What’s the Difference Between Investing and Speculating?

Answer:  Your time horizon.

From Carl Richards, author of the One Page Financial Plan:

investing-is-not-the-same-as-speculating

More from Carl Richards:

“When people talk about investing, they often confuse it with speculating or trading. This confusion isn’t surprising.  The financial entertainment industry has convinced us that investing success depends on predicting what the markets will do next. But predicting the markets is easier said than done.

As a result, we end up frustrated, even scared, by what we “think” is investing. In reality, investing is about what we want to happen in the long term, not what happens day to day. Investors get to ignore the market’s daily or even weekly performance.  Speculators, however, can’t help but lay awake at night and worry what will happen tomorrow.”