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  • Writer's pictureFreya Savage

Don't confuse investing with gambling

Everything is so fast, instant gratification is a disease that kills mastery.

The crash diet, the fast investment, the 5minute 'quickie', the device we all carry around with us for a quick dopamine hit.

And so often I see people so desperate for results from their businesses, that if they don't sell their first few programs they are ready to throw soul to the wayside and create cookie cutter bullshit.

People are so quick to decide to shift focus, and often there was never ever any focus anyway, moving through life like a crack addict.

'put in $1,000 and like magic $10,000 spits out, it's called crypto currency, line right up'

And many people line up, mostly because they have no staying power, maybe they think it is too good to be true, but the pull towards 'instant' just grabs them by the neck, and the idea of building wealth over long-term is just well, too long, because 'who knows where I'll be in 20 years'.

It's pretty likely you'll still be alive in 20 years if you're reading this. So you either don't start now and instead you continue to not invest or 'invest' in random get rich quick promises that will most likely loose you a lot of money.

Or you could start investing using strategies that WORK and you'll be very thankful you did down the track.

But people are so focused on time, and the idea of time is what makes people gamble.

Unable to commit unless they are shown results right away. Constantly chasing the next thing, never becoming a master at anything.

If you have accumulated wealth, are building wealth or want to start building wealth you need to know the difference between investing & gambling.

And you need to understand if you are an investor or a gambler.

Most people gamble, and they think they are investing.

Putting money in short-term assets based on pure speculation without any consideration of the below components is gambling.

If you have no investment philosophy, no clear financial goals, no idea about risk tolerance & risk capacity, no knowledge on asset classes, passive vs active statistics & diversification strategies before putting money into anything you are gambling.

Investing in the share market is not a gamble if you have the above and invest in line with long-term statistics that 99% guarantee you come out on top. But most people won't do this because they are so short-term focused.

Averages only work if you do it over the long-term.

To have a solid average that is predictable takes time to compute. In finance it takes decades.

Long-term when investing is not a year, it's not even 5 years, cycles now are up to 10 years, and even that is not really long enough.

Investing is for forever. But it doesn't mean it takes for forever to become financially supported by the wealth you're building.

Investing in companies is great for that because they pay out profits in the form of dividends and that's how you stay invested while still getting paid an income stream.

Trying to build wealth from buying and selling generally ends in disaster. It's a very very dangerous game to play, and you are essentially going against statistics.

I don't invest in anything unless it makes profit from selling a service or a product. I don't invest in anything unless it has a balance sheet and cash flow. If it doesn't have a clear underlying intrinsic tangible value I wouldn't invest in it.

Otherwise it's a black jack table.

If you understand the statistics and averages when investing you're able to create a strategy that is pretty much guaranteed over the long-term. The way that I teach calculates that 99% of the time you will make money over 15 years.

I have no idea what will happen short term, I can guess, but it's not necessary, we don't need to guess.

Lack of time is what creates the gamble, when you remove the short-term focus, returns become almost a sure thing (with quality investments).

When you put pressure for short term results you gamble because the outcome is uncertain.

Long-term investing increases certainty, that's maths, not an opinion.

Short-term retail investors are the parasites of investing. I say that because they disturb the homeostasis of the fair prices of assets, they trade on hype and on emotion, they inflate and deflate prices without any tangible reason, so the intrinsic value becomes distorted from the price.

But eventually over the long-term it settles back to it's fair value, again this is why long-term investing wins, we are able to see the broader view. To not follow the crowd, to stay focused.

Someone said to me recently something like 'in this day you have to gamble because everything is changing so quickly'

Yes and No.

It's the same thing, just a different flavour.

There are always 'hot' things coming into the market and there will always be market crashes, neither of them last.

It's the same shit.

The stock market will continue to exist & it will continue to be where I invest because business will alway exist.

Yes those businesses will look different in 10 years, but the stock market will still be there, and if you're invested passively you will automatically own the 'current' businesses of the time.

The more you start to focus, and decide to commit things shift from a gamble to an investment.

Work on the inner game & REAL financial intellect, because you will get tested and you'll need that to sail through the storm. You'll also be tested with shinny objects, but the master can see through this.

I've re-launched Invest like a Queen, 5 weeks of investment education that will teach you how to understand the investment market & build your own investment portfolio. You can find out more here.

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