3 Ways to Make Sure You’re Not Gambling with Your Investments

culled from:http://www.grandascent.com
Life is like a game, sometimes you win, sometimes you lose. Investing is a big part of life, whether it’s time, money, effort, or any of other facet that is valuable to you. Taking gambles when you want to make more money is what investments are all about. Being smart to make the right moves while taming that poker face is how you come out ahead. While you’ll want to secure your future, it is important to know the right steps so that you don’t make the wrong choices in your investments or gambles.

In order to differentiate between gambling and infesting, we must define the two first:

Gambling is, “to play at any game of chance for stakes. To stake or risk money, or anything of value, on the outcome of something involving chance,” while investments are “to put money to use, by purchase or expenditure, in something offering profitable returns.”

From the definitions one would infer that either one is interchangeable with the other, but this is not necessarily the case. Investing normally has connotations of being a good thing, while it helps the economy and grows your money, it also drives capitalism. On the other hand, gambling isn’t so good because of the implications of it not helping the economy and the potential side-effects. Regardless of the side-effects of both, there are differences to help you decide which route you would like to take when it comes to your money.

#1) Gambling Can be Addictive & Destructive, While Investing Generally Isn’t

Gambling is notorious for being a problem and fortunately there are associations like Gambler’s Anonymous who are willing and able to help people with their gambling addictions.  There is no investor problem, such as Investor’s Anonymous, that is equivalent to someone who has an issue with gambling, it simply doesn’t exist.

While there is no known knowledge about investing addiction, Marvin Steinberg had this to say about the potentially worrisome issue, “We don’t know the true extent of the problem because hardly anyone identifies it as a gambling problem — they see it as a ‘financial problem’ or an ‘investing problem.’

While it’s true that any interest in anything can become an addiction, no one sees investing as being a problem because it’s helpful to many people, unlike gambling in the grand scheme of things. The economy is driven by investing and people safeguard their lives on it. Despite this fact, many stockholders nervously check their portfolio on an hourly basis daily. Some people also invest more vigorously than is recommended which is  similar in the way that gamblers bet on something that they can’t afford to lose. While investment codependancy isn’t on the radar as much, at least there is this page to help determine whether or not you, or someone you know has a gambling problem.

#2) Gambling is Entertainment, While Investing is Business

While the dichotomy between investing and gambling is apparent, the line that is drawn between the two is blurring. Thanks to the internet, brokerage firms and other investment websites have the ability to change the way we look at investing, which is both very beneficial to investors as well as the economy. Ironically, the availability of online trades has attracted many people to bet on them as a source of entertainment.

Chris Anderson, executive director of the Illinois Council on Problem and Compulsive Gambling states, “Compulsive gambling isn’t really about making money, it’s about ‘action.’ Perhaps the chemical imbalances that occur in addictive gambling also occur in those that are obsessed with investments and perform day trading as more than something simply for business.

This isn’t to say that that it’s more acceptable for gambling to be used for entertainment purposes than it is for investing to be used in entertainment purposes. However, there seems to be a problem when either activity is used solely for entertainment purposes rather than to grow money, or when both are usually used solely to participate than for business. Who knows, I’m not rocket scientist, but I would make bets based on value, not by whether or not the activity entertains me or not.

#3) Investing is Saving for Future Goals, While Gambling Is Wasteful

While investing is normally used to go towards a fund for something in the future, such as retirement, business-related, or educational, gambling is normally a short-lived thrill that one may or may not can afford. Whatever your choices are both attributes are highly dependent on odds and whether or not they are in your favor. Investments are a popular way to grow money and to secure a future but one could very well do the same with gambling, if the odds are in that person’s favor as well. Risk-taking in both gambling and investing are intrinsic and gambling could very well pay off just as well as a good investment plan.

There are many similarities with investments and gambling. Both involve risk-taking, using one’s own money and a bit of favoritism. While gambling is seen as some sleazy form of accruing money, investment-types are normally stereotyped as having their things more together. Both activities come with their own set of pros and cons and while the taxonomy of both is somewhat blurred, its essentially up to you, the individual, as well as good “luck” to decide which route is best in accumulating more wealth.