Investing as a Smart Way to Make Money
I love a good game of roulette; it is just so exciting. The concept of putting chips on a board makes my mind lose track that money is involved. I’ve been described as a “mad man” at the table because each round of betting I bet every chip I have, ensuring that every number is covered and that my lucky number 17 has a large pile of chips on it. When the dealer spins the ball, I wait in suspense, hoping to be lucky, hoping to win big; but that’s just it, gambling is simply pure luck.
Investing has characteristics similar to gambling. The uncertainty, the thrill of winning, the risking of money, and the anguish of losing are all present in both gambling and investing, yet, there are also grave differences between the two.
Investing can be done through a long-term approach, whereas gambling is often instantaneous. Many investors, especially investors with a retirement fund, are planning for their future. They are investing money for use fifty years down the road. Gambling happens in an instant. The time it takes for me to bet my chips and for the ball to settle in one numbers crevice on a roulette wheel is the time a gamble takes.
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Investing allows for research, tips, and calculation, while gambling doesn’t. There is tons of information about investments, allowing investors to understand where they are putting money. This information also allows them to diversify their portfolio to hedge their losses. While you can become a master at poker or blackjack, gambling is still, simply, pure luck. You can’t change your hand in blackjack, but you can research a stock to see if it is a buy.
Investing often provides dividends as a way to reward risk, whereas gambling doesn’t compensate for risk (except for the occasional free hotel night.) Through investing, investors can have a stream of income through dividends as a way to be compensated for the use of their money.
This can alleviate some of the financial burdens of investing, while also allowing investors to recoup some of their cost. Gambling always has the house edge, and doesn’t pay money out to reward risk, but rather entice people to gamble more money.
I like investing. Investing is not gambling. Gambling implies short-term luck, whereas, investing, if done right, is a well researched field crafted to maximize both risk and reward. Nonetheless, many investors act like they are gambling. The noise investors who haven’t researched a stock, don’t understand how to invest, and simply “gamble” money away based on one news report are gamblers.
They are not taking advantage of the knowledge and facts present in our world, and can often hurt the true investors. However, in the end, investing, in general, is not gambling. Investing is a smart way to make money based on the uncertainty of the market, very rarely can you make money gambling on the uncertainty in a casino.
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Investing as a Smart Way to Make Money. (2023, Jan 18). Retrieved from https://phdessay.com/investing-as-a-smart-way-to-make-money/
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