The performer hands several paper bags (usually five), to members of the audience. Before doing so, he shows the audience that a one- hundred-dollar bill has been inserted into one of the bags. The performer concentrates, then asks the volunteers to set fire to two of the bags and return to their seats with the other two. One bag remains on stage. Of course, the $100.00 bill is always found to be in the bag left on stage.
The secret: Once again, simplicity is the key to this trick, along with great stage presence and presentation. The $100.00 bill is never placed into any of the bags. Instead the performer pretends to put it in. The money has, in fact been concealed in the performer's palm during the process of pretending to place the bill in the bag.
At the end of the trick, the performer takes hold of the remaining bag and violently tears it open while the palmed money seems to mysteriously emerge from the torn bag.
I have also seen this effect done in a comedy motif, where the performer will borrow a high-denomination bill from someone in the audience. During the trick, the performer will make out as if the trick has not worked. He does this by tearing open the last bag and pretending to find no money within. Then the performer asks the spectator who helped him before to now open their bags, search their pockets, even look under their seats. Still no money.
At this point, the audience believes the money has literally gone up in smoke, only to have the performer recover the money from a pocket or behind an ear.
This effect works as above, except the money does not have to be palmed when the on-stage bag is o pened. A good way to get rid of the palmed money is to reach into a pocket for matches used in bur ning the stage bags.