Investing vs Speculating

First decide whether you will invest or speculate.

The most frequent investing Google search is likely to be "investing versus speculating." Ben Graham's explanations of the terms are everywhere online.

I even have a random entry in my notes that I don't remember writing!

But Fred Schwed said (say that three times fast!) it best recently with the following:

"Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little."

To that I'll add that we EACH can be a person with "a lot of money," no matter whether we have it now or not. The following chart shows that when we earn, save, and invest substantial, yet very realistic, amounts regularly, and patiently invest more and more as our earnings grow, the amount we "successfully" prevent from becoming "a little" most certainly becomes "a lot."

So I've obviously decided to be an investor. Being a good speculator seems to me to require too much luck, or maybe incredible skill. And some speculators obviously achieve great results. I agree with Schwed that the chances are too great that I would be an unsuccessful speculator. So I take my chances at being a lucky and skilled investor.