whats the difference between investing and gambling?
- Bigsky_52Lv 61 decade agoFavorite Answer
The main difference is the expected outcome. In gambling there is a house edge in ALL games. Yes, even poker has a rake, and at the lower limits like 2/4 the rake alone will bust out the equivalent of two or three players an hour at the minimum buy in. So based on the house edge there is a negative expectation for your money. You are more likely to lose money than make it. Whereas with investments there is a positive expectation. You can easily find how much profit they've posted and how their stocks have performed since the beginning of time. If you invest in a mutal fund you can expect to make money at a certain rate. Nothing is certain, but if I played nothing but the pass line for several days at a craps table I could expect to lose 1.41% of my money. Whereas if I invested that same amount in a mutual fund I could expect to have about 8% more at the end of the year (depending on the fund). So the difference is what you can logically expect your pile of money to do: increase (invest) or decrease (gamble).
- closetcoon_fanLv 51 decade ago
The only difference between the two words is that investing means a gamble over an extended period of time where gambling is an investment for a short term result. In both cases, money is expected to be made. Don't confuse gambling with losing. That is only what lotteries and casinos expect. Gambling on sports with the proper research on teams will give you a profittable short term result. Investing in a long term venture can also lose you money.
Investing and gambling do not mean winning and losing, they are words that describe length of time.
- 1 decade ago
Gambling is just that. You're taking a gamble or a risk. Investment is something that you want to put work and money in to that will (hopefully) give you a big return further down the road. In short, gambling is a quick way to make a bit of money fast, but the odds are more against you. Investing is a more calcuated risk that is done over a longer period.
- 1 decade ago
Gambling is betting on an uncertain outcome. Some investments are gambles in that you might win or you might lose money.
Some investments are not gambles in so far as you are essentially guaranteed to win, although the amount you win may be very low.
Colloquially, we consider "gambling" to mean high-risk, high-reward, whereas "investing" generally means little or no risk, with an almost certain reward.
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- 1 decade ago
All depends on your skill level and the odds of the game you are playing. Any novice investing in the stock market has less odds of winning than a random person walking into a casino and playing a slot machine. In investing and gambling there are educational tools to lead you to the right game/investment vehicle to increase your odds of success. My point is........there is no difference. Are Daniel Negraneu or Phil Ivey (poker pros) investors or gamblers? They are a little of both but because of their skill level, they are truly investing their money because their skill gives them a major edge above competitors.
- GustavLv 51 decade ago
In gambling the odds are in favor of the house. When investing you are trying to manage risk to your favor.
- pokercoachLv 51 decade ago
Well, they have one thing in comment: You need to be good with money management, to have success in it.
- Anonymous1 decade ago
Big investors don't get the free penthouse at the Bellagio and the endless parade of hookers.
- joe sLv 61 decade ago
If you have to ask that questions, then the answer is nothing.