Wait, What? Why Barbara Corcoran Is Against Diversifying and Saving Money
Famed “Shark Tank” investor Barbara Corcoran has some strong advice about investing that flies in the face of traditional thinking. Unlike most financial experts, Corcoran believes that diversification is not the best path to building wealth. Perhaps even more controversially, she’s also against the general concept of savings .
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Here are Corcoran’s explanations of her non-traditional views, along with a look at whether or not you should take her advice .
What Does Corcoran Say About Diversification?
Diversification is one of the cornerstones of basic investment advice.
The theory is that by combining non-correlated assets — or those that don’t move up or down in price at the same time, like gold and stocks — you can reduce the volatility in your overall portfolio. Also, by having multiple assets, you avoid the risk that you can lose all your money by making one bad bet.
However, Corcoran sees things in an entirely different manner.
As she told CNBC Make It in 2023, “One piece of advice people hear all the time, and I just don’t believe it, is: ‘Diversify, don’t put all your eggs in one basket. I put all my money in the real estate basket, my brokerage firm and everything in there went to buying properties.”
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Is She Alone in Her Thinking?
Other famous investors support Corcoran’s ideas about diversification as well. Billionaires Warren Buffett and Charlie Munger, who were co-chairs of Berkshire Hathaway until Munger’s passing in 2023, famously referred to diversification as “diworsification” and “protection against ignorance.”
Like Corcoran, they believed that if you know what you’re doing, putting most or even all of your money into a single idea is the way to achieve outsized returns.
Why Is She Against Saving?
Corcoran’s “anti-saving” stance isn’t a recommendation to avoid basic building blocks like an emergency fund or contributions to a 401(k) plan. Rather, it’s just an expression of how she prefers to invest — in herself.
“I’m just not a believer in saving money,” the real estate guru told CNBC Make It. “I’ve never saved a dime my whole life. I spent every dollar I ever made and threw it back into the business.”
In other words, Corcoran’s approach towards “saving” is to reinvest her income into her growing business, which most successful companies do as well.