I’m sorry but this headline is rage bait. You have a spending problem if you need $1.2 millions for new cars, even in lifetime. Are those the same people who complain about living paycheck to paycheck on $300k income?
Yep, it’s the F.E.E.D. or, as they call own might say at Meta/insta/tiktok/youtube, “Fuck Everything Engagement Decides!”
It’s kinda sad how the era of human curation
has come and gone. And while it wasn’t perfect (or even close)
many people don’t quite realize what has been lost when we decided to swap in behavioral optimization.
Instead of human editors determining what is newsworthy, you have FEED
Instead of merchandising, carefully selecting that sweater just for you (See: Cerulean) you have 1M sweaters to choose from.
Instead of A&R working to find novel new acts, you have streaming algos that hew towards what you already like.
I would suggest that the populace both knows that and doesn't know it at the same time, unfortunately what it results in is human nature and cognitive biases taking over and making us all a bit dumber.
For instance, we read a bullshit article that's in line with our politics, personal struggles, cognitive biases, etc and we conclude it's a great factual article.
Then, we read a factual article that's in conflict with our personal politics, doesn't line up with our struggles, or conflicts with various biases and we automatically tend to conclude that it's bullshit, biased, and further evidence that the internet is not a real place anymore.
It's going to be a real place that serves to further confirmation bias and further isolate individuals from information that conflicts with their feels.
I’m assuming that this is actually two vehicles, one for each adult in the household. My back of napkin calculations come short of this 1.2 million but I can see how more aggressive calculations could get to 1.2 million with slightly more frequent car refreshes (I used every 10 years for 60 years as it made the calculation easy) and how you choose to model fuel costs. You can probably also justify using a higher new car price than I did (40k for ease because I knew the median was higher than that. After googling it’s a tad over 50k). It’s not unreasonable to justify using the median, saying over the course of the lifetime you’d expect to be on average “the median”.
It feels a little cheat-y to say two vehicles for 2 adults compared to one income, but then again “American Dream” definitely was only one working adult at one point so I’m willing to give it a pass. I think the 1.2 million is aggressive but within realm of reason. The real problem becomes when every number is aggressive.
Do back of napkin calculations for the same in 1975.
Average car got 12mpg ^^^https://www.fhwa.dot.gov/ohim/onh00/onh2p8.htm)
Gas cost $3.65/gal ^^^https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0524
Average age of a car was 5.5 years (1977) ^^^https://www.bts.gov/content/average-age-automobiles-and-trucks-operation-united-states
Interestingly the "American Dream" from the 1950s, 60s, and 70s as colloquially used also means 1 car: https://www.bts.gov/browse-statistical-products-and-data/info-gallery/share-household-vehicles-available-1960-2023
>How we estimated it: Assumes that two adults own and operate vehicles bought new in 10-year cycles from age 22 to 75. The data on the average new-vehicle loan amount and loan term are from Experian. AAA is the source for each person’s costs over those 53 years at 15,000 miles per year: fuel ($103,350), maintenance and repairs ($87,768), full-coverage insurance ($89,782), and license, registration, and taxes ($43,089). The calculation excludes vehicle resale value.
Here's the blurb from investopedia.
So they assume you need to buy two brand new cars every decade, each drives 15k miles/yr, and zero accounting for resales values lmfao.
No. I didn't buy a new car until I was 38, even then it was because the specific car I wanted had little benefits from going used/lightly used. And I've been more than able to buy new for a while.
This isn't "the American dream", it's an exercise in purposeful rage bait for dumb readers. At it's core - their assumption has you spending as much on vehicle ownership as you do on home ownership. That is almost never the case, for anyone.
Also, buying every car from age 22 on brand new is just nonsense. Most people are broke in their 20s, the median income for the 20-25 age bracket is ~41k/yr. The median income for 35-55 year olds hovers in the upper 70k range.
Being broke in your 20s is entirely normal, that's how life works, pretending like one should be buying brand new cars then is just hilariously bad.
Maybe not brand new, but new to you? My wife and I shoot for something fresh off a 3-year lease and drive it for a decade, with one of us getting a vehicle every 5 years.
A household earning $125k over 40 years would have this $5m.
The headline is quite rage bait because it’s not clear when this hypothetical couple start. If they started 40 years ago, they don’t need $5m for the same lifestyle, because houses and cars and income were nominally much lower. If they start now, it’s not hard to earn $5m over the next 40 years.
Yeah, household at 125 is not nearly as abnormal as people think.
Age also matters here. 35-60 tends to be the brackets where people are in their highest earnings years. Median wages (not household income, individual income) in the 35-45 bracket and 45-55 brackets are both over 70k.
This projection for instance presumes you're buying new cars from age 22 on, but in reality most people don't get to the point where they're comfortable buying a new car until their late 20s or 30 years old.
About one third of US households make $125k or more. This is household income, meaning a couple each makes $65k is counted.
About inflation: income should rise alongside cost. Some years ago this same report said $3.5m is the American dream. I bet they would come back some years later and update it to $6m, $7m, etc. But the top 1/3 of household income should rise too to match with that. Truth is, whatever we define as American dream is just the upper middle class lifestyle.
> This is household income, meaning a couple each makes $65k is counted.
Household can be fucky like that, which makes it not the best measure at times. For instance a single person is a household, but also a couple is a household. So household income figures are some mixture of couples and single people.
This is because household income stats are derived from tax returns, which aren't more granular than this.
But, the median individual income for people in their mid 30s to 60 years old is above 70k. That's the median. So if you take two median workers, their combined income from age 35 to retirement is a bit over 140k.
Because households have some non working spouses, lots of single households, and no age bracketing on the income figures, you get a bit more noise than other measures.
BLS median weekly earnings is a great resource: https://www.bls.gov/charts/usual-weekly-earnings/usual-weekly-earnings-current-quarter-by-age.htm
Important to take the age aspects in to consideration, young people in entry level jobs usually aren't making much, plus there's part time retirees as well as college/high school workers in the mix in various measures. You can see the noteworthy progression as one enters prime earnings years.
