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.
For some, investing is also a game. By investing, you are putting your money into something that you really believe will increase in value and be successful. If the investment is successful, you make money. Some people play with the market as a game and have fun with it. Others do it solely to make money and have no desire for enjoyment. Why don’t they look at it as a game?
When you invest your money, you aren’t gambling. Some investments are very far from gambling, they’re not even close. Take government bonds for example. You might even say they are more likely to pay you back with interest than your employer is, assuming it’s not a government employer. There is a tiny chance they won’t pay you back, but only in the severest of cases.
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.
By investing, you are adding another source of income to your existing income. In your investments, your money is working to make more money. If you ever receive a large sum of money for anything, invest it in a stable, low risk investment. By gambling it you are essentially throwing it away and won’t make nearly as much as you would by investing in it.
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?
