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?
Investing is not the same as gambling. There are many different ways to invest your money, and some ways are not even close to gambling. When you invest in a government bond, you are guaranteed your principle and interest. It’s not a gamble if you know for sure you’re going to be paid back. There is a slight possibility that they government won’t pay you back, but the government would have to be in a lot of trouble for that to happen and getting your money back would be the least of your worries.
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.
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?
