The Link Between Investing And Gambling

From time to time, we compare gambling to genuine investing. However, the difference isn’t complicated at all. With investing, you are putting your hard-earned money to work for another business, and with gambling, you are just tossing it in the air in exchange for a slight chance to catch some more. Investing is a calculated risk that has real-world chances of working out, and betting is statistically a certain failure and a loss of funds. In this post, we are exploring the major differences between the two and will help you sort the matter for you once and for all.

Gambling VS Investing

The Cambridge English Dictionary defines the world gamble as “to do something that involves risk, hoping for money or success”. Gambling, by its nature, is a deceiving activity. When you make a bet, somebody always wins. And that’s usually the casino you are playing against. The odds just aren’t in your favor, no matter how you look at it. Of course, a tiny minority of gamblers win, but there’s a reason that’s such a small percentage and you aren’t likely to be one of them, looking at things objectively. Investing, such as on a stock exchange, may seem similar to the uneducated or uninformed eye. But it is vastly different. Investing is a form of transaction where both parties can win. You, and the person you are paying to, can benefit from the money. That doesn’t happen in gambling.

When you invest money, for instance, in Apple or Microsoft, you are putting your trust in these companies to multiply that money and bring you revenue. Of course, you never should blindly do such a thing. You have to understand the market, how the economy might affect these companies, read their financial reports, and so on and so on. With gambling, you can’t have a strategy no matter what you try to do. The odds are set, and you are there to watch you fail and fail again in hopes of a better outcome. With investing, you are setting yourself up either for success, or failure, depending on your personal willingness to devote your time for proper preparation. It is not a chance factor, but a factual result. Does the company make good revenue? How is the competition doing? Where is the industry heading?

The Time Factor

Investing is a lifetime activity. You decide where you put your assets, and you can always change your decisions, perhaps for the better. You can cut your losses when the stock isn’t doing as you have expected, and you can invest in a different resource, such as real estate or any other commercial possession. Gambling, on the other hand, is a one-time activity. You bet your money, and you get your result. Predictably, the result is not in your favor, and then you are a 100% loss. Even if you win, what do you do with that money? Gamble it again? The chances of winning, even more, are not any better than losing all of your earned money.

So Why Is The Comparison So Common?

Just because a thing is common, doesn’t mean it holds any value or truth in it. It is true that most people have no clue regarding medicine, that’s why they go to a doctor. If a person is poor in all investing-related knowledge, and he still proceeds and tries to invest, that is the same as gambling. That very individual has the ability to control their actions and thus influence the consequences. A gambler can’t do that. He can’t make a tangible difference to his results. That’s why the choice component is so important- you can make the decision to work with a financial consultant, spend the time researching where you put the money, and make an informed decision.

What Not To Do

Day trading is a form of speculation that very much resembles gambling. That is why so many people who exhibit the traits of a gambler are interested in it. They want quick and undeserved results, perhaps owing to a certain trick or “secret”.

Here is an example. Gambling is illegal in Japan. But certainly, the Japanese people are allowed to invest their money, including foreign markets. Popular Japanese website made an analogy between betting and day trading. On a broker app such as Robinhood, there isn’t much information provided about anything that’s related to investing. Still, the platform is letting you purchase and sell stock shares with a few clicks on your phone. This action requires as little thought as gambling, and thus bears a similarity to it.

And What To Do Instead

We are not bashing the app here by the way. We are simply pointing out that it could be abused that way, just as excessive drinking of alcohol. Rather, we suggest you adhere to a reasonable approach, with a careful entry into the investing field. Take your time, invest only what you can afford to lose, and with enough patience and knowledge, you may make good returns on your investments. To get started, we suggest trying an online broker such as eToro.