Investing vs Gambling

By Monique Bellamont - August 2019.

There are many ways people can invest their money these days (or gamble with it). Real estate, investing in art, the stock market, foreign exchange rates, insider trading (which is illegal BTW), buying sports memoribilia (baseball cards), stamps, old coins, gold, silver, gambling on stock market futures (which I would argue really SHOULD be illegal), horse races, brick and mortar casinos, and these days online casinos are a dime a dozen.

Whatever happened to investing in local businesses? Or investing in commercial real estate that you can rent out?

Like for example lets say you lived in Hawaii. Yes, you could invest in local real estate in Hawaii. The real estate prices there have been going up roughly 5% per year for the last so many years. So if you bought $1 million worth of commercial real estate there after 5 years you could sell it for a good profit thanks to the value of the property being compounded.

  • 0 - 1,000,000.00
  • 1 - 1,102,500.00
  • 2 - 1,157,625.00
  • 3 - 1,215,506.25
  • 4 - 1,276,281.56
  • 5 - 1,340,095.64

    Rent out the property during that five year period and you would collect rental fees, minus expenses, minus property taxes, and you would probably still be up an extra $500,000 after 5 years from your initial investment.

    And if anything goes bad (eg. the real estate market suddenly tanks) you are sheltered by the fact real estate is called real estate for a reason. Even if the market sours it is still land and still has value.

    Now not everyone has $1 million just laying around. And lets face it, the stock market in the Trump Economy is starting to look like a real "Trump Recession". When it finally hits the next recession is going to be HUGE thanks to Trump's Trade War. Couple that with TrumpCare (his el cheapo version of ObamaCare) and many Americans are going to lose their jobs, their homes, their savings, and in some cases their lives because they won't be able to afford healthcare.

    And lets face it, if you don't have a lot of money what do you do? Well, for starters you don't have any money to invest so lottery tickets and online casinos start to look pretty darling when you are down on your luck and desperate, willing to try anything. Many of these online casinos even offer sign up bonuses.

    Now what I don't understand is how people gambling on these websites don't realize when to cash out. Let me give you an example. Lets say you find a gambling website which gives you a $100 bonus for signing up with them (which usually means you had to deposit at least $100 in the first place during the signing process). So you deposit $100, they give you an extra $100... what is to stop you from just making one $1 bet and then changing your mind to withdraw your $200 later?

    Like I assume there is probably time limits and other rules so you cannot just cash out immediately. And probably a minimum payment requirement. eg. If the minimum payment is $500, couldn't you just deposit $400, take your $100, and then cash out as soon as possible?

    I must be missing something here. Maybe it is because I don't gamble.

    Is it because they make the games full of flashing lights and bright graphics that they stimulate the brain to make these online gambling games super addictive? That puts it on par with Pokemon Go, a game which is technically free to play and encourages you to go outside and exercise. (A game I do in fact play, because the only requirement is time and sweat and I get the bonus of burning calories.)

    Do I own stocks in the stock market? Yes.

    Would I bet on horses at the racetrack for fun? Yes.

    Would I invest in real estate if I had lots of money already? Yes.

    Would I bet on something that was a sure thing (I am guaranteed to win)? Yes.

    Would I give a lot of my money to an online casino with zero intention of withdrawing it for a profit at the first opportunity? No.

    The whole point of investing (or gambling for that matter) is that you need to withdraw your money before the proverbial ball drops. Before the stock market crashes, before the real estate market crashes, before you lose all your money on some stupid bets.

    The whole point is to QUIT WHILE YOU ARE AHEAD. Buy low, sell high.

    This is why problem gamblers are so often, in my opinion, morons who think they are smart. They think they are somehow gaming the system, that somehow they will get their money back, that they will get lucky and get everything they lost back.

    Look at Donald Trump for an example of a moron who thinks he is smart. He bankrupted his own casino. How dumb do you have to be to lose money while running a casino? Super dumb, but also completely delusional.

    I had a math teacher once who liked to gamble. He was into calculating the odds and owned his own race horses. But here is the fun fact... he rarely bet on his own horse. He bet against his own horse. And that my friend is how you bet on "a sure thing". You own the horse, you rig the race.

    And yet Donald Trump still lost money on his casino... How in the world of rigged tables and rigged slot machines did he manage to do that? Sheer idiocy and delusions.

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