Most people believe that speculating is a true investment; however, it’s not. When you speculate, you’re actually hoping that your investment goes up in value, but it is always a gamble. It is no different than going to the casino and hoping to win. Speculation is never about doing your homework, understanding all the risks, or knowing all the pertinent facts that would make your investment a viable one. Speculation is for amateurs.
Real investing is a thorough process that takes time, experience, and patience. When investing in anything, you should always read all the fine print, understand the financials behind the investment, and know all the nuts and bolts about the investment opportunity. You must do your homework. You can’t cut corners. If you don’t have time to do all of the work, my suggestion is to hire somebody with experience and knowledge in the investment subject matter.
Keeping in mind, even after all of that, you can still lose money. It’s all about taking calculated risks and diversifying your investments for the best potential outcome. In other words, don’t put all your eggs in one basket.
Suggested Homework: Study your past investments and identify which were speculation and which were real investments and look at your overall results. That’s your lesson.