Including interest, maintenance, gas, etc... If you paid $80,000 for every car you ever bought, you'd need to purchase 15 vehicles in your lifetime to hit $1.2m
Assuming you drive for 70 years, that would be a new car, with a total bill, gas and maintenance included, every 4.5 years
Basically every presidential election you get a brand new car, and by the time the next election comes, you've spent $80,000 on that car.
That just seems totally unrealistic in any practical world.
edit: Not to mention average drive puts less than 15k miles per year on their vehicle. So, lets say that's a brand new car every 60,000 miles? There would be basically $0 in maintenance at that rate because your car would be essentially new by the time you got the next one.
edit edit: I mean shit, in this weird scenario just lease your cars every 2-3 years and never pay maintenance. Google says it's $4k-$7k a year to lease a Ford F150, a very common large and unnecessary vehicle Americans like to drive. Lets say you pay $7000 every year for 70 years that's still only $490k for your whole life, and that's a wildly stupid way of handling your transportation needs.
Not that your sentiment is wrong, but man it drives me insane how many people on this sub just make absolutely wild guesses about this sort of stuff, write some confident comment about it, and have it hit top comment because nobody else bothered to literally just spend 3 seconds checking the literal sources.
The article links directly to this source: https://www.investopedia.com/the-2026-american-dream-cost-rises-4-percent-12154346
Which has this:
>How we estimated it: Assumes that two adults own and operate vehicles bought new in 10-year cycles from age 22 to 75. The data on the average new-vehicle loan amount and loan term are from Experian. AAA is the source for each person’s costs over those 53 years at 15,000 miles per year: fuel ($103,350), maintenance and repairs ($87,768), full-coverage insurance ($89,782), and license, registration, and taxes ($43,089). The calculation excludes vehicle resale value.
Obviously that's also a bullshit way to measure vehicle ownership in "the American dream", but like come on guys, it takes seconds to gather this information, rather than amplify some random redditor who spent way more effort and time making wild guesses and dropping a confidently incorrect post.
This is exactly why disinformation spreads like wildfire on this sub, people put 10x as much effort in to guessing than they would spending a few seconds to read.
Seems pretty reasonable actually, the resale value should partially be captured in the average loan value. There is some discussion of new vs new-to-me, but it is the dream right?
How do you mean? The common resale value is included in peoples assessments, they either privately sell the car and use it as the downpayment, or they trade it in for part of the downpayment. Even after 2 decades the car still has residual value, but if your measurement is of the vehicle loan price thats captured within it.
You think it's reasonable that you buy a new car, own it for a decade, and the resale value of said new car at the end of that period in time would be captured by loan value??
You think that a reasonable assumption is that people who've owned a car for a decade have lending against that vehicle that's still most of it's value? Walk yourself through what you're saying. You buy a brand new Honda Accord in 2016, let's say you get the EX-L at like ~30k in 2016. Today that car is worth around 12-14k. And you're suggesting that "the resale value will be captured by the loan value". You understand that to have this be true you'd have needed to do like 15 year financing, right?
In what world, anywhere, is this "reasonable"?
e: not to mention, this is still erasing value from the modeling and adding cost, even if it was an accurate portrayal - which it 10000% is not lol.
>Even after 2 decades the car still has residual value, but if your measurement is of the vehicle loan price thats captured within it.
I have absolutely no idea what this is even trying to articulate, are you some sort of AI that's on the fritz or something?
>You think it's reasonable that you buy a new car, own it for a decade, and the resale value of said new car at the end of that period in time would be captured by loan value
Yes, I put $3,000 down, buy a car for $20k, shows up as a loan for $17k, loan gets paid off in 3-5 years and in ten years I sell the car, lets say for $3k, buy a new car for $20k, I take out a loan for $17k. It is showing up in the loan value because the resale value gets deducted from the loan expense.
>lending against that vehicle that's still most of it's value?
I didn't say any of that.
>You understand that to have this be true you'd have needed to do like 15 year financing, right?
Buy a car for $30k, sell a car for $12k as part of the transaction, the AAA loan cost will only show $18k, meaning the loan value captured (excluded) the residual value ($12k) of the car.
This is very simple, and entirely reasonable to not subtract the resale value again, because it is already in the equation.
> Yes, I put $3,000 down, buy a car for $20k, shows up as a loan for $17k, loan gets paid off in 3-5 years and in ten years I sell the car, lets say for $3k, buy a new car for $20k, I take out a loan for $17k. It is showing up in the loan value because the resale value gets deducted from the loan expense.
My man are you struggling to read here or what? What contrived scenario is this?
Did you read the methodology? It includes none of that. It's an accounting of brand new average transaction prices + costs of ownership averages across a decade, with zero consideration for resale value.
There's no way you understand the basic ass math here and think it's a reasonable representation of reality.
Because I think this has flown way over your overly confident head - what the modeling says is every 10 years you buy a Toyota Rav4, maintain that payment + interest, keep it for a decade, incur ownership costs, then throw it in the trash. That's it.
And here's you, several comments deep saying that's a "very reasonable" thing to assume. Does that sound smart? Be serious my man...
>I didn't say any of that.
No, you explicitly did, but somehow you seem to not understand the thing you're arguing about.
>Buy a car for $30k, sell a car for $12k as part of the transaction, the AAA loan cost will only show $18k, meaning the loan value captured (excluded) the residual value ($12k) of the car.
For the love of god, please go read the actual methodology that you rushed in to this conversation to defend. Please, stop embarrassing yourself trying to argue and go read it. There is no way you read their modeling methodology, or even read the part I had quoted, and thought that somehow was in line with whatever you're saying here. You're just writing fanfiction and trying to use that to justify calling extremely unreasonable modeling "reasonable".
Brother either you are one of the most confused people I've ever encountered on reddit or you have not spent a single second reading the thing you rushed in this thread to argue is "very reasonable".
>This is very simple
I agree, which is why I'm having trouble understanding how people like you exist in this world.
Right, I have no idea how bro thinks it's reasonable to not include resale value. Or why on earth the loan would still be present at a decade in lol.
