The Difference Between Investing & Gambling

I’ll never forget my first investment on my own. A friend of my father’s was forming a limited partnership. He’d just opened T.J. Cinnamons, a retail outlet that sold sticky buns. And he needed to raise money.

I knew what sticky buns were. I had no idea what a limited partnership was, or the risk I was taking. But hey, this was my dad’s close friend. He was extremely wealthy, very smart, massively successful. So, it had to be a great thing, right?

When T.J. Cinnamons went under, I lost all my money.

It was a priceless lesson.

I learned the difference between investing and gambling, between creating a well-planned, diversified portfolio rather than making scattershot decisions you don’t fully understand.

Picking stocks or bonds haphazardly, following a hot tip or purchasing the hottest stock, trying to time the market (buying when it’s high, freaking out and selling when it’s plunging), or just simply deferring investment decisions to another…that isn’t investing.

That is gambling…pure and simple. Have you learned any investment lessons the hard way? Share in the comments below.

Comments & Feedback

  • Lisa

    When I left the United States 🇺🇸, I was legally allowed to withdraw and take my 401k with me. Instead of reinvesting it, I spent it all!!!! I spent my mutual fund, too!

    Not doing anything like that again! I did use some of the money to start a side hustle that gives me drips and drops of tiny amounts of money, but nothing like one of my investments that just paid me the amount of months salary!

    This has come from small, consistent efforts over the years. It makes me feel like I’m not a victim to society or my circumstances. and more inclined to say no to bad opportunities. My dream to live off interest is starting to happen ❤️

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Meet Barbara Huson

When a devastating financial crisis rocked her world, Barbara Huson knew she had to get smart about money… and she did. Now, she wants to empower every women to take charge of their money and take charge of their lives! She’s doing just that with her best-selling books, life changing retreats and private financial coaching.

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