Life Is a Gamble. Investing Is Just One of the Smarter Ones.

I was catching up with some old friends and colleagues recently, sharing how I’ve taken an unpaid leave of absence—and how, thanks to years of frugal living and solid investing, I’m financially secure enough to make that choice. I got a mixture of responses including congratulations and curiosity. However, I also got one response that really surprised me:

“Well, that’s just gambling.”

It caught me off guard. Not just because it felt dismissive, but because it touched on something deeper. It made me reflect: Is that true? Was I just lucky? Are my successes built on skill, hard work, chance, or some blend of all of these factors? And what really is gambling, anyway?

This question unraveled a thread that went far beyond investing. I started thinking about risk, control, and uncertainty—not just in markets, but in all of life. And I came to believe that asking whether investing is gambling reveals more about how we think about meaning, agency, and possibility than it does about the nitty gritty of investing research.

A Personal Journey: Luck, Hard Work, and Choices

My own path to financial flexibility has been a mix of luck, hard work, and good decisions — but also moments of bad luck. Growing up, my immigrant parents instilled in me a strong frugal mindset. They were introduced early to investing by a friend who taught them about mutual funds well before they became mainstream, and they drilled the value of long-term investing into me. Alongside this, spending many years in academia reinforced my belief that material things were not necessary for happiness. The combination of frugality and contentment with simplicity gave me the mindset to save diligently and eventually invest.

For most of my 20s and into my early 30s, I was content to pursue academia, focused on graduate school and postdoctoral research on a modest stipend. During that period, I faced the harsh realities of the financial crisis, struggling to find jobs and enduring low income well into my 30s. Investing was barely on my radar; my energy was spent on learning and surviving.

Then, I was fortunate to land a job at Illumina during its high growth phase. There, performing well in R&D meant receiving stock compensation, which I prudently saved and reinvested. That accumulation of equity and savings gave me a foundation.

It’s this foundation that eventually allowed me to take bigger risks — like joining a startup and even taking an unpaid leave of absence when life circumstances called for it. I wouldn’t call myself “rich,” but I have enough security to create more flexibility in my life. That’s the payoff of a combination of luck, persistence, frugality, and embracing calculated risk.

What Is Gambling, Really?

At its core, gambling involves risking something of value on an uncertain outcome in the hope of winning something more. So defined, all investing contains an element of gambling. But not all gambling is equal.

According to philosopher Roger Caillois, gambling is a form of play—”alea”—in which fate rules entirely. In contrast, investing attempts to add skill and information to that equation, transforming aleatory risk into something more calculated.

This is where we must begin to distinguish:

Gambling: A zero-sum or negative-sum game, like roulette or lottery tickets, where over time the house wins.
Speculation: Trading based on price movements rather than underlying value; often short-term and emotionally driven.
Investing: Allocating capital toward assets with the intention of generating long-term productive returns.

But even the best investment comes with uncertainty. So what really separates smart investing from roulette?

Investing vs. Speculation vs. Gambling: A Spectrum of Risk

Imagine a spectrum:

Strategy	Time Horizon	Skill Input	Expected Return	Behavioral Risk
Gambling (slots, lotto)	Instant	None	Negative	Very High
Crypto day trading	Hours	Low	Highly Variable	Extremely High
Options speculation	Days–Weeks	Medium	Variable	High
Stock picking (informed)	Years	High	Positive	Medium
Index investing	Decades	Minimal	Historically Positive	Low

As research by Arthur, Williams & Delfabbro (2016) shows, speculative trading habits and traditional gambling behaviors share empirical and psychological traits, such as impulsivity, sensation-seeking, and addiction vulnerability. So it’s not merely about what you’re doing—but how and why you’re doing it.

There are some investors who take exception to calling all investing gambling, and some who think the very best pathway is to do so only in a slow but effective way with broad index investing. Ramit Sethi and Tae Kim (Financial Tortoise) both advocate for this approach. Their arguments are that based on all of the past data, broad index investing is so low risk over long periods of time that it shouldn’t be called gambling at all.

I’d like to frame investing as a spectrum of choices/strategies and risk levels with varying impact, which all can be some form of gambling. But not all gambling is necessarily a “bad thing” or “just luck.” In fact, I think it is a necessary part of life in general where we gather and analyze information to try to make the best decisions.

Here is some additional interesting discussion about this topic:

“Investing is based on strategic decision‑making and research, while gambling is based on chance and luck. Investing is also a long‑term strategy aimed at growing wealth, while gambling is often a short‑term thrill with the possibility of losing money.”
— Remote‑Direction963, r/AskReddit

The Brain Science of Risk and Reward

What drives people to take on traits of high risk gambling for investing?

Behavioral economics and neuroeconomics offer deep insight. According to prospect theory (Kahneman & Tversky), humans consistently overweight small probabilities (e.g. dream of hitting it big) and underweight high-probability modest returns. This is why “lottery stocks” or YOLO options seem exciting—even when they’re bad bets.

