Recently, USA Today published a report estimating the American Dream now costs $130,000/year to attain. You can find the entire article and figures here: Price tag for the American dream: $130K a year
Based on these figures, only 1 out of 8 American families are living the dream. Yours truly would be excluded.
To compute the numbers, the author determined first to define the American Dream. Based on surveys and interviews, the American Dream became defined as “economic security, finding and pursuing a rewarding career, leading a healthy and personally fulfilling life, being able to retire in comfort, and opportunity for their children to live a better life.” All good things.
With this as the goal, the actual cost of the American Dream was parsed into several broad categories:
- The Essentials (housing, food, transportation, medical, utilities): $58,491
- Extras (vacation, entertainment, eating out, communications): $17,009
- Taxes/Savings (taxes, college savings, retirements): $54,857
Yearly income required for security, health, fulfillment, comfortable retirement, and opportunity for your offspring? $130,357
The article has continued to grow in popularity since its publication on Friday. It has been shared via social media thousands of times and has been reprinted in countless publications around the world: Detroit, Seattle, New Orleans, Great Britain, just to name a few.
This is unfortunate. Not only because the article is untrue, but because it is harmful.
For starters, consider the math. The notion that a family of four must own a $275K home, drive an SUV, spend $5K on summer vacation, and eat $315 worth of food every week is foolishness. The presumption that security and fulfillment and happiness can only be found in the ownership of these luxuries is a shameful misrepresentation of our heart’s greatest desires. I know countless people who live fulfilled and content lives on far less—all the while planning on a comfortable retirement and providing opportunity for their children.
Nevertheless, it is not the math that worries me so much and prompted this public response. Instead, it is the unintended (or maybe intended) consequence of this article. And my only hope is that these words will find their way into the minds of those who need to read them.
The bold proclamation that an annual income of $130K is required for the American Dream carries with it serious consequences:
It breeds discontent. 7 out of 8 American families are being told their lives would be more fulfilling if they had more money. As a result, our standards become redefined. While we may have been living a perfectly content life with far less annual income, we are forced to reconsider the possibility that we may be missing the really good life—and even worse, that we may never fully attain it.
It breeds jealousy and envy. 7 out of 8 American families are left out of the American Dream, left only to wish and dream it could be theirs. Soon, comparison begins to settle in our minds. The presence of bigger houses, faster cars, and corner offices become more apparent than ever before. And we begin to ask ourselves, “Why do they get to live the American Dream and not us?” Jealousy has taken root.
It breeds resentment. When jealousy and envy take hold of a heart, resentment is soon to follow. Not only do we wish we had what they had, but we soon become bitter towards those who have more. And whether we are in the 87.5% or the 99%, resentment will always steal more joy from us than it will from the other person.
The American Dream does not require $130K/year. To claim that it does, is to grow discontent, jealousy, and resentment in many American families. Indeed, this article harms us as individuals.
And it harms us as a nation because it is based on a faulty definition of the American Dream.
Every summer, we celebrate Independence Day in America. Towns and Cities all across our great Republic are united in their celebration: 250 years ago, our forefathers stood up against what they believed to be unfair laws and unfair taxation without representation.
These are the words they chose to boldly declare their independence on July 4th, 1776:
We hold these truths to be self-evident: that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness—that to secure these rights, Governments are instituted among Men.
This, then, is the American Dream. It always has been and must continue to be so: that each of us would be allowed to experience life, liberty, and the pursuit of happiness. And government would not stand in the way of these pursuits.
As Americans, we are free to pursue our own happiness—however we decide to define it—in whatever lawful manner we desire. And those of us who have chosen to define happiness and security apart from $250K mortgages and SUVs in the garage are free to do so. Because a happy life contains more important pursuits than material possessions.
This is the American Dream. And it costs far less than $130K/year.
mindy says
while I agree with you about not having to have the money to live the Dream, I disagree with your take on the article. The article points out that there is an ideal in people’s mind about that the Dream is, but it’s not about having a lot of money. People want these ideals without regardless of the cost. Take “having a better life for our children”. A family of 4 living in a 1 bedroom apartment would strife for a “better” 3 br townhome. I think what is some what wrong is that USA Today took a simple point and ran number to generalize the cost. They have to do an average of cost of living which really skews everything for everyone. Said 3br TH can cost from $150k to $600K even within the same county, depending on where you are. So that $130k/yr number can be a lot to some and possible to others. I think the bigger point is that there is an ideal, but it can get somewhat excessive. Also the fact people blindly following some written piece(yours or the article your referred to) without questioning and looking at all the facts is what will harm us.
julia says
Great way to put it! It’s the ideal and not the exact number.
Tina says
I read something somewhere about the cost of having a child without college being about $200,000 or some such and I know we raised 3 kids without spending nearly that much. I am not sure what these figures count but we never had an SUV, a large house,
or many luxuries and they turned out just fine. 2 of them got 4 year college degrees and the 3rd went to a jr. college. I think it’s the same for retirement figures. If you don’t need all the junk you can have all the pleasures for much less.
Padge says
Always appreciate every word you write. Still trying to get out of debt and live on less. Wish I hadn’t bought into this so many years ago.
Tcobb says
I echo your sentiments, Padge, but grateful I’ve finally woken up!
Christina Judd says
Keep on keeping on! It took me many years and I won’t go back for any of money. There’s such value and peace in being ‘current’ as I like to refer to it. Good luck.
Britt Reints says
Bravo.
Kristin says
It amazes me that we must define our happiness based on SUV’s, vacations and eating out. What happened to finding happiness in the little things in life? The people around you, the experiences you have, the development of yourself are the things that really make us happy and most of those things are free. The fact that this article has gone viral is really disheartening.
Rain San Martin says
I couldn’t agree more. The true American dream is about having the freedom to live with passion and purpose. We need to live on far less than the projected expenses contained within the 130K estimate.
Jeanneke says
The Dutch dream nowadays is similar to the American dream…
I do not (want to) dream it and am still feeling blessed and happy with my life, which isn’t without trouble on health and money and sorrow.
It is fulfilling and filled with contentment, gratitude, love and happiness.
Thanks for this great post.
Sending blessings from The Netherlands.
d.s says
Thank you Jeanneke for your very beautiful blessing. If more of us could share your attitude, perhaps we could be discussing what the Earthling Dream might be.
And thank you Joshua for your insightful and compassionate rebuttal to the propaganda of discontent.
Carl says
Fantastic writing Joshua and this post is very much on point!
The pursuit of happiness/wellbeing and the pursuit of more are often conflicting paths and yet most people are sold on one will lead to the other.
More is not the answer.
jennifer says
Great commentary on how we can be content with less. There are many that do not make $130,000 that are able to provide all the things that are needed and still have fun/vacation, etc. Living the “American Dream” is relative to what you think that exactly is. Many are happy just to be in America. Dreaming, working, and saving contribute to financial success in my opinion.
Tom says
Don’t forget the general consensus of almost the entire world is that to have a fulfilling live you need to have money, and lot’s of it. In essence that’s what the US was build on.
What’s more, if you look at emerging nations like China or India this is the biggest mantra for the majority of people. To have a fulfilling you need to earn more money, buy more things and then flaunt that wealth and the materialistic belongings to the people around you.
It’s only recently that in places like the US people have come to realise that no matter how rich you are happiness has nothing to do with the balance of your bank account or how many cars you have in your garage.
So in essence I agree with you the article is wrong but sadly the majority of Americans are still chasing this dream.
Timothy W. says
Great article! I wholeheartedly agree with the points you put forward.