Gambling and I have a pretty rough history.
In my 20s I lost many thousands of dollars gambling.
I didn’t know at the time but it was a coping mechanism for my undiagnosed Attention Deficit Disorder (ADD).
I started on medication in 2008, went through a lot of therapy at the Centre for Addiction and Mental Health (CAMH), and eventually stopped gambling for good in 2011.
For the last 7 years, I’ve been very careful to stay out of anything that might be considered gambling.
My measure of whether something is gambling or not is: did I spend money on something with the hope that it would make me money.
For example: Fast food contests like McDonald’s Monopoly and Tim Horton’s Roll Up The Rim are fine as long as they don’t change my spending. However if during the McDonald’s Monopoly contest period, I start eating all of my meals there in the hopes of winning a $25,000 prize, then maybe there’s an element of gambling there.
Of course, buying something that will hopefully make me money is also the definition of investing.
So what’s the difference between investing and gambling?
I own many shares of exchange-traded funds(ETFs) and some blue chip Canadian stocks(see my post on How to Buy Stocks for FREE!).
I bought these investment products and I hope they grow and pay me dividends.
But clearly investing in financial products that grow over time and pay regular dividends is not gambling, right?
So how do I know if something is investing or gambling?
MY CRYPTOCURRENCY EXPERIMENT
To be able to write about Bitcoin and Ethereum in my post “WTF is Cryptocurrency?” I bought a little bit of each.
I decided that it would make it more interesting and real if I actually went through the process with real money.
And when I got to the point where I had to figure out how to transfer cryptocurrency from one exchange to another, the amount had to be large enough that I would feel concerned waiting for it to show up on the other side. But also small enough that I could afford to lose it all and it not affect my life in any significant way.
I set rules for my experiment that I would only buy $500 total and whatever happened I wouldn’t buy any more.
I wasn’t hoping to make money so it didn’t qualify as gambling to me.
But over the 2 weeks, my wife noticed I would behave differently when I talked about cryptocurrency.
It was exciting to watch it grow so quickly.
The value of both currencies rose 30-40% in 2 weeks.
I would look at my cryptocurrency app several times a day to see what the price of the currency was.
I would read the news to find out what made it go up.
Even though I wasn’t hoping for it to go up, I was very excited that it did.
But it was still an experiment with a purpose. I wanted to learn, and having a stake in the cryptocurrency market would make me pay attention.
INVESTING IS SUPPOSED TO BE BORING
But I don’t get excited about the Canadian bank stocks that I own.
I barely look at my balanced portfolios of ETFs – because they are not exciting.
The excitement that I felt and the volatility that I observed in the cryptocurrencies made me start to feel like this wasn’t a good thing for me.
I didn’t want to admit to myself that this might fall into the category of gambling because I don’t gamble anymore.
Even though I bought a fixed amount, and that it was for my experiment, and even though this was very different from any gambling I ever did in the past, I finally had admit to myself that it had all of the signs of gambling and I should probably shut it down.
When you go through addiction recovery, one of the things that you have to accept is that you’re not like everyone else.
I’m not like everyone else and I’m ok with that.
But it seems part of me just wanted to feel “normal” and buy a little bit of cryptocurrency. I wanted to participate in this exciting thing and for it to not be a big deal.
And maybe you can totally do this and be fine.
Maybe it’s ok for you to take $500 of your disposable income and buy volatile cryptocurrency, or tech stocks or go to the casino. It’s your life and you have every right.
But I realized that it’s not healthy for me to do these things.
It may seem harmless on the surface but if you’ve been addicted to something in the past, the best thing to do is avoid it. Testing yourself is never good. If you’re trying to quit smoking, you don’t hang around with smokers. And though I’m a huge Cheers fan, you don’t become a bartender if you’re an alcoholic. Sorry Sam Malone, but you set a pretty bad example.
So I decided that I would withdraw my original investment of $500 and leave the remaining $200 of growth in there for the next 20 years or more. It might become zero or $1,000 but the important thing is that I’m leaving it alone and not letting it take over my life.
I got my stake back and I learned that speculation is probably not the best thing for me.
So whether you consider it gambling or not, just keep in mind that cryptocurrency, or any new, volatile investment is not the place to invest money that you ever expect to see again.