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.
Gail says
Amen brother, the American Dream isn’t buying stuff but rather our freedoms and rights to dream and pursue.
Gladys (The Pinay Mom) says
I agree with you! If American dream costs this much,then they faking this “dream”.It depends how you live your life,yes possessions count but people go overboard on this one.
Carrie says
I understand your point, Joshua, but I guess I look at things a little differently than most people. I know full well that most American families don’t make $130k + a year. Therefore, instead of being jealous, my instinct is to feel right at home with my fellow Americans. There’s no point in keeping up with the Joneses when I know the Joneses can’t keep up with themselves! That realization is very freeing.
Jeremy says
I love your statement: “There’s no point in keeping up with the Joneses when I know the Joneses can’t keep up with themselves!”
Judy says
—And when you need a dog to throw behind the white picket fence…please be sure to rescue…and not pay hundreds for “papers”.
Laura says
Wonderful article Joshua! The American Dream definitely differs person to person, but does seem to be based on material possessions rather than personal contentment and happiness for a lot of people. I like to believe happiness is what people are looking for in the dream, but just misguided towards possessions in their search for it.
Marya says
If we know how to spend wisely we can have the American Dream with far less than $130k/year.
Robert says
I’m agree with you, Joshua and I enjoy reading your blog very much. I think that the whole concept of the American dream is silly. Dreams are for free, but living your dreams isn’t. Right from the start many people, actually the majority, had to pay (not only money, gold, oil, but also with their lives) the American dream of a bunch of people. Is it any different today? I don’t think so. This is why it is called the American dream, it is just a dream, not reality. Sorry, my English isn’t very good, but I think you understood, what I wanted to say.
Diana says
American Dream? Reality check: this has become the American Nightmare for many. Of course is impossible to place a price tag to happiness. America is a land of waste and opportunity, in some instances, for those who can profit from the wasteful.
There is no American Dream any longer because the priorities have shifted. Health care and job security have become the number one concerns for Americans. Luxury cars and large homes are still sought after as part of this so called “American Dream”, but the truth is that more and more people cannot make financially because they were never taught how.
Reclaiming Your Future says
Fantastic article Joshua! I’m not even American but I can appreciate all your points about it making the 7 out of 8 who don’t have the money for the ‘American dream’ unhappy and jealous etc.
It’s so disheartening being told that just because you don’t have the ‘right’ amount of money that somehow your life is not fulfilled!
Liz says
So this either assumes a 2 parent income or one parent with an income greater than twice the average. Where I live in upstate NY that income would buy lots of things including a BIG home but move 3 hours south to NYC and you’d barely be able to afford a 1-2 bedroom apartment. Obviously this is an average number.
I am a professional and if I chose to work full time, our combined income would exceed this but because I would rather be home with our children as much as possible we’ve scaled some stuff back, paid off our cars (mine is 12 years old, my husbands is 7), and budget. We were able to pay for private school this year despite the fact that we don’t both work full time.
However, my professional friends talk about getting a new SUV when their lease is up or buying a new home. My colleague recently told me she is looking for that 250-300K home because she and her husband recently had a baby and want to upgrade from their 3 bedroom 2000(!) sq.ft. town house! I don’t even know how to respond to that at this point. At the same time she complains about having to leave her son to go to work full time!
Another friend took out a SEVEN year loan to buy a car. A CAR. It was hard to feign excitement for her.
While driving a 12 year old car isn’t exactly fashionable I am more than happy to continue driving it until it completely dies. I truly don’t give a fig about what others think a “professional” should drive. Not that I wouldn’t love to drive a new car! But my priorities are in order. My family trumps any “thing.”
We will no longer be paying for school, so now I can work even less. I am still able to save for retirement, save for emergencies, go on vacation and pay a little more for things like locally raised meats and necessities like gluten free foods (2 of us are celiac). IF we chose to put our girls in some extra curricular activity, we would adjust our budget to pay for it but right now are choosing not to do so.
I think that regardless of the absolute dollar amount, what many people are missing is the realization that they DO have a choice! You don’t need nearly as much as you think and you are not forced to to own or buy stuff that ultimately owns you. AND you CAN say NO to children and they won’t die. Really. I do it all the time ;)
Only YOU can own your life. Regardless of your “position” or profession, you are not beholden to someone else’s idea of what you should wear/drive/live in/own. And in that is true freedom!