{"id":4704,"date":"2020-04-10T16:23:28","date_gmt":"2020-04-10T10:53:28","guid":{"rendered":"http:\/\/capitalante.com\/?p=4704"},"modified":"2021-01-16T01:28:25","modified_gmt":"2021-01-15T19:58:25","slug":"difference-between-investment-and-gambling","status":"publish","type":"post","link":"https:\/\/capitalante.com\/difference-between-investment-and-gambling\/","title":{"rendered":"Difference between Investment and Gambling"},"content":{"rendered":"

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Everything we do in life involves some degree of risk either it is driving a car or starting a business. But has anyone skipped any of the above-mentioned acts? In order to succeed in the above-mentioned acts, you need proper training or guidance.<\/span><\/p>\r\n

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But once you get the right guidance you can win any game either it is starting a multi-million dollar company from a scratch or being a driver like Michael Schumacher.<\/span><\/p>\r\n

Many a person has a perception that there is no difference between investment in the stock market and gambling as both involve some risk. But friends it isn\u2019t true. <\/span><\/p>\r\n

In this column we will discuss why investing is not gambling and also offer you a step by step guide to the difference between investment and gambling.<\/span><\/p>\r\n

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What is Gambling?<\/strong><\/span><\/h2>\r\n

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Gambling is acting completely dependent on the favour of luck. In gambling, you may either win or lose. You have to accept the possibility of losing your invested amount. Sometimes the amount of risk crosses the expected reward.<\/span><\/p>\r\n

It can be assumed that gambling is like dividing up a fixed cake among winners and losers. In most gambling, there are some additional factors involved such as costs, fees, or odds. These things result in dividing a shrinking cake.<\/span><\/p>\r\n

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Some examples of gambling:<\/strong><\/span> <\/span><\/p>\r\n

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Currency Trading of Futures and Options (except hedging), Commodity Futures and Options Trading\u00a0 (except hedging), All Lotteries, and Casino games such as cards, table games, or electronic games.<\/span><\/p>\r\n

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In all these gambling the odds act against you because they divide among the \u201cwinners\u201d a smaller cake than originally exist.<\/span><\/p>\r\n

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What is investing?<\/strong><\/span><\/h2>\r\n

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Investing is putting the money in assets or fields that may generate income or appreciation in the future with the risk. These asset classes are expected to generate profit for investors. In most cases investing generally involves placing the money at risk for the purpose of gaining higher returns than savings.<\/span><\/p>\r\n

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Investing means purchasing a claim on goods or services to create wealth. You are investing means you are resorting to a way to gain wealth in the future.<\/span><\/p>\r\n

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Examples of Investing:<\/strong> <\/span><\/span><\/p>\r\n

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Individual stocks, bonds, mutual funds, most ETFs, etc. The other mechanisms are real estate, gold bonds, rental property, buildings such as factories, office space, retail space, etc.<\/span><\/p>\r\n

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The gain or loss in investment depends on the performance of the asset or sector you put your money.<\/span><\/p>\r\n

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Difference between Investment and Gambling<\/strong><\/span><\/h2>\r\n

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We will have our discussion on the basis of investment in the stock market. People have confusion about investing and gambling. Gambling totally depends on the favour of luck. On the other hand, investment is the performance of that sector. <\/span>In gambling cards or dice may act differently. You have to depend on your luck.<\/span><\/p>\r\n

Investment is made on a real basis. It works on practicability. Suppose you buy any stock. The concerned company will try to do business and gain profit. Similarly, in any kind of investment someone or a group of people tries to act for that money. But in the case of gambling, no one can do anything.<\/span><\/p>\r\n

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Without knowing the proper information about the company or stock in which you are going to invest your hard-earned money and betting at poker without looking at your cards both can be treated as a gamble.<\/span><\/p>\r\n

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