In praise of extravagance

Sometimes the best investments are material things that make you feel good. Even Milton Friedman says so.

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By Ben Stein, contributor

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NEW YORK (Fortune) -- As I sign up for Medicare, a few thoughts run through my little mind. There is a fabulously great quote from an Ernest Hemingway story. After the Crash of '29, a man is asked how he went broke. "Slowly," he says, "and then all at once."

I hate to say it, but that's sort of how getting old is. It happens very, very slowly when you're young, as if you are approaching a city that's 3,000 miles ahead and you see road markers saying now it's only 2,500 and then only 2,000 but it still seems incredibly far away, and then there's a sign saying it's five miles away, and you start to gasp. Because once you reach being old, you have a pretty good idea what the next stop is.

Perhaps the best pupil I ever had, Ferris Bueller, put it best. Lamenting his best friend Cameron's reluctance to do anything interesting or exciting, he said, "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it."

As far as I know, no one has done more interesting things than I have done -- White House speech writer, trial lawyer, columnist for large and powerful newspapers, TV and movie actor, economist, game show host -- all serious and sometimes profitable enterprises. But the best time I recall in my life was taking a brief respite from making money and just listlessly hanging out in the redwoods of Santa Cruz, California, spending the money I had saved.

Then, about fifteen years ago, my wife was lamenting the fact that, in my frugality, I had us living in a modest home in the Hollywood Hills instead of in the large home on flat land she had always wanted.

When I told her we would never move, she simply said, "Well, maybe in my next life I'll get the house I always wanted." That hit me like a ton of bricks. As far as I know, the next life does not involve houses. So I soon bought her the house she wanted and we both like it a lot.

It's cruel, but the life we have right now is the only sure thing we've got. This one. This highly imperfect, pain-wracked, and VERY VERY SHORT life. If we want to have the things we have always wanted, maybe we, those of us contemplating Medicare, should get them now, while we still have enough life and vitality to enjoy them.

Now, bear in mind, your humble old servant has been writing for decades ( yes, decades!) about how the most important thing is to not run out of money before you run out of breath. And that's still absolutely true. To be old and broke is no joke. But assuming you have enough to get by as you get old, what do you do with the rest?

My parents made the decision to continue living frugally all of their lives. The result was that the U.S. Treasury got a meaningful windfall from them when they passed into economists' heaven. Was that a good idea? I don't know, but I keep remembering my economics professor, C. Lowell Harriss at Columbia telling us that economics is the study of the allocation and use of scarce goods.

What could be scarcer and more precious than life itself? Is it prudent to deny oneself joy (and yes, to me, buying things is joy) in this very short and scarce thing called life to make Mr. Geithner happy? Is it prudent to give money to my stunningly strong son as I am barely able to get off my boat? I keep thinking of what my father could have bought with the money he gave to the Treasury. I don't want to make the same mistake.

Now, again, if there is a good likelihood that spending money now will reduce you to cat food (the most revolting of all smells) when you are old, just put down this miserable column right now.

But if you have a little extra beyond what you might need when you are old (bearing in mind that as you age, there are many things you simply do not have the energy to do), isn't it sensible to live it up now when you still have zest for living?

The Cobalt or Corvette you have when you are able to feel the wind rushing through your hair without a nurse's aide sitting next to you is worth quite a lot. The joy and memories you accumulate as you spend your money has real value as you age and live largely in memories.

Many years ago, when Milton Friedman was telling me one of his many great epigrams, he said, "You really cannot predict the return on stocks or bonds. You can predict that if you buy a shirt you love or a car you love, you will enjoy it." (I am paraphrasing. The conversation was in 1963 or 1964.)

I sit here looking out at magnificent, spectacular Lake Pendoreille in North Idaho and wonder how many more years I will be able to come here and how many more times I can take my little boat out on the water, and I think, "You know what, pal? You need a bigger boat."

I am not sure there are speedboats in the next life. And I have always wanted a Cobalt boat. And I know the next life comes up faster than you think. This is so if you are 64 or 44.

Economics tells us to enjoy the life we have. There are many ways to do that without spending money -- but also quite a few that do require spending money. "Life goes by pretty fast. If you don't slow down, you might miss it." For many of us, it may be time to slow down and buy what we have always wanted. Maybe sometimes the best investment is buying something you want. To top of page

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