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.
Andrew says
The American dream is not that specific. The American dream is this: When you live in another country with little freedom (because the government does not allow you to reap the fruits of your labor) you come to live in America where you have the ability to be successful, whatever you dream you have the freedom to do it.
Em says
I’m the only one in my family that’s not upset about living below the “poverty line”.
they are all busy trying to get loans and save up 22K for brand new car when I can get the same one on craigslist for 1K.
I really think most of this ‘american dream’ is all about showing off to the neighbors and not about actually enjoying yourself.
Rachael Jere says
…”does not allow you to reap the fruits of your labour”; you mean pay taxes for FREE healthcare, FREE education, effective public transport, MODERN infrastructure and all those other pesky things that benefit ALL rather than only those who can afford it? Your American sense of freedom is a pup that has been sold to you and keeps you on someone else’s treadmill to fund their dream. And what freedom is there in that?
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Carlos says
???
annmarie says
Aaaaaaagreed!!!!!!
Jennifer says
I very much do like a lot of things about minimalism. I have always strongly valued freedom and experiences over things, so I consider myself to be minimalist with respect to possessions too! But, I have to say that I don’t like this article. Specifically, I disagree with the writer that the USA today article is bad because it “breeds discontent.” First, people are either content with their lives or they are not. A short article publishing some numbers is simply information that we thankfully all have the freedom to read and do with as we please. So I don’t like the writer’s paternalistic tone or his suggestion that the public cannot emotionally handle some basic facts about how much things can reasonably cost in America. Second, if someone reads the USA T article and suddenly feels very upset, I think they should be allowed to, and should not be judged for wanting more in their lives. Wages for most in this country are depressingly low, at a time when companies are reporting record profits and the stock market is booming, and that’s just not right. People should be free to feel mad when they are being treated unfairly, and when they are upset, they should speak up about it. In contrast to this writer, I hope people read this article, get mad, and call their congressmen.
Linda says
So glad to see someone with some common sense comment! I was getting angry while i continued to read this article. If you are jealous of some who has a corner office then you should talk to them and figure out how they got there and then maybe you can get your own corner office!
Terri says
Agreed!
Nan says
I also agree that the housing costs are pretty accurate. Any house in the northeast outside of a major metro area is going to cost that much plus high taxes, high home heating oil and fuel oil. Rents for a one bedroom are almost the size of a mortgage payment.
We try to live a minimalist lifestyle because it appeals to us and because the high cost of living requires it too! We have a child with a serious chronic illness and we need our good medical coverage that my husband’s job provides.
Our daughter is in a state university with a good scholarship and has taken the federal loans offered and still half our paychecks go to her tuition so she doesn’t come out with a grand in loans! Our house is paid off last year but we have taken just 2 vacations in the last 30 years.
I think the harm in this article is that it infers people are so into stuff and living an expensive lifestyle that they have enormous debt and maybe that is true for some. But we find the basic cost of living so high we can just meet our needs. Happily we don’t want the luxuries.
Nan says
Meant to say a hundred grand in loans, not a grand, that would be nice :)
Martha Evans says
I would have to agree. My husband and I make far far less and have two children. We are very happy and contented. We have a bit of a struggle every now and then, but we are truly happy. I wouldn’t Chang my life. We work hard, maybe harder then the next guy. In the end we appreciate what we where working for even more. My american dream is to have a happy healthy safe family. Living were we can walk down the street and not be worried that something may happen to our children. Living in a place were I can send my kids to school and know they are safe and learning. Thank you for your article:)
Brian H says
I generally agree with this article, although it certain parts of this country a $275k residence is very basic and also it is very difficult to eat on less than $300 a week if you try to shop for healthy food, especially of the organic kind. Those numbers probably are pretty accurate. I totally agree with all the other so called ‘requirements’ that you must spend money on in order to be perceived as ‘livin’ the dream’. Total materialism. Not for me. To each their own.
Martha says
I never have and never will have that amount of annual income. Put two kids through college, no student loans as a single mom, no public assistance and loved every minute of it. I am now retired, live conservatively but lack for nothing. This estimate is inaccurate from my point of view.
Angela says
Agreed