Forget About The Zeros

Here's a tip passed on to me by a multimillionaire that has helped me control how I think about large sums of money.

You see, when you think about big money... whether a lotto winning, purchasing a house or buying a new car... most of us make a financial comparison to our own circumstances. So most people automatically calculate the sums in their head like this: "This car is going to cost me $25,000 to buy. It's almost my annual wage."

When you measure large numbers against your income, it becomes harder to deal with them emotionally. You are always making the comparison against something you are familiar with.

The figures become scary.

This is not necessarily a good thing. For example, if you wanted to invest your lotto winnings in real estate, you're going to have to get used to dealing with large sums very quickly.

So my multimillionaire friend suggested you never include the zeros in any large figure when you talk about them.

I never do. I always say "300" for $300,000. Or, "1.1" for $1,100,000.

Even for the small amounts... I'll say "2 and a half" for $2500.

It makes dealing with larger sums easier to deal with - they become mere figures instead of having an emotional content.

Most people understand what you're saying too. Nowadays it's rare for someone to not be able to understand the real cost of something you're talking about. But of course, in the final transaction you need to spell out the exact amount just be sure.

In the meantime, start by making large figures small by removing the zeros, and see how it changes your thinking.

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