We’re here today to discuss the death of the American Dream, and what must be done. That statement might sound depressing at first glance, but those who look beyond mere appearances will find something much different – an opportunity. The death of the American Dream represents an opportunity to shift our perception, to decide what matters to us today. To create a paradigm shift in our very thinking.
The Old American Dream
Once upon a time, the American Dream was described as owning a home with a white picket fence, having 2.3 kids, a dog in the yard, and staying with a job for decades until retirement came along with a pension. It was the quintessential atomic family. That’s what people seem to have been screaming they want to go back to for the last seven or eight years – that we need to make America great again.
The challenge is that, for the vast majority of people, that sort of life isn’t even an option any longer. It’s impossible to go back to that. That reality was only an imagining. It was an illusion, a myth that we’ve all bought into today.
So, what is the American Dream, if the atomic family and working for one company until retirement rolls along is not it? Is it being able to work hard and achieve financial freedom? Is it not having to kill yourself working at a job you hate while enriching everyone else? Today, it feels like the definition is shifting, that it’s different for everyone.
However, most people can agree on a few things. One of those is that the American Dream means stability at the end of the day, whatever that means for each of us. The issue is that this idea of stability is being challenged. COVID-19, the ongoing global supply chain issues, and global inflation – they all show just how fragile “stability” is in an interconnected world. They show us that we cannot rely on our jobs, the services available to us, or even the stock market.
If we cannot rely on those things, what can we rely on? The answer is us. We must learn to rely on ourselves, on our experiences, our intuition, and our capabilities.
Ultimately, the American Dream isn’t dead. It’s just changed formats. The house with the white picket fence, the one-income family, the single job held through retirement, those are gone, but there are so many new opportunities today that anyone can find a way to ignite their Dream and achieve success.
The Forces at Play
Today, Americans must contend with an incredible range of forces – a vortex of expenses that seems destined to keep them impoverished.
In 1975, the average income for an American family was around $13,000. Today, it’s $36,000. In 1975, the cost of the average home was around $40,000. Today, it’s $428,000.
In 1975, the ratio of income to home cost was 32%, which was very good. Today, that ratio is only 12%, meaning that younger generations are being financially harmed by the economy.
In the 1970s and 80s, it cost around $2,200 per semester to attend the University of Texas at Austin. Today, that cost has gone up seven times to $15,400 per semester on average. The skyrocketing costs of education mean that many cannot afford to go to college, and those who do carry immense debt loads for decades into their professional lives. It’s no longer enough to work a job or even two jobs to get through college. To afford an education, students must be like Michael Dell, who started a multi-million-dollar company in the middle of his college experience.
As a result, even the idea that children should go to college is being challenged. Do they need $100,000 in school debt? How will that affect their ability to live a fulfilled, successful life? Even many parents would choose to do things differently if they had known in their youth what they know today.
These facts are just the tip of the proverbial iceberg. In short, it is becoming harder and harder to meet basic needs, much less attain the financial freedom necessary to focus on the things in life that matter, like serving others or giving back to the local community.
Maslow’s Hierarchy of Needs
Achieving financial security is a critical component of the American Dream because it extends so far beyond the boundaries of “ourselves”. With financial security comes the ability to donate time at the local food pantry or homeless shelter. With financial security comes the opportunity to build stronger communities, plan and develop community gardens to address food insecurity, strengthen bonds between neighbors, and turn the “us and them” mentality into just “us”.
Maslow’s hierarchy of needs describes the basic requirements of all humans, without which they cannot achieve self-actualization. Those requirements form a ladder that looks like this:
- Physiological needs: These include food, shelter, water, air, and anything necessary to take care of the body and mind. If someone is unable to take care of their basic bodily and mental needs, everything else goes out the window. This is one underlying cause of the increased rate of mental illness today.
- Safety needs: These include security, health, employment, and financial safety, although it does not necessarily require being independently wealthy. Those who are unable to achieve positive health outcomes are usually unable to do much beyond striving to get by.
- Love and belonging: Without a sense of love and belonging, humans are unable to achieve their full potential. It leads to serious increases in mental illness, like depression and even chronic anger. It all kind of all falls apart. The mental health industry is thriving right now because we haven't taken care of love, belonging, or self-esteem.
