Is Investing really Just Gambling?
Gambling is a game, a contest. When you gamble, you take a chance that you will increase your money or lose your money. There's no way of knowing what will happen.
Investing is a game for some people. When you invest, you are putting money into something that you feel will be successful. If and when they are, the money you put in will increase. It is a game for those who do it for enjoyment. Many people invest not for enjoyment, but to make money. Why is this not a game for them?
Investing is not a gamble. Some types of investments are so obviously not like gambling. For example, you may decide to put some money into government bonds. You are guaranteed the money back plus interest. It can't be a gamble if you know you're going to get money back. There is the smallest chance you won't get your money back, but that would have to be because the government is in a lot of trouble, and I think you'd have more to worry about than getting your money back.
What about stocks? How does the stock market work in a way that's not gambling? Buying stock means buying part ownership in a company. You invest in that company with expectations that they will make a profit and you'll get paid dividends and/or the value of the stock will increase and you could sell for capital gains.
What about when you bet money at a casino or at a horse race? You don't own part of anything. You can't rely on the success of a stable business to make you money. You are just taking a chance that you could win. A low chance at that.
Investing is another way to earn an income. When you invest, your money is earning money, not simply taking a chance on itself. If you ever fall into a large sum of money and you aren't sure which way to go, remember that investing is much less risky and could earn you a lot more money over the long run.
Let's look at an example. You win $10,000 in a small lottery game, (which by the way is gambling to). You could go to a casino and double it 5 times, or even just once, but the chance of that happen is next to nothing. You'd probably end up losing it no matter how good a gambler you think you are. Or, you could put it into a stable mutual fund earning 8% a year for 30 years and even without adding anything to it have $100,000 by the end. What do you think? - 23167
Investing is a game for some people. When you invest, you are putting money into something that you feel will be successful. If and when they are, the money you put in will increase. It is a game for those who do it for enjoyment. Many people invest not for enjoyment, but to make money. Why is this not a game for them?
Investing is not a gamble. Some types of investments are so obviously not like gambling. For example, you may decide to put some money into government bonds. You are guaranteed the money back plus interest. It can't be a gamble if you know you're going to get money back. There is the smallest chance you won't get your money back, but that would have to be because the government is in a lot of trouble, and I think you'd have more to worry about than getting your money back.
What about stocks? How does the stock market work in a way that's not gambling? Buying stock means buying part ownership in a company. You invest in that company with expectations that they will make a profit and you'll get paid dividends and/or the value of the stock will increase and you could sell for capital gains.
What about when you bet money at a casino or at a horse race? You don't own part of anything. You can't rely on the success of a stable business to make you money. You are just taking a chance that you could win. A low chance at that.
Investing is another way to earn an income. When you invest, your money is earning money, not simply taking a chance on itself. If you ever fall into a large sum of money and you aren't sure which way to go, remember that investing is much less risky and could earn you a lot more money over the long run.
Let's look at an example. You win $10,000 in a small lottery game, (which by the way is gambling to). You could go to a casino and double it 5 times, or even just once, but the chance of that happen is next to nothing. You'd probably end up losing it no matter how good a gambler you think you are. Or, you could put it into a stable mutual fund earning 8% a year for 30 years and even without adding anything to it have $100,000 by the end. What do you think? - 23167
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How does the stock market work to increase your wealth? Don't let the stock market keep you confused. Learn how to buy stocks safely to start safely investing your money today.
posted by X - Men @ 9:25 AM
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