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What's your magic number? I'm talking the number of dollars that, if someone gave you today, would convince you to stop working and stop worrying about money.  It would be enough that you would feel comfortable living off of for the rest of your life.

Most people probably have some sort of number in their head.

Five million bucks.  Two million bucks.  Ten million bucks.

Whatever the case is, I'm sure most people have it. I'm sure that most people have a number that would somehow end up in million.

I'm also sure that most people would not abide by the ‘no worry' part for very long.  Why?  It's simple human nature that once we have the money for a certain period of time, it's going to become routine for us, at which point we're probably going to start worrying about it again in some fashion.

Here's how I envision it would all go down:

  • Pretend that $5,000,000 is your magic number.  It's a nice round number with lots of zeros after it.  You get your check for $5,000,000 and head over to the bank to deposit it.
  • Even if you're completely responsible, you're going to spend some of that right away.  Pay off your mortgage, buy a fun car, help out your siblings, parents, children, and maybe a close friend or two.  Go on some trips.  Splurge on a membership at the golf club, a new set of earrings for you or that someone special.  After all that, say you have $4,000,000.  That's really your baseline number.

Live off the interest.  One of the first things that people do is say that you'll stick that money aside and live off the interest and investment income.  Sounds awesome!  Say that you can somehow invest so that you can get a 4% return.  That would yield you an annual salary of $160,000.

I don't know about you, but that would be a nice raise from where I'm at today.  And, that I get to not go to work would be even better.  Since I paid off the mortgage, that leaves even more spending power.  That first year would be nice and enjoyable.

Then the second year would come along, and you'd notice that stuff started to cost more.  Maybe that trip you took for $8,000 last year now costs $8,500.  The guy you started paying to cut your lawn wants $40 a cut instead of $35.  You will probably start to notice that everybody else is starting to take more and more of your money, but the check you get from your accountant stays the same.

:Let's not forget unexpected or unbudgeted costs

There's also the element that other costs will come into effect that you probably can't even envision today.

How many people would factor in that they have to pay for their own health care if they stopped bringing in money?  Even if that theoretical $160,000 per year more than doubled your take home pay today, chances are the health care costs are going to hit you higher than you could had ever thought of before writing down your number.

But, back to our example.  After a couple of years, you start seeing prices rise and costs of things that you never figured you'd have to pay for come into effect.  For those first five years or so, you might even not care.  But, at a certain point, you will notice this effect.  By this point, you'd be several years in, and you're not going to want to start ‘cutting back', are you?  Of course not!  There's nothing ‘magical' about that, is there?

Maybe you go back and say that your magic number is higher, right?  Double it, and everything gets doubled, including the money you'd bring in every month.

That might work and it might get you through a bit longer, but the truth is that the more money you come into, you'll probably adjust your lifestyle to spend more.  So, the increase in costs will come to get you at a certain point.

I guess if you set your magic number at some absurdly high number, like $100,000,000, you could probably get away with never feeling the effect, but that's going beyond magic and going into crazy athlete money territory.  Besides, that's no fun for the purposes of this article!

Magic turns into boredom

Give a young kid a magic kit with some card tricks and a bunny-out-of-the hat routine, and he'll likely have fun with it.  For awhile, anyways.

After he's exhausted everybody in the family with the card tricks, perfected the art of hiding the fake bunny (and maybe even tried a few times with the family cat much to the likely unhappiness of said family cat), he'll get bored with it.  He'll either tire of magic or he'll want to take magic to the next level.

This is perfectly normal.  And, the reason I bring it up is because the same thing would happen to the magic money for most people.

After you do your spending, and you have a balance of $4,000,000, for most people (me included) that is going to look pretty dang cool.  I'm going to wake up in the morning, check my account balance, and it's going to put a smile on my face.  I'll probably think to myself multiple times throughout the day something along the lines of “Wow, four million bucks in the bank!”

But how long is that going to last?  At a certain point, you're going to get so used to having that $4,000,000 in the bank, that it won't bring that same level of satisfaction.  And, if something happens where you need to draw down a little bit of it, you're probably going to quite unhappy if you see the balance fall even a dollar below that $4,000,000.

Even though it's still a lot of money.

All told, I think most people have a magic number, but I don't think that many would live for the rest of their lives as they would in those initial months after getting their ‘windfall'.  For people who wonder why the rich keep trying to get richer, and why some people never seem to think they have enough, I think this might shed a little bit of light.

I would be curious, readers.  Do you have a magic amount of money that if you received it you feel you would be totally happy with it?  Do you think that you would remain happy for years and years, or would the magic wear off, especially with inflation and other costs?