Tuesday, February 5, 2013

How to Get Rich - Invest Don't Gamble

Do you think that investing in the stock market is like gambling ?

Are you afraid of rolling the dice on an investment ?

If you are like many, this is a common misconception !

What Is Gambling

First of all, let me say that gambling is an addiction that will kill your financial dreams. Gambling is based mostly on emotion and very little on logic. Most games of chance are designed for you to lose money. The lure of a potential big payout is what keeps people coming back for more.

Casinos and Lotteries are big business today. They know that human nature will always take the easy path and hope for the instant windfall. Sad to say that this is the world's biggest legalized scam today. Yes, governments even run lotteries to boost their tax revenue. It works well for them.

What Is Investing

Investing on the other hand uses mostly logic and understanding of how money is made. Emotions play a very small part in actual investing. A well educated investor takes very little risk when investing his/her money. For example, an investor would buy shares in the above casinos and lotteries which are almost guaranteed to make big profits. This is certainly not gambling.

Where The Problem Lies

The problem with the investment world is that there have been and still are many dishonest individuals selling uneducated investors on fast easy profits. They hardly ever promote the high risk along with their high reward potential. The result is most of these uneducated investors lose their money. Hence these people consider investing the same as gambling.

Stories of losing money eventually spread and the uneducated individual believes that investing is the same as gambling. This misconception will likely continue until more individuals become better educated.  

What To Do

If you want to become truly wealthy, become educated first. Learn the differences between gambling and investing. Never invest in something that has a high risk of failure. Never invest in something that you don't totally understand. Never invest in something that doesn't put money in your pocket every month or every quarter.

You must learn not to believe the promises of huge profits by promoters of so called investments without careful examination. Many pad their own pockets first and leave the unwary investor to hold the obligations of the future enterprise. A very bad situation for most.

Education is your key to building a bright financial future. Continue learning.

As always, I welcome your comments and suggestions for future topics.

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