http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#comments Comments from 'Am I an investor or speculator?' in JT's RE Blog at BiggerPockets.com http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_436 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_436 Jeff - Those code enforcement issues can be a real pain! I'm sorry to hear about what you went through, but anyone reading this post should have something important to take away from it. Little mistakes can be a very big deal, and even the most experienced investors can make them. Be thorough, be careful, be methodical. Thanks for sharing with all of us. http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_448 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_448 Good article Jeff. Love the "Power Team" reference. Especially in today's marketplace. It's easier to put together a good one because the ones left standing know what they're doing. I've certainly learned the lessons you speak of at the school of hard knocks. Bottom line is..information is power, use it to your advantage. Thanks http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_457 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_457 I like this article, but I do think that there are times to speculate. It is when you are betting the ranch and have your net worth on the line when it isn't ok. I kind of think of it as a "portfolio effect". The majority of what I have is in stable properties, and then I have a couple "high fliers" that have intrinsic risk but with commensurate potential return possibilities. For example, Spending $3000 for an option on a $800K deal with a $350K upside potential is a gamble, but with significant return potential. If that was the money my family needed to live on then the risk shouldn't be taken, but if is a tiny fraction of operating capital, then it may be worth it. It's ok to gamble, as long as you know that you are gambling, and what you have on the line. Because sometimes you actually do win. James Miller http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_460 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_460 As long as you are not gambling the grocery money. I like a barbell approach 80 to 90 percent in stabile cash flowing investments. The rest gamble away, leverage it if you can. http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_510 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_510 Depends on how you difine speculation, but I am not sure I agree with some of the comments. I think speculation is a vital part of investing. Certainly cash flow is great, tax deductions are helpful, but spec plays can create wealth. Just ask Mr. Warren Buffet. He has invested in several companies over the last few years. AB comes to mind. Did he speculate? Sure, but he also had lots of "info" to hedge against loss and cashed out a coll $800 million in less than two years. Not bad. http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_511 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_511 Sorry for the typos, its late and I don't see an edit button for blog post commets. Perhaps Josh can add them. http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_512 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_512 Mr Buffett speculated with AIG, it looks like http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_557 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_557 Jeff, I enjoyed reading this...you make some good points. http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_561 http://www.biggerpockets.com/blogs/149/blog_posts/554-am-i-an-investor-or-speculator-#c_561 I didn't say he was perfect, but I would follow Mr. B anyday. Anyone who owns stock is speculating. A large majority of 401k and IRA money sits in the stock market. All of it is speculation that the stock will go up in value. History has shown it does, but point is, there is a time, place, and method for speculation.