🇺🇸 Want the American Dream? That will be $4.4m, please
Well atleast according to the 2024 Investopedia report.
The Cost of the American Dream: $4.4 Million?
🇺🇸 Want the American Dream? That will be $4.4m, please.
I recently came across an article on Investopedia which breaks down the "American Dream" into these eight categories:
- Owning a home
- Funding Retirement
- Having a Wedding
- Raising Two Kids
- Owning New Cars
- Yearly Vacations
- Having Pets
- Paying for your Funeral
🤯 The crazy part? That $4.4m price tag doesn't even include daily necessities like food, healthcare, home/auto insurance, and general cost of living.
Source: https://www.investopedia.com/cost-of-the-american-dream-2024-8705906
Do you actually need this much?
The math varies for everyone. For example:
- Cars: The study suggests an $800,000 lifetime cost for new cars. That doesn't apply to my family (I’ll be driving my Civic until it falls apart!).
- Lifestyle: We take more vacations than the average family (three times a year), and having dogs adds a significant premium to those trips.
It’s all about where you choose to allocate your capital.
Who can actually afford this?
According to Investopedia, to earn $5.6 million over a lifetime (to cover the dream + basics), a household typically needs dual earners with degrees. However, data shows that even the 90th percentile of American households has lifetime earnings of approximately $3.9 million.
The Reality Check: This lifestyle is becoming inaccessible to the vast majority of Americans. I fear this gap will only widen with the shift in the future of work due to AI, offshoring of talent, and persistent economic headwinds.
💡 Rethinking the "Dream"
Anecdotally, I’ve seen many friends move toward a different version of success. They are focusing less on material accumulation and prioritizing experiences and freedom.