The American Dream or Nightmare?

 We are taught to work hard so we can play hard.  We are sold the idea that the college educated people sporting suits, living behind white picket fences with new Suburbans in the driveway are the showcase piece of success in America.  We believe that the more money we make the happier we will be, and there is a desire instilled in us all from an early age to chase this dream, this status, this destination and all its material possessions at almost any cost.  We trade our hobbies, our free time, or worse, our health, happiness, precious relationships and our financial freedom in exchange for these status symbols.  A silent statement of accomplishment.  In this thought journey, I want to discuss a complex idea that is broken down into a simple question.  Which is the bigger flex?  The house, car and the look, or a modest life which opens the door to early retirement and the possession of ‘fuck you money’?  Is it the American dream or the American nightmare we are chasing?

The best way I know to illustrate this point is by sharing a story that is not my own.  The Tale of the Fisherman.  A corporate man. Think corner office, big car, big house, finally enjoying his off hours spent servicing the cost of these things, takes a trip where he encounters a fishermen.  The fishermen runs a small business, taking tourists out to fish for a few hours and then back to shore.  No fancy boat, no lines, or beach-side bar to spend your money at while waiting for your turn.  Just a simple business, not designed to be a fortune 500 company.  The fisherman seems to have it made, as he spends his days in a beautiful landscape doing something that makes him happy.  The business man strikes up conversation with the fishermen, discussing how he can increase profits, grow the business, sell it and ultimately retire.  The fishermen listens politely and in the end basically informs the businessmen that he has already retired and has achieved the same end result the business man is speaking about only in a more direct way.  Without all the debt accumulation, without slaving away for 30 years under fluorescent lights, or scrambling to make enough to pay for all the things one “needs” only to sell it one day and move to an island to enjoy the less is more life.  He simply skipped the middle steps, the unnecessary steps, it turns out, and got right to the enjoying life part.  But how the hell did he do this?  Lottery?  Inheritance? Murder for hire?  No the Fisherman simply didn’t give into the narrative that we need a boat load of ‘stuff’ to find great happiness.  

The material milestones we are told to achieve are not at all symbols of freedom. It’s only a mask.  I believe the more we have, the less free we are.  Consider this, that beautiful house with the perfect lawn is attached to a mortgage with interest rates, the shiny new cars likely have a loan with interest rates, your education was paid for with a student loan which has an interest rate, and the credit cards allow for everything from vacations to concert tickets to Christmas Day with the added cost of interest.  This debt  becomes the framework of your income allocation.  The amassing of material things make you look successful, chic, or even straight ballin’, if that’s your thing, but you’re a slave to the debt attached to the image you’ve created.  Those things are now the reason you are going into the office.  The reason you are not contributing the full amount to your retirement accounts, and in turn, the reason why you end up working an additional 10 years, catching up your neglected 401k, rather than having the option to retire early.  All those things you needed to prove you ‘reached the top’ now own you.  The only thing you’re on top of is a sinking ship unless you find a way out.  How can we label this as success with a straight face?  Instead of finding a way out of the debt cycle,which can take years,  what if you never got into it in the first place?

The American dream that is sold to us is a lie.  It is more appropriately labeled the American nightmare.  Stop walking blindly into this trap.  Sometimes we have to do the things we do not want to do in order to live the life we want to live.  Allow me to be more specific. First, the messaging society pushes on us is something along the lines of bigger is better.  In reality it’s not better for the average individual.  In fact  it’s only better for the bank collecting the interest on all of your loans, and credit cards.  Remember that.  Let’s start with the house.  The cost and risk associated with ownership of real estate is a losing battle.  Between interest rates, taxes that can be raised at any time, insurance and potential sky high repair costs, it’s not the investment opportunity our parents saw it as back in 1970.  Your home is not a guaranteed asset, and it could easily force you further into debt.  Renting, is typically cheaper, and is certainly less risk.  The notion that you are throwing your money away in rent every month is ridiculous.  You have to pay for housing either way, so why not take the cash you save from renting and invest it?  Guaranteed the renter/investor gets to the finish line, i.e. retirement, quicker than the homeowner in most cases.  I plan to dissect this housing topic in great detail in another post.  In either case, how much house do you actually need?  No, you want the giant house because you feel the pressure to have the best of everything, don’t you deserve it?  Over the years the average size of homes continues to increase.  In 1920 the average home was around 1,048 square feet.  By 1960 homes were up to 1,289 square feet and we see a steep increase from there.  20 years later, 1980, we’re up to 1,740 square feet and by the year 2000, the average size of a home was 2,266 square feet.  By 2023 we are at 2,400 square feet.  Why is this?  It’s not because the size of the American family is growing.  In fact, families are smaller on average and in many cases people are choosing not to start families.  So does a single individual or couple need a home this size?  Absolutely not, but again the bigger your mortgage, the more the bank makes putting you further away from retirement.  This is society and other powers driving people to spend, unnecessarily, for corporate gains, not yours.  Your large home, which is likely built nothing like a home from 1930 in terms of quality, is not only a supposed symbol of your success.  It also shows that you have a lot to learn about investing and effective allocation of your hard earned dollars.  The takeaway? Rent or buy small, invest big.

