While arguably a very simple mathematical concept, “order of magnitude” is an idea that appears to ellude both young children and full-grown adults. This is unfortunate, because concept can have profound ramifications on personal finance, employment outcomes, entrepreneurship and everything in between.

In other words, even a rudimentary grasp of order of magnitude can serve as a fundamental life skill of sorts, regardless of one’s socio-economic status, race, gender, etc.

Based on my experience, it is a concept that should be tought to children early and often, and yet when I look back on my own education I don’t remember the topic coming up even once, much less on a recurring basis. Why is this such an obvious and concerning miss in my opinion? Because understanding order of magnitude can help people problem solve by focusing on the variables that truly matter (e.g. “move the needle”) and putting less important variables on the back burner.

It’s the Pareto Principle (a.k.a. “the 80/20 rule”) on steroids.

Too often in life, an individual’s pursuit of happiness is felled by their inability to quantify the impacts of decisions they make. They spend their time, money, effort, life, etc. on variables worth $10 dollars while ignoring variables worth $100, $1,000, $10,000, etc. This becomes even more pronounced when you factor in compounding interest, attentional collapse, and executive function; concepts I’ll touch on in future posts.

Innumeracy is to the 21st century as illiteracy was to the 20th century. Ensuring that people understand and apply “order of magnitude” thinking can help turn the tide.