Why Following the American Dream Will Rob You of Financial Control

by | BiggerPockets.com

I know that what I’m about to tell you is not probably something you don’t want to hear. I’m sorry to do this, but I’m about to burst your bubble. Let’s talk about the American dream. Many of you out there reading this have hit the subscribe button to this idea—because society has engrained into your head that there is a path to realizing this dream. That path goes like this:

  1. Go to college and get a degree.
  2. Get married and start a family.
  3. Combine your incomes and by a house.
  4. Downsize and send your kids to college.
  5. Hopefully after many years of hard work, you can retire and sip piña coladas on the beach.

The reality is that this path to the American dream is false, and I refuse to subscribe to it. Don’t get me wrong—I am very fortunate to be here in the great U.S. of A., and I never want to leave. However, before following the path to the American dream, I want you to consider something first. I want you to consider following your own dream.

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Why Following the American Dream Will Rob You of True Happiness

Now let’s go back to the original topic. Time and time again, the American dream has led so many down the path towards nothing but debt. To start down the path of fulfilling your own dreams, the first step you have to take is getting out of this deadly trap. Stop the downward spiral of using your credit cards for everything from electronics at Best Buy to triple lattes at Starbucks. In my eyes, financial freedom is having a successful business (real estate investing is also a business) and controlling your own destiny. The time for fun toys will come later; for now, let’s learn to be frugal.

Truth be told, you don’t need a single dollar to start a career as a real estate investor. What you need is a commitment to your own aspirations. Start with something as simple as jumping on the BiggerPockets Forums. Whether you’re a flipper, a wholesaler, or a buy and hold investor, there are plenty of very knowledgeable folks willing to help you get started down the right path to success.

One last thing—once you make this decision to carve out a future for yourself, you’d better be prepared to work your tail off. Your life is not contained within the hours of 9 to 5—nor should your business be. Having a successful business is hard work, but the reward of controlling your own future will be more fulfilling than any job title you have ever held.

What’s your take on pursing the “American dream”? Do you agree with this assessment?

Let me know with a comment!

About Author

Engelo Rumora

Engelo Rumora “The Real Estate Dingo" is a successful property investor, motivational speaker and serial entrepreneur that quit school at the age of 14 and played professional soccer at 18. He is also a soon to be published author along with becoming a TV personality in his very own real estate house flipping show. To find out more go to engelorumora.com . Engelo Rumora has been involved in over 400 real estate deals and founded five businesses in Ohio. The most successful is Ohio Cashflow, a company that specializes in providing turnkey properties in several Ohio markets. The newest venture is List’n Sell Realty, a real estate brokerage based in Toledo, Ohio and soon to be known as the #1 discount broker in the country.

30 Comments

  1. karoline kaon

    Good article to start a conversation the idea of success but I don’t agree with you’re version of the American dream. Let me explain! The idea of the American dream to me was always that anyone in the US can be a successful entrepreneur. The dream is that moving to the U.S. can provide opportunity for anyone to become successful. Other countries have a barrier to entry to become successful because things like status, and connections matter more than persistent hard work. My parents were successful business owners in Brazil and immigrated to the U.S. with the hope that there are better opportunities here for their children. I would agree that my generation had been brainwashed to think that success is determined by going to college and getting a good job. But to call it the American dream is a but if a stretch. Although you do bring up good points. Anyway, I’m ready to give up the 9-5 life to pursue my dream of F.I. and hopefully real estate can get me there!

    • Engelo Rumora

      Thanks Karoline,

      In my opinion the underlining fact to the ‘American Dream’ is to own your own home along with the other things I mentioned in my video.

      It’s a typical example of how society has brainwashed many folks.

      I’m a big believer in every living their own dream whatever that is.

      I suggest taking a deep look within to see what one truly wants.

      Much success

  2. Peter Schuyler

    I’m 48, and yes I got caught up in the American dream myself, I went to college, got a Computer Science degree, bought a townhouse 4 months out of college (house hacked with roommates), meet my wife, got married, three kids, moved to Colorado, bought a big house, fixed it up with HELOC, saved for kids colleges, went on vacations, bought new cars, saved in 401K’s, etc.

