Is Investing Gambling?
By gambling you are taking a chance. You could make a lot of money, or you could lose a lot of money. It is a game or contest. You can't know what will happen because it is all by chance.
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 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.
How does the stock market work differently in the case of gambling? When you purchase stock, you become part owner in the company. By investing in that corporation, hopefully when they make a profit, you'll be paid in dividends, or if they are growing and increasing in value, the value of the stock will go up.
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 say you inherit $10,000 from a long lost Uncle. If you have a chance to gamble your money and double it, you could have $20,000. You could double it again and have $40,000 and so on and so forth. The problem is that the possibility that you'll even double it the first time is slim to none. If instead you invested it into the stock market and got an average 8 percent return and didn't touch it for 30 years, you would have about $100,000. Which would you choose? - 23212
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 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.
How does the stock market work differently in the case of gambling? When you purchase stock, you become part owner in the company. By investing in that corporation, hopefully when they make a profit, you'll be paid in dividends, or if they are growing and increasing in value, the value of the stock will go up.
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 say you inherit $10,000 from a long lost Uncle. If you have a chance to gamble your money and double it, you could have $20,000. You could double it again and have $40,000 and so on and so forth. The problem is that the possibility that you'll even double it the first time is slim to none. If instead you invested it into the stock market and got an average 8 percent return and didn't touch it for 30 years, you would have about $100,000. Which would you choose? - 23212
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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 @ 9:27 AM
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