American Dream is dying or has it changed?

Question

I was listening to the BPMoney podcast my favorite one, and @Scott Trench got under my skin by saying that Americans are wealthier today then in the past. I don't believe it. I also could be old fashioned (I am a gen Xer 47) but I do not believe young people today have the opportunity to get married and buy a home like they have in the past. Vacations and time off are cool but a family and a home is what is becoming out of reach from today's young. Love to hear what others think.

@Scott Trench

Scott Trench · Answer

Americans ARE wealthier today than in the past. They earn more relative to inflation, even at the median and lowest levels, than they did in the past. And, numerous areas of life are cheaper and higher quality than they would have been for our baby boomer, or Gen X counterparts. When one zooms FAR out, the change is absolutely staggering.

But, millennials are also having a rough go of it when it comes to homebuying, and more and more of them are choosing not to, or are simply unable to, have children. As you point out. And, there is a lot more social stratification. While this generally has the benefit of pushing more and more people into the "upper class", it also has increased the total number of people, and percentage of people, in the "lower class" (though, all "classes" earn much more, relative to inflation, in real terms, than they did at the outset of the study).

For those interested in learning more about why it is so hard for most people to conceive of the incredible pace and march of progress in almost every conceivable area of human life that we can measure for, I encourage you to check out Factfulness and Enlightenment Now.

Obviously, not everyone is benefitting proportionately, or at all, from the march of "progress" as we define it in Western Civilization. But, the numbers, if you can believe them (depends on your political lean these days, I guess!), tell a clear story of ever increasing prosperity among Americans, on average (or on median).

Bill B. · Answer

I feel sorry for the youth today if they are living the same life I did and still can’t afford to buy a house, at least house hack one.

That means no cable tv, no cellphone, no Starbucks, no streaming series, heck, no internet, (though you can rent a vhs tape or two per week.), eating out once or two meals a week at a fast food joint and once or twice a month at the fancy place. (Olive Garden/chillis). Don’t fly on a plane until your almost 18 and then take only weekend drive and camp vacations until years after you own a home. Drive a 10-20 year old car and certainly the only people going to college had a job, or kind of job in mind that required a degree. There weren’t any of the “feel good: degrees some kids take today.

If they do that they should be able to buy a house the way I did. Get a co-worker, 2 friends, and a relative to move in with them and pay enough rent to cover the mortgage while you cover the utilities.

Everyone that compares today’s youth to our generation gives ZERO VALUE to all the things they call necessities. My college age nieces have been on 2-3 week long fly vacations every year since they were 6 or 7. And they vacation out of the country every year. If you don’t count riding my bike to Mexico and Canada  I wasn’t out of the country until I was 35. I didn’t have money for that kind of luxury, I didn’t want to pay rent so I needed a house.

Ps. They also aren’t big on taking any advice or help from anyone that desperately wants to help. Have you ever noticed how good you feel on the rare times you meet a genuinely interested and or polite “kid”? (I hate when the news calls college students kids and here I am referring to anyone 16-23 or 24 as a kid.)

Pps. I assume anyone that “can’t afford to buy a home” won’t even consider a rural or small town, I guarantee they could afford one there, but that’s below them. As are the people that live there now. It really bothers me when someone who lives in NYC, LA, or San Fran says housing is unaffordable. YES.  Yes it is in that location. So is Hong Kong or Brisbane. Nobody gave your the right to live in an expensive market because you want to.   I’ll add tot hat how mad it makes me when they say the average “XXX” can’t afford the average home. (Often a teacher, cop, etc.)  the “average” homes is a 3bd 2 bath home  why should a single person need that? (You might not notice, but they specifically don’t say household or it might not be true.)

Anyway. Thanks if you got this far. Rant off. Ignore most of this. Unless it hits home or applies to you. Then change your situation, if it’s not your fault you can’t fix it.

Scott Trench · Answer

Two more notes:

1) Citing this fact (generally increasing prosperity in almost every area of life for Americans over any long period of time) is generally unpopular. So, I will probably stop mentioning it. Though, you will be foolish to bet against it.

2) I do not believe the American dream is a house, two cars, 2.5 kids, and a dog anymore.

I believe that the new American dream is FIRE.

American Dream is dying or has it changed?

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