Recently, Investopedia made headlines with their findings on how much it actually costs to live the American Dream. According to the study, it costs roughly 4.4 million dollars to have all of the things traditionally viewed as part of living the dream. This includes such things as a home, a car, two children, yearly vacations etc.

What makes this study so concerning is that number is approximately 1.5 million more than what the average college educated person makes in their entire lifetime. Even more, troubling, the cost rose by nearly 1 million dollars when compared to the same study in 2023.

Perhaps this is why according to a recent YouGov poll nearly half of all young adults no longer believe attaining the American Dream is possible. There is clearly a lot of pessimism for the future right now amongst our young people.

Who can blame them though? With interest rates the highest they have been in decades, and the cost of housing, college, and other basic necessities growing faster than wages it’s harder to get ahead than it used to be.  I would argue young people today face more economic challenges than any generation since the 1930’s.

I wrote several weeks ago about the fact that young people believe they need better than average returns on their investments and find themselves taking more and more risks to grow their money. With these additional risks can often come additional loses, putting the American Dream even more out of reach for many.

So why are they doing it? I believe most young people know they have more debt that they should, and not enough savings. They know they are not where they need to be, or where their parents were at the same point in their lives. Unfortunately, the actions they are taking to try and get ahead is often putting them even further behind

I know I am painting a bleak picture, but to be clear I do not believe the American Dream is dead. As someone who is living this dream despite joining the workforce during the great recession, I am walking proof that hard work and wise decisions can still lead to success in America. Even during difficult economic times. But I do think the Dream is in critical condition and without emergency treatment we may soon find ourselves saying it’s past saving.

So, what do we do to restore a belief in the American Dream? First, I think we must recognize it is not something we are all entitled to, but something we must work achieve. Here are a few of the actions I think are vital to making this dream a reality.

  1. Work both hard and smart: It’s not enough to put in long hours, you must also make sure the things you are doing bring value in the marketplace.
  2. Have perseverance: We will all fail; we will all have setbacks. It’s how we react to them that matters most. Don’t give up.
  3. Learn from others: Most successful people didn’t get there on their own. They have taken the wisdom others have imparted on them and used it for their betterment.
  4. Be bold and intentional: Things usually don’t just happen to successful people. They go out with a solid plan and make it happen.
  5. Do things in the correct order: Too often we want to run before we have mastered walking. Taking actions you are not ready for is one of the best ways to insure failure.

I’m sure there are plenty more steps to success, but these are a pretty good start. I won’t promise following these rules alone will guarantee you success. Luck and personal circumstances play a role too. But isn’t that what the American Dream is all about? Having the opportunity for the life you want, even if its not a sure thing?

(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)