What’s the difference between Gambling and Investing?

jimosophy 4 years ago 2 min read

Traders and gamblers have the same goal. Short term gain, fast easy money. An extremely enticing outcome.

Investors have the same goal as traders and gamblers, an outcome of money, but not fast and therefore the perception of not easy. The slow payoff makes it not extremely enticing or even desirable.

The difference between the two is “time.” Traders and gamblers seek a quick payoff, while investors seek a slow payoff.

What do Warren Buffett and Tiger Woods have in common? They are investors. Their payoff was big! Were they instant successes? No, it took time (countless hours of practice and learning). Warren’s hair is grey, and the bandages on Tiger’s fingers are from practicing more than any golfer. Ask them.

Time is the most precious commodity on earth for us, it is finite. It will end on each and every one of us. We can’t buy more of it.

Knowing the difference between gambling (trading) and investing, “time” is paramount to financial success.

All financial media caters to traders and gamblers. If they didn’t, no one would watch or pay attention. We are inundated with, “buy, buy, buy.” or various opinions from so called, “experts” Boring does not sell. Fast, easy money appeals to us, while a ten, twenty or thirty year wait won’t be tolerated. I’m unlikely to be a guest on financial media because I’d have one sentence, and nothing more to say to achieve financial success (one sentence – that’s not good for TV).

“Buy the market regularly over time.”

Ignore the power of that sentence at your peril. You don’t have to spend countless hours of practice and learning, just the discipline to stick to it. The payoff will be big.

When time is up, how many eulogies start with, “Here lies a successful gambler and trader.” If you don’t have a long term time horizon, you are not an investor.