really? the 'essentials' seemed mostly reasonable to me - grew up in midwest, now living in the US 'south' (NC). Not much there struck me as way out of line.
on the 'taxes' segment: most people won't owe $32k in taxes unless they're actually earning a high amount anyway, so it's sort of self-fulfilling - if you include $32k in taxes, then yes, you'll need to earn far more than that to pay those taxes.
Not sure why 'cable/internet' are separate from 'entertainment'.
Well, when you put on a 4WD SUV as 'essential' and the payment/costs is approx. 65% of housing expenses, either the numbers are padded or someone doing that is a fucking idiot.
4k education expenses also seems excessive but I won't comment on that since I don't really know much about the US education system costs but apparel 2.6k? More than Utilities? WTF? That comes to around 200 dollars on apparel per month.
Do you have a more realistic automobile for a family of four? IMO, it's more realistic to have two cars, because it usually takes two incomes to make 130K, and 275K houses aren't near good public transportation.
2013 Mazda 5, $333/month payment, $50/month for 2 tanks of gas, $80/month insurance, service averages less than $50/month. Total: ~ $500/month. Fits our family of 4 nicely.
We are a family of 3, plan on another one soon. We have a Toyota Auris (Corolla over in the states). It will last us many more years (unless it fully breaks down) and it is more than enough. Sure, would it be nice to have more space for when vacation comes and need to bring a few more things, sure.. but not 1000 bucks per month worth. We are now a 1 car family, but when we had two, the other one was a 10 year old Toyota Yaris that whoever didn't had to drive our kid used to go to work/errands.
As someone else in the thread mentioned, this isn't the "America Dream", this is the "I want shit and have fun dream".
I don't see why either a minivan or mini-mini (like the Mazda CX-5) or crossover (Toyota Highlander, Kia Sorento, Hyundai SantaFe) wouldn't be a good choice. I am living the proverbial American Dream and love our Odyssey to death. Guess what, though: it's not new (a 2008), and it costs nowhere near the article's projected annual cost, especially if you do your own oil/fluid changes. I drove a VW GTI and my wife had a Golf TDI when our first child was born and there was no conceivable way to fit his car seat rear-facing behind me, so we sold my GTI and bought a bigger vehicle. Minivans are awesome. :)
The expenses for groceries and the car are far higher than what someone making $130k a year would pay.
$12,659 per year on groceries works out to roughly $240 per week. While it is possible to reach that (e.g. by shopping exclusively at high-end specialty grocers and avoiding coupons), most families would pay far less. A family with access to a supermarket would probably spend around $80-$120 per week on groceries, or $4200-$6300 per year.
The car expenses assume a very large fuel-hungry vehicle, and appear to assume the vehicle will be purchased on a high-interest loan. A five-seat sedan would work just as well, and would result in expenses of about $3000 per year ($10k amortized over a ten-year operating lifetime, plus $2k per year in fuel).
Similar issues exist with the other large expenses. For example, the author's chosen goal for college savings is higher than the cost of a four-year degree at Stanford (according to the stanford.edu Net Price Calculator) and is far more than tuition costs at a normal school.
> A five-seat sedan would work just as well, and would result in expenses of about $3000 per year ($10k amortized over a ten-year operating lifetime, plus $2k per year in fuel).
(1) automobile costs include more than amortized purchase costs and fuel (such as maintenance) -- especially if you are going to keep it operational for a decade.
(2) what 5 seat sedan has a $10K new price?
> For example, the author's chosen goal for college savings is higher than the cost of a four-year degree at Stanford (according to the stanford.edu Net Price Calculator) and is far more than tuition costs at a normal school.
The savings target for college savings shouldn't be compared against the current cost, but against the expected cost at the time the student will be attending college.
> automobile costs include more than amortized purchase
> costs and fuel (such as maintenance)
For modern cars, maintenance is not a significant expense compared to the purchase price and fuel. Insurance is cheap if one's not driving an expensive truck.
> what 5 seat sedan has a $10K new price?
No need to buy new, let some other sucker eat the depreciation. A 3-4 year old Corolla (or equivalent) shouldn't cost more than $10k.