Meanwhile, brain imaging studies reveal that speculation activates the dopaminergic reward pathways similarly to addictive behaviors. As Annie Duke notes in Thinking in Bets, our brains crave certainty and reward, often at the expense of rational analysis.

My guess is that some people observe these problematic behaviors in investing, and as a result label investing as gambling.

Gambling as a Metaphor for Life

Let’s widen the lens. If risk and uncertainty define gambling, then we gamble far more often than we admit:

Picking a partner is a long-term bet on compatibility.
Buying a house is a wager on the housing market, location, and structural soundness.
Choosing a career is a leap into an unknowable future economy.
Having children is perhaps the biggest gamble of all, with genetic, environmental, and societal risks built in.

And yet, we rarely call these decisions gambling. That’s because we’ve accepted that a meaningful life demands risk. As Simone de Beauvoir suggests, to act freely is to take a gamble. Avoiding risk entirely is not prudence—it’s paralysis.

What’s Not Gambling?

Only a few things in life are truly certain and don’t involve choice (death, which parents you were born to, where/when you were born, and change)

Everything else involves chance, decisions, and trade-offs.

But here’s the paradox: choosing not to invest can actually be the riskiest gamble of all. Investing is a kind of gambling—but so is almost everything else we do in life. The difference is in the nature of the risk, the timeframe, and the potential reward.

If you avoid investing entirely, your options for achieving long-term financial independence become much narrower. Realistically, you’d need to:

Work in high-paying jobs continuously into your later years
Live with extreme modesty and frugality for decades
Inherit substantial wealth
Or marry someone who did

None of those paths are guaranteed—or necessarily desirable. So while investing is a gamble, not investing is often a bigger one: you’re betting against inflation, against time, and against the odds that you’ll earn or inherit your way to financial freedom.

Investing as Enlightened Gambling

Smart investing is about placing asymmetric bets: small, well-calculated risks for potentially large rewards. This is what the Kelly Criterion—borrowed from gambling theory—tells us: bet proportionally to the edge you believe you have, and never over-bet your bankroll.

This aligns with the views in Moffitt’s Strategic Analysis of Financial Markets, which reframes markets as competitive arenas where smart players anticipate the irrational moves of others. Investing becomes less about certainty and more about calculated uncertainty—strategic gambling, not blind faith.

Investing, Luck, and Virtue: Challenging Common Perceptions

Many people see investing simply as gambling—an arbitrary game of chance or a tool for the wealthy to get wealthier. But from the perspective of virtue ethics, investing can be understood as a meaningful practice of earned increasing prospects of life. This view challenges the common narrative that investing is merely luck or privilege.

Aristotle’s concept of phronesis, or practical wisdom, applies beautifully here. Wise investing requires cultivating virtues like patience, prudence, courage, and temperance. It’s not about blind risk-taking or reckless speculation; it’s about making informed, deliberate choices over time, learning from mistakes, and adapting to new information. Investing becomes a practice in character development—an exercise in navigating uncertainty with discipline and integrity.

Yet, it is critical to acknowledge that not everyone starts from the same place. Life circumstances—such as being born into poverty or systemic inequality—limit options and access. For many, investing isn’t just about virtue; it’s about survival and overcoming structural barriers. Luck, in terms of one’s starting point, matters deeply and shapes what kinds of “gambling” or risk-taking are even possible.

Recognizing this does not diminish the role of personal responsibility or virtue; rather, it invites a more compassionate and nuanced conversation about investing. It encourages us to see investing not just as a means to accumulate wealth, but as part of a broader ethical journey—where effort, character, and context intersect.

You also have the power to support and affirm your virtues by investing in areas/companies you really believe in that have a positive impact based on your values and beliefs, whether through stock investing in companies in which you believe in their missions, or angel investing when you are wealthy enough. For example, I personally like investing in biotech companies in which I believe in their promise to cure, prevent, or treat diseases.

In this light, investing is less a gamble and more a lifelong pursuit of practical wisdom in managing uncertainty, finding meaning with your personal virtues, and cultivating a flourishing life.

Conclusion: Investing as a Form of Life’s Gambling — Wisdom Over Greed

Investing is undeniably a form of gambling—like the vast majority of decisions we make in life. But it can be much more than a mere game of chance. When approached with discipline, humility, and a mindset of learning, investing becomes an opportunity to gain wisdom, increase flexibility, and improve your prospects for a fulfilling life.

This stands in stark contrast to investing driven by greed or the pursuit of unnecessary material possessions. True investing is less about amassing wealth for wealth’s sake and more about creating options that align with your values and long-term goals.

In embracing investing as a deliberate form of gambling, you acknowledge life’s inherent uncertainties while empowering yourself to navigate them more skillfully. It’s not about avoiding risk—it’s about cultivating the wisdom to take the right kinds of risks, for the right reasons.

So, yes: life is a gamble. But investing is one of the smarter bets you can make.