This archive report was first published on 24 October 2019.
Breaking Free from Gambling Addiction ¶
Dear Dr Pesa, I am 27 years old and married with a second child on the way. I have been betting for seven years, and despite winning a total of Sh20,000, I have lost hundreds of thousands of shillings. I am a successful entrepreneur, but I save nothing, and I fear that my business will crash and my wife will leave me. How can I control this addiction, and if not, how can I indulge with moderation?
Dear Tom, I commend you for recognizing your addiction and seeking help. Given your family responsibilities, it's essential to have things under control. The main problem is how you direct your funds. To turn this around, consider investing in opportunities like stocks, fixed income securities, and collective investment schemes. These will give you a return while preserving your capital.
Investing and gambling may seem similar, but they are quite different. Investing involves a level of risk that can be reduced by diversifying your portfolio and spreading your funds across various asset classes. In contrast, gambling risk cannot be spread, putting your entire funds in jeopardy. Additionally, investing provides access to information, allowing you to conduct analysis and mitigate risk. Gambling, on the other hand, forces you to go in blind, hoping for the best but preparing for the worst.
Investing and gambling also have different time frames of viability. Investing can become an alternative income stream, with monthly interest payments and capital gains. Gambling, however, is a one-off event with immediate gains, but no income stream after the initial win. Furthermore, gambling is a zero-sum game, where one has to lose for the other to win, increasing the level of risk. Investing, on the other hand, allows all parties to win, making it a more predictable and controllable option.
Therefore, I recommend choosing an option that discloses information on expected outcomes rather than relying on luck. To control your addiction, consider signing up for a personal finance class and getting a circle of people who are trying to kick the habit around you.
— Dr Pesa, this week is Ascar Sudi, an Investments Assistant at Cytonn Investments.
