This is a foundational concept in investing and yet there are shockingly few who are able to articulate the difference. The only sensible comment I've read on this can be attributed to none other than the late Benjamin Graham. For the unfamiliar, Graham was Warren Buffett's mentor and one of the few people Buffett ever quotes.
Investing: That's when you buy into a business and you believe it will generate profit over time because of human effort.
Speculating: Buying into something and hoping that it appreciates over time. Buying a gold bar or a painting.
I see confusion between the two almost everytime I have a conversation about real estate. When someone buys an apartment, he has to be clear if it is for utility (a place to live) or income (an investment because you collect rent) or speculation (you just hope the price goes up when you try to sell it later). Not being clear about your objectives is like going into battle without a plan.
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