Is Gambling the Same as Investing?

One of the underlying things I’ve noticed with my investments is that exciting and sexy deals are often some of my least favorites and the ones where things are most likely to go wrong. 

I’ve had lots of investors (and my mom) ask me “Isn’t investing just gambling?” If you invest in a stock, you actually own part of that company. If you invest in 200 unit property, you are an owner on a multifamily investment. If you put “invest” $100 into blackjack, you aren’t suddenly a part owner of the casino.

For those of us who spend a weekend once or twice a year in Vegas, I think we can agree that our gambling is almost entirely speculative. While there is no investment that doesn’t have some degree of risk, the beauty of multifamily investing is that, after thorough analysis, we can make an investment that simply has “speculative factors” and isn’t in and of itself a speculative investment.

Before investing in any of Noir Capitals deals, a good question to ask us would be “which areas of the underwriting were most speculative and how did you determine what projections to use?” Then see if you agree with us. 

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

– Paul Samuelson, First American Winner of Nobel Prize in Economic Sciences

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