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.
Pitting haves against have less has become fashionable. There has always been those with more, we just didn’t vilify them.
I know many people who make far more than $130,000/year and not one of them is happy and they can’t understand why they are not.
Bought into the dream (nightmare); 5 bedroom, 3 bath, Hummer, and a lot of toys. Walked away (clawed my way out); now living in a 1000 sq. ft. and drive a Jeep. Eliminating all of that dead weight has given me the opportunity to do what I want, when I want………I am totally CONTENT! Comparison is truly the thief of happiness.
Keep touching our hearts with your introspective and thought-provoking articles! You rock, Joshua!
Teri Clifton says
THANK YOU and SHARED!
Lively Minimalist says
Glad for your strong stand and the simplicity of your message!
Thank you for snapping your fingers and helping to break the spell. This (and your other writings) are incredibly helpful to me.
This article definitely gives some food for thought, however it’s a very geographicly-centered argument. I used to live in the middle of nowhere. There, 275k mortgages were a bit ridiculous and not at all necessary. Now, I live in an area where the cost of living is much higher. A 275k mortgage buys a nice, average home that’s comfortable (around 1700 sq. ft.), in a good neighborhood. However, I think everyone can rethink their needs vs. wants.
I had a similar thought . . . in SoCal you can’t get a condo for 275K, let alone a house, unless you drive 3 hours to get to your job . . . you also have to be in a very ambitious career to earn 130K here . . . the american dream of owning a house is a bit hard to come by in some parts of this country. . . minimalism helps one cope with this while we try to escape . . . but at the same time, do you really want to pay rent to help someone else get richer?
John Joyce says
Thank you for taking such strong stands in support of the truth and against the faulty standards of popular culture.
So many people are caught in the tide of excess, blind to the reality of the simple axiom “when goods increase, so do those who consume them”. It is a difficult and painful lesson to learn. I say that firsthand having lived the “American Dream” and ultimately selling everything my family and I owned to embark on a new kind of adventure in minimalism. All your articles are very encouraging. True joy does not come from “more”. It is only a long and sad distraction that many, many of us pour our too much of our lives into.
Thank you for this very real and truthful essay, Joshua.
We are waking up – slowly – but we are waking up. And people like you who bravely write about it are making a difference.
Peace to you,
I agree with you, Joshua 100%. I know a few people who spend like this…even more. A lady I know pays someone $150.00 a week to clean her house…and she’s been doing this for 20 years. Unbelievable! Does she care that her laziness has cost her over 144K so far? I doubt it. Glad I don’t live this way.
(Although the housekeeper is happy, I guess,)
Don’t forget about the opportunity cost of not investing $150 a week for 20 years! Using average market returns she’s not just out $144K, she’s out $385K.
Perhaps she does this so she could spend more time with her family, work a job she loves and enjoys or because she likes having a clean home but despises the act of cleaning. Perhaps she has a home that is difficult to clean (cork floors or lots of windows or something else that takes a fair amount of time or special materials/tools to clean) and she’d rather pay someone to clean it properly than make a (more) costly mistake.
Having a cleaning person in and of itself may be a conscious decision so someone has time or other resources available. Having a cleaning person because everyone else in the neighborhood has one – totally agree that the money could be better spent elsewhere!
I have a friend who owns a cleaning business and you’d be surprised how many people have a cleaning person come in so that they have the time to do something they want/need to do and the number of people who hire a single specific task done on a regular basis (one women pays just to have her carpets vacuumed because the sound is unpleasant enough to her) rather than having everything cleaned.
Just a different perspective!
PS For the record I don’t have a cleaning person and I doubt I ever will.
Telma Melissa Armanini says
Perfeito ! ! I love it…