- December 12, 2021
- Posted by: Robert Brown
- Category: Investing
A lot of people think twice about getting into the stock market because they believe it is similar to gambling. We are living in hard economic times where everyone is looking for a way to make extra money and secure their financial future. Because of the high standards of living and financial pressure, some people opt for methods such as gambling in order to earn money. While some people believe investing in the stock market cannot be equated to gambling, others believe otherwise. To understand the difference between gambling and whether the stock market is a legalized form of gambling, it is vital to know what each definition involves.
It’s important to mention that both investing and gambling involve putting money into use with a hope of getting back more. The dictionary meaning of gamble is highly associated with games which has no association whatsoever with stock investing. Therefore, it is accurate to conclude that gambling is closely associated with games and entertainment but with the aim of making a better return on the initial investment. On the other hand, investing in the stock market is all about business. It’s good to mention that in some countries, gambling is outlawed and therefore, those found engaging in this practice are reprimanded by the law. On the other hand, stock investing is a business investment practice that is legal across the globe. Based on this explanation, stock investing is purely a business activity and cannot therefore be referred to as legalized gambling.
For gamblers, their ultimate aim is to reap as much money as possible after playing a game. However, for stock investors, they don’t aim for immediate profits but rather, wait until the markets become favorable to allow them make good returns. In other words, it could take months or years before you finally make good financial returns.
The purpose of engaging in gambling and the stock market is totally different. A lot of gamblers engage in this activity in order to make money for leisure activities. However, the stock market is used by investors to grow their investment in order to spend it productively. Investing in stocks is a serious affair and can therefore not be associated with any gambling techniques. Stock market investment is a long-term affair while gamblers do it for short-term excitement by putting their money at risk and hope for a chance that it will turn around their financial fortunes.
However, despite the differences, there are a few things that both gambling and stock investing share in common. To begin with, they both involve the use of money in form of an investment whose return is not known. In other words, they are associated with both the risk of time and money. The stock market shouldn’t be at any one time confused with gambling whether legal or not because the two operate differently. It is important for the difference between the two to be clearly defined to avoid sending out the wrong perceptions.