Is Investing really Just Gambling?
By gambling you are taking a big chance that you might either win a lot of money, or you might lose a lot of money. You are playing a game and you don't know what's going to 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.
When you put money down on a football game or when you give your cash to a casino, you own nothing. Your earning power does not depend on the success of anything or anyone. It depends simply on chance.
You can use investing as another source of income. By investing, your money is working to earn money just as you do at your job. If you ever inherit or win a lot of money, never gamble it. Invest it in a low risk, stable investment and that money can grow exponentially over time.
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? - 23162
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.
When you put money down on a football game or when you give your cash to a casino, you own nothing. Your earning power does not depend on the success of anything or anyone. It depends simply on chance.
You can use investing as another source of income. By investing, your money is working to earn money just as you do at your job. If you ever inherit or win a lot of money, never gamble it. Invest it in a low risk, stable investment and that money can grow exponentially over time.
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? - 23162
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Just how does the stock market work? Don't let the stock market keep you perplexed. Learn how to buy stocks easily to start safely investing your money right away.
posted by X - Men @ 9:34 AM
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