Whats the difference between investing and speculating?
In financial terms, investing is a general term where you are putting money to use to generate a profit (grow your money) or gain interest. Speculating is where you are risking money in the hope that in the future it will be worth more than you originally put forward. In general terms, the more risk you take, the bigger the speculation, the greater the potential reward. The key difference between the two is risk. Investing in the stock market could also be described as speculating, since you are putting money to use in the hope that it makes profit, but it might not do so – it might make a loss. However, investing can also mean using a savings account, where the capital is safe and interest added. Speculating is more commonly used for higher risk investments. Investing can also mean putting something else to use, for example, you “invest in yourself” when you undergo training.
