Rarely a day goes by where I don’t hear some politician or pundit claim that the American Dream has become unattainable for too many. It’s also a common theme in my Facebook feed.
Sometimes the culprit is student debt. Sometimes it’s static wages, or the disappearance of pensions and manufacturing jobs. Sometimes it’s how predatory lenders have the disproportionate capacity to financially maim so many.
And I have responded by despairing for their desperation, for their newfound conviction that America is no longer the land of opportunity—that the prospect of upward mobility has become a cruel mirage. My only solace was my equally strong conviction that I not only have achieved at least some version of the American dream (yes, via a combination of privilege, hard-work and luck), but that my daughter will have a chance to do the same.
But, for the first time, I’m no longer so sure my daughter will get there. Not because she’ll lack for intelligence or dedication or good fortune, but because she will be raised in an era of unprecedented entitlement. If it takes a village to raise a child, then her father’s voice will be drowned out by millions of naysayers.
So, What Changed?
My breaking point came yesterday, upon reading a Legg Mason survey of affluent investors, which Legg Mason defined as individuals with more than $200,000 in investment assets. It found that 55% of those surveyed believe that the American Dream no longer remains within reach, with only 23% “strongly agreeing” that they are living proof of its existence.
Remember, these people are prosperous, by almost any relative measure of global or American life in 2016. Their $200,000 isn’t an annual salary. It’s the amount of cash sitting in bank accounts or investments that are designed to appreciate in value. It doesn’t even include the value of their home, or even their second or third. (Legg Mason excluded vacation properties.) It’s income after tax, mortgage payments, and literally every other past expense. There should be little worry about where the next meal, or next lifetime of meals, is coming from. If the car dies, these survey respondents can afford to immediately buy another one without the help of a financing plan (save for the event of an unexpected medical disaster or macro economic meltdown).
But they don’t feel rich. And before you tell me that $200,000 doesn’t go as far as it used to, particularly in certain cities, please realize that only 36% of those with at least $1 million in investible assets “strongly agreed” that they had attained the American Dream.
A few more stats from the Legg Mason (LM) survey:
* 64% of those with annual household incomes of at least $250,000 believe the American Dream is now out of reach.
* 62% of those between 55 and 64 years-old believe the American Dream is unattainable.
* Women are 14% more likely than are men to believe the American dream is unattainable.
To be sure, the “American Dream” has no official definition, making it largely in the eye of the beholder. But when asked to give their top characteristics of someone who has achieved the American Dream, Legg Mason survey respondents said the following (in order):
1. Feeling financially secure
2. Having the freedom to live the way you want to
3. Being able to retire at 65 and live comfortably in old age
4. Owning your own home
5. Knowing that working hard pays off
We’ve already addressed and dismissed the first one, and the second is equally absurd. If you have $200,000 of investible assets—let alone $1 million—and you don’t have the “freedom to live the way you want to live,” perhaps that’s more reflective on your expectations than on your actual means. For example, I want to live with a private helicopter (with a dedicated pilot) sitting outside of my home so that I can avoid traffic when heading into the city. A private chef would also be nice, plus a heated indoor pool, and court-side season tickets to the Boston Celtics. Am I missing out on the American Dream until those luxuries materialize? Of course not.
Retiring at 65 (or maybe an extra couple of years, given average lifespan increases) should be possible for most of these survey respondents, again depending on their definition of living comfortably. And I’d assume that most people with this much cash either own their own home, or have intentionally decided that it’s too much of a hassle (helicopter pad maintenance and all). Finally, if you’ve achieved the first four, it’s hard to imagine that the fifth remains elusive.
But, again, none of this is about objective logic. It’s about sentiment, and a political and societal climate that can no longer distinguish between those who actually have been victimized and those who simply fuel their own narcissism with self-pity. How can most Americans aspire to the American Dream when those who have achieved it refuse to acknowledge their own success?
They probably can’t, which means this cycle of pessimism will feed on itself and, in some cases, become self-fulfilling. I really hope my daughter doesn’t fall into that trap, that she will take advantage of opportunities and, if successful, that she will be grateful for it. Not ignorant of it.