Investments and speculation – Which one is rich fast? There are many ways to make money. Depending on the time and “taste” that form is also different. There are deals where someone wants a quick profit in a short time. Some people accept sustainable gains in the future. So, what is the best overview?
Similarities and differences between investments and speculation.
In general terms, if the purpose is money then there will be two schools of investment: speculation and investment. The goal of these two schools is nothing more than profit. Is there any difference between investment and speculation just the “harvest time” and profit margin.
We temporarily call speculation “short-term investment”. The purpose of speculation is to make short-term profits by scarcity of goods (resources). Speculators will collect goods at a time when prices are low and create scarcity. After market – users no longer have much choice. They will push prices up very fast and sell high prices to take profit in a short time.
Participants can be an individual or an organization (group of people).
Advantages of speculation
Make quick profits and withdraw quickly. There is no need to care too much about the long-term benefits. Every profit high enough sold out.
Disadvantages of speculation
A large amount of money may be required to conduct “manipulation.” The value created for the community may not be as high or almost none. It merely pushed up the selling price and then sold off. Long time will become a habit, until a certain time speculation failure will be nothing. And usually because speculation needs big money, it will involve interest. So speculation is very stressful and stressful.
Note: Speculation is not for less experienced people.
Medium to long term investment
Simply put, you accept to sacrifice “temporary spending”. In other words, you will spend less to spend on an asset with the ability to increase prices in the long run. Usually the holding period is quite long (can last from a few years to a few dozen years).
Long-term investment advantages
“Sweet fruit will come to the patient.” The reward can be huge and you may not be under such enormous pressure as the speculators. If speculation fails, it can be exhausted, and the investment you have determined to leave it for a few months, a few years, you do not need to care much about it.
In fact. There are many assets that can hold for a long time and the profits can be even higher than when speculating. Some popular investment channels. They are: Real estate, financial assets – stocks – bonds or cryptocurrencies … Each type will have its own advantages and disadvantages depending on investors’ expectations and “taste”.
Disadvantages of long-term investment
Specifically, “the fruit takes a long time to get impatient”. The down side of this school is the result to “quite long”. So if the spirit of “Keep the tangerine season next year” or “Leave it to the descendants” is not available, it is quite impatient…
In fact, some investment channels can meet this demand “want to keep but also want to be profitable”. Specifically, the real estate, you let the price rise for a long time, increase slightly, then I rent. Or holding stocks and I eat dividends all year round is not bad. Or softer can leave banks to take interest.
Investment and speculation have different advantages and disadvantages. You should consider before deciding to down money with any investment channel outside your field.
If you want to allocate your investment channel and find a sustainable investment channel. You can see more article: Sustainable investment with Eco points.