> The savings target for college savings shouldn't be
> compared against the current cost, but against the
> expected cost at the time the student will be
> attending college.
Inflation isn't going to be a significant factor, since long-term savings are going to be placed in something like a TIPS bond. It is possible that the total cost will increase, but what are the chances it'll cost more for a regular school then than it does for a top-tier school now?
> For modern cars, maintenance is not a significant expense compared to the purchase price and fuel
Its certainly not in the first few years (which is why some companies offer prepaid routine maintenance) -- in the latter several years of a 10 year life, that's far less the case.
> No need to buy new, let some other sucker eat the depreciation. A 3-4 year old Corolla (or equivalent) shouldn't cost more than $10k.
A 3-4 year old Corolla or other economy car is going to be spending more of the 10 year life you propose in the part of its lifespan where the "maintenance is not a significant expense compared to the purchase price and fuel" argument is invalid than a new car.
> Inflation isn't going to be a significant factor, since long-term savings are going to be placed in something like a TIPS bond.
A TIPS bond is indexed to general inflation, inflation of higher education costs has been much higher than the general inflation for quite a long time. So, yes, for college savings, inflation is likely to be significant factor, even if you use an investment vehicle protected against general inflation.
> It is possible that the total cost will increase, but what are the chances it'll cost more for a regular school then than it does for a top-tier school now?
Quite good. Using reference points I'm familiar with, the tuition for a UC now are higher than the tuition at Caltech in the early 1990s, and the ratio of college tuition inflation to general inflation has been higher in the second half of that interval at the first, having stabilized at around 2.0 from the late 1990s on, where it had been at around 1.5 in the early 1990s. So
For modern cars, maintenance is not a significant expense compared to the purchase price and fuel. Insurance is cheap if one's not driving an expensive truck.
I disagree with both of these assertions.
No need to buy new, let some other sucker eat the depreciation. A 3-4 year old Corolla (or equivalent) shouldn't cost more than $10k.
According to edmunds.com, your typical 4 year old Toyota Corolla will cost closer to $15k+.
> Saving $2500/year @ 10% compounded annually over 18
> years is a little over $120K.
10% is not realistic; 2-3% is more likely, since a college fund isn't the sort of thing you'd want to gamble on stocks with.
> Not qualifying for financial aid
Always factor in financial aid when calculating college costs. According to stanford.edu's Net Price Calculator, a gross income of $130k with the specified income tax rates will receive sufficient financial aid to reduce the net cost to about $11k per year. This is still pretty high for undergrad, but it's not financially ruinous.
That's not self-fulfilling. Add up all of the essentials without considering taxes. Figure out how much income it would take to pay for all of those things. Work out the amount of taxes that you would owe on that income. Add it to income.
Of course, you now have to take into account this extra income and add that to the taxes, and you'll add that result to the total income, which'll need taxing, but this fortunately has a closed form solution, and we can quickly calculate a final number. At least I think other people could quickly calculate it.
> on the 'taxes' segment: most people won't owe $32k in taxes unless they're actually earning a high amount anyway, so it's sort of self-fulfilling - if you include $32k in taxes, then yes, you'll need to earn far more than that to pay those taxes.
For the article they want to present a gross income figure, i.e. what salary do you need to afford the American Dream. The figure for taxes is simply the income tax due on a salary high enough to have an after-tax (net) income equal to the other expenditures. There's nothing funny or self-fulfilling about it.
Many do have a simple answer: slightly modify our social arrangements. There's no law of physics leading to these outcomes; we are way past the need for starvation; there's enough shelter for everyone; etc.
Just that those of us who wish to do this find themselves in war with the elites who don't. :)
It depends how to define American Dream. That's an outlandish salary even there, attainable by almost no one, at yet thousands upon thousands of folks are getting by ok.
I really appreciate that they pointed out where they got their numbers.
I don't agree with all of them (I don't think that a family of 4 should necesarily own a 4WD SUV which will accentuate gas and insurance costs when 4 door economy car would be fine.
Not sure what the $2,000 a year per child education expense is, seems too small for private school, too big for public school. I couldn't find the referenced USA Today article. Our neighbors' kids who are still going to the public high school spend about $1,500 on various sports costs and other school supplies.