Generally speaking with increased vehicle longevity decade old cars are worth quite a bit. A decade old CRV has a KBB of ~15k, it was barely 30 brand new. Lots of other mainstream vehicles showing similar trends, ~40-60% depreciation across a decade isn't insane. So you translate that across 10 vehicles and you're missing ~150k+ in value lol.
I mean youre ignoring the resale value on roughly 10 cars. Even after 10 years theyll still have around 40% of their value. Probably more if you trade in. (maybe not doing a crazy 15K per year miles though)
Just FYI, I'm not ignoring anything - I'm quoting the actual methods used here. They're explicitly ignoring that.
And yes, that alone is a massive lift, not to mention that buying two new cars in this cadence is not a normal thing.
There's some dude in another part of this thread trying to argue with me that the resale value is taken up by the loan lmao. IDK how some people function being this uncritical of what they read.
Ok, but then you have to consider 50% of households are duel income.
Even still, even two cars, $1.2m is an outrageous amount of money. If both people leased a car for $7000 a year for 7 decades, you'd still be $200k short by the end. And if gas/insurance somehow closed the gap, then ok sure, you spent $1.2m on transportation, but you had to lease 2 of the most expensive variety of F150s every year, your entire life.
> Ok, but then you have to consider 50% of households are duel income
"Households" are just the wrong way to look at this.
If you want to approximate income for a two adult household you need to not rely on household income stats. The census bureau's definition of a household is based on who lives within a house. Single people who have their own place are a household. ~30% of the Census bureau's dataset for households is single member households.
So, any household income stat is skewed heavily by that inclusion. Let's say every single person makes $100,000. Because the dataset has 30% inclusion of single households, your average household income here is going to be $170,000. But every single household with two earners will be making $200,000.
Note: medians require actual variability in the data so I'm not fucking with making a dataset to illustrate how it hits median, but with the law of large numbers your median and mean are the same with a normal distribution - medians are better for income because the distribution skews so heavily upwards, but the single member household presence still creates similar downward skew to the median as mean.
Basically, using official stats of a household's income is going to get you a lower income figure than what a median married household actually makes. The stats are correct, they're just not measuring what people are trying to use them to measure here.
Yes, you should compare this to quintiles of lifetime household income, because this analysis contains lifetimes of household expenses. That will include periods where one of the two members of the household is not working for reasons of unemployment, parental leave.
The issue is that household income isn't really a good gauge of what a two person household makes.
These costs are obviously all sorts of fucked up, but they're modeled for a two parent/two child household. I am a single(not married) person, but for purposes of household income statistics I am a household. My girlfriend is also not married, I hope, and for purposes of household income she is also a household. If we hang out with a married couple friend of ours, they are two incomes in one household.
So, If we all make the same amount of money, the household average is going to be below what any two incomes of ours combined are. Let's assume the four of us make even 100k salaries. That's a dataset of three households, two that make 100k, one that makes 200k. It's four workers that all make 100k, but three households. So, the average household income is 133k. It's not a large enough distribution for a meaningful median (and this sort of contrived dataset is going to give you a fucked up median regardless) - but the average paints the right picture within a reasonable distance here given the lack of outliers.
In the US about 30% of households within this dataset are single person households. So it's a significant portion of the data. Furthermore, there's no information around age related progression - on average a median 35-60 year old makes like 30% more than a median 25 year old.
TLDR: Use BLS median weekly earnings, household income is really useful, but really doesn't tell the story people think it does.
If you and your girlfriend pool your resources and make joint financial decisions, I believe from the BLS's perspective you are a household even if you are not married.
>Furthermore, there's no information around age related progression
Isn't there lifespan data progression? I have seen that quite extensively before, although I am not 100% sure if I saw it from the BLS or Census.
>Use BLS median weekly earnings
That would make most of your objections worse. Taking an estimate of lifetime household income would appear a very reasonable way to quantify the general direction of these costs.
The Census bureau is the one who publishes household income stats, not the BLS. Their definition rests on actual physical households, but their income statistics is heavily derived from actual tax returns as well. Regardless, the important piece here is that ~30% of households in this data set are single people, so you can see how it would significantly detach these figures from the reality of what a median two income married couple looks like.
IDK what you mean with lifespan data progression, the important aspect of this is that you hit your prime earnings years in your 30s and maintain that until retirement. Median incomes encompass everything from retired part timers to high school kids. The BLS median wage stats isolate age brackets, and you can see the considerable difference between median income vs medians within primary earnings years.
>That would make most of your objections worse.
There's no way you think this and understand any of the stats in question.
>Taking an estimate of lifetime household income would appear a very reasonable way to quantify the general direction of these costs.
Did you read anything I wrote to actually understand it, or just to argue? Because it feels like the latter. Try reading it to understand.
Better yet - create a dataset of incomes, normal distribution, individual incomes. Then combine your data such that 2/3 of the final distribution is two income datapoints and 1/3 is single income data points. Run medians and averages, then run medians and averages with only two income datapoints. See how different they are?
I feel like way way too many people here spend too much time trying to debate someone and nowhere near enough time trying to understand what they're reading.
>I feel like way way too many people here spend too much time trying to debate someone and nowhere near enough time trying to understand what they're reading.
You offer nothing but ad hominems and complain others are here to argue.
>IDK what you mean with lifespan data progression, the important aspect of this is that you hit your prime earnings years in your 30s and maintain that until retirement
Generally keeps rising into the 40s but maybe you can get really bent out of shape by that fact too.
But we see the earning charts for every generation and the uplift they have between generations. While we don't have data points for all generations (because they havent lived that long yet)
we can map out a prospective course for them based on previous earning profiles and estimate how much they will earn compared to previous generations and put it against this forecast of how much they will pay over a lifetime.
>There's no way you think this and understand any of the stats in question.
Weekly earnings is far more disconnected from looking at annual household earnings over time.
Sure, some households are small and this doesnt apply, but are those households always expected to be small? Is it fully separate from them deciding to be smaller?
Also in your example of you and your girlfriend, in many cohabitating situations we would call that a household or consumer unit, not two individuals. But if you think that we should compare it to households of two of more people, reasonable enough adjustment to the comparator.
