If you want the American dream of a house in the suburbs, two kids, and a cabriolet to drive around, it’s going to cost you millions of dollars.
Financial media site Investopedia has calculated that achieving these milestones will now cost a staggering $4.4 million, and researchers say most Americans That’s more than $1 million more than he would have earned in his lifetime.
To put this into context, the median net worth of the top 10% of U.S. households is approximately $3.8 million, according to the 2022 Federal Consumer Finance Survey.
The American Dream is probably out of reach for the average single person, but it is “comparable to the incomes of two-income households,” the researchers said.
The price of the American dream
Severance pay: $1,599,995
Home ownership: $929,955
Raising two children and college: $832,172
Owning a new car: $811,440
Annual vacation: $179,109
Wedding: $44,300
Pet: $36,626
Funeral: $8,453
Total: $4,442,050
Perhaps surprisingly, severance is the biggest expense, accounting for $1.6 million of the $4.4 million total.
The report found that Americans start saving from the moment they graduate from college and start their first job at age 22, to retire comfortably (or to pay for retirement benefits) until age 65. He points out that it is necessary to continue saving until the end of the year.
That is, if you want to be able to live on the recommended 4% annual withdrawal, or about $64,000 over 20 years.
The second-largest expense for people wanting to live the American dream is a $929,955 home.
It’s worth noting that the average American actually spends about $400,000 on their family home. The remaining $930,000 comes from 30 years of interest, insurance, and taxes.
However, the report highlights that the total cost can be even higher if maintenance repairs are required over the life of the property.
According to researchers, owning a pet costs American households a hefty $36,626 per dog or cat.
Then there’s the price of having a child, which trivializes the cost of a baby. It costs about $611,694 to raise two children to age 17. Add in college costs and that number increases to $832,172.
Realistically, the price would probably be even higher, since today’s teenagers typically stay at home with their parents well into their 20s.
the american dream is over
Achieving the American Dream costs far more than the average person earns in a lifetime, so it’s no wonder more and more people feel it’s completely out of reach.
Another survey found that just over a quarter of Americans say the American Dream is still true, compared to about half in 2010.
Donald Trump has promised to restore the American Dream “bigger, better and stronger than ever” if he wins next month’s election. But he has a big task ahead of him: convincing Gen Z.
Just 14 years ago, an ACB New and Ipsos study found that 56% of 18-29 year olds believed in the American Dream.
But since then, inflation and rising costs of living have made adulthood milestones like getting onto the property ladder increasingly out of reach.
At the same time, competition for jobs has increased, wages have stagnated, and a global pandemic has compounded the impact of nearly three years of disruption to life.
Right now, they don’t feel so bright about the future. Only 21% of today’s young people think the American Dream is achievable.
