Wednesday, January 28, 2009

THE LAW OF BIG NUMBERS

The papers have abounded with big numbers. The bail out - $700 billion dollars, the deficit - $1.2 trillion dollars, Madoff uses a Ponzi scheme to rip off investors of $50 billion dollars.

Million, Billion, Trillion

The only difference between the words is one letter and sometimes people get those things confused. I think there should be a law of big numbers so people really understand the difference between a million, and a billion, and a trillion. Everett Dirksen once said, “a million here, a million there, pretty soon we’re talking big numbers.”

Being a math guy, I like to explain it like this:

If you were going to count to a Million, and you counted one count per second, it would take you a little bit over eleven and one half days of counting non-stop.

Now lets go to a Billion, mostly when I ask people this, they usually guess 100 days. Well actually, to count to a billion, would take you 31 years and 8 ½ months. Remember, a billion is a thousand millions.

Then we can talk about a Trillion. How long would it take to count to a trillion? Do the math. Again you move the decimal point but it would take you 31,709 years plus 8 months to count to a trillion.

Another way I like to explain this is if you started a business the day Jesus was born, and your business worked non-stop seven days a week, you and your business made a million dollars a day and there were no taxes, how much money would you have? You would not even have a trillion dollars; you would only have $732,920,000,000. That’s about $733 billion for those of you that have problems with too many zeros. That was our first bail out amount and now they're talking even more.

Larry Kopsa CPA

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