“Order of Magnitude” (Making A Point Using Trivia)

Categories : Financial, News
June 26, 2019

Each and every week on the Van Wie Financial Hour, we present to the listeners a trivia question. The winner (if any) receives whatever prize we are offering for the week. Trivia questions (our way, at least) are designed for more than time fillers -- we always strive to educate people. Most often, our point is designed to give the audience an appreciation for the “order of magnitude” of a topic.

Order of magnitude is a concept with several definitions, but the fundamentals involve having a concept of the size (and/or relative size) of almost anything. A few examples include:

  • An amount of money (Millions have 6 zeros, Billions have 9 zeros, and Trillions have 12 zeros)
  • The size of a population (worldwide, US, statewide, or local)
  • Geographical distances between any 2 points
  • An amount of time (no matter how long or short)
  • Financial market statistics (one of our concentrations)
  • Relative sizes of economies and companies

Topics for trivia are nearly endless, and our questions always have a point. The exact answer to any of our trivia questions is far less important to us than the message we are trying to convey. Understanding the Order of Magnitude in the subject matter gives savers and investors an edge when they see or hear actual news. Being able to analyze information logically and in the correct setting is one key to financial insight.

There are about 8 billion (9 zeros) people on our planet, but only about 330 million (6 zeros) of them are in the USA. The US produces an astounding 24.4% of the world’s GDP (Gross Domestic Product). Americans are fortunate to be experiencing current economic prosperity. Understanding the relative value of your own personal place in the vast American economic engine can propel you to success.

The size of the U.S. Stock Market (measured by market capitalization, meaning current prices times number of outstanding shares) is about $30 Trillion (12 zeros). Since the last federal election, that has risen about $7 Trillion (12 zeros). Understanding the underlying reasons is critical to sound investment strategy.

One person, or a small but organized group, can make a relatively large impact, and in a capitalistic society, the rewards may be significant. A thorough understanding of the order of magnitude of your own endeavors can only help your progress.

Never stop learning, and never stop teaching, and we will all grow. The Van Wie Financial Hour has been criticized for our “silly” trivia, but we will not stop utilizing our teaching technique. Listen every week, and you will gather very useful information that should increase your understanding of where you are going. We also think it is fun, and hope that you do as well. Comments regarding our radio show are always welcomed.

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