When you think of investors and entrepreneurs, Bill Gates, Elon Musk, and Warren Buffett are probably the first names that come to your mind. Nobody ever associates investing with gambling, but there’s so much wisdom you can take away from the gambling world if you don’t work a traditional 9-5.
There are many similarities between investing and gambling. Professional gamblers and those who have made a fortune from gambling are entrepreneurial because they take calculated risks and compete against others in card games or online slots.
In financial markets, too, there’s always risk involved, and someone who bears the brunt of acquiring losses in the long run. We’re sure you can see the big picture now.
While it seems as though there’s nothing good about gambling, there are a lot of business values to learn from it. In the upcoming paragraphs, you will discover five business strategies you can learn from gambling.
Table of Contents
1. Never Follow the Crowd
Being an entrepreneur requires decision-making, and sometimes it may be unpopular. Wise bettors know they have to research to decide instead of following what others are doing.
Following the crowd is an insult to your intelligence. You’re capable of making well-informed decisions; taking the easy way is all fun until it leads to premium tears.
Similarly, as an investor, buying a stock others are buying without adequate research is a huge mistake. Whenever a stock has become popular, and most people are buying it, it’s a surefire way to know that the price will eventually decrease.
2. Choose the Right Balance between Risk and Reward
To avoid the risk of addiction, wise gamblers only stake what they know they can afford to lose. They have a budget that keeps them acting out of impulse and emotion. An investor also needs to tap into this wisdom.
Assess your risk and possible reward and weigh your options before investing or starting that business.
3. Choose the Right Timing
Yes, risk assessment pays off, but choosing the right moment to strike is even better than that. Professional poker players, for instance, don’t go to the casino every day.
They wait for the people who have low skills and large amounts to wager before coming to the casino with skills that can earn them a big payoff. Even sports bettors do the same as they wait for the odds to be in their favor before making bets.
Timing is also a crucial factor in business and investment. You need to know the right time to sell a share as an investor, i.e., when prices are soaring or are expected to come down. Entrepreneurs also face the same. If your business is seasonal, you know you have to up your game when it favors your business.
4. Cut Your Losses Fast
Pro gamblers understand that sometimes it just doesn’t work in their favor regardless of the level of research or skill. They also understand that dwelling on losses isn’t healthy. If a strategy doesn’t work and you lose money, learn from it and choose another plan till you find one that works.
It’s the same with the trading market. If you invest in something that causes losses or start a business that fails, learn from the mistakes you made but never give up or let your mistakes ruin everything.
5. Don’t be Greedy
Casino games like roulette are where you see greed come into play. If a gambler gets a life-changing winning streak out of luck, some unwise ones put all of their earnings back in, only to end up losing it all. Greed is terrible and can leave you hopeless and homeless in one second in gambling.
It’s the same with investing and entrepreneurship. If a stock’s profit is soaring for a while, it may continue to do so but putting all your earnings in with the intent of making huge profits can backfire.
Investing, entrepreneurship, and gambling are more similar than you think. It’s important to assess your risks, stand firmly on your decision, choose the right time, not dwell on your losses, and avoid greediness. As an investor or business owner, you can gain insight into gambling and incorporate it into trading if you want to stand out from the competition.