Also food seems a bit steep, a bit over $1,000/month on food? That is like $250 a week. Presumably they eat out a lot?
But the quibbling then boils down to how they are living and where. So that makes it challenging. A family of four that buys annual ski passes every year, eats out for at least four meals a week, has the bread winner buying lunch every day, buys all new clothes to match the latest fashion, doesn't keep any vehicle longer than 4 years, and only buys things "new"? Ok, I could believe $130K.
But then I fall back to what is the point? And then you see it, the entire point:
"Nonetheless, it's clear that though the American dream is still alive, fewer and fewer of us can afford to live it."
And this, I just don't believe at all, although I get how if people do believe this, it works to their advantage. So by and large, not a reasonable article in my opinion.
I don't agree with them either. Too low. A family of 4 would drive two cars. With two breadwinners they would have to spend a lot on childcare until the age of 12. The housing expenses seem extremely low. Cheap house and maintenance is unneeded?
Maybe food is more expensive in Canada, but my family of 4 never eats out and we spend $250-275/week. I cook most things from scratch and I buy mostly local or organic dairy and produce which costs me an extra 25-30% depending on the season.
There can be a lot of variability depending on where you shop.
We buy fruits and veggies in the specialized "market" stores. Supermarket prices are double. We buy stuff that's on sale (pretty much everything goes through a cycle of sales or is on sale somewhere). We shop for dairy across the border where organic milk costs about half...
Yeah... the food estimate is one of the things they got right, at least in my experience. Have four people living in our house right now and we spend about $250-300/week on food. All healthy stuff, I avoid a lot of canned food. That doesn't include eating out or desserts. If we didn't bother to deal hunt the costs would be even higher.
It depends on what you consider groceries I suppose. Are you only counting food and drink? Where do you put toiletries, cleaning and general household supplies?
$1k/mo does seem a bit high, but not unreasonable. We do a lot of budget shopping (Costco, coupons, generics, almost no organics, and usually split a side of beef with friends). Meat has gotten really expensive, and I would definitely consider that to be part of the American Dream.
I don't agree with these numbers either since it's all relative to a person's lifestyle.
I didn't grow up with cable television or fancy toys. If anything, I received a single toy once a year as my birthday present. We rarely if ever ate out at a restaurant; those were reserved for special occasions. If we did eat out at a restaurant, everything on the menu would be under $10. Vacations? We still managed to have one once a year. Usually we'd sign up for a 3-4 day group tour trip to another state. Clothes were generally hand me downs.
My family went from being in the low income bracket to the middle class. Basically we had to make a lot of sacrifices in life. Sure I was envious of my friends having the newest sneakers or latest gaming console, but I understood we couldn't afford it. I didn't grow up eating organic healthy food, hell, I couldn't afford that stuff. We bought whatever was on sale. These days, things are different.
As for the $2000 year education expense. My guess it's for private classes. Despite my parents making minimum wage, they never neglected my education. I hated taking extra classes on the weekends/during the summer while the rest of my friends were out playing, but looking back now, I totally get it.
Keep in mind that there are assumptions made about what the "American Dream" is, driven by cultural representations of what a stereotypical successful American life should be like. It doesn't seem geared toward what the "Average American" life is really like, it's more of a "How do I live like the families on TV?"
Hence the 4WD SUV, owned home, 2 kids and college attendance, etc.
I think the American Dream has been inflated to mean "the American citizen gets everything s/he wants." hmmm, seems like whining.
Look, the American Dream is about being able to have a reasonable life, keep your family healthy and safe, be a free citizen, and work hard to earn your living.
When did it get to be redefined as "I need a 80 inch TV, XBox, 4-wheel drive car, private education, cellphones, multiple DVRs, 3000 sq ft home, and no taxes and no responsibilities for my expenses, nanny for my kids, golf lessons, soccer, and three cars"?
That attitude of entitlement is what is killing the American Dream, IMHO.
One more little thing: immigrants are coming here with $20 bucks to their name, washing cars, or driving them, or cleaning windows, or doing lawn, or being engineers, or whatever. They talk about the American Dream.
