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Subject:  The High Cost of Flattery Date:  7/12/2000  11:01 AM
Author:  hocus Number:  12589 of 840961

Flattery is the enemy of Retire Early dreams. Once someone sees that retiring early is a goal within his reach, it is hard to talk him out of it. But flattery prevents many of us from ever seeing the possibilities.

The usual progression of thought starts like this. You hear a comedy act about "the high cost of living nowadays." You start feeling a little deprived. The idea gets reinforced by a politician, who says he wants to help the middle-class "deal with all the financial pressure they are under." You wonder, why did I have to be born at a time when ordinary people have it so tough? Finally, a neighbor kicks in with this thought: "You know, it's getting hard just to make a living." You shake your head, flattered.

Flattered, because the hidden message is that just the fact that you are getting by means that you must be a pretty tough character. It's like when a boy who survived a fistfight shows off his scars. We all enjoy this feeling, and the notion that we are struggling against a strong economic wind in our faces brings it on.

The next step is to reward yourself for all this toughness. As hard as your life is, you need to get away from it all every six months or so. And you need furniture which speaks for you, sending a subtle signal as to how special you are for having such survival skills. And a brand of coffee that gives you a lift through all the rough spots that come with making a living under such difficult circumstances.

At the end of the day, you're satisfied with yourself because you know you earned each and every one of those little rewards. But in examining my own attitudes from my free-spending days, what I think was really happening is that I was accepting unearned praise for a toughness I didn't possess.

Which wouldn't be such a big deal, except that the final step in this progression of thought was to blind myself to the consequences of my uncritical unacceptance of flattering ideas. Once I spent the money on the vacation, the furniture, and the coffee, I didn't want anyone telling me that such spending might be a bad idea. "Hey, buddy, I worked hard for every dollar I've spent. I don't need you to tell me what to do with it," I would think.

Which was true, in a way. I didn't need anyone to tell me how to spend my money, and I still don't. But it would have been nice if my own mind had been functioning well enough that I would have made decisions that were in my long-term best interest.

I spend a lot of time trying to figure out why my mind failed me for so long. I now am coming to believe that it was flattery that paralyzed my logic. The only reason to have cut back spending on things I liked would have been to acquire some other thing I liked better in return. Early retirement, for instance. But early retirement is a threatening notion to someone who pats himself on the back for his courage in getting through hard economic times.

To accept even the possibility of early retirement is to cast doubt on the popular worldview of economic hardship. If ordinary people are earning enough to retire earlier than ever before in history, it can't also be true that our financial struggles are tougher than ever today. To believe the former, you first have to stop believing in the latter.

It's surprising how powerful a force flattery can be. If someone tried to directly take away your chance at early retirement, you would resist with all your strength. But flattery slips in through the back door. It's a message pretending to be your friend, offering sympathy for your trouble.

Because it's not true, though, it doesn't help make the trouble go away. Instead, it makes the trouble worse. It's not true that the middle-class has it worse than ever before. The middle-class has it great, at least in financial terms. The biggest economic problem faced by the middle-class is that it is throwing away much of its financial rewards on things that offer little lasting value. It's paying for those things with its "Get Out of Work Early" card.

These thoughts were sparked by a report I learned about last week from a link on the Living Below Your Means board. It's called Time Well Spent: The Declining Real Cost of Living in America," published as part of the 1997 Annual Report of the Federal Reserve Bank of Dallas.(

The report is based on the proposition that it doesn't matter so much what something costs in dollar terms; what matters is how many hours of work it takes to earn the money needed to buy