The American Dream Needs Revisiting

The Statue of Liberty front shot, on Liberty I...

The big lie about the American Dream is the concept of upward mobility through dedicated effort to a career and a job. Statistics and surveys indicate THAT just doesn’t happen any more in America. The fact is great economic upward mobility comes from those who work not only harder, but smarter.

An article in the Seattle Times yesterday made us all aware of how bad things have gotten. “Problem With Paychecks” took much of its content from Parade Magazine’s annual “What People Earn” survey. Here are just some examples of what the story reported. The following list names the person, their location, and their annual income and descends from highest to lowest:

…11. Lorri Froid, Seattle
Office manager
$49,000
12. Heather Murphy
Woodinville elementary school teacher
$39,032
13. Anne Fogarty, Kirkland
Event planner
$37,760
14. Mary Purdy, Seattle
Dietician and adjunct college professor
$36,000
15. Nan Lammers, Skykomish
Forest services snowshoe ranger
$33,414
16. Curtis Hodgson, Burnaby, B.C.
Lacrosse player
$26,500
17. Ned Whalen, Seattle
Car sales professional
$26,000
18. Cara Sullivan, Seattle
Barista
$15,000
19. Betsy McPhaden, Seattle
Artist
$2,000

I didn’t list the Top Ten on the actual Seattle Times list since most of us are not them; i.e. Major League baseball pitchers, NFL running backs, CEO’s of billion dollar corporations, etc.

I know the income that my wife and I earn, and I know how much we struggle to meet our bills and live in what could only be described as a middle-Middle-Class lifestyle (8-10 years ago I would have said upper-Middle-Class, but that’s another story). Nine years ago when we bought our home in the Seattle suburb of Renton, WA it’s purchase price was exactly what the King County Association of Realtors was identifying as the median-price for homes being sold in King County at that time.

Map of Washington highlighting King County

Some up-grades may have pushed its price slightly above the local median price/value; but for the most part it serves as a pretty evident measuring stick for middle-Middle Class. My point is…for the people listed above…I don’t know how they make it.

The American Dream as it is defined by one on-line dictionary is as follows:

a·mer·i·can dream
Noun
The traditional social ideals of the United States, such as equality, democracy, and material prosperity.

The term was coined in 1931 by historian James T. Adams. It’s changed over the years but basically came to represent:

Owning a home and a car or two

Raising a family, with kids that grew up to do much the same as you

Working 40 hours per week for 40-50 years in a job or career

Taking 1-2 approximately week-long vacations every year to Disneyland or the big regional beach

Retiring in comfort to regularly play golf, bingo, and visit the grandkids once in a while. 

It became:

Leasing (buying) your home from the bank who charges you a low-interest rate for the right to do so; a home of 2500 square feet or more, 2-3 cars, and an RV.

Have kids raised by someone other than Mom or Dad who are too busy at the office to be home for dinner, let alone after school (whether as a family or not is optional); or raised by your 55-inch tv, or by Facebook. Pay $15,000-$20,000 per year per kid for 5-6 years for them to get drunk at college.

Work 50-70 hours per week for a wage capable of allowing you to save for retirement, or (as with the people listed above) 40 hours per week to barely scrape by and have zero retirement.

Vacation every year for 2 weeks in some exotic location, paying for all of it on your credit cards.

Retiring in your 70s with a reverse mortgage praying the 20-30% equity you’ve managed to accumulate in your primary residence is enough to maintain your lifestyle.

That’s some lifestyle. That’s a lifestyle in which children are sacrificed in favor of “stuff” and “status”.

Today working a job that keeps you from your family, or your recreations, 50-70 hours per week is something people wear like a badge of honor. Why? Wouldn’t you be better off working only 30-40 hours per week, making as much money or more, and devoting the rest of the time to your children, your wife, your husband, vacations, etc?  The obvious answer is, yes. And you can do it. But the key is to get money working.  Get multiple streams of income. The earlier mentioned Seattle Times article points out that median hourly income has rose only 11-percent since 1973. Additionally, in 2011, wages for males with college degrees were JUST 5 percent greater than in 1979. For men with only high-school degrees, entry-level wages were 25 percent lower than in 1979. Your single-solitary job is making you poorer and requiring you to work more hours. The 1-job, 1-career American Dream doesn’t work. You need money coming in from elsewhere.

We used a very large sales-commission check to buy our first home in 1994. Two years later being home owners allowed for us to borrow enough to move-up into a bigger house and keep the other house as a rental. We did the same thing again in 2003. My wife and I acquired nearly all our most valuable possessions, went on our most expensive vacations, and spoiled our kids during the time we had the additional income stream from owning rental property from 1996-2006. Warren Buffett, among others, is one who cites multiple streams of income as key to being successful.

The Missus and I have finally re-learned what we knew before. In our case AdvoCare is already giving us a new income stream. Based on the $20-25-thousand per month incomes our friends achieved with AdvoCare in just 3-years, we expect it to be a sizable stream, growing into a river. We’ve met many others who also are earning over $1000-per month with AdvoCare while working a mere 5-10 extra hours per week. And it’s a growing business. And it has the added benefit of paying us while we aren’t even doing anything. It has the added benefit of only paying us when we genuinely help other people. And it has the added benefit of being a continuing inheritable business and income stream, meaning should my wife and I die the income generated by our AdvoCare business becomes our children’s. Then they will have multiple income streams too.