If I went from washing cars in Bangladesh to washing cars in the US, I would call it my American Dream. For a lot of immigrants, simply being in the US is the American Dream. And as long as their quality of life keeps improving, the Dream lives on.
> Look, the American Dream is about being able to have a reasonable life, keep your family healthy and safe, be a free citizen, and work hard to earn your living
No, its always been about having two general things:
(1) Experiencing continually improving material abundance by the standards of the time, and
(2) Not being prevented by imposed class or other restrictions from being able to attain even greater material abundance with the scope of one's own ability.
This has been pretty true even before the phrase "American Dream" for the concept was popularized in the early 20th Century, but was clearly attached to the original popularization of the term and to its use since then.
> It just means you have the opportunity to prosper based on talent and achievement.
No, it doesn't. From the earliest articulations, it involves both having wealth and having opportunity to further that wealth without barriers of class.
> It never guaranteed prosperity individually.
It doesn't guarantee anything, because its an common individual aspiration (hence the word "Dream" in "American Dream"), not a covenant.
> When did it get to be redefined as "I need a ... private education"
$2000/year per child is not a private education, that's consumables, school trips, maybe some educational activities during the 3 months of summer when public schools don't run. Child care would easily cost that per child per month if both parents are working.
We'll halve the car expense to $6000 a year and drop all extra expenses (vacation, entertainment, eating out, cable/internet.) And let's drop our taxes by 50%, since we are earning less, and our savings entirely since, really, who saves anything anyway, right?
My math pegs that right around 70k a year, or about 20k more than the median household income.
Yeah, it's totally entitlement that's killing the american dream.
This would be really interesting with some sort of selector to see how the costs and relative balance would change by region/state.
For instance, in the DC area it would be far more - probably nearly double for housing, utilities and education/childcare. Median home price here is $400k, electricity is $0.13+ kWh, daycare is $500-1000/mo, private school is $11-30k+/yr.
Personally, I spend far more than listed in each category above plus taxes and far less on nearly every 'extra' and several 'essentials'.
Also, since a surprising number of people commenting here don't seem to be familiar with the phrase:
I think it's a good goal to work towards. Second, it's one less thing to worry about. You could easily get by on half of that if your American Dream is different.
As a software developer, I've always dreamt of making enough money, or getting funded to the point where I can make my own software.
Recruiters often remind me that programmers are a dime a dozen, so chasing projects can be frustrating.
My 'workaround' to a lack of funding is to develop my first game (that I designed) on the weekends. The only drawback is it takes a lot longer.
The sweetest advantage to weekend software projects? I can focus on making a game that I know will be fun and sell well. That aspect has always been out of my control for my previous projects, where the focus is creating another's vision of an app or game.
You can check out my apps at bensapps.neocities.org for previous client work.
The American Dream isn't about a price of annual income. The American Dream is about the possibility of having an annual income. Originally American was free which brought on the Enlightenment Period, the Industrial Revolution and allow with it, the concept of making money. The dream is you can make money. This is an important concept to understand back then because making your own money was impossible with the enslavement by kings and variants of Statism. Today American isn't free there is no American dream. Today we are more taxed and more regulated than ever. The concept of making money only exists by having 50% of it redistributed - enjoy.
You are talking about 1 element, out of a million, pointing to it and saying this is a falsehood. For example, you are basically looking at 1 tree saying its not growing, while ignoring the forest around you - enjoy.
So what parts of the "American Dream" are cut and/or subsidized with debt to fit reality? Median household income is about $50K so there's about a $80K shortfall between the $130K "American Dream" and the $50K "Median American". Assuming $20K of the $80K shortfall are taxes you wouldn't have to pay due to earning $50K instead of $130K, you would still need to cut $60K out of expenses. Looking at the list, the line items most likely to see cuts are:
Housing at $17k per year
Groceries at $13k per year
Car at $11k per year
Medical at $9k per year
Education at $4K per year
Apparel at $2.6K per year
Vacation/Entertainment/Discretionary at $17k per year
Savings/College Investments at $22.5k per year
What's scary is you can completely cut savings, discretionary, and medical (~$50k total) and still need to find another $10k to cut. This is how we end up with people in debt and/or are forced to live without a safety net (no insurance/savings) to fund everyday expenses.