    Then in 2007, BAM !!!, read Dave Ramsey, switched mind set to budget, save, live below means. Paid off all debt, got rid of credit cards, did the 6 month emergency fund, sold big house, renting a smaller house now, and reached the step where we wanted to save for house or build wealth. Dave does not educate beyond this step much.

    Then 2016, BAM again !!!, read Rich Dad Poor Dad, changed my mindset on debt, we took the savings we had scrimped away, and now have two investment properties, rent a house for now, but no commercial debt, only debt we have in being paid by tenants and we continue to sock money away for #3.

    Our plan, manage the properties ourselves, learn the expense game, focus on saving for next investments, rent for awhile to have no personal debt so we can borrow for investments, and Iive below our means, still budgeting from the Dave Ramsey days, and using debt for real estate investing from the Rich Dad Poor Dad mindset. I read every book that makes sense on real estate investing, joining a local REI to educate further. I finally started educating around taxes, its like I crawled out of nightmare, “I mean dream”, to discover more freedom. My hope is that someday I can move away from my IT world and be financially free to choose a new path.

    I agree we got caught up in the dream, executed it for sometime, re-educated ourselves on the wealth potential from smart investments, will maintain the 401K system since its there, and build assets instead of consumer debt. Loved the video, inspired me to write this comment.

    Good luck to all.

    • Engelo Rumora

      Thanks Peter for your absolutely awesome comment.

      You’re on the right track there for sure and funny thing is that I also rent and will continue renting.

      Owning a huge home is pointless in so many ways.

      I’d much rather rent and invest as I can make so much more with $30,000 – $40,000 or $50,000 than using it as a deposit on my ‘American Dream’ house.

      My strategy for owning my dream property is only when less than 10% of my net wealth can afford it.

      That mean’s my net wealth will need to be at $50m before I ever buy my dream property haha

      Much success

  3. Devin McGowan

    Yeah I’m paying for the first one right now. Although I’m glad I realized the lie that is the American Dream as soon as I did (22; I coulda still be in the matrix for another couple of years), I wish I had been woke to this before I got college debt and an underwhelming degree.

    • Engelo Rumora

      Hi Devin,

      You caught it pretty early mate so well done.

      I wouldn’t discount the benefits of the college degree.

      I always wished I had just a bit more schooling then I do as I can’t read or write too well, my typing is extremely poor and math sucks hehe

      Keep YOUR DREAM alive and I wish you much success

  4. Mike Dymski

    There are consumers and there are investors. Neither one is better than the other…to each their own. Contrary to popular belief, people do what they want to do and wishes are not true wants. Most people are much more satisfied doing what they are doing than starting a business or landlording. They think people like us are crazy (and they may not be wrong).