Thanks for visiting. Comments are welcome.

Click to go to our AdvoCare website.

Click to go to our AdvoCare website.

War on the Middle Class is all Friendly Fire.

“Those who ignore history are doomed to repeat it”- George Santayana, 19th Century writer, philosopher

Have you ever driven through an old neighborhood where the houses were mostly constructed in the 1920’s?

Old Neighborhood

Seattle's Queen Anne Hill

What did you see? What you saw from that era of American consumption is very large homes; Bungalow styles, Colonial revival, Ranch style and others. In Seattle the Leschi neighborhood and the area east of Franklin High School give adequate representation of the kind of opulence home owners enjoyed in the time of Prohibition,

Calvin Coolidge, President of the United State...

President Calvin Coolidge

Calvin Coolidge, and a rising stock market.

History being our teacher we look back on that time and know what followed; a record stock market crash, increased taxes from the Federal Government and a depression that shook the foundation of our country. So what do you see in the neighborhoods where the houses were constructed in the 1930s? The answer is nothing. There are no neighborhoods built in the 1930s. Like today construction ground to a complete halt because of the depression leaving nothing to look back on.

World War II took us out of the depression, but because of the diverting of resources home construction didn’t recover in this country for five more years. When it resumed in the late 40s and continued through the 50s and 60s what was being built? The Lake Hills community in Bellevue, WA is a fair representation of late 50s early 60s construction. I grew up there.

Small homes from 1950s

With very few exceptions it’s a community made up almost entirely of ramblers with a size seldom exceeding 1200-1500 square feet. They were easy to construct and inexpensive. And the Eisenhower and Kennedy 50s and 60s gave America a universal image of happiness and wealth. In my case I thought my house was a palace growing up. After my parents divorced our single parent home, led by my Dad, became a 1100 square foot rented duplex. The whole neighborhood was duplexes, so once again I didn’t feel deprived.

Slowly through the 70s the houses got bigger, introducing the God-awful split-level

I always hated Split-levels

. But even these were generally no more than 2000 square feet.

By the time the 90s come around everything has exploded.

A 1990s McMansion

Newly constructed homes have to have a minimum of three bedrooms, laundry room, office, play room and foyer. The home I grew up in would be swallowed by my current homes downstairs alone. And with the added size came an awful lot of opulence too. Granite countertops now are staples in even the most humble abode. In the past 20 years we’ve furnished these McMansions with leather furniture and tile floors. And if our home didn’t have the amenities we desired we would refinance our mortgage or get a second mortgage, taking equity out of our personally largest investment. Taking equity out of your home was something our parents and grandparents wouldn’t dream of doing except in the most dire financial emergency. Now we do it to finance a trip to Cancun.

The 2008 financial collapse was largely caused by an increasing number of Americans failing to pay their mortgage; mortgages for big, opulent homes too many flat-out couldn’t afford. But creative financial instruments were put before us and Presto! We could suddenly afford these ridiculous houses. The dreaded ARM loan became a buzz word and the source of all our consternation. Nobody put a gun to anyone’s head asking them to sign these unwise financial documents. But like lemmings lining up for our own fatal plunge Americans from every corner of our nation made the dive.

The expenses our parents faced on a monthly basis included a rent or mortgage payment on a fixed-rate 30 year mortgage. They included heating bills, water, sewer, life insurance, car insurance, phone, food and gas. It included little else. Today all those expenses have exploded. Gas prices have doubled just since Barrack Obama became President. Also now our monthly expenses include all of what’s just been mentioned PLUS cable tv, internet, DVRs, cell phones

English: Mobile phone evolution Русский: Эволю...

, workout-clubs or gyms, video game networking, 50 inch TVs and more. And these are just regular monthly expenses. These are expenses earlier generations couldn’t fathom; nearly all of them unnecessary extravagances. Can you say with a straight face that you honestly NEED 200 different television channels? Is it really necessary that each individual in the household be available for a telephone (cell phone) call 24-7? We have five different telephones in my four person home. We could have six but I fought my wife against getting our 13-year-old daughter her own phone.

When dollars are tight and the bills aren’t being met too many enviously scream at those who have more and shout “No fair!”. But when you look around at what even the poorest in our society enjoy compared to our forefathers, and compared to the rest of the world, for that matter, shouldn’t the finger of blame be pointed at the man or woman in the mirror when cash flow is not there for you? Doesn’t history show us that when you build up and up and up and live beyond your means a correction is inevitable? And doesn’t history tell us that living humbly coincided with happy times and progress for our society?

I don’t wish anyone to live uncomfortably. I want us all to have a rich and fabulous existence. I want us all to thrive. I’m just saying thriving could be a lot easier if we look back from whence we came.

Thanks for visiting. Comments are welcome.

Share this blog if you find it interesting. Others may as well.

  • Calendar

    • December 2019
      M T W T F S S
      « Nov    
       1
      2345678
      9101112131415
      16171819202122
      23242526272829
      3031  
  • Search