I may be misunderstanding you. There's a lot of variability in cash flow over a household's lifetime. What's that got to do with the proposed lifetime expense of 2 vehicles being put at $1.2m? I was just commenting the projected cost is way too much in any real world scenario.
Two new vehicles, replaced on a 10 year cadence, prices based on average new vehicle loans including interest, insurance, maintenance, gas.
I will quibble and argue "new to me" cars should be included - especially when younger, but its not an completely unreasonable set of assumptions, especially when framed as the aspirational number.
Yes, that should be compared to household incomes, not individual, but its close to what the top 30-40% earn.
This is literally the proposed cost of living the American dream. The average price for a new vehicle in America just under $50,000. Replacing your cars every 5 years so both household vehicles are covered by the manufacturer's warranty is extremely common for househol that can afford it. That's not a stretch for the American Dream.
> Replacing your cars every 5 years so both household vehicles are covered by the manufacturer's warranty is extremely common for househol that can afford it.
You're just massively moving the goalposts and even attaching a disclaimer "for househol that can afford it."
I'm using the goalposts established in the article. I really don't understand what point you're trying to argue, but it doesn't seem relevant to the discussion of the article.
If "The American Dream" is making enough money to build a future and have the financial capacity to live comfortably with a good work life balance, buying 2 new cars every 5 years that somehow cost you $50,000 each is not a prerequisite to doing that. That would be a luxury expense a household might choose to indulge in. The whole conversation is framed around what is necessary to achieve the american dream.
That's completely out of the norm, and totally unnecessary. People that do that are going to get a lot of money back when they trade that vehicle in, albeit at a loss, and still a financially stupid move.
And even if they decided to do this, by the end it would still cost them nowhere near $1.2million.
I don't know what to tell you. This figure is consistent with the most recent AAA report I've seen. It seems obscenely high for somebody who hasn't had to buy a car recently. I drive a 2015 Hyundai, so these prices are pretty shocking to me, but so were rent prices after moving back to a relatively LCOL city after 10 years. Everything is just way more expensive.
I mean, I get it, it can be that high if you go that route, but we're conflating the necessary cost of living, eg having a vehicle in the US, with a opposite end of that necessity, which is buying a new vehicle, and an expensive variety at that, and continually doing that forever.
Using the $11,577/year metric doesn't last if you're not buying a new car every 5 years, right? I guess, my question to you is, why would buying a new car every 5 years be necessary in the American Dream? Maybe I'm totally misunderstanding what is implied by the American dream.
That's definitely the source of the disagreement. I'm discussing this information with the context of the article posted, which is that achieving the American Dream is getting more and more expensive. We can reasonably disagree that two relatively new/reliable cars is not a part of what you would consider "The American Dream," (I actually agree with you), but we could say that about literally any of the other seven indicators discussed in the article.
The point of the article isn't, "The American Dream is totally attainable, depending on what that means to you." The point is that what we call the American Dream is becoming further and further out of reach for most Americans. To have that conversation, we have to use consistent metrics, and AAA has been publishing this information consistently, making that a perfectly reasonable figure to use, when discussing the change in costs. It doesn't really matter if your idea of the American dream doesn't include new cars. Many people don't consider have children, owning a home, or taking vacations to be a necessity for their idea of the American dream, and that's perfectly reasonable, but it just doesn't matter in the context of this discussion.
It's a clickbait site basing their article on something someone at investopedia.com did lol. Of course it's ragebait, none of the parties involved are respected in econ at all.
$1.2 over 40 years is $30,000
Divided by 2 is $15,000 a year per car in a two car household.
Since this is the American dream, let’s assume the cars are new.
Average new car loan+insurance would have you a bit under $1,000 a month, unless this includes gas for the car this seems like a high estimate, although close.
There's also interest if you don't buy the car outright. And, to be fair, I don't think they consider the "American dream" buying a used car and driving it into the ground every 15 years.
might involve inflation projections? i think a lot of people feel like their wages aren't rising with inflation, or that its lagging in such a way that they lose out on a lot of money in a practical sense.
Thats roughly 20k per year for a brand new car. Miss me with that shit damn. Personally I dont buy new to begin with not due to cost but due to the markup. I hate having a monthly car payment. Anyone needing 20k per year for a new car is not living responsibly.
A $40k car will cost you about $57k with a 5 year loan and 7% interest rate. Let’s say insurance is $400 a month and gas is $200 a month. We’ll say $1500 a year for maintenance and repairs. That’s $43.5k over those 5 years. So that’s a total of $100.5k for one car for 5 years. I can see how we get to $1.2 million over a lifetime if we’re projecting into the future (aka taking future inflation into account).
You can pick apart this in many ways, but the main one that caught my eye was “buying and maintaining new cars” for just north of $1.2 million.
Even if you assume it’s two cars and 50 years of this activity , that’s $12,000 per year per car. Even with average new car prices being what they are you’d have to swap out a car every 5 years or so to make that math out.
Aspects of their method are proprietary which makes critiquing it harder but their core assumption is 5 years of ownership per car and 75k miles.
There are strategies to have this number be lower, obviously. I don’t think my number is really this high. But I guess we’re talking about the “dream” here and not creative cost saving.
I also doubt your number is that high, as ours is way below that. That's not to say the number is inaccurate, because I'm thinking of all of the $100k pickup trucks I see on the road nowadays, and you have to figure a good number of people don't have budget friendly monthly payments on them. If your car payment is $500/mo, that means you have another $6k left on the year to cover gas, oil, maintenance, repairs, and insurance assuming they included those in the $12k metric.
A 100k Ford just means you are no longer middle class? Thats just upper class.
Upper middle class I would say is one small car for getting to work, a hatchback and one larger car that can also used for travel/holidays like a cheap SUV or a big sedan.
Normal middle class is either 1 big car or just both in a smaller version.
I don't think anyone in my family ever bought a new car for example, the value loss in the first years is really bad. Always bought 2-4 year old models and then drive them to like 8-10. Lower middle class is maybe substituting one car for a bike with work is <15 miles away.
