Are you caught up in the excitement of trading on platforms ? Do you dream of making a quick buck by buying and selling stocks rapidly? If so, you might want to reconsider your strategy. In the latest episode of the Financial Freedom Pod, Bruce Whitfield and certified financial planner Warren Ingram look into the critical differences between trading and investing, and why the latter might be a more prudent choice for most of us.

Bruce Whitfield opens the discussion by sharing his experience with numerous emails from people eager to start trading shares. His advice? Don’t do it. The allure of trading platforms like Robinhood is undeniable—they offer low-cost, accessible ways to get into the stock market. However, they also create a hype that can lead people to believe they can make quick profits by trading in and out of positions frequently. This mindset is more akin to the risky behavior of the “wolf of Wall Street” than the patient, calculated approach of Warren Buffett.

Warren Ingram explains that the key difference between trading and investing lies in the time horizon. Investors typically have a long-term perspective, often looking at a minimum of three to five years, and sometimes even decades. Their goal is to invest in assets they believe will grow over time, despite the inevitable market fluctuations. On the other hand, traders focus on short-term gains, buying something today with the intention of selling it for a profit in a matter of days or weeks. This approach is not only risky but also unsustainable for most people.

One of the most compelling points Ingram makes is the distinction between luck and skill. While a trader might get lucky and make a quick profit, this doesn’t translate to long-term success. In fact, even highly sophisticated thinkers like Nassim Taleb have struggled to make consistent profits through trading over extended periods. For the average person, the chances of achieving sustained success through trading are slim.

So, what can you do to build wealth? According to Ingram, the answer lies in patient investing. Unlike institutions and professional traders who may not have the luxury of time, individual investors can afford to let their investments grow over the long term. This approach not only reduces the stress associated with market volatility but also increases the likelihood of substantial gains.

In conclusion, if you’re tempted to dive into the world of trading, take a step back and consider the benefits of long-term investing. As Bruce Whitfield aptly puts it, “The thing you do this week is abandon the idea of trading for your own sake and go back to the principles of investing.” By focusing on a long-term strategy, you stand a much better chance of achieving financial freedom.