  5. Jerry W.

    Engelo,
    Nice sensationalism, but little to no information to back it up except, I never grew up here, I never went to college but I know what you should do. It appears you have no credentials or experience to back any of this up except your dealings in real estate. I agree that the way most folks spend now is atrocious. I agree that budgeting and living within your means and not overspending your credit card is vitally important to financial health. However you say in your article, going to college, getting married combining income having kids, and buying a house is bad. So are you single with no kids and do not own any houses?
    The truth is going to college provides opportunities that many simply would never have without it. My dad never even finished high school, he really struggled with concepts over time that would have been easy with a bit more education. He eventually learned, but the lessons were hard. I went to college, but never took out a student loan until my second year of law school. I worked for 8 months out of the year then went to school for 4 months. Times were hard, but I made it. The law degree opened doors that would likely have never opened but for the degree, jobs, income, and the knowledge to do more in real estate or other businesses I could have never done with my high school education. I imagine the same is true for many folks. Yet you seem pretty comfortable telling folks they don’t need college. Better yet they don’t need any savings to quit their job while having a family. So what if they guess wrong and their kids have to live in the street. Never mind that they may lack the ability to get their kids quality health care or or even basic things like stability of knowing where they will sleep the next night.
    Reading a few blogs on BP makes it OK to forget you have a responsibility to look out for the future of your family. You have some good points but hopefully no one really listens to this garbage.
    You say invest in real estate but don’t buy a house. Wow, how can it be good for one but not for the other. My house payment was a third of what rent was on my first home I bought to live in. The money from selling that trailer house gave me the money to buy the land and trailer I lived in for the 7 years I went to the university. I went to school, worked 3 jobs, sold cars I would buy and fix up, etc. My wife worked part time as well. Her business degree was probably bad for her. We could have just hired a $40 per hour accountant to do our books, run my law office, and help run the rental business. In fact according to your article, I should not have married her or had kids. We should not have combined income or bought a house. When I sold the house i lived in going to the university I took the money and paid off the new house I bought in the town where my next job was. I still live in that house 27 years later. I paid $38K for it. It is worth about 4X that now.
    I also own about 30 to 35 doors of rentals. I do them on the side. I paid for both of my kids to go to college. My daughter is married and has a great child I adore. She has a very good job, her husband runs a small construction company, and they have started building and running storage rentals. I know, it is horrible how badly they have messed up.
    My son is a firefighter. I know bad thing, he helps save people and property. He is not married, so he is doing something right by your standards, but he did buy a house, bad thing according to you. It has a rental in the back that pays about 2/3 of his mortgage payment. He also has a business on the side running a cleaning business, doing commercial carpet cleaning. His degree actually helped him advance in his business.
    You lack the credentials and credibility to give the advice you are giving. you may be harming lives by the drivel you are preaching ignorantly. You are free to even say stuff like go rob banks, but hopefully folks will not listen too seriously. Your path is right for some folks, it dead wrong for most. Nearly every really successful person I know who made it with no college degree makes sure their kids get one. Ever wonder why? Just because your way is right for you does not make it right for everyone. Do you seriously believe everyone is just like you? How many here have ever been professional athletes?
    I have no problem saying be financially responsible, or only buy a house if it makes sense dollar wise compared to renting. Saying do not go to college, do not get a job to support your family, do not have money saved before quitting a job is stupid and plain bad advice for most folks. You don’t have to worry though, but I bet you wouldn’t rent to someone who did that without a track record of making money from real estate. Nearly everyone I know of said it took a long time to begin making money in real estate. How did they live until the money began rolling in?
    If everyone reading your article followed your advice 90% or more would probably fail. Hopefully most will not take you seriously.
    I came from a home with very little money. When me or my brother worked the money was used to help feed the family. Education not only opened up a path for me, it opened up my mind to possibilities I never even knew existed. The education I received in high school never did any of that except a very few teachers. You are welcome to belittle education, but please do not spout this garbage as the true path that everyone must follow. This article is like a bad informercial selling real estate. I bet you even sell houses to folks wanting to buy turnkey right? You going to sell to someone without a job just starting out in real estate? How many folks who buy from you have jobs and college degrees?
    OK rant over. Your turn to take a few shots at me.

    • Engelo Rumora

      Thanks for taking the time to compose such a detailed comment.

      I’m glad it hit home with you but you missed the point and I can see a bit of Jay Hinrichs in the attention to detail just ZERO finesse to the structure.

      The main point here was that most folks fail because they are lazy and use every excuse known to mankind for their failure.

      I’ll just answer some of your questions without going into too much depth on the matter as I don’t want to throw any more salt on the wound.

      “So are you single with no kids and do not own any houses?”
      Not single, have 1 kid that I know off haha and own a ton of investment properties world wide. I would NEVER get into debt to own my own home. The freedom everyone looses by doing this is detrimental IMO. I’m happy to travel (Moving to the Bahamas this year for 3 months) at the drop of a dime and will continue to do so.

      “I bet you even sell houses to folks wanting to buy turnkey right? ”
      We sell turnkey and are one of best companies in the business. Reputation has blossomed (To the disappointment of many eager to see the company and myself fail) over the years for doing the right thing by all of our investors.

      “You going to sell to someone without a job just starting out in real estate?”
      Probably not as they couldn’t afford to invest and it wouldn’t be the right move for them at such an early stage of their investment cycle.

      “How many folks who buy from you have jobs and college degrees?”
      I would say almost everyone.

      Thanks again mate and I wish you another 27 happy and successful years in the same house 🙂

    • Hans Borchardt

      Jerry,
      I agree that higher education should not be discounted. It is important to think about college as an investment; people should be mindful of the return on that investment. Here is an interesting TED Talk about how higher education is sometimes a bad investment.

      http://www.ted.com/talks/sajay_samuel_how_college_loans_exploit_students_for_profit

      I think that Engelo makes a good point. People should think twice about whether college is the right investment for them.