So what's the fix? Tough to say. Near term you're definitely seeing a rise in "sharing economy" type activities to better utilize/monetize assets. Provider gets another revenue stream (to supplement flat/stagnant wages). Consumer gets an end product at an affordable price (since they can't afford it otherwise).
"It's not about getting rich and making a lot of money.
It's about security"
that the American Dream can somehow provide security is its greatest lie. any american that has lived in europe long enough understands what differentiates it from america is how people perceive this issue of social and financial security. europeans expect their socialist structures to provide security. one can see it clearly in the mentality of personal investment. american's, to their credit, live for taking risks to get ahead. whereas europeans avoid it (and save), with the expectation their government is to provide them with such security. a european is more likely to put their money into an obscure insurance than a stock. sure, this risk-averse mentality might might make the place a lot less productive (at least one could argue) but it sure makes it a lot more liveable and safe.
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[ 0.22 ms ] story [ 134 ms ] threadon the 'taxes' segment: most people won't owe $32k in taxes unless they're actually earning a high amount anyway, so it's sort of self-fulfilling - if you include $32k in taxes, then yes, you'll need to earn far more than that to pay those taxes.
Not sure why 'cable/internet' are separate from 'entertainment'.
4k education expenses also seems excessive but I won't comment on that since I don't really know much about the US education system costs but apparel 2.6k? More than Utilities? WTF? That comes to around 200 dollars on apparel per month.
As someone else in the thread mentioned, this isn't the "America Dream", this is the "I want shit and have fun dream".
$12,659 per year on groceries works out to roughly $240 per week. While it is possible to reach that (e.g. by shopping exclusively at high-end specialty grocers and avoiding coupons), most families would pay far less. A family with access to a supermarket would probably spend around $80-$120 per week on groceries, or $4200-$6300 per year.
The car expenses assume a very large fuel-hungry vehicle, and appear to assume the vehicle will be purchased on a high-interest loan. A five-seat sedan would work just as well, and would result in expenses of about $3000 per year ($10k amortized over a ten-year operating lifetime, plus $2k per year in fuel).
Similar issues exist with the other large expenses. For example, the author's chosen goal for college savings is higher than the cost of a four-year degree at Stanford (according to the stanford.edu Net Price Calculator) and is far more than tuition costs at a normal school.
(1) automobile costs include more than amortized purchase costs and fuel (such as maintenance) -- especially if you are going to keep it operational for a decade. (2) what 5 seat sedan has a $10K new price?
> For example, the author's chosen goal for college savings is higher than the cost of a four-year degree at Stanford (according to the stanford.edu Net Price Calculator) and is far more than tuition costs at a normal school.
The savings target for college savings shouldn't be compared against the current cost, but against the expected cost at the time the student will be attending college.
Its certainly not in the first few years (which is why some companies offer prepaid routine maintenance) -- in the latter several years of a 10 year life, that's far less the case.
> No need to buy new, let some other sucker eat the depreciation. A 3-4 year old Corolla (or equivalent) shouldn't cost more than $10k.
A 3-4 year old Corolla or other economy car is going to be spending more of the 10 year life you propose in the part of its lifespan where the "maintenance is not a significant expense compared to the purchase price and fuel" argument is invalid than a new car.
> Inflation isn't going to be a significant factor, since long-term savings are going to be placed in something like a TIPS bond.
A TIPS bond is indexed to general inflation, inflation of higher education costs has been much higher than the general inflation for quite a long time. So, yes, for college savings, inflation is likely to be significant factor, even if you use an investment vehicle protected against general inflation.
> It is possible that the total cost will increase, but what are the chances it'll cost more for a regular school then than it does for a top-tier school now?
Quite good. Using reference points I'm familiar with, the tuition for a UC now are higher than the tuition at Caltech in the early 1990s, and the ratio of college tuition inflation to general inflation has been higher in the second half of that interval at the first, having stabilized at around 2.0 from the late 1990s on, where it had been at around 1.5 in the early 1990s. So
I disagree with both of these assertions.
No need to buy new, let some other sucker eat the depreciation. A 3-4 year old Corolla (or equivalent) shouldn't cost more than $10k.
