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.
