Is investing gambling?
Updated: Dec 3, 2018
As a financial adviser I hear this sometimes, “investing in shares is like gambling”. It can be, and it can also be totally different. I consider investment to be measured and carefully considered use of money with the intention to see it gradually increase in value over the long term. And I consider gambling to be throwing money at something with little regard for the consequences with the remote but tempting possibility that lots more of it comes back at you.
Let’s think shares. You can carefully research different companies, risk and diversification, dividend earnings, investor reports, and come to the conclusion (for example) that overtime, the value of the share will go up. You may also choose a company at whim and throw all your money at it because you heard something in the news. One of these is investing and
one of these is arguably gambling.
The other differentiating factor in my view is long term planning and financial goals. Investment is often part of a long term plan to increase wealth, whereas gambling is often done for short term gain, or even for adrenaline rush. In short – this is completely different to investing and can be aligned with mental health problems and addiction. Gambling can
even lead to suicide. This is the complete opposite of financial health, which is what we value at Genki Finance.
So with Melbourne Cup on Tuesday, if you are choosing to gamble, please do so sensibly. And while you’re at it, please consider what actions you’re taking to contribute to your future wealth and future financial health.
Alison Kaigan – Your Canberra Financial Adviser