How Much is a Million?

Do you know what a million dollars in banknotes looks like? Or perhaps a billion, or even a trillion?  No, neither did I, until I read about it last night. For anyone remotely interested in the financial crisis, banking, or even just current affairs, A Week in December, by Sebastian Faulks, is a cracking good read.

A Good Read

Don’t worry; you have not come to the wrong place. This IS the Arcturus Global Finance blog and not a book-club blog. But yes, believe it or not, I don’t spend all my spare time thinking about banking, regulatory compliance and Basel III.  From time to time I do actually like to relax and read a book or two. 

Unlike Sebastian Faulks’ other, better-known books (The Girl at the Lion D’Or, Birdsong and Charlotte Grey) A Week in December is set very much in the 21^st century, and although it was first published in 2009 is still very relevant to current stories that are dominating  the news headlines every day.  The protagonists include a young lawyer, a London tube train driver, a Polish premier-league football player and his internet porn-star WAG, a dope-smoking, reality TV obsessed teenage boy, and a hedge fund manager working on the killer deal of his life.

The story hinges around a dinner party attended by all the main characters, and one thread in the conversation at the party really caught my attention. 

I don’t know about you, but I don’t know what a million dollars looks like.  I don’t know what a billion dollars looks like either, let alone a trillion.  Come to think of it, I don’t very often even get to look at a £50 note.  Most of the banknotes in my wallet are fives, tens and twenties.  They don’t tend to last long once they get there, so there is very little opportunity for me to have a good look at them.       

To get back to the book, the conversation turns to financial affairs, and one of the characters asks how high a stack of million dollars, in tightly-packed $100 bills, would be. It turns out that the answer is just four and a half inches.  Now that is a nice, compact little stack.  Small enough to fit inside a handbag.  That was a surprise, because to me a million dollars is an unimaginably high amount of money, although I guess it would keep me in Marks & Spencer clothing and ready-meals for the rest of my life.

Anything higher than a million starts to become an even more nebulous concept.  When I think about a billion or a trillion, the true magnitude of the numbers is even harder to grasp.  For me it becomes almost an irrelevance, because I will never have access to such huge sums.  Even if I did, I would never be able to spend it all, though I am willing to have a jolly good try.

No, as far as I am concerned, for all practical purposes, £1 million, £1 billion, £1 trillion dollars, are all just vague, unimaginably enormous amounts of money.  So a trillion doesn’t seem that much different from a million. Which is why it came as a big shock to read that a $1 trillion stack of $100 dollar bills would in fact be seventy one miles high.  Quite a substantial difference from the four and a half inch $1million dollar stack!

Thank you very much, Sebastian Faulks, for opening my eyes!  It’s just a well that I am not in charge of a multi-billion dollar hedge fund.  More to the point, it is just as well that I am not an accountant or an auditor.

We take an awful lot of things for granted, like assuming that politicians actually know what they are talking about, and that financial regulators have a grasp of what really goes on in the world of investment banking,  including just how titanic the sums of money involved are. If not, they could do a lot worse than starting the educative process by reading this book.