While investing and gambling may seem similar in that you weigh risks against returns, put down money and hope to get even more back, there are key differences.
Gambling means putting money down and either losing it all or winning big. While you may employ strategies, the odds are ultimately against you, and your risk level only increases with every bet you make.
Investing, however, means purchasing assets that make up a portfolio, which, when strategically diversified, has the possibility to generate continuous returns. Unlike gambling, the more you invest over the long-term, the more likely you actually are to maximize returns. In fact, investing typically sees annual returns of about eight to 10 percent since companies have a financial interest in making sure that their shareholders are rewarded. In this case, the odds may be in your favor.
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