- Self-actualization: When you can let the ego go, you can turn toward others and help them. But if you don't have those lower levels, the physiological needs, the safety, the love, and belonging, you're never going to get to self-actualization; you're never going to realize inner peace. So, if we can help people get to that point and help them get towards that inner peace, society overall will be a better place.
Again, the American Dream is really about stability. It’s not about money or status or fame. It’s about having an idea of what will happen tomorrow and being okay with it.
Applying Maslow’s Hierarchy to the American Dream
Thinking back to the now-defunct American Dream, we can see that the house, the white picket fence, and the one-income family are all gone. They’re simply not there. And that’s because, for too many Americans, achieving any of the basic needs is impossible.
For instance, people who don’t know where they’re going to live cannot move beyond seeking to meet their physiological needs. When people lack access to basic needs like housing, they’re unable to move beyond and give back to the wider community. If you’re facing rent hikes or cannot find a home to purchase because everything has been bought up by landlords, it locks that person into an endless cycle of seeking safety and being unable to move beyond that.
Of course, landlords shoulder their share of the blame, but the problem lies beyond them. They are simply following the market and the example of the wealthy. High rents are often not due to landlord greed, but due to the need to recoup the immense costs involved with purchasing rental property in the first place in today’s real estate market. In some instances, property prices are so high that even landlords cannot afford to purchase them.
In this, we’re seeing the antithesis of the American Dream dawning, as we move from an ownership mentality to one of leasing and renting, where people can no longer afford to own the homes in which they live. It further widens the gap between the haves and have-nots.
We need an interjection – to achieve financial freedom, people must step outside the paradigm. They must take the next step in their own lives. Getting out of the race through real estate, a side hustle, building a business, or creating something/providing a service is the only path forward toward financial security.
With that being said, entrepreneurship may not be right for everyone. There’s a lot of freedom in it, but it comes with an immense burden of work. Entrepreneurs are free to work any 80 hours during the workweek they like. Even going the passive income route comes with a lot of uncertainty, including figuring out how to create passive income in the first place.
Building the New American Dream
So, what can people do to get themselves a piece of the new American Dream? How can they ensure predictability and stability in their lives, particularly in today’s topsy-turvy world where change seems to be the only constant? Here are six tips:
- Find something where you're creating your destiny, controlling the environment, whether that’s a side hustle or something else.
- Get your kids starting early with building their financial freedom, show them what a savings account looks like, show them an IRA, a 401(K), and other retirement mechanisms to help them get prepared for college if that's their path, and planning early.
- Buy inexpensive assets. Focus on things that will make money or provide something that will help you grow and build. For instance, buying a car every five years might not be what you want to do because that might take away from something else.
- Figure out what you enjoy, because whether you have a job and are creating this as a side hustle or a passive growth portfolio, it generally starts with literally more than your 40 hours a week as something after hours. Or even if you are very successful with it, it does become your life. So, make sure that you're happy and know what you're getting yourself into.
- Know what you're doing. Get educated through experience, mentorship, or just an educational program so, you're not flying blind.
- Get off the starting line—entrepreneurship to do your side hustle to do anything. Some so many people fail and can't do it. And you know what, it's analysis paralysis. The fear of the unknown is that I want everything to be perfect, and then I'll start, but the reality is if you start today, some little mistakes will happen. But you recognize them, correct them, do better, and keep moving forward.
Without forward movement, nothing will ever change. For those who want to claim their piece of the American Dream, it means acting and committing to change. It means being accountable for your future and realizing that the old dream of working for a company and then retiring with a pension just isn’t feasible any longer.
Diversification is the rule in investments, and it’s the rule in achieving success. It allows people to satisfy their basic needs and then begin to give back to the community and build better lives for everyone. Of course, getting to the position where someone can volunteer their time or money requires that they’re not living hand to mouth in the first place.
The right help can go a long way here. At Crowdfunding Lawyers, we’ve made it our mission to help people bring it all together. We help fill the void, whether someone’s struggling to start raising capital, grow their business, or find sustainable paths forward. We also help people handle some of the most overlooked aspects of running successful businesses, like taking care of their investors while still meeting SEC rules and regulations.
Above all, aspiring entrepreneurs and business owners need to remember that securities laws are no joke. Compliance isn’t easy, but it is mandatory.