Thats a family of 4 sorted
Pew Research in 2022 "Middle-income households – those with an income that is two-thirds to double the U.S. median household income – had incomes ranging from about $56,600 to $169,800 in 2022. Lower-income households had incomes less than $56,600, and upper-income households had incomes greater than $169,800."
A middle class family making $150k per year can afford a $100k truck spread across 5-7 years. Not that it's a good idea in my opinion, but it's definitely not out of reach.
Congratulations on discovering how averages work! Some people have a long commute which increases gas consumption and maintenance costs, while some people drive very little.
A lot of people's car payments are way higher than $500. Given current interest rates and long 84, 96, or even 120 month durations, a new car after five years means they are rolling pre-existing debt into the next purchase, increasing their (mostly interest) payments significantly.
The reality and what is necessary are different things. People are welcome to spend above their means, doesn’t mean anything about what is necessary to make for the American dream.
There is probably a conversation about who needs new cars. A lot of your retirement account millionaire friends don’t buy them. I commented that my annual TCO was probably not $12k - my car isn’t exactly a beater either … it does 0-60 in about 4 seconds, it has less than 30k miles on it, it’s in great cosmetic condition, the battery is in good shape … I’m not driving a Yugo.
I TBH would characterize myself as living the American dream - we own a couple houses, we can travel, we have the bandwidth to engage in national and local philanthropy …. After my parents’ sacrifices in terms of what they left behind to come here, I’m doing pretty well ….
Yes, you can live frugally, but that's not exactly what we used to call The American Dream, is it?
Which is the topic of the entire post, so anyone taking about how they only buy used cars is off topic. I have a used car, too.
Doesn't mean I'm living The American Dream the way we imagine it and the way it was possible once, when a home was three annual salaries, college was about what any student could earn in a menial summer job at the local ice cream parlor, and a family car (because a single income was enough to finance a family) was a simple purchase instead of a ruinous long-term financial commitment. Not to mention catastrophic increases in healthcare cost that used to not be as much of a concern as it is today.
The American dream has nothing to do with luxury cars. In the 50s the American dream was 1, absolutely stripped down basic model car, a 800 sq foot house with no insulation or ac, and enough food to feed your family. College wasn't even in the picture.
Whatever you want to define it as is up to you. But trucks you do not need for work are luxury vehicles. They just are.
Just keep numbers simple and it makes sense. One way to get to 12k/yr:
car insurance | 2k/year
gas; 12k miles @ 30mpg @ 5/gal | 2k/year
compliance & maintenance | 2k/year
depreciation & loan interest | 6k/year
This is a cost model for buying a brand-new vehicle and then selling/trading it at 5 years/60,000miles, relatively common given warranty expiration timings. Anyway this is the dream right? - 2 brand new vehicles that are paid to be maintained by the dealer that you buy from and also them being replaced every 5 years when the warranties end. No risks incurred in cost, reliable performance, modern amenities, etc.
The car insurance and gas costs being 2k/yr are very fair if not underestimates depending on the actual vehicle fuel efficiency and insurance rates. Compliance and routine maintenance might be a little overestimated, but not much. You will have ~10 oil changes and at least 1 set of tires and brakes/rotors, 5 years worth of annual inspections/registrations, etc. It can add up. Remember we are just dropping it off at the dealer at the regular intervals and just paying the bill here, it is going to cost a little extra.
The last one is the most variable - it depends how expensive the purchase price was and the overall depreciation curve and how much you had to put on loan. For instance a 40k loan at 5% over 4 years would eat one of those 6k years just in interest paid over the loan. Brand new cars lose value. This is only 30k over 5 years to cover rolling sale taxes/fees, depreciation, interest, etc. on a brand new vehicle. This estimate is like saying you buy at 50k brand new and sell at 30k when it is a 5yr/60mi vehicle and pay a decent amount in interest/taxes/fees along the way.
Your number also highlights the double whammy kind of situation that people fall into if they take a loan at a higher unsubsidized interest rate, especially on a new car that experiences more rapid depreciation - you are paying interest on the loan (locked to the purchase price) and you are “also paying” depreciation.
If you buy in cash you are still paying opportunity cost of that cash, and depreciation, but not directly paying interest. Depending on the interest rate, one might be better than the other or the other might be better than the one.
But you do have to capture all the costs, either way.
I can somewhat believe this, I just ran the numbers earlier this year on replacing an old car. It turned out to be cheaper for my specific use case to just not replace it and rent a car for when I need to take long road trips.
What is the American Dream? I feel like people have conflated it to something that is purposely unrecognizable.
The “American Dream” is the belief that anyone, regardless of where they start, should have the opportunity to build a better life through effort, with the freedom to choose what that life looks like.
It’s often associated with a stable job, owning a home, raising a family, and giving your children more opportunities than you had. But the broader idea is opportunity, dignity, and upward mobility, rather than simply becoming wealthy. It’s not a check list
The American Middle Class is the American Dream kind of ultimate manifestation of the American dream.
The American dream is that you can work hard and - especially for immigrants - level up from the working class into a middle class type experience pretty quickly as long as you're willing to work hard and have some initiative and smarts.
The American middle class was at one point like 70% of the country but it meant that you could own some kind of home if you were a married couple, you could afford for one person to go to work while the other stayed home to attend the house and the children because that's a full-time job, you can take one to two vacations a year even if it's in the backseat of a station wagon, you can afford to retire modestly, you can afford to send your kids to college, you can afford healthcare, and like 1 to 2 vehicles.
A generic life. The idea was that the American dream enabled this.
And for 40 years we have steadily done everything we can to destroy every pillar that sure that system up.
K. I’m gonna be really happy to retire 10 years early with less than 1/2 that but okay sure. Retirement doesn’t mean living in Manhattan or San Francisco
These kind of statements are so wildly out of touch with reality it is crazy people post them. You don’t need $5M dollars to live a fine life in America. That is super rich.
The median American gets nowhere near this. These people are nuts. They’re basically saying “the American dream” is to be in the top few percent of earners. That is very silly.
