Price tag for the American dream: $130K a year | General Homesteading Discussion | Forums

What do you guys think?

No idea is more central to Americans' outlook than the American dream — the belief that with hard work and the freedom to pursue your destiny you can achieve success and provide better opportunities for your children.

Historian John Truslow Adams, who coined the term, called it "the greatest contribution we have made to the thought and welfare of the world." It has inspired millions of people from every corner of the globe to come here in search of liberty and opportunity.But the financial crisis, housing bust and Great Recession have caused more of us to worry that the American dream is out of reach.

For the vast majority of Americans, there is a sense that achieving the American dream is becoming more difficult," wrote Mark Robert Rank, Thomas A. Hirschl and Kirk A. Foster in a new book,

Chasing the American Dream.

Starbucks CEO Howard Schultz, in announcing a new policy to provide employees with a college education, declared: "In the last few years, we have seen the fracturing of the American dream."

In fact, three-quarters of Americans polled by the Brookings Institution in 2008 said the dream was harder to attain.

They're right to worry. An analysis by USA TODAY shows that living the American dream would cost the average family of four about $130,000 a year. Only 16 million U.S. households — around 1 in 8 — earned that much in 2013, according to the U.S. Census Bureau.

In an interview, co-author Thomas Hirschl, a professor at Cornell University, stressed that for the dozens of people they surveyed and interviewed, the American dream was not about becoming one of the 1%.

"It's not about getting rich and making a lot of money. It's about security," he said. It's also as much about hope for the next generation as it is about the success of this one. "They want to feel that their children are going to have a better life than they do," said Hirschl.

In their book, the authors write that besides economic security, the American dream includes "finding and pursuing a rewarding career, leading a healthy and personally fulfilling life, and being able to retire in comfort."

With that in mind, USA TODAY added up the estimated costs of living the American dream:

•Home ownership is central to the American dream. So, we took the median price of a new home ($275,000), subtracted a 10% down payment, then projected the annual cost of a 30-year mortgage at 4% interest. We also added annual maintenance costs of 1% of the purchase price. Total: $17,062 a year.

•We used the U.S. Department of Agriculture's April 2014 figure of $12,659 for a moderate-cost grocery plan for a family of four.

•In May, AAA estimated it would cost $11,039 a year to own one four-wheel-drive sport-utility vehicle.

•The Milliman Medical Index pegged annual health insurance premiums and out-of-pocket medical expenses at $9,144.•We used various estimates for the costs of restaurants and entertainment; one family summer vacation; clothing; utilities; cable or satellite; Internet and cellphone; and miscellaneous expenses (see table).

•Total federal, state, and local taxes were pegged at 30% for households at this income level, based on a model developed for Citizens for Tax Justice.

•USA TODAY calculated current educational expenses for two children at $4,000 a year and college savings (all of it pretax, we assumed) at $2,500 per year per child, based on various rules of thumb.

•Finally, the maximum annual pretax contribution to a retirement plan for people under 50 is $17,500. That's slightly less than 15% of this American dream household's annual earnings, in line with financial planners' recommendations.

Total: $130,357.

It sounds like a lot — and it is in a country where the median household income is about $51,000. Add one more child and another vehicle and you could easily reach $150,000

There are big regional variations, too. It costs a lot less to live the American dream in, say, Indianapolis or Tulsa than it does in metro areas like New York and San Francisco, where housing prices and taxes are sky high.

And many people achieve the dream on much less. Some immigrants, for example, have extended families and other support systems to help bear the burden.

Nonetheless, it's clear that though the American dream is still alive, fewer and fewer of us can afford to live it.

http://www.usatoday....../11122015/

a nice rebuttal piece

This past weekend, 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.

This past weekend, we celebrated Independence Day in America. Towns and Cities all across our great Republic were united in their celebration: 238 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 there are greater and more important pursuits available to us than material possessions.

This is the American Dream. And it costs far less than $130K/year.

http://www.becomingm.....can-dream/