The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
The headline, as designed, caught my attention. “The American Dream is out of reach.” It being a CNN Money article, I was curious to see what is was about. Apparently, CNN Money had conducted a poll and about 60% of the respondents said the American dream was out of reach. I think there are a lot of pessimistic people in this country.
The American Dream
The simplest I way to describe the American dream is that children generally end up in a better position financially than their parents. I am sure that is what my parents wanted for me and it is also what I want for my children. Now, better is of course a relative term. My dream is certainly not for them to become the next Bill Gates or Warren Buffet. That would be nice though. No, my dream is that they are more financially secure. My hope is that I can teach them the necessary tools to achieve it. I think in the future, the emphasis should be on how you manage your money, not necessarily how much salary you can earn. I don’t think that was the case as I was growing up.
Now versus Then
I’ve talked about the differences between my parents and myself previously. They were blue-collar hard-working people. Learning that work-ethic from my parents and being blessed with a certain skill set, I have managed to obtain a nice white-collar job. The job pays me quite well. Not Bill Gates or Warren Buffet well, but well enough that my wife does not have to work. The job alone has allowed me to be in a better position financially than my parents. This is why I think it will require more than just a job for my children and other children today to end up in a better position than their parents. There are more people today working in cubicles than ever. Most of them are probably earning more now than their parents. In addition to that, there are a lot more dual income households, which the article touches on, making it that much harder for children today to out earn their parents.
Keys Going Forward
The article only mentions this statement in passing, but I think it is probably the biggest key. The article mentions that the savings rate today is low. No wonder people think the dream is unachievable; they aren’t doing anything to achieve it. They aren’t setting aside money for retirement, for college, for anything. People are just consuming. Companies have become very sophisticated at separating people from their money for the latest products. Smart phones, TV’s, computers, cable TV and even cars are being advertised so effectively, that people feel they can’t live without them. This means they spend their money on these products, instead of saving, and wonder why they can’t get ahead. I have learned this lesson the hard way. I was in a financial hole. The only way I was able to dig myself out was to stop spending more than I made. This has meant no smart phone, no new car, limited cable and until recently, no new TV. Discipline is going to be needed to get ahead in the future. Without it, people will go through life complaining how they never get ahead, all the while buying the latest fad.
My hope is that my children are able to find a job that they enjoy. I won’t even mind if they don’t go to college. My plan is to have money set aside for them in case they do attend college. I want them to start out in the best position that I can possible put them in. I don’t really care whether their job pays them a higher salary than what I currently earn. I care that they will be able to manage their finances and be happy. By accomplishing this, they will be able to achieve the dream.