Setting aside the numbers, the idea “the American dream” is defined by material things is kinda gross. If that’s all it is, then it doesn’t matter at all and we need a better dream.
That would put you in the top 10% of earners in America as an individual, and the top third of earners as a household. It also doesn’t count for the fact that you would be paying around a quarter of your income in taxes, so that’s not actually your take-home pay.
The FRED distinction is that a family is a narrower category than a household, and families tend to have higher incomes because they are more likely to contain multiple earners than a household.
We typically talk about household income relative to COL because households are more diverse and inclusive of different lifestyles, but of course many households that are also families will be above that.
Its a materialistic dream and most people don't live like that but its a solid indicator how out of reach a model house and new vehicles are getting from the average worker. Analyzing the car indicators, people are keeping new and used cars longer and the average car age on the road is also increasing constantly. The trends clearly show that certain staples of American life like cars are outpacing wages.
Honestly, people buying new cars shouldn’t be complaining their “dreams” are unattainable. Literally nobody has to do that.
We also gotta keep in mind, things like cars and houses are of much higher quality and houses much larger than they used to be. There’s definitely a housing affordability problem with housing because of how we regulate it, but we should be driving cars a lot longer than we used to because they are much more reliable for much longer, and safer to boot.
It's out of touch with YOUR reality. But, that doesn't make it less true IF you want to own a home, pay for college for your kids, and comfortably retire at a reasonable age.
5 million over your working life is not "super rich" and it's sad that people think it is. Even 5 million in the bank is not "super" rich, especially when you get older and at peak retirement savings.
Someone retiring with 5 million because they spent 40 years saving in their 401k is not "super" rich. They are wealthy but not obscenely so, especially depending on where they live.
The issue here is the definition of "super". I think of the "super rich" in regards to purchasing power and wealth hoarding.
Mary and Todd with their 5 million for retirement is not living the lavish life like Joe, who has 50 million, driving a McLaren, with a mansion on each coast.
The issue is that being a couple like Mary and Todd, who will be ok in retirement, even if they have expensive Healthcare bills (because that is what eats your money when you get old), should be attainable to more than 5% of the populous.
The top 1% begins at 11 million. The top .1% begins at 63 million. That is super rich.
Interesting, I'm seeing top 1% at $38 million average wealth, and $13 million median wealth.
And that's people who have built that wealth up to this point. This measurement just takes the numbers we have now and projects them, which is closer to reality than including numbers from 40 years ago.
Annual income, assuming you have to actually earn your money rather than being born wealthy, would be $659,050 to $787,712 depending on the source.
Don't just compare cash in the bank to total wealth, that's disingenuous.
At $5M in the bank, you own your house, your cars, likely have other investments, have a maxed out Social Security plan, and so on that probably a bit more than doubles your wealth.
Well yeah, taxes, accidents, medical alignments...
That's why income is the far better measure than wealth for someone just starting out economically. It's also why the income number isn't just $5 million divided by income per year. That's why saying $125,000/year for 40 years is enough to retire on is just wrong.
Don’t forget the 3 in 5 statistical chance that someone that wealthy ALSO has a rich parent that spoiled the shit out of them to the point they didn’t need an income until they were like 30. Meanwhile, living a six figure lifestyle wanting for nothing.
I'm not saying to move across the nation but lots of cheap housing in places that aren't "Bumfuckville". San Antonio, Dallas both have cheap housing, hell for a condo you can get sub 100k depending on the area (and not bad areas), 3 bed 2 bath can be sub 250. St Louis isn't bad. Denver was pretty pricey when I lived there but still. Lots of major cities that aren't bad and some even in purple states and/or blue cities.
I moved to San Antonio for work during the 2009 downturn, I hated it there but it was very livable on a limited income even for a family of three. I was laid off in CA and there was no way I could stay without draining my savings in a heartbeat.
For those who wonder why use Texas specifically, it's because they allowed a massive amount of home building during the early to mid-2020's, and are now reckoning with a housing crash:
8 of the 64 housing markets losing value are in Texas, so it is becoming an easier place to buy. Another 15 markets are in Florida. So a full 39.5% of all markets where housing is becoming cheaper are in Texas or Florida.
These are very specific examples that aren't replicated throughout the country.
RTO has really fucked over a lot of people. I’d love to live in bumfuckville, but have to be in an office now to attend the exact same Teams meetings that I would if I were working from home…because reasons.
That’s what I’m fuckign saying. I’m catching flack for having to uproot our entire jobs to go an an area with “cheaper” housing while taking a major pay cut at the same time. Yeah that don’t fuckign math in addition to these places being worse in every measurable standard of living.
Americans for the last 250 years have constantly uprooted their lives to chase their dreams and stay where the going is good. We're very famous for it actually.
Yeah, it’s a very dumb time to be investing in residential real estate. Don’t do that.
That said, mortage rates going up ass money cost, but they are actually holding down prices. People can’t afford to pay any more than they are now. This is why we should expect pretty flat home values for the foreseeable future.
Buddy, that's why it's an analysis of the classic "American dream" not being possible anymore.
Can most afford to buy a nice house for their 2-3 kids and 2 relatively new cars? No. That's the entire point buddy.
It used to be possible and now, even for college graduates, it's not. Again: That's the entire point. If you want to redefine what the American dream is, then that's another discussion.
My absolute favorite argument on the internet because it caused tens of thousands of people to get degrees in IT, which is now considered a worthless degree because there are far too many workers for the shrinking number of jobs.
Yet you still haven't replied to any actual points.
If what I said was so dumb, it'd be super easy to counter all the points. But you're just spiraling, which suggests you don't actually have any way to counter.
I always find it funny when people spout bullshit on the Internet, and then when they’re called on it, are incredulous that the other person didn’t go do a bunch of research and provide citations for them.
If you want to do research on this topic to inform yourself, you can simply do that. You don’t need people on the Internet to do it for you.
All that text and you still can't manage to address any of the points I made, not even a bit.
How should a third person know which of us "needs to do research"? I would probably err on the side of the person making an argument over "oh it's obvious, you're being dumb".