According to edmunds.com, your typical 4 year old Toyota Corolla will cost closer to $15k+.
Not qualifying for financial aid, the total cost (tuition, room, books) per year @ Stanford will run you $50-60K--easily $200K+ for four years.
If this tuition history chart (http://www.collegecalc.org/colleges/california/stanford-univ...) is any indication of the future, four years at Stanford or any prestigious college in 2032 will set you back a ~half million USD!
I suppose the parents can bet on the smarter of the two kids...
Of course, you now have to take into account this extra income and add that to the taxes, and you'll add that result to the total income, which'll need taxing, but this fortunately has a closed form solution, and we can quickly calculate a final number. At least I think other people could quickly calculate it.
For the article they want to present a gross income figure, i.e. what salary do you need to afford the American Dream. The figure for taxes is simply the income tax due on a salary high enough to have an after-tax (net) income equal to the other expenditures. There's nothing funny or self-fulfilling about it.
Look man, we know we're being screwed over. We all do. Why don't you tell us what to do about it? Oh what's that? You don't have an answer...?
I think they are telling you that you need to earn $120k+ a year.
Like should we not talk about the North Korean work camps/political prisoners/torture because we aren't ready/willing to go invade them?
Anything that Government covers (education, health) will increase in cost because the "vendors" know the government will "bail" them out.
Real-estate increasing price is partially because the realtor as well in some places.
Perhaps the government should take note of the trends and at least investigate a little bit deeper.
Just that those of us who wish to do this find themselves in war with the elites who don't. :)
Also, I disagree with the sentiment that children (2?) are essential.
For four, including growing children?
>Also, I disagree with the sentiment that children (2?) are essential.
Essential for the "American Dream," not for the calculation. Of course they are.
You can spend anywhere between close to zero to infinity on clothing. Brands or not brands, new vs. hand-me-down. Sale or regular prices...
I don't agree with all of them (I don't think that a family of 4 should necesarily own a 4WD SUV which will accentuate gas and insurance costs when 4 door economy car would be fine.
Not sure what the $2,000 a year per child education expense is, seems too small for private school, too big for public school. I couldn't find the referenced USA Today article. Our neighbors' kids who are still going to the public high school spend about $1,500 on various sports costs and other school supplies.
Also food seems a bit steep, a bit over $1,000/month on food? That is like $250 a week. Presumably they eat out a lot?
But the quibbling then boils down to how they are living and where. So that makes it challenging. A family of four that buys annual ski passes every year, eats out for at least four meals a week, has the bread winner buying lunch every day, buys all new clothes to match the latest fashion, doesn't keep any vehicle longer than 4 years, and only buys things "new"? Ok, I could believe $130K.
But then I fall back to what is the point? And then you see it, the entire point:
"Nonetheless, it's clear that though the American dream is still alive, fewer and fewer of us can afford to live it."
And this, I just don't believe at all, although I get how if people do believe this, it works to their advantage. So by and large, not a reasonable article in my opinion.
But I do workout a lot so I tend to eat like a monster. Still ...
130K wouldn't cover my bills, that's for sure.
We buy fruits and veggies in the specialized "market" stores. Supermarket prices are double. We buy stuff that's on sale (pretty much everything goes through a cycle of sales or is on sale somewhere). We shop for dairy across the border where organic milk costs about half...
(Vancouver, BC, area)
$1k/mo does seem a bit high, but not unreasonable. We do a lot of budget shopping (Costco, coupons, generics, almost no organics, and usually split a side of beef with friends). Meat has gotten really expensive, and I would definitely consider that to be part of the American Dream.
I didn't grow up with cable television or fancy toys. If anything, I received a single toy once a year as my birthday present. We rarely if ever ate out at a restaurant; those were reserved for special occasions. If we did eat out at a restaurant, everything on the menu would be under $10. Vacations? We still managed to have one once a year. Usually we'd sign up for a 3-4 day group tour trip to another state. Clothes were generally hand me downs.
My family went from being in the low income bracket to the middle class. Basically we had to make a lot of sacrifices in life. Sure I was envious of my friends having the newest sneakers or latest gaming console, but I understood we couldn't afford it. I didn't grow up eating organic healthy food, hell, I couldn't afford that stuff. We bought whatever was on sale. These days, things are different.
