A non-profit startup accelerator for female founders.
The Odds are in My Favor: You Can Bet on Me
Are you investing or gambling when it comes to business?
Don’t confuse me with Katniss Everdeen, I am not volunteering as tribute, nor do I consider myself a huge gambler when it comes to my life. I wouldn’t rate slots, card games, or horseraces as my favorite activities. Even though I personally don’t see the appeal, there are plenty of people who do. It seems like Derby Day is practically a national holiday, but I’d rather not participate. When it comes to investing vs. gambling, I would consider myself more of an investor.
What’s the difference between an investor and a gambler? I found myself pondering the answer to this question while I was running at the gym the other day. It seems so obvious, yet, when I really thought about it, I questioned if I really knew the difference. An investor has a positive connotation, and a gambler a negative connotation. However, they are both after a reward, and they both rely on some amount of luck to get what they desire. After realizing that no one is a Miss Cleo and can predict the future, I set out to define what an investor is, and what makes them different from a gambler.
I CAME UP WITH FOUR KEY DIFFERENCES:
1. Investors take risks. Gamblers take chances.
When I think of taking a risk vs. taking a chance, strategy is what separates them. Investors know their cards and when to play them. Gamblers don’t have a strategy; they throw down their chips and hope for the best. Gamblers rely more on luck than knowledge. An investor uses their knowledge to take a risk as a part of a bigger picture. There are no guarantees, but using strategy to take a risk vs. taking a chance has a higher probability of success every time.
2. Investors seek a return. Gamblers seek to win.
#Winning? Winning and seeking a return may seem like the same thing. I would argue, though, that winning is selfish, and seeking a return implies that something has been given. Winning only benefits one. When an investor gives up their time, money, expertise, etc., they are doing it not only to benefit themselves, but also to benefit another.
3. Investors have vision. Gamblers can’t see past lunch.
The difference between an investor and a gambler is that investors can visualize the endgame when the game has only just begun. Gamblers, on the other hand, only live in the present. While it is good to live in the present, if you do not have your eyes set on the finish line, the chances of crossing it are slim. Investors can see the potential future in something, and that is why they invest. Gamblers are not thinking about tomorrow, thus when tomorrow comes, he or she will not be prepared.
4. Investors practice disciplined. Gamblers rely on emotions.
Investors say no more than they say yes, and gamblers say yes more than they say no. From choosing not to eat that piece of cake, to passing on a million dollar deal, it takes discipline to be an investor. It means carefully weighing the pros and cons and sometimes saying no when you want to say yes so badly. Practicing discipline requires strength, or not being ruled by one’s emotions. The difference between gamblers and investors is that a gambler’s emotions lead them to make bad decisions, while an investor’s discipline leads to the desired outcome.
Now that you know the difference between an investor and a gambler, ask yourself these questions to determine if you align more with one or the other:
Are you taking calculated risks with your budget, or are you guessing?
Are you seeking to win for yourself, or investing in others to see a mutual return?
Do you have vision for the future of your business, or are you only focused on today?
Are you disciplined enough not be ruled by your emotions when making a decision about your business?
When it comes to your business, finances, and life in general; are you investing or are you gambling?