The rate of inflation have been faster and higher than any point of time in the history and everyone is fighting against it. Other than living below your means and to save, which is definitely not enough, there are actually many ways to fight this inflation. In which a dollar that we try to save today, should be at least a dollar or more(hopefully) for years to come. Now think about how much it costs to buy anything 10 years ago, and the price it costs now. On average, probably a near 20% increase. We tried to google and found a website that helps you understand it better.
THAT. IS. CRAZY. No matter how we look at it, we live in a system that is not sustainable. In the example above, your $20 has to be about $24 in 10 years time. So how do we go about doing that? One of the ways is to invest.
What is an investment
The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.
To further elaborate, it can be spending money, time, effort on something, and expecting a return. It is an act of analysing and committing, and not guessing and hoping for luck to be on your side. There are definitely risks involved, and there are no guarantees.
Investment has always been looked at as planting a tree, for example. You have to put in indefinite amount of time, effort and some spending for nutrients so that it grows well. You may decide to sell it if the progress is too slow, or when you think you have maximise your gain from this investment. Some people choose to sell it away, or give it away so that other people can continue with them. During the investment, you cannot guarantee that your tree will not be uproot by someone else, or even safe from natural disasters. These are the risks that you can try to prevent as much as you can, but have no control over them.
What is a gamble
Gambling is the wagering of money or something of value (referred to as “the stakes”) on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods.
We find these sentences sum up just everything. Although both have similarity, which is the intention to obtain additional income or profit, the difference is that investment requires a lot of backing from research, study and statistics, while gambling is basically a wager of an outcome.
Current views of people have already classified products in the market as investment and gamble.
The common products for investment are:
– mutual funds
– real estate
And for gambling:
– poker cards related games
– all sports games
How is it investment and how is it a gamble
Investment are looked at long term. Never is it looked at as a one off trade. Some may say that a long term investment is never going to be traded, and is usually to ride on the wins. It really depends on your strategy and what your targets are. Some may choose to cut their loss at 10% deficit, some may want to trade when they are at a profit of 20%. There are many strategies revolving around the market, and it really depends on each’s appetite.
Gambling on the other hand is exactly the opposite. It is traded at a game by game level. It does not allow a time frame factor to come in place, and a deciding factor to trade once more when you are profiting or at a deficit. Once the game is over, the fate is sealed and it usually ends here.
At Boon Investment Club, we think that it is very much still based on the mentality of the investor, if the products are becoming an investment or a gambling tool. The irony here is that, you can gamble in investments, and you can invest in gambling. It’s what you do and how you intend to grow your capital. We have seen people trying to guess that a certain stocks counter may increase or decrease in price, and often placing a bet on the contra system. We have also seen people investing long term on different games, with a system that claim to profit.
Our opinion is simple. The objective here is to profit. If you have a system that works for you and is profitable, that to us is investment.