Feature

The Magic Number

The men of my father's generation -- they dreamed about making $1 million after a whole lifetime of work. The fellows of this generation add another zero. Sometimes that's just the bare minimum. Ten million dollars: Along with 40's being the new 30 and Thursday's being the new Saturday, we can toss $10 million's being the new $1 million into the pile. At Edward Moran Bar & Grill in the World Financial Center, which blossoms forth on warm evenings with unwinding Wall Streeters, I hear this number constantly. According to my friend at Shearman & Sterling, "$10 million is the back-of-the-envelope calculation, assuming the most conservative investments. And adjusting for inflation." The bottom line is $500,000 annually -- just enough to cover the vacations, monthly expenses, and tuition bills for your basic Tuscany-and-Hamptons-going, Fifth Avenue-dwelling, Yalie-bearing New Yorker.

On the other hand, Greg Meyer wants that Ben Franklin so he can sustain at least three homes -- one in Europe, one in Florida, and one here -- while donating big chunks of his income to the institutions and causes that move him. And the downtown Internet entrepreneur gives an almost metaphysical reason for choosing $40 million: "It's like being rich squared. If you make 8 percent per year, that's $3.2 million in interest, then $2 million after you're finished with Uncle Sam. Two million. That'd be twice as rich as I ever thought I'd be. It's one thing to make $2 million per year by working your ass off. It's another to make $2 million for doing nothing."

So -- is this a good thing, Daddy? The answer is probably irrelevant. In The Overspent American: Why We Want What We Don't Need, Harvard economist Juliet Schor argues that fantasies of idleness and upscale desires have become an undifferentiated part of the American psyche. Her book doesn't discuss magic numbers, per se. "But I know what you mean," she confesses. "I have one."

Rutgers historian Jackson Lears, who's writing a book about the history of the American idea of luck, does spot one problem: We're taking the mechanisms that make big, easy money possible -- most notably, market levitation -- for granted. "All of the old ambivalence and hostility and questioning has pretty much evaporated," he says. "There's no suspicion; there isn't even any ironic distance."

There has always been a tension in American culture between the champions of grinding, incremental acquisition and the champions of risk. "I think there is an element of excitement, even liberation, in acknowledging the role of chance and celebrating it," says Lears. "It's certainly more appealing than plodding diligence, and in some ways more realistic. Life is more interesting than plodding your way up the ladder, one rung at a time. That's not how it works for most people, and it's not that satisfying a way to live."

Ironically, the first generation of dot-commandos didn't go into the business for the money -- or at least not the nine-figure gushers they've been hitting lately. Today, if they have magic numbers, they don't want to retire once they've reached them; they want to keep working, keep creating, just at a slower speed. The downtown Internet guru, for example, says he wants to start his own magazine when
he collects his $40 million -- if he doesn't open a couple of restaurants first, or perhaps write a book.

"These people aren't the types to say, 'All right, I'm 34 years old, I'm gonna go collect shells,' " says Richard Blau, who co-founded a special-event-entertainment company called Chezzam, and whose magic number is $15 million. "They might do it for a little while, but soon they're going to learn how to sell shells on the Internet."

That's basically what happened to Chris Kitze, the founder of Point Communications, a Web directory, which Lycos bought in 1996. "I remember him telling me that he retired to Lake Tahoe," recalls Henry Blodget, an Internet analyst for Merrill Lynch, "and then, two weeks later, he said, 'What the hell am I doing with my life?' Then he founded Xoom.com. Now he's worth 100 times as much."

Whether the next generation of Net entrepreneurs will be so entrepreneurial remains to be seen. Bo Peabody, the 28-year-old co-founder of Tripod, which Lycos also bought, is skeptical. "What you already see," he says, "which is so discouraging, is that the people who now get into the Internet industry are doing so for the same reasons they would have gotten into banking five years ago. And they're bringing that unfortunate culture, which isn't centered on innovation, quality of product, fun, or vision. It's centered on money."

And so the Number game begins anew. "There's relative envy," sighs Blodget, "which is: 'If he's worth $100 million, then I should be worth $200.' It's natural." If envy is natural, yes. Whether in the Hamptons or in Silicon Alley, your neighbor's gross, it seems, is always greener.