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White Elephant


A “White Elephant” in finance refers to an investment, asset, or project that is very costly to maintain, doesn’t generate adequate returns, and can’t be easily sold off. Originating from the historical practice of giving rare white elephants as gifts in South Asia, these animals were costly to upkeep and couldn’t be used for labor, mirroring their financial counterpart. Essentially, a White Elephant is an investment that drains more resources than it is worth and is difficult to dispose of.


The phonetics of the keyword “White Elephant” is: /waɪt ‘ɛlɪfənt/.

Key Takeaways

Key Takeaways About White Elephant

  1. White Elephant is a popular holiday party game, often also referred to as Yankee Swap or Dirty Santa, which involves fun, strategy, and an element of surprise.
  2. The basic rules involve participants bringing wrapped, often humorous or unique, gifts to put into a common pool. Players take turns to either unwrap a new present or steal a previously opened one, with a gift potentially changing hands multiple times
  3. While entertaining, the primary purpose of this game is not the value of the gifts, but rather the enjoyment and camaraderie among participants, making it a popular choice for social gatherings during holiday seasons.


The term “White Elephant” is significant in the business and finance sector as it refers to an investment or possession that is burdensome or costly to maintain, but difficult to sell. Typically, it is an asset that isn’t generating enough profit, or in some cases, is creating a loss for the owner. These resources are often considered to have more potential market value than actual return on investment (ROI). Understanding and identifying any white elephants in one’s business is key to maintaining financial health as it allows leaders to make informed decisions on whether to continue investing in a particular asset or to let it go, hence mitigating financial loss.


The term ‘White Elephant’ primarily refers to an investment or business venture that has cost substantially more than it yields. This term finds its origins in ancient Siam (now Thailand), where the king would gift a rare white elephant, considered sacred, to someone who displeased him. The recipient couldn’t refuse the gift as it would be disrespectful, and couldn’t put the elephant to work either, due to its sacredness, resulting in financial strain due to the costs of upkeep. In a similar vein, in finance and business, a white elephant represents a burdensome property or product, whose maintenance or holding costs outweigh its usefulness or value.White elephants play a significant role in highlighting faulty strategic decisions or misallocations of resources in business. They can cause substantial financial losses if not identified early and rectified in time. These white elephants can be found in various forms, such as an unused or unprofitable factory, a costly business program that provides little to no return on investment, outdated technology or equipment that is expensive to maintain and operate, or even an extravagant corporate office that is not financially justified. Identifying such “white elephants” requires careful analysis of business processes and regular audits, enabling firms to take corrective measures and avoid financial drain.


1. New South China Mall: This shopping mall, located in Dongguan, China, is one of the largest malls on the planet. Despite its size and impressive architecture, it remained virtually vacant for over a decade since its opening in 2005. The mall became an example of a white elephant because of the significant investment involved in its construction and maintenance, and the lack of returns due to low tenant and visitor numbers.2. The Rio Olympics Facilities: Several stadiums and facilities built for the 2016 Summer Olympics in Rio de Janeiro are now largely unused and have become costly to maintain. Despite the massive expenditure on these infrastructure projects, they have not delivered the expected revenue or community benefits post-games, thus turning into white elephants.3. Montreal’s Olympic Stadium: Constructed for the 1976 Summer Olympics, the stadium became a financial burden due to its high maintenance costs and lack of regular, profitable use. The Canadian government spent several years paying off the debt incurred by its construction, making it a classic case of a white elephant investment in the business/finance world.

Frequently Asked Questions(FAQ)

What is a White Elephant in finance or business terms?

A White Elephant refers to an investment, asset, project, or business that is expensive to maintain or difficult to dispose of, but has little to no value or income potential. This term is often used to describe such investments that have become a burden to the owner.

Why is the term “White Elephant” used in finance and business?

The term “White Elephant” comes from an ancient Asian tradition where rare albino elephants were considered sacred but also burdensome. Kings used to gift them to courtiers they didn’t favor, as keeping these elephants was expensive and they could not be used for labor. In the business context, it represents an investment or asset that becomes difficult to maintain or sell off.

Can you give an example of a White Elephant in business?

An example of a White Elephant in business could be a large factory that is no longer productive but causes high maintenance costs or a technologically outdated and expensive piece of machinery that has been surpassed by cheaper alternatives.

How can businesses avoid accumulating White Elephants?

Businesses can avoid accumulating White Elephants by performing thorough cost-benefit analysis before investing in any assets or projects, regularly investing in updating their technology and resources, and by being adaptable in their business approach.

What should businesses do if they already have a White Elephant?

If a business already owns a White Elephant, they could try to find ways to either make it profitable again or cut losses. This could involve selling the asset, repurposing it, or finding ways to reduce the maintenance cost. Consulting with finance experts or business consultants could also help derive productive solutions.

Related Finance Terms

  • Asset Maintenance Cost
  • Loss on Investment
  • Market Value Depreciation
  • Property Divestment
  • Non-Performing Asset

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