  6. Davit Gharibyan

    The American dream is a scam. They sell you the false sense of security when in reality there is none. All the American does is makes you average and being stuck in the middle class. I don’t know if you received the memo but the middle class is about to get crashed. Don’t be naive, start pursuing your dream and control your life and destiny. There is no security on the other side but there is lot’s of freedom!

    • Engelo Rumora

      Thanks Davit and 100% agreed.

      Worked 100+ hrs every week over the last 4 years on my own business and investments.

      I’m turning 30 this year and am at a stage where I can retire if needed 🙂

      This never could or would have been possible If I followed the life cycle that most do.

      Much success

  7. Ira Ashton

    I think you may be confusing what the average American does vs “the American Dream.” I always thought the American dream meant that anyone can go from rags to riches through hard work (w/formal or informal education) regardless of the social status or hierarchies that they were born into. I think it’s the “Anyone can be anything” idea that is the American dream. Buying a house, having a family, career, and dream home could definitely be part of that though. I have built a couple businesses from the ground up. Although I do not own a home at the moment, I feel that I am living the American dream. I built something out of nothing. Just my two cents. I agree that most Americans live well above their means with way too much consumer debt and spending money on things that will not give them any kind of return ( including college debt). If that is the American dream, then yes, we need to get rid of it.

    • Engelo Rumora

      Thanks Ira,

      What the average American does is that they follow the path of owning their own home which in my opinion they classify as living the “American Dream”.

      The proud “home owner” mentality, etc…

      It’s the wrong way to go about it and being bogged down in the same house for 10s of years is not freedom.

      Just my opinion

  8. What I got from the post is that there is no one formula for the American dream. I don’t think the author advocated not going to college, or not getting married. Chart your own dream. You can be successful and happy single with no kids . A college degree doesn’t guarantee wealth, but we agree it’s important. Everyone’s lifestyle doesn’t dictate owning a house, but It could involve owning Rental property that supports ones dreams to travel. Even being a real estate investor isn’t for everyone. I think he’s saying “determine your own dream and figure out what’s necessary to make it a reality.

  9. Krista Riggs

    That sounds like the opposite of the American dream. That is the formula your parents want you to follow and what everyone does by being a zombie living their lives on consumer-auto-pilot.
    I am really surprised to hear a real estate investor who thinks it’s a bad idea to own their own home. I’m not shackled to my house, I got cheap financing on it and can move anytime and turn it into a rental or remodel a few things and sell for a good profit, or if I stay in it I’ll have the same low monthly payment for the life of the loan. Owning is important for maintaining control of personal finances as monthly payments are fixed where as rents are completely out of one’s control.

    • Engelo Rumora

      Thanks Krista but I would never own my own home.

      Well, I would once my dream home is only 10% of my net wealth and I would need to buy it with cash.

      I can do magic with $50,000 or a $100,000 and the same can be said for other investors that know what they are doing.

      Liquidity is so important and money makes money.

      So whatever you have tied up in your house is capital that is not working for you, making you even more.

      Just my opinion

      Much success

  10. Jerry W.

    PBBBBTTH,
    You are no fun Engelo. By now we should be trading insults, and vociferous statements about why we are each right. I like your reply, but please keep in mind that you are pretty far removed from normal in either Australian or American culture. Very few have your tenacity or drive. Education really can be defining of whether or not you can break out of the cycle of poverty. It will positively affect more peoples lives than real estate investing will. Of the 5 kids in my family 2 of us got higher education and did pretty well in completely different fields. One made it becoming a mechanic, and the other two did not get education and struggle in barely above minimum wage jobs.
    It’s great to show folks another path if education is not for them, but please do not encourage folks to avoid education when it is so important to most of them. Thanks for listening to the rant. Gday to you.

    • Engelo Rumora

      haha

      I’m much more fun in person mate so come and visit Ohio sometime.

