Step 1: Realize that we can’t really tell the difference between large numbers.
Once we understand that we can’t really tell the difference between large numbers, we have a chance of starting to save those big numbers.
… which means you get to buy more ice cream cones, socks, or ball point pens.
Here’s the skinny: Our brains are incapable of understanding large numbers, except vaguely by analogy.
Like it or not, we can’t really grasp the difference between 10000, 270375, 42000000, and 870000000. Heck, we can barely even fathom a number like 325. Go ahead – try to fully fathom 325 of anything (sea gulls, pebbles, songs, sandwiches, whatever) and see if you can simultaneously think about all 325…
High digit mathematics is a relatively new phenomenon in terms of human history. Multiplication only really became useful once cities and agriculture (and taxes) flourished, which was perhaps only 200 generations ago(5000 years @25 years per generation = 200 generations = the distance between you and your grandparent x 100) (not much, really). Ancient Indian civilization had high-powered multiplication, but that was mainly to ‘calculate’ the extent and grandeur of symbolic magesties, where ‘impressive and big’ was more important than comparing specific massive numbers.
This inability to understand massive numbers is a major reason we keep making such colossally stupid decisions when it comes to personal finance (we fret over $2 price differences on some items, yet splurge on some 1000-times more expensive thing 2 weeks later) and government finance (trillion dollar “bail outs”/”free for alls”/”trying to solve our problems by inflating them away.”)
We let these things happen because we don’t get outraged because we don’t really understand how stupid our stupid decisions are.
To begin to fathom what $1,000,000,000,000 (a trillion dollars) looks like, consider this great piece from Pagetutor. Then, start figuring out how to start making smarter decisions.
Reposted from: pagetutor.comAll this talk about “stimulus packages” and “bailouts”…A billion dollars…A hundred billion dollars…Eight hundred billion dollars…One TRILLION dollars…What does that look like?I mean, these various numbers are tossed around like so many doggie treats, so I thought I’d take Google Sketchup out for a test drive and try to get a sense of what exactly a trillion dollars lookslike.We’ll start with a $100 dollar bill. Currently the largest U.S. denomination in general circulation. Most everyone has seen them, slighty fewer have owned them. Guaranteed to make friends wherever they go.
A packet of one hundred $100 bills is less than 1/2″ thick and contains $10,000. Fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.
Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.
While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet…
And $1 BILLION dollars… now we’re really getting somewhere…
Next we’ll look at ONE TRILLION dollars. This is that number we’ve been hearing so much about. What is a trillion dollars? Well, it’s a million million. It’s a thousand billion. It’s a one followed by 12 zeros.
You ready for this?
It’s pretty surprising.
Ladies and gentlemen… I give you $1 trillion dollars…
(And notice those pallets are double stacked.)
So the next time you hear someone toss around the phrase “trillion dollars”… that’s what they’re talking about