What comes to your mind when you hear the word Stock Market or Share Market? Investing or Gambling? I know if you lose your money you think that the stock market is gambling and when if you make money out of it then you think that it’s genuine. right? Ha Ha Are you a small kid? Investing vs Gambling many people doubt. Some people think that is stock market similar to gambling.
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Investing vs Gambling – 7 Major Difference to watch out
Well, there are lots of factors to distinguish between investing vs gambling. The 7 main differences between investing and gambling some of them are as follows:-
1. Strategy
In investing the investor or the traders depends on their strategy or method or system anything you can call. The thing that I am trying to say is that the person something has to invest their money in stock market to back themselves to trade or invest money in stocks. They have proper systematic plan to invest money. In short you can say that they have some valid points to trade or invest.
But when you look gambling the person looks to trade or invest on the basis of someone’s else decision or news or external factor. They randomly make any decision to invest money without having any plan. They try to check their luck you can say this. And you too know that you never know or you can claim anythings on the basis of luck.
2. Duration
Investing is basically for long term. The person looks to invest for at least 5 years or 10 years or two or three decades. In a short time horizon, in investing is for the long term.
But when you look at gambling people always look to make millions in less time. That’s why the probability of making that is also less and losing the capital is too high.
3. Mindset
The mindset in investing is very positive and optimistic. Because they look to have a proper plan to invest money in stock market. They believe in their hard work and they try different plans which might work for them. They invest in stock market to meet their financial goals.
In contrast to investing in gambling people have the mindset of greediness. They only put money in stock market to have a fun. They are not serious with their goals and all those.
4. Backup Plan
When you look investor or trader they have a back up plan if by chance things not go in their favour they still have some money left to invest the money in stock market. They usually try to first have a backup before putting any money. As I said earlier they are very optimistic people.
But in gambling there is only one way gain or loose. That’s it that’s why you either become hero or zero. They don’t have any back up plan. This is seriously very dangerous to wealth. So be aware of that otherwise you will not take any second to wipe out your account.
5. Risk
In investing risk become very less if you do the proper research, if do your fundamental analysis properly seriously your risk becomes next to zero. That’s why investing with proper knowledge can help you to grow your money without taking any risk.
In gambling, the risk is very high because you don’t know anything about that particular stocks or business or anything where you are putting your money. Because you are only putting money without knowing anything.
6. Stability of growth
If one do proper investing one can assure at least they can make a decent amount of stable income from stock market. Whether you do trading in stock market or investing in stock market. In both case one has the chance to make money from stock every month. That’s you have some surity that one can make stable income from investing.
While in gambling one cannot make stable income. The reason is simple you don’t have any proper planing. You are only dependent on gambling or luck. And you too know that gambling or luck you never what will happen. That’s in this case your stability of growth is not guaranteed. Whether you earn or not.
7. Knowledge
In investing one should require knowledge to make money from the stock market. Atleast some amount of knowledge is required to make a consistent income from stocks. Or if you to grow your wealth than also one should know that.
Gambling knowledge?. Ha ha the person who doesn’t have knowledge does gambling. Because people always look to take a shortcut instead of doing the hard work. Gambling don’t require knowledge.
Investing vs Gambling Quick Overview
| Sr. No. | Fators | Investing | Gambling |
| 1 | Strategy | Yes | No |
| 2 | Duration | Long Term | Short Term |
| 3 | Mindset | Fulfil dreams | Greed |
| 4 | Backup Plan | Yes | No |
| 5 | Risk | Low | Very high |
| 6 | Stability of growth | Stable | Not stable |
| 7 | Knowledge | Yes | No |
Is stock market similar to gambling?
No more suspense I am creating the answer is straightforward. No, the Stock Market is not gambling. Or I can put this in this way how you treat stock market it will as it is look to you. I mean to say if one person do proper homework and does the fundamental or technical research properly then for that person stock market is not gambling. Or if the person just randomly put their money without looking at factual data then for them stock market is similar to gambling.
Well frankly speaking if you don’t know any particular thing every thing will be gambling anything in the world. So that’s why I say again and again learn more and more. If you don’t have knowledge about particular things then you definitely without knowing you will do gambling.