The American Dream is Dead, So What Do I Tell My Kids? ~ Personal Finance Blog

  I know what you're probably thinking....well, Merry Effing Christmas to you too, Pudgy. What a topic to spring on people in the midst of holiday cheer! 
  But, hang in there with me. It's not ALL doom and gloom and bad news bears. I promise. 

  The American Dream, as we knew it for so long, is dead.

  Now, I used to be a fervent believer in the so-called American Dream. I believed the lie that with enough gumption, elbow-grease, sweat-equity, and heart....anyone...and I do mean anyone...could succeed in this country. I believed that if I didn't "make it", whatever that meant, I just wasn't working hard enough. I wasn't putting in enough grit. I wasn't smart enough to figure out how to play the game. That if my peers were struggling, it was on account of their own unwillingness to work multiple jobs, to sacrifice and suffer and bow at the altar of capitalism.

  I was raised with this notion....brought up in a family of hard-toiling blue-collar workers who worked for everything they had. When I listened to D-Ram on the radio, he would regale us with platitudes such as "You know where's a good place to go when you need money? To work!" ......sure thing, Mr. Ramsey. Sure thing.

  Now, I have followed Dave Ramsey's Debt Snowball for years....and his zero based budgeting...and they work. For sure. But, it seems that the older I get and the more I think about our own financial situation, I start to think some of D-Ram's ideas may be growing mold. 

 The Dave Ramsey Show started in 1992 and things have certainly changed in America in the past 26 years. In 1992 I was 12 years old. My dad was part owner in an auto body shop. He was completely self-taught in his trade. My mother worked at a drug store as a cashier. We lived a very comfortable middle-class life in smaller-city Wisconsin.

   Ten miles away was the GM Factory, where many of my friend's parents worked and made hella-good cash on the line. They had nice houses....they had nice cars....they took vacations...they (hopefully) saved for retirement. They had pensions to look forward to. They didn't need a college degree to land this position either. They just needed to know the right people....or be lucky enough to be hired when GM actually OPENED up hiring....because no one in their right mind got IN to GM and then voluntarily opted out. It was the big game. It was what you aimed for if you lived in South Eastern Wisconsin and didn't plan on going away to college.

  GM's line shut down for good in 2008. 

  Paul Ryan is from that city. He still has a house there, up on Courthouse Hill I think....with all the rest of the big, fancy houses. So, being that the old GM home of Janesville, WI is Paul Ryan's home city, you'd think he'd have some insider knowledge of the American Dream gone bad. Of how wages don't rise with cost of living. Of how people who fall upon hard times are not necessarily lazy, good-for-nothing jackasses who don't want to work. Of how, sometimes, it's only by the grace of "entitlement programs" that people get through their month before the money runs out. Of how if you watch your grandfather, your father, your brothers, your uncles and aunts and mothers all work at the same factory and "make it", you'd be apt to think you could too. 

 To follow the creed of D-Ram and others who have a biblical, simplisitic take on personal finance is to believe, fully, that work = money = security. That saving = healthy retirement = happy old people with money to give their kids. That delivering pizzas + not going to parties in college = paying cash for a college education. It's frighteningly simplified and I think I bought into it for a very long time.

 I'm sometimes ashamed of how much I bought into it.

 4 year college in 1992 averaged (for Public Institutions in-state students) about $5740.00 a year (per National Center for Education Statistics) and today is averaging about $10,000-$16,000 a year for in state public education. So, it's nearly doubled or tripled since the Dave Ramsey program began. That's a crap-ton of pizzas. 

  He's still giving the same advice he did then....not acknowledging that costs steadily rise while wages stay stagnant and automation fast takes the place of workers in low-wage positions. Can you work very hard and put yourself through state school? Absolutely! 

But then what....

  Then comes the problem of having a college degree and coming out of college with nowhere to go but....well...maybe mom's couch. This is touted as a problem of the entitled, lazy millenials....and maybe in some cases (like those on Dr. Phil regularly) that's the God's honest truth. I'm not here to tell you that there are no lazy-ass, entitled people out there. Oh, there are. In SPADES. All over this great Earth of ours. 

  I'm here to tell you that I'm starting to believe they are definitely the minority. A "welfare queen" fable scare-tactic to support conservative talking-points. There are so many varying factors involved in chasing the American Dream (as it's been presented) including beginning social or economic status, race, religion, country of origin, job availability in your area or field, start-up costs of self-employment, access to affordable healthcare....the list could go on infinitely....and feel free to call them excuses. Successful entrepreneurs will tell you to hear the excuses and "do it anyway", because it worked out for them. And there is a nugget of truth in there. If you don't risk failure you will never reach success....because you'll never move from where you are. You'll be cemented to your space by fear.

  But staring fear in the face and doing it anyway does not mean blindly jumping and ignoring the reality of your situation.
   Is it wise to invest the last of your savings into a business idea if you are behind in your mortgage and have children to feed/support? Is there a more prudent way to use those funds? Is it wise to rack up debt going to college to get, say, a degree in art history when you live in the middle of podunk Wisconsin and you don't plan on going anywhere else to utilize said degree? Yes, that may be where your interest lies....but that's not where the jobs are, clearly.

  The American Dream, as the story was sold to us.....that anyone can be anything and succeed infinitely if they just try hard enough and soar high, indeed, dead. But, this is not necessarily a bad thing. I propose a NEW American Dream, pivoting from the old on account of new laws, new government, new costs, and new ideals. Maybe the reason so many are stuck is because they are focused intensely on that old Dream.....which has long been 6 feet under and turned to dust. 
  The new American Dream can look different to each person. Maybe YOUR dream isn't the same as mine, and that's okay. We have certain factors in play in this country that are hard to ignore. These include: a failing healthcare system with no sign of relief, an incredibly expensive higher education system that creates massive amounts of life-long debt for students before they even get started with their adult working lives, an administration laser-focused on playing to the wants and needs on those who bought them, not those they promised to represent.  We have new rules that we are trying to apply to old ways. 

  Yes. It's hard out there. For EVERYONE. Not everything is fair. Not everything is just. 

 But dreams, they can still be had. With careful planning, strong personal finance skills, and a realistic base to jump off can still make it happen. 
  I will tell my kids the same thing I've always thought: You are not a tree. If you don't like where you are, move. Just stop expecting the move to mean immediate change and success. I will tell them the way things are....I will regale them with stories of the way things used to be...and I will make sure they have a realistic base to jump from. 

 Be patient.
 And hang in there. 

That is the best we can do.