Next on the list is your car.  The very unpopular and extreme opinion is to not have a car at all.  That’s right, walk, bike, Uber, rideshare, ect.  It saves you on not only the cost of the car, but gas, insurance, repairs and tags and registration.  That is thousands of dollars a year.  A less extreme choice is pay cash for your ride.  You’re likely thinking how can I pay cash for a car when the price tag is about 40-50K on average?  And it should come as no surprise that my response is why do you need a 50k vehicle to travel 20 minutes to your job and back each day?  That looks like excess to me.  What is wrong with buying something for 5k or even 10k?  No you won’t look extremely cool and you may run into the occasional repair, but again the image of success you think that car gives you is only a mask.  The money you could save on the interest alone will blow you away.

We can apply this same line of thinking to the entire list I mentioned at the beginning of this post.  The message here is we would be able to keep more of our hard earned dollars in our pockets if we stopped giving into the pressure society and culture places on the importance of materialistic possessions and their status.  If we choose to live simply, we would have more of our own money and we would have a greater ability to comfortably retire and to do so well before 67, which is the current age the social security administration deems acceptable to throw in the towel.  Let’s pause on that for a moment, age 67.  That is 13 years away from turning 80 years old.  That is 27 years after turning 40, which by most accounts, is past middle age.  Think about how tired you are at your current age.  How hard do you work each day?  The time spent preparing for your work day, shower, grooming, lunch prep, ect.  The time you spend traveling to and from your job, and of course you must consider how many hours you are spending at your job each day. I think we all want more time to enjoy the fruits of our labor (retirement).  We deserve to.  What we do not deserve is to be spending our money on things that in reality mean nothing, fancy cars, over priced handbags, or houses 3 times the size we need,  in exchange for less years to enjoy what we really are chasing after, which I believe is financial freedom, and more ownership over our time.

I want to be the fisherman in the story I told.  He is happy and free.  Debt does not own him, and he knows there is no solace in material things.  The real flex is financial freedom.  This is a hard sell for a lot of us, because we work hard and we want a tangible reward.  We get a raise, we upgrade the car and that bonus becomes a pool in the backyard.  We want our peers, friends, neighbors, or total strangers to look at us and know something about us.  We want them to know we are successful, powerful, well paid, or deserve respect all from the clothes we wear, or the neighborhood we live in or the car we roll up in.  Having a nondescript Ford sedan or an older home that you remodel as you go along probably makes exactly zero people jealous, but why do we care so much how another person perceives us?  

We need to reframe these types of things and do so outside of how society tells us to.  Our possessions are still a reflection of what we have but it's simply a thing that others can't see.  When we are not saddled with debt and interest rates, we are able to contribute to our retirement fund at the full rate.  We are able to save for our child’s education in a 529 account, rather than utilizeing student loans later.  We can save an emergency fund so when unpredictable things happen it is not a point of anxiety for us.  And if we keep at this long enough, it creates a new sense of liberation that most of us can’t even dream of.  Picture this, you have worked for the company for 10 years and as far as you know your job is secure.  One day you come in and they inform you that you are no longer needed.  Your job was eliminated.  Budget cuts.  Most of us would shit our pants, but the financially sound person can pack up their desk and not feel anything more than irritation and maybe some betrayal.  They are not worried about paying their bills because they have no debt, and have enough savings that they can take their time finding a new job.  The right job for them.  They are now able to be selective in what jobs they apply to because they are not dependent on that next check.  This person controls the game.  When you have the money you have the power.  This is what fuck you money looks like.  It is not a yacht, or beach house in the Hamptons or owning a Rolls Royce.  Fuck you money is not about flexing.  It's about having the freedom to make choices that actually benefit you.  

That my friends is what the American dream is supposed to look like.  Yes we still work for a corporation, and function as a part of capitalism, and we must work hard to earn what we have.  The difference is that when you get that money- whatever money you have- you do not throw it away buying up as much stuff as possible.  You are aware, cautious and strategic about spending.  Your goal is not to climb the corporate ladder to show off your possessions and somehow still have enough money to retire.  Your goal is to climb that ladder while you live simply so you can get to retirement faster.  Retirement, the correct way, is such an essential part of the American dream in my opinion.  It doesn't mean we save a ton of money so you can afford to die.  It means you have saved a ton of money so you can own your time, and with that time you can pursue hobbies, travel, spend time with your family, and friends and create rich and meaningful experiences for the children in your life.  I imagine retirement is a beautiful experience and we should not allow the pressures of society, the media or the opinions of others rob us of something we all will earn at some point.  Chase your American dream and wake up from the American nightmare.

Trash the rules. Open your mind.