One of the biggest oversimplifications commonly made about investing in the stock market and other securities — and one which I believed myself, for a while — is that it’s “just another type of gambling.” This is a common refrain from people who are apprehensive about investing themselves, or who for whatever reason want to discourage other people who are interested in investing. Or, for people who have actual gambling addictions and want to make some sort of false equivalency so they won’t be as harshly judged by others or themselves (gross).

Either way, I think that it glosses over a lot. But we can run with that analogy and use it to show why investing — whether or not you consider it a form of gambling — can be a reliable way to build wealth, with no dumb luck involved.

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