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The main differences between investing and speculating are as follows:

1. Significance

Investment: It is a purchase of assets with the expectation of a regular return.

Speculation: It is a financial transaction with the expectation of a capital gain or a substantial gain.

2. Planning

Investment: It is a long-term plan (at least a year or more).

Speculation: This is a short-term plan (only for a few months).

3. Risk taking

Investment: it involves only a modest risk.

Speculation: It carries a higher risk.

4. Expected return

Investment: Expect a modest return due to the moderate risk.

Speculation: Due to the higher risk, a higher return is expected.

5. Leverage

Investment: The investor's own funds and real estate are used.

Speculation: Usually, loans are used by others.

6. Type of income

Investments: The income is secure and stable with investments.

Speculation: Income is uncertain and unstable when speculating.

7. Behavior

Investment: Investors have caring and cautious behavior.

Speculation: Speculators are careless and daring.



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