The numbers make sense if you read the source methodology, and remember this is the “dream” not the norm.
Most couples don’t buy brand new cars every 5 years (or they shouldn’t, anyway). Maintenance gas repairs and insurance.
Raising kids includes the costs of needing housing with more bedrooms, medical insurance which is astronomical, childcare, college at a public univ which is now frequently 40k including tuition room board and fees. And thats not even the “dream” which would usually be the expensive private at 90k+ per year, per kid.
If anything, the article is under-reporting the costs of the dream. My dream is the house on the waterfront, and international vacations every 6 months and smaller ones every month or two. Easily 10m.
It makes sense if you put it into context that this was always a dream and never reality, its not middle class.
Its like the from dishwasher to millionaire,which is also not reality.
So when politicans say we want the american dream back, this cannot be what they mean, cause this never existed for a middle class american
Has "the American Dream" ever been a literal interpretation? I also would edit the dream for me personally: 120 acres in a beautiful, private, but convenient place in Montana.
I have never heard the colloquial American Dream include two new cars every 5 years. That may have been the dream back in 1950 when the average lifespan of a car was actually 5 years and the majority of households only owned one car.
Any attempt to quantify what a communal dream is is going to vary. IIRC, the investopedia methodology doesn’t really justify why they pick those things and they change the underlying’basket of goods’ every year.
So they are double dipping with housing? They include housing as a separate line item and include again in the childcare? That doesn’t make sense unless the kids have their own home for some reason.
The real mind blown is the annual vacations at 200k. The person who wrote this has to be some privileged individual to think that’s the “American Dream”.
If one is able to afford a comfortable life in The US, they are able to afford a very, very good life in a large portion of the world. Not only is it much more affordable, but there are far fewer assholes to suffer.
I don't know if I necessarily agree with this. I just moved abroad to a very low expense country. And I still think it would take $600,000 to make it work here without being miserable. The jobs that do pay a lot are minimum 10-hour days sometimes 15 and they don't pay overtime. And the amount of money that they pay is not great.
So in order to be able to afford a comfortable life you need a lot more money to supplement your income.
And if you're not going to have a job you're going to need at least $600,000.
I am sure that there are cheaper places to live so maybe you could get by with 400 but medical expenses still come up.
And the average person simply cannot save 400,000 by the time they're 40 or so.
If you're doing it when you're 60 the ability to learn a new language is just not going to be there and it's going to be even more costly to move abroad.
On top of that if you want to fly home twice a year to visit family that's $1,000 each trip minimal. So all of a sudden you're very cheap cost of living goes up when you go back to the US and you need money saved for that.
I'm not saying it's not possible I'm just saying that people drastically underestimate how much planning money and time is required to move abroad. And especially money where they hear you can live somewhere off of $30,000 a year. You better have much more than that able to be spent when you get there because you're going to need a car or a motorbike. You're going to need to bribe local officials occasionally.
I live in Croatia, Dalmatia. A lot of foreigners moved to our island, from Germany, Poland, Italy, Belgium, Nepal, Thailand, South Africa, Ukraine...
We all speak English.
And medical insurance is ridiculously low. If you don't want to wait for certain procedures you can use private health providers and pay out of pocket, and it's still much cheaper then medical procedure in US with insurance.
If you buy a house, a couple could live very decently with €20000 a year.
Wait until you complex medical treatment via emergency room and an ambulance. And the ambulance driver doesn't speak English enough for you to describe a seizure. Where I live English is very prevalent but you still need the native language or life will be infinitely harder when doing things like finding a local repairman that doesn't gouge you. It's really a necessity if you really want to be successful.
SEA. Renting for 450$ a month bills and utilities included.
In a lot of countries it's illegal for foreigners to own land. What they do sometimes is work out a 99 year lease. Other places will do a company where you buy the entirety of the house but you have to partner with a local business and the local business owns 51%. And you take all of the costs. So the company has actual ownership and you have all of the liability.
I would advise against ever buying a house in a foreign country unless you have full ownership and a lot of them don't allow that. So you're stuck renting or marrying a local. And putting it in their name. But I've also heard stories of people marrying the locals and then they travel abroad and when they come back the house is sold in the partner has taken the cash.
Which makes me wonder why more don't. I left, not because I couldn't afford it, but because the collective attitude and mentality were in the toilet. It's so much nicer living where people aren't so angry all the time.
A decent chunk of why they are so angry is because major countries like Russia, Iran, and China have made it their mission to sow discord via social media disinformation and misinformation campaigns, incessantly, for years. There’s no reason to believe they won’t turn their sights more heavily on other western countries once they feel they are done with the US.
Yes the US is the only country with assholes. The US is so bad that the rest of the world is trying to move there, and the US is somehow bad for turning them away
We have a specific type of assholes. Combine church + the post WW2 american advantage that boomers think they had something to do with + 70 years of right wingers gutting education means our assholes are an extremely stupid and racist kind of assholes. Just look at MAGA. The worst people in the universe.
Yea about that whole "the rest of the world is trying to move there". I have some news for the boomers; that was partially true a long time ago and I know faux news has been repeating it for decades, but ya it's all in your head.
The US is near the bottom in nearly every category that's desirable, but if there were a way to tally assholes/capita they would be at least 4x the #2 rankimg.
mmm it sucks that most people earning potential is already determined in life since they can cap it with artificial laws and rules... lifetime earnings are usually $1M to $3M anything more and "you're lucky or top 1%" :( unlike a video game.. if that makes sense . and pay inequality continues to get worse
As other people point out, it's how you define "American Dream" that determines how much it will cost. Most of us won't do at least 2-3 of the things in the article's breakdown as part of our own American Dream (like the "Buying and maintaining new cars = $1,205,627") so the 5.3M number is closer to like 3.5M or something way more regionally influenced.
Some say Americans should be grateful because they make more money than rest of the world and would be wealthy if they moved to another country. But the thing is, the vast majority of Americans will continue to live in America, packing up and becoming a digital nomad isn't option for most people. Also, just because the standard of living in your country is higher than the next doesn't mean you should not strive for better.
