What's the difference between a Million and a Billion?
About a Billion
Practically a rounding error.
Came here to post this.
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.
People don't have a strong intuitive sense of how much bigger one thousand is than one.
One second is one second.
One thousand seconds is like 15 minutes idk it's not very intuitive.
Anyway, it's about a thousand times bigger.
Hope this helps.
I should find some better hobbies.
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.
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.
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.
The difference between one million and one billion is almost exactly one billion.
Within a margin of error of 0.1%
Its so crazy our highest tax bracket is at low 6 figures when we have people at 10 figures.
why is it in brackets why not just a percentage
Percentages don't scale well into the billions, you will still need brackets.
A billionaire can give away 98% of their wealth and still comfortably be a multi millionare.
A full time cashier on the minimum wage can barely even survive on 100% of their wage. When it comes to living a healthy fulfilling life, If they contribute just 5% of their wage to tax they are sacrificing far more a billionaire paying 98% tax would be.
because then paupers would pay the same rate as billionaires. At the same time brackets make sure eveyone pays the same for the set amount. So even if more brackets were introduced billionaires would pay the same rate on their first 100k as millionaires. People of wealth only pay higher on the actualy high level. Whats crazy is we have several brackets that basically run through the 5 figure range and just into the 6 but none higher were 5 figures should just have one lowest rate.
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.
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.
This is the best way to explain it I've seen. Tell me those billionaires are struggling 🙄
What's funny is millionaires arguing against tax increases on the right when they are much closer to the pleb than they are from the billionaires that are the ones who would really pay the price.
Once you reach a certain point of greed, nothing is ever enough money. That's why they need to be made illegal. They are literaly economic cancer.
I had a dream this week that I won 2 billions somehow in a lottery. I had so many headaches thinking about all the friends etc.. and how to give the millions away to all of them and family. And these guys are storing them like a dragon and it's gold.
A bank account with one million dollars can be completely wiped at any time. This could happen by American healthcare cost due to illness or an accident, or a lawsuit from something like a handyman slipping on your property. A billion dollars wouldn't even feel it.
By some measures, Musk's decisions managing Twitter/X should earn him one million lifetimes of homelessness.
I know no one personally who would remain secure after losing billions of dollars, yet I keep hearing that owners take all the risks and workers are always protected from hardship.
With all the layoffs we see, that is fucking bullshit. The workers get shafted even when they are doing a good job because of dumb fucks c-suite gambling the company on bullshit technology, or simple cutting costs for the shareholders.
There's a Tom Scott video where he illustrates the difference between a million USD and a billion USD, expressed as the size of a stack of 1 dollar bills.
A million was about the size of a football field and a less than two minute walk.
A billion took him from somewhere near London all the way to the east coast, and had him drive for over an hour.
One million years ago some of our more advanced ancestors walked the earth
One billion years ago multicellular life having evolved yet is debated
In terms of wealth, neither one will ever be achievable by me, so one might as well be the other.
You are probably not vastly different from a millionaire, just someone with less pomp and perhaps pretentiousness than some millionaires may have.
You may even know someone who secretly holds such wealth but feels too embarrassed to make it known.
A billionaire is someone who has the social role of controlling a vast section of society, through private ownership of resources and assets that are needed by others for use.
Oh I'm pretty different from a millionaire. My car is a lot older and less fancy, my house (which I'm lucky to have because I bought it when you could still get low-rate, fixed-rate mortgage) is a lot smaller, my hospital bills are a lot harder to cover, the food I buy isn't as high-quality, my job is likely shittier, and they never have to worry if their paycheck is enough to get them through the month. I also probably pay more in taxes because I can't afford an accountant to hide all of my money from the IRS.
And if they're so embarrassed that they live a shittier life just to hide the fact that they're a millionaire, I think that tells you something about millionaires.
1 million dollars in net worth is achievable with investments early in life in a 401(k) or other tax deferred retirement fund. ~$300/month starting at age 20 gets you to $1,000,000 which is about 10% of the income of someone making $40k/year. That's not completely out of reach.
It would take you a lifetime of saving 100% of that ($1,000,000 initial investment + $40k/year), a 10% interest rate (which is ridiculous), and daily compounding to reach $1bil. That is the difference between $1mil and $1bil.
What blows my mind is is that astronomers work with numbers incomprehensible to the human mind every day. Of course, they can calculate them, but to comprehend what a trip to our nearest galaxy would be like? Pretty damn difficult. What it would be like to travel from one end of the known universe to the other? Our fragile minds just can't take in numbers of that magnitude.
It's 1000 times bigger, woah
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
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.
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.
As a computer guy, just say, what's bigger? A gigabyte or a terabyte? That's the difference between a million and a billion.
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.
I like to think it like this: a million is a decent vacation. A billion is a generation.
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