As for the $2000 year education expense. My guess it's for private classes. Despite my parents making minimum wage, they never neglected my education. I hated taking extra classes on the weekends/during the summer while the rest of my friends were out playing, but looking back now, I totally get it.
Hence the 4WD SUV, owned home, 2 kids and college attendance, etc.
EDIT: Downvote? Am I misrepresenting something?
Look, the American Dream is about being able to have a reasonable life, keep your family healthy and safe, be a free citizen, and work hard to earn your living.
When did it get to be redefined as "I need a 80 inch TV, XBox, 4-wheel drive car, private education, cellphones, multiple DVRs, 3000 sq ft home, and no taxes and no responsibilities for my expenses, nanny for my kids, golf lessons, soccer, and three cars"?
That attitude of entitlement is what is killing the American Dream, IMHO.
$130k is an offensive number to call the Dream.
No, its always been about having two general things: (1) Experiencing continually improving material abundance by the standards of the time, and (2) Not being prevented by imposed class or other restrictions from being able to attain even greater material abundance with the scope of one's own ability.
This has been pretty true even before the phrase "American Dream" for the concept was popularized in the early 20th Century, but was clearly attached to the original popularization of the term and to its use since then.
It has never been as modest as you present it.
It just means you have the opportunity to prosper based on talent and achievement. It never guaranteed prosperity individually.
No, it doesn't. From the earliest articulations, it involves both having wealth and having opportunity to further that wealth without barriers of class.
> It never guaranteed prosperity individually.
It doesn't guarantee anything, because its an common individual aspiration (hence the word "Dream" in "American Dream"), not a covenant.
$2000/year per child is not a private education, that's consumables, school trips, maybe some educational activities during the 3 months of summer when public schools don't run. Child care would easily cost that per child per month if both parents are working.
We'll halve the car expense to $6000 a year and drop all extra expenses (vacation, entertainment, eating out, cable/internet.) And let's drop our taxes by 50%, since we are earning less, and our savings entirely since, really, who saves anything anyway, right?
My math pegs that right around 70k a year, or about 20k more than the median household income.
Yeah, it's totally entitlement that's killing the american dream.
For instance, in the DC area it would be far more - probably nearly double for housing, utilities and education/childcare. Median home price here is $400k, electricity is $0.13+ kWh, daycare is $500-1000/mo, private school is $11-30k+/yr.
Personally, I spend far more than listed in each category above plus taxes and far less on nearly every 'extra' and several 'essentials'.
Also, since a surprising number of people commenting here don't seem to be familiar with the phrase:
http://en.wikipedia.org/wiki/American_Dream
As a software developer, I've always dreamt of making enough money, or getting funded to the point where I can make my own software.
Recruiters often remind me that programmers are a dime a dozen, so chasing projects can be frustrating.
My 'workaround' to a lack of funding is to develop my first game (that I designed) on the weekends. The only drawback is it takes a lot longer.
The sweetest advantage to weekend software projects? I can focus on making a game that I know will be fun and sell well. That aspect has always been out of my control for my previous projects, where the focus is creating another's vision of an app or game.
You can check out my apps at bensapps.neocities.org for previous client work.
Say what? Tax rates in the U.S. have been trending down for decades, especially for the wealthy.
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States
See the section titled "History of income tax rates adjusted for inflation".
Housing at $17k per year
Groceries at $13k per year
Car at $11k per year
Medical at $9k per year
Education at $4K per year
Apparel at $2.6K per year
Vacation/Entertainment/Discretionary at $17k per year
Savings/College Investments at $22.5k per year
What's scary is you can completely cut savings, discretionary, and medical (~$50k total) and still need to find another $10k to cut. This is how we end up with people in debt and/or are forced to live without a safety net (no insurance/savings) to fund everyday expenses.
So what's the fix? Tough to say. Near term you're definitely seeing a rise in "sharing economy" type activities to better utilize/monetize assets. Provider gets another revenue stream (to supplement flat/stagnant wages). Consumer gets an end product at an affordable price (since they can't afford it otherwise).