What's the difference between investing and gambling?

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[matthewkimberlin]

Dave unfortunately misses an opportunity here to explain the critical difference between investing and gambling: productive activity. Gambling inherently involves a zero-sum game in which one party wins and another loses based on an outcome of some sort. Investing, on the other hand, involves providing capital resources to be used in economically productive activity and then reaping the rewards--profits--of that production. One creates wealth, while the other merely redistributes it.

[erikmartin]

If I talk a chance at the roulette wheel and I don't win - I end up with nothing. If I invest in a company and the stock goes down - I still own something...that may go back up and go higher (if the fundamentals of the business are strong).

[NathanHedglin]

Blackjack player is gambling, the house is investing (sometimes they lose but in the end they win).

[Sutterjack]

It is a form of gambling - why do all the invest ads have disclaimers at the end? Because they know you can lose money! I wish Dave would be more honest on this.

[drowjackson]

One is owning a share of a company, the other generally is flipping a coin.

[alvaromuto]

It is somewhat like gambling, the difference is that gambling it is defined by the house. The stock market are very influenced by the investors themselves. In the stock market you put x amount of money, and you can get back 0.9x, 1.1x, 0.5x, 1.5x... while in gambling you gamble x and you either get 0, or yx, with y being the percent return of you win. They are similar, but I wouldn't call investing gambling, however, I completely understand why some people would call it like that. Have a good day!

[KompisPrat]

"I'ts not gambling, (proceeds to explain how it actually is gambling), *but it's not gambling tho!*"

[jbeck]

boy he slipped up at 2:45 what you are "betting" on lol. same thing as gambling.

[chrishdk]

He literally defined gambling in his explanation of how stock investment works. Gambling by definition requires 3 factors: skill, chance, reward. So I guess investing has a 100% guarantee you'll be rewarded in this guys rotted brain. But ya, just write off another persons opinion by saying its pessimistic therefore a fallacy.

[DrogoBaggins]

When someone tells me that investing is gambling I know to stay away from them. It is possible to gamble in the markets and when I talk to another "investor" who says he is investing but talks about the markets as if he is at a casino then I know to stay away from him too. Understanding the difference between calculated risk and gambling is simple but it's very emotional for a lot of people for some reason. I don't think that people who don't or won't understand the difference will build wealth in the long run.

I have talked to people who say that stock markets are gambling but buying and selling real estate is investing. It is the same thing but they refuse to see it. I used to argue with people on these points but now I realize that it is pointless and when I encounter such people I just get away from them. Unless it's a young person asking honest questions. But then usually they go and ask someone else the same questions and I end up arguing by proxy which I then have to cut off as well.

[welliguessimwhateverusayia]

People will quit there job over a 10 cent raise and then come up with every excuse in the world to not take control of there life. Amazing.

[schoksi]

“What you’re betting on”...2:46...LOL!

[creman]

Sooo conclusion is investing = gambling?

[Drie]

I’ve read a lot of very intelligent comments in here, and to be honest I am still unsure if investing is the same as gambling. But, here is my final opinion:
Gambling and investing should not be defined by how much influence or control you have on the outcome, because ultimately, no-one has control over anything.
I believe gambling is the pursuit of big reward for minimum effort. When one avoids discomfort, shows no desire to work hard, but seeks the quickest and easiest way to make money/wealth.
Therefore, both investing and gambling can tick these boxes.
However, I would not consider it gambling if one was to invest in a start-up they truly believe in. That would be faith!
In conclusion, investing is gambling depending on your reasons for doing it.

[josh_final]

Wallstreetbets be like *I heard nothing*

[fmccloud]

The wealthy gamble, it’s called “investing”. Everyone else without money, it’s just gambling.

[DannyOvox]

At the end of the day is a game of semantics. I am for investing but at the same time I’d agree is a form of gambling. However, in a situation where we try to predict the outcome (gambling) mathematically speaking some have higher degrees of risk than others.

For example, would I gamble $1, 000 and bet that a shark will attack me at a local pool vs a shark attacking me in open sea? No, I wouldn’t bet on the pool attack because it has practically 0% chance of happening, not 0 but close. Most of our life activities are a gamble to a certain % degree of the outcome we desire actually happening. Like if I say I’m driving to the store, there is a chance I won’t make it to the store for many reasons outside of my control like a crash or sudden death.

At the end almost everything is gambling with risk management and that is exactly why investing, especially in the stock market is gambling but with a good risk management strategy it differs from other forms of gambling without strategies and thus the reason why it works for a great deal of people.

[donaldrichey]

Don’t go to coworkers for financial advice. Especially a person that has zero knowledge of investing.

[welliguessimwhateverusayia]

The people that quit before the miracle happens it's gambling. There was a tuition cost, that learning curve.

[UnoriginallyInclined]

I would say that if you're going to define gambling by risk then starting a business or buying a house is gambling. Capitalism is based on a willingness to accept risk. The difference is in the fact that businesses are producing new wealth but gambling is only taking away from other people's. Gambling isn't productive, it doesn't make anything.