Quantifying a billion dollars can be hard for the average person. You know it’s big but you can’t necessarily conceptualize just how big. Forbes reports Microsoft’s Bill Gates’s net worth at $56 billion. Gates is the richest man in the world so obviously 56 billion dollars is a lot of money. By contrast, Oprah Winfrey’s net worth is $1.5 billion and we know she’s super rich because we keep hearing how super rich she is every time we turn around. The same for Donald Trump whose net worth is $2.9 billion. We know these people have an obscene amount of money, but we can’t work figures in the billion around our brain as easily as with figures in the hundreds and thousands. For example, it’s a little easier to understand when you say that 1000 million make 1 billion, or simpler yet to say there are 1 million thousands in a billion., or better yet, let’s put it like this: if you had suitcases filled with a thousand dollars each, you’d need 1 million suitcases filled with a thousand dollars to make 1 billion dollars. Here’s a chart that compares the net earnings of the top 10 richest people in the world according to Forbes.com : Bill Gates 56 billion, Warren Buffet 53 billion, Carols Slim Helu 49 billion, Ingvar Kamprad 33 billion, Lakshmi Mittal 32 billion, Sheldon Adelson 26.5 billion, Bernard Arnault 26 billion, Amancio Ortega 24 billion, Li Ka-shing 23 billion, David Thompson 22 billion

Now, here’s a chart that compares Bill Gate’s net worth to Donald Trump’s and Oprah Winfrey’s net worth. Donald Trump’s net worth as reported by Forbes in their 2007 billionaires list is $2.9 billion and Oprah Winfrey’s is $1.5 billion

Now here’s a chart that compares Bill Gates’s, Donald Trump’s, and Oprah Winfrey’s net worth to that of Joe Millionaire with Joe Millionaire’s net worth at $1 million. (**Note: our Joe Millionaire is just a random Joe and has nothing to do with any known Joe Millionaire personalities)

The graph shows that Joe Millionaire would have an easier time catching up to Oprah Winfrey than Oprah would have catching up to Bill Gates. If you think about it, Joe Millionaire only needs 1499 more million to catch up to Oprah; but Oprah needs roughly 55,400 more million to catch up to Bill Gates.

Nowadays it’s no big deal if you’re a milionaire. There are reportedly more than 5.4 million millionaires in the United States, which is to say that more than 5.4 million US households have at least $1 million in liquid or “investable” assets. By contrast, there are under 1000 billionaires in the entire world. So it’s a really big deal to be a billionaire and no grand event if you’re a millionaire, unless of course you happen to have a good few hundred million. 1 million dollars can’t go very far. Once upon a time it was conceivable that you could live for a good while on a million dollars. If you spend $100,000 per year you can live for 10 years on a million dollars. 10 years isn’t a very long time. If you come into your million dollars at age 25 for example, you’ll be 35 ten years later. If you tried to live on $25,000 a year you’re looking at 40 years.

If you came into a million dollars at age 25 and figured, hey, I’m rich, I can quit my job and just do whatever I want to do with the rest of my life as long as long as I don’t spend more than twenty-five grand a year, you’ll find yourself broke at age 65 assuming you had the discipline to keep your spending at a max of $25,000 dollars. But you wouldn’t be living like a rich man then would you? And what’s the point of having a million dollars if you’re still going to be living at the same level of life? Most people immediately run to buy a new house and a new car when they get money. So let’s say you buy a new house for $250,000 in a sub-division, and 2 new cars, one for you and another for your significant other totalling $80,000. You’re down to $670,000. And your new house and new cars will both come with monthly expenses.

Let’s say your total monthly expenses between your house and car, including gas for traveling, utility bills, groceries and other miscellaneous is $3500. You’re looking at $42,000 per year in expenses to maintain your home and vehicles, transport yourself and eat. You’re probably also going to spend money on things like clothes and CDs, DVDs and other stuff like that on yourself and your significant other, so let’s call that another $2000 per month which is $24,000 per year. Then there’ll be the movies and going out to dinner, ordering pizza and Chinese, and going to the ball game or other event for an additional 2 grand which comes to another $24,000 per year. Then let’s throw away an additional 1000 per month which is the equivalent of $10,000 per year and we’ve got you spending $100,000 per year with $670,000 to your name. In just over 6 years you’ll be back out looking for a job; and you’ll need to find one paying you at least $100,000 per year in order to maintain your new lifestyle. Otherwise you’ll be holding some yard sales and running Ebay auctions. Obviously you don’t have enough money to go crazy with if you have 1 million dollars, or even 2 million or 5 million for that matter. With that kind of money you’re still restricted in where and how you can afford to live.

With a billion dollars you can go a little crazy if you want. A billion dollars after all is 1000 million dollars. You can conceivably throw away 200 million of your 1000 million and still have a whole lot of millions to secure you. You can buy a $25 million dollar house in some prestigious location, although, frankly, I wouldn’t pay 25 million dollars for a 5-bedroom 5-bath house I could buy a near duplicate of in an Alabama suburb for $200,000. Not just for the privilege of being able to say I live in a prestigious location. Which isn’t to say I’d buy the house in Alabama. I’d just rather get a little more value than "prestigious location" out of spending $25 million dollars on a house. Like ‘Tranquility" in Lake Tahoe for example. They at least throw in 210 acres, a conservatory, guest residence, art studio, boat house pavilion, gymnasium with indoor basketball court, stable, two par 3 golf holes, 16-car garage and exquisite furniture for the $100 million they’re asking for the place. The architectural style of ‘tranquility" doesn’t exactly speak to me personally; but if it did, I would consider shelling out one-hundred mil for a 16-car garage and exquisite furniture. Why not? My only complaint would be that a 100 million dollar house situated on 210 acres overlooking Lake Tahoe should have more than just 9 bedrooms and 9 bathrooms. Sure, "Tranquility" also comes with guest and staff accommodations but I would personally prefer the main house to have at least 15 bedrooms and 15 bathrooms. It just seems more appropriate than 9; but that’s quibbling over rice grains or some such thing I suppose.

The property taxes for Tranquility are a mere $144,734 per year. With a billion dollars to your name that’s really nothing so outrageous. Over 100 years that’s just 14,473,400 (fourteen million, four-hundred-seventy-three-thousand, four-hundred dollars). That doesn’t really put a serious dent in anything. To acquire "Tranquility" and afford the property taxes for 100 years will cost just 114 million, 473 thousand 400 dollars ($114,473,400) The cost to maintain such an immense property, well, that might take another $50 million over 100 years, but it still doesn’t bring you anywhere close to wiping out 1000 million dollars. You’re looking at $164,473,400 to own and maintain the 210 acre property over a 100 year period. Of course I’m just playing with numbers here and have no factual knowledge of how much it would cost per year to maintain such a property. It could be way more than my estimated half a million per year; but it still wouldn’t put any serious dent in your money while you’re alive. And imagine if you were Bill Gates, Warren Buffett, or one of those multi-billionaires who make moguls like Oprah Winfrey and Donald Trump look poor? Gates’s great grandchildren probably couldn’t blow the family fortune in their lifetime unless they spent money wildly, crazily and stupidly. If a billionaire spent 5 million per year for 100 years he’d still have half a billion left over for someone to inherit. Bill Gates’ net worth in 2007 as reported by Forbes is $56 billion. Warren Buffett’s net worth in 2007as reported by Forbes is $52 billion. It’s hard to quantify that kind of money, but if you look at the chart below showing how Bill Gate’s fortune compares to Oprah Winfrey’s and Donald Trump’s you might get an idea just how insignificant a million dollars really is: