It’s 3 more zeroes. It’s nothing.
At a modest average annual dividend yield of 4%, $1 million in investments will generate $40,000 in income. $1 billion will generate $40,000,000.
This is the best way to explain it I’ve seen. Tell me those billionaires are struggling 🙄
For real. Once you are a billionaire, with even the most basic investments, you have to try REAL hard to become broke again. Spare money begets money. Spare dragon hoards begets dragon hoards. Any bitch baby billionaire whining about taxes can kiss every single asshole of single working parents, people struggling to cover student loan debts, people who perpetually rent because they can’t afford a home with a lower mortgage payment than there rent is, and every person who got ill and lost there job and home as a result. They don’t need more dragon hoards. They’ll be just fine.
Hot damn that is a good way to contextualize it.
That’s how multiplication by 1000 works
TIL I’m 1 billion seconds old
If second were money, I’d be worth a hell of a lot more than a billion. And I’d be richer than a lot of tech bros.
If you had invested your time at the gray men but you didn’t
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It’s much like trying to imagine the mass of the sun having only known the earth, or the vastness of space having only known the solar system.
This is one of the best ways I’ve seen the difference represented. Quick and simple to understand. Way easier than a visual of grains of sand or an infographic, etc
But also misleading
It’s 1000 times bigger, woah
I think that this is a pretty bad and deceptive way of demonstrating the size comparison. Mainly because only 60 sec go into 1 minute, not 100. Only 60 min go into 1 hour not 100. Only 24 to a day etc.
Still though I agree thet people have a hard time grasoingbthe difference between millions and billions
Why do the ratios of conversion matter at all? The point is that all three of 1 second, 11 days, and 31.5 years are human comprehensible quantities. You can look at those values and actually understand the difference without having to do mental conversions.
Well, because you can see at the result of this meme, that the result is extremely misleading. It is correct but not representative of how much more one billion is compared to a million.
1bill is just 1000 times more than 1mil. The example here makes it look like a lot more.
Instead you could compare 1mil kilograms = 22 Titanic’s where 1bill kilograms = 22000 Titanics. But that is too straight forward and people would not react the same way as they do when you use time instead of a ratio that is representative of the numbers you are trying to compare
What? It is exactly representative. The values are correct and comprehensible. The fact that the numeric orders of magnitude of the units involved don’t progress uniformly is irrelevant. The point is that they are all values that are relatable within normal human experience.
1 kilogram, 22 Titanics, and 22000 Titanics doesn’t help at all. There is no number of Titanics that is is a human relatable quantity.
As a computer guy, just say, what’s bigger? A gigabyte or a terabyte? That’s the difference between a million and a billion.
For clarity, the scale in difference is the same between a terabyte and a gigabyte as compared to a billion and a million (a factor of 1000). But a gigabyte is not a million bytes and a terabyte is not a billion bytes Kilo = thousand Mega = million Giga = billion Tera = trillion
Gigabyte is a billion bytes, terabyte is a trillion bytes. But yes, relatively speaking, you’re correct.
There really is a Tom Scott video for each possible topic out there, amazing
I think people can’t really comprehend this because a long time ago a million was a lot of money. Like, if you had a million in your bank account you were a rich person. Nowadays that means you are just an average person with a little extra money. Heck, in places like San Francisco having a million means you are just scraping by.
That’s… not accurate. The average American family has $62.5k in total across savings, checking, prepaid cards, money market accounts and call deposit accounts. That’s more than an order of magnitude under $1 million. Those households with $1 million dollars in assets (which also includes investments and homes/property) are in the 87th percentile. At $2 million in assets, they’re already in the 95th percentile. You’re not wrong that a million dollar net worth is not what it used to be, but it is still far far far above average.
The bay area/San Francisco does require an inordinate amount of money to be financially comfortable, but that is an outlier, not the norm. Even other major metropolitan areas like Houston don’t require even half as much money for the same financial comfort. In non-urban areas a million dollar net worth would make you among the wealthiest in the area. The context of the environment, house prices and local cost of living play a major factor in one’s relative wealth in a given area. The inequality of those factors in different parts of the country is as great as the wealth inequality in America in general.
I like to think of $1 billion in terms of how much money you need to spend. Let’s say you’re given $1 billion at birth, never earn another cent in your life, and live for exactly 75 years. To spend all of that money, you’d need to spend $36,500 per day, every day, for your entire life. Even then, you’d have nearly a million dollars left to pass down to your children.
It feels elusive how anyone could spend so much, but controlling the content of mass media has been of great service for the interests of the Kochs and the Wilkses.
If you only spent 36,500 a day, you’d probably die far far richer (like, 10s of billions) than you were born assuming you have it invested. You could spend more like 100k a day (adjusting up for inflation) and you’d probably almost certainly die a billionaire.
that’s exactly why I have to add that you never earn another cent. The easiest way to spend money is to increase personal wealth.
Billionaires never earn their wealth. Doesn’t stop them from accumulating it anyways.
I like to think it like this: a million is a decent vacation. A billion is a generation.
Dude,… it’s a bit more paradox than usual, BUT I take it!
I have a theory about this: We group money in magnitudes of tens up to a million but then jump up from 10x to 1,000x:
1
10
100
1,000
10,000
100,000
1,000,000
1,000,000,000
That’s a huge increase but our minds like patterns so we instinctively feel that a billion must be about 10x a million and not the 1,000x it really is, thus leading to huge inaccuracies.
Much of our perception is logarithmic, which is predictable, since patterns occur from proportion of quantities. Absolute quantities are meaningless in themselves. Even ten dollars as a quantity is meaningless except through prior experience understanding the value of a single dollar. Every value except the smallest is tenfold greater than some other value of at least some consequence.
I don’t really understand your initial assumption. What if someone has 10 million dollars? Would you say he has 0.01 billion?
I think that your theory has some merit, but I believe it’s more apparent when we describe the people who own the money, as opposed to the money itself: A millionaire will stay a (multi)millionaire until they become a billionaire.
I think the idea is that we still think of someone who has >1 million but <1 billion as having some number of millions of dollars, rather than subdividing “millions” into “millions,” “tens of millions,” and “hundreds of millions.” Of course we do subdivide that when we’re being particular about how incredibly rich some actor is or something, but generally they all fall on the same order of magnitude in our minds.
millions = lifetime human income
billions = massive company (top 5,000)
trillions = large government (top 20)
- Read “gov spends millions” as “they employed 3 to 30 people”
- Read “company is fined 1 million” as “the had to hire 2 lawyers instead of 1”
- Read “company is fined 100 million” as “paying ~100 employees for ~10 years”