      This typing pisses me off and my staff constantly teases me saying I’m preparing Chop Suey when I write an email (I type with only 2 fingers) so I always try to keep things short and remove drama lol

      I stress my points in an extreme way and I am fully aware of how important education is. I wish I had the capacity to go back and finish high school at least because just having those basics would have helped me get to where I am now much quicker.

      Still, it’s not a requirement for success and too many folks just need a big kick up the A$$.

      Success comes down to hard work and not many are willing to work hard and most stand for nothing.

      And you know how the saying goes “If you stand for nothing, you fall for everything”

      Much success and please comment on my next vlog.

      Many more controversial ones coming 🙂

  11. kris patel

    I had been lucky buying home, selling at profit, used equity to invest in real estate. All depend on the cycle you and real estate is. My 1 st home in 1969, than sold and got another, 3 times. Now I live free in my home with reverse mortgage, and happy at age 75.
    Thanks

  12. DL Martin

    I pretty much agree with Engelo.

    COLLEGE: Ironically, I enlisted in the US Army Military Police in order to pay for four years of college. I emerged from college debt free but obtained a stupid liberal arts degree instead of a business degree. I worked as a police officer in SoCal for 25 years and a degree was not required to get the job, was not required to obtain any special assignments and was not required for promotion… Conclusion? I should have taken the job offer from the Los Angeles Police Department in 1985 instead of delaying for 4 years to go to college. I assume that I walked away from $50k in lost earnings in 1986, $55k in 1987, $60k in 1988 and $65k in 1989… I made $56k as a rookie cop in 1990.

    BUYING A HOUSE: Another shining example of stupidity. During the police academy, and approximately six months following, I rented a bedroom from a divorced homicide detective who owned a great house, in a gated neighborhood, close to the police department. I paid $350 per month. And that included utilities and I got to park my car inside his garage.

    Instead of continuing to “share” a house for $350 a month, I drank the Kool-aid and used a VA loan to buy a single family residence with zero down. It was “nice” to own a house I guess, but my monthly housing cost skyrocketed from $350 to $1,400 per month. And I was single. For many, many years…

    Its too bad that I waited until 2000 to buy a 4 plex in SoCal. Had I purchased a small multi in 1991, instead of a SFR, I would have been buying owner occupied 4 plex’s instead of owner occupied SFR’s throughout the 1990’s. At least I had the foresight to keep my SFR’s as rentals instead of using HELOC’s to buy boats and who knows what else.

    WORKING FOR THE MAN: I retired at 50 (2014) with 84% of my single highest year salary and incentive pay. I am “set” until CALPERS crashes and the Ponzi Scheme comes to a screeching halt. I sold my SoCal SFR and moved to Cincinnati, one of the most “affordable” housing markets in the USA.

    ENTREPRENEURISM: We sold our SoCal rental houses and the SoCal 4 plex. 1031 exchanged the 4 plex to a 39 unit in suburban Cincinnati, paying zero capital gain in the process.

    For me, going to college and buying 5 single family residences, were very bad decisions on many levels.

    An excellent K-12 grade education and three years in the US Army was really all I needed to prepare myself for life. Your mileage may vary.

    DL
    Luke 2:14 KJV

  13. Stanley McKenzie on

    Engelo maybe you should change the title to “Stop being an American Lemming” because Engelo YOU ARE LIVING THE AMERICAN DREAM. Definition of American Dream is (noun) – the ideal that every US citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative.”he could achieve the American dream only by hard work”. It says nothing about college, home ownership, marriage, kids, etc. Each person’s path to success is different, the important part is living below your means, hard work, and investing in opportunities that can give you an ROI. Stop walking off the cliff with the rest of the American lemmings (living beyond your means). So…How much money do you need to quit your 9 to 5? eh?

    • Engelo Rumora

      haha

      Good one Stanley but there are mixed thoughts on the subject.

      Since you started with the Google search, here is what I found:

      “While running for President in 2008, Hillary Clinton’s American Dream Plan included homeownership, college, retirement, and health insurance for children. Obama extended healthcare with the Affordable Care Act.” – https://www.thebalance.com/what-is-the-american-dream-today-3306027

      But all in all Yes, many folks are lemmings lol

      I’m proud to say that I’m living my dream in the best country in the world. But my dream is not my version of the “American Dream” haha

      Much success 🙂

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