Risk is a good thing. Without risk there is no reward. In most cases the greater the possible reward, the more risk involved. Therefore when one takes a risk, they should first take into account they possible payoff to determine if the risk is worthwhile.
When you invest your money in the stock market, the risk is worthwhile because there is a high degree of probability that you will increase your net worth over the long-term by doing so. There is a chance that you might lose some money in the stock market, but you will most likely be able to sell a losing stock before you have lost all of your money. If you don’t invest, and instead keep all your money in a sock drawer, you will lose ground because of inflation. Therefore investing in the stock market is a good risk.
On the other hand, if you take your money down to the casino and bet it all on roulette, even though you have a chance of making several times your “investment” back, mostly likely you will lose it all, so roulette is a bad risk.
Ok, you got me, those examples are cliché and obvious. “Of course the stock market is a better risk that roulette!”, you say.
Well. Yeah. So consider this: