Is there a hard threshold? Do high risk investments such as penny stocks qualify as gambling? Do low risk investments? Annuities? Bonds? CDs?

This comment got me wondering.

Is it more to do with the venue? Stock markets and real estate vs casinos and the lottery?

Were the MIT Blackjack Team gambling or investing?

Or Jerry and Marge Selbee?

Is this just another semantic hotdogs are sandwiches discussion or is there an agreed threshold?

  • BombOmOmEnglish
    2•6 months ago

    Buying enough lottery tickets to guarantee a payout just ensures you lose money as the house always takes a cut. Investing, unlike the lottery, has the benefit of not being a zero sum game. There is wealth generated and buying something like an index fund and holding for years puts you in the group making a profit along with everyone else.

    Example: If you bought VTI (an index fund) just before the 2008 crash (and subsequently lost a bunch of value during the crash), you would still be up 257% today. And that isn’t some outladish example; do the same with the S&P 500 and you are up 279% today. Purchasing for the long term and with a wide array of stocks is investing.

    Edit: And in both of those examples you would be earning dividends the entire time as well, which is not part of the quoted %.