Las Vegas skyline at night

Two Big Ways in Which Investing and Gambling Overlap

This week calls for a bit of celebration. Seeing as my wife and I are now both fully vaccinated, we decided to travel to Las Vegas and meet up with a couple of friends. In addition to resort hopping and gathering material for future Travel Tuesday reviews, I’ve also taken to playing a bit as the mood strikes me.

At the same time that I’ve been hitting up the Strip, the stock market and other investments such as cryptocurrencies have had a bit of an interesting week. This got me thinking about some of the ways the gambling and investing are actually alike — as well as how they’re quite different. Here are a couple of examples that came to mind:

Don’t Invest or Gamble More Than You Can Afford to Lose

You had to see this one coming, right? It’s easily one of the most important rules of investing and gambling — and for good reason. I always advise that, before you pour money into a slot machine or into a stock, you should be prepared for that money to burst into flames. Otherwise, you could end up putting money at risk that you can’t actually afford to lose, which is really just tempting fate.

Being realistic, the odds of losing everything by investing in an S&P 500 ETF versus the odds of going belly up at the Craps tables are massively different. Therefore, there’s really wiggle room to that first rule (such as I wouldn’t advise workers not to invest in their 401(k)s just because they can’t really afford to lose those funds). Still, as a general principle, I think it applies.

Keeping Your Emotions in Check

To paraphrase the Most Interesting Man in the World (he’s still relevant, right?), “I don’t always gamble, but when I do, I prefer Blackjack.” As many amateur Blackjack players likely know, to give yourself the best chance at succeeding at the game, you should adhere to the rules of Basic Strategy — often humorously referred to as “BS.” By playing perfect BS and selecting tables that play by the most advantageous rules, players can limit the house edge to fractions of a percent. However, not only does it take a lot of practice to memorize the basic strategy table but following its teachings in theory can also be a lot easier than doing so in practice. For example, hitting on 16 can be scary given the likelihood of a bust and doubling down when you’re supposed to can be complicated if you’re watching your chips stack dwindle. Yet, while these plays certainly won’t work out 100% of the time, they are what’s right in the long run.

This is quite similar to investing, where emotions can often lead consumers to make mistakes. An obvious example involves market dips and even crashes. As is often said, the only way to lock-in market losses is to sell. Thus, it’s typically advised that long-term investors “stay the course” and resist the urge to panic sell.

Of course, something to note here is that “staying the course” means two very different things depending on whether you’re talking the stock market or the Blackjack table. For long term investors, it may be best to shrug off losses and wait for a return. However, to some, that might equate to chasing your losses in gambling, which can be dangerous. Instead, the course that you’re staying is playing to your basic strategy, not assuming that you’re bound to win if you just keep playing.


The line between investing and gambling can often be blurred, with one only needing to look at the rise in stocks such as GameStop and AMC for evidence of that. But, the truth is, the two activities may have even a bit more in common than some financial experts may be willing to admit. Ultimately, regardless of whether you’re investing, speculating, or just straight up gambling, knowing your risk tolerance and adhering to it is what’s most important. Good luck!

Author

Kyle Burbank

Founder ~ Moneyat30
Kyle is a freelance writer - including being the head writer for Fioney.com. He also serves as editorial director for the Disney fan site LaughingPlace.com and the founder of Money@30.com. In 2015, Kyle and his wife Bekah moved from Los Angeles to Springfield MO in pursuit of greater financial freedom. Together, the pair enjoy travel, coffee, and spending time with their dog Rigby. Additionally, as of 2023, they become first-time homeowners.

Other Articles by Kyle Burbank

bed at Tru by Hitlon Wichita

Hilton is Offering Double Points on Hotel Stays This Summer

Hilton is making it easy to earn bonus points on hotel stays this summer. For stays from May 2nd to September 2nd, Hilton Honors members can earn 2x points. All you need to do is register on the Hilton site and you'll be good to go. Of course, you will...
Solis 5G alone and attached to a backpack

2024 Solis 5G Mobile Hotspot Review

For years, I've been a regular user of Solis mobile hotspots and have used them for several international trips (and some domestic). Of course, as the years have gone on, my Solis 1 device has grown a bit old. While it still works just fine, it has been discontinued and...
working off a Solis WiFi Hotspot

2024 Solis WiFi Hotspot Review: Using the Skyroam Solis Lite Overseas

As someone who regularly “workations” and relies on a solid Internet connection to be productive while traveling, it’s kind of crazy that I went without a WiFi hotspot for so long. That’s mostly because I had never come across a particular device that jumped out at me.  Well, that was...

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get Posts in Your Inbox
Featured Articles
bed at Tru by Hitlon Wichita

Hilton is Offering Double Points on Hotel Stays This Summer

Hilton is making it easy to earn bonus points on hotel stays this summer. For stays from May 2nd to September 2nd, Hilton Honors members can earn 2x points. All you need to do is register on the Hilton site and you'll be good to go. Of course, you will...
Solis 5G alone and attached to a backpack

2024 Solis 5G Mobile Hotspot Review

For years, I've been a regular user of Solis mobile hotspots and have used them for several international trips (and some domestic). Of course, as the years have gone on, my Solis 1 device has grown a bit old. While it still works just fine, it has been discontinued and...
working off a Solis WiFi Hotspot

2024 Solis WiFi Hotspot Review: Using the Skyroam Solis Lite Overseas

As someone who regularly “workations” and relies on a solid Internet connection to be productive while traveling, it’s kind of crazy that I went without a WiFi hotspot for so long. That’s mostly because I had never come across a particular device that jumped out at me.  Well, that was...
Current Rewards music app

Current Rewards (Current Music) iOS App Review

Some time ago, Instagram introduced me to an app called Current Rewards — also known as Current Music (and not to be confused with the neobanking app Current). For a time, I got pretty into it and even purchased the Mode Phone, which took the Current Rewards concept to a...