I think you miss the point of the conveniences most people have in America. Even poor folks in parts of the US have houses with modern conveniences like central air, large lots, etc. The floor for the standard of living is very high in the US.
Why would you become a digital nomad when if you’re not tied to a location, you can live very comfortably in lower cost of living places in the US. You’re paying federal income taxes either way.
Eh, I’d argue most of those folks are just younger with less responsibilities and transient. Very few people with families are digital nomads as you need some stability.
I’d gander expats over 50 are less common than 20s. I don’t know any real data that tracks the number of digital nomads, but the core reason they go to HCOL areas is they need internet, amenities, and are younger looking for fun. Provence vs Paris is an easy choice for a young man. Same with nyc vs Tampa. For older folks, it’s a different story.
You’re right and, with respect, maybe a bit off re: mobility and resource access.
Most of us are not in a position to relocate the hundreds, or thousands, of miles for a better opportunity.
The cost of housing is becoming an increasingly unachievable goal on every level.
The job market is stacked with overqualified, underemployed seekers.
The cost of balancing higher education with other costs of living is out of reach for most.
Most live in a place without walkable access to a hospital, school, or grocery store, and too few have access to public transportation.
Healthcare can sink you in a single incident, eliminating both your remaining assets and your access to further treatment in an increasingly privatized
Public schools are being hamstrung and sold out while private prisons are gaining ground. Oh, and those prisons are often rife with violence, sanitation failures, and infrastructural failures like a lack of AC in tropical climates.
Meanwhile, most of us are living one major incident away from financial insolvency which, in this society, is tantamount to homelessness.
Speaking from my own experiences with the social safety services available, I can say that they are woefully insufficient in keeping folks in a place of stability while crises are navigated, with the result often leading to homelessness, incarceration, and/or death.
Certainly, many places around the world can claim the same. For some of us, though, the notion of giving up some conveniences for the security a healthier society is awfully tempting.
Yes, all efforts that can be made to change things at home should be made. In the face of present resistance, I do not blame anyone for thinking that it might be time to accept present conditions and do what they can to stabilize their own situation. You have to get your own oxygen mask on first, so to speak.
Yes, there are some people struggling, but it’s at the margins and those people would struggle today or yesterday. Most Americans have anxiety about issues that never happen to them and will never happen.
The paycheck to paycheck nonsense is just something people say. The reality is it’s like discussing your own class. Most people say middle class as it’s socially acceptable. It’s socially acceptable to act as if you’re a step away from a disaster with no fact based analysis.
What’s happened recently is the first real inflation since the 1980s. Its felt acutely. It makes everyday things people take for granted eat more into their liquidity, but it doesn’t create disasters. Just worse vibes.
Anyway, sensational stuff like this is not reality. Its buying into psuedo social science rather than economic analysis.
Americans have tremendous liquidity, but are cash poor in many instances. You can easily get credit in America (mortgages, auto, credit cards, payday loans) for the vast majority of us. Anyone walking around sees this daily.
This is not the case for much of the rest of the world, it’s why other counties have higher savings rates. In America, we charge people, but routinely give them credit to extend payment. Other countries offer no credit terms.
Regional data, racial data, and education for the 25 most populous areas in the US easily show the average American has thousands in credit and liquidity at their disposal for an emergency. Whether they use it is a question, but the old $1k in the bank account is anecdotal info about deposits rather than actual spend.
You’re talking about a portions of Americans on the precipice of disaster in areas where they historically they always were this way. So it’s not so much an economic indicator of most Americans, but looking at a section of America where social mobility is impossible for most. The idea 150 million people would just fall apart on a turn is illogical and the type of fantastical financial headlines stupid people eat up as it fits a narrative that things are going to shit.
Are you actually suggesting the ability to go and get a payday loan is equivalent to having savings to pay for an emergency? You shouldn't need to go into debt for an emergency.
This is the type of logic that is pervasive. We go into ‘debt’ all the time. People use credit as a normal part of life. I’m suggesting Americans have a lot more liquidity than is being presented and that $1k is not at all representative of their spending power for 150 million people.
And so what's your point with that, that things are fine somehow and we don't need to improve things? That the healthcare system works fine as is, that workers aren't facing an affordability crisis because we can just take out more loans? Why are you making this argument lol, what's motivating this
That people disingenuously act as if 150 million people in America are destitute and financially not capable, which is illogical for anyone who lived here and see the quality of life.
I travel a lot globally. I’ve been places where the per capita annual income is USD$300. Those people genuinely live in poverty. USA half these folks live at a much higher standard.
Access to credit is the reality and you’re also using an absurd logic that 150 million Americans would be out on the street as finding $1k is that tough. It’s not. It’s illogical thinking.
Are you American? You seem out of touch. There's way more poor Americans living under slumlords who don't keep buildings up to code, no place to park, and if it has AC, it's not upkept and it's not used because the electric bill is a thing that exists.
I’m an American. Live in Ny and can tell you the sensationalism here is absurd. The floor is extremely high. We are closing in 350 million people. The expectation is in that people expect the bottom 3rd economically to live like the top 2/3rds in the US. No other country has these out of whack expectations.
As far as slumlords, most housing is not rentals. 1/3 of property is rented. Parking is a luxury based on space. I own a car in manhattan. It’s $300-$1k/month. When I go to the burbs parking galore. AC is a luxury. Go to Europe in the summer. Way hotter places don’t have AC. As far as utilities, electric is pretty cheap here overall for the reliability. The biggest indicator are the data centers. Geo political companies can build wherever and choose the states as our grid is the very reliable.
Apparently reading comprehension is an issue. The post I responded to suggested Americans move to
other countries and my point is they probably have a better quality of life being lower middle class here than upper middle class somewhere else.
I wanted to word it a little more nicely but yes. Those people make significantly more than locals and don't contribute to taxes. Their immigration status is also...questionable.
Aside from the issues with the assumptions that have already been pointed out ad nauseum here, it doesn't seem like a totally unreasonable figure.
$5.3 million over the course of a 45 year long career means you need to average $117k in earnings per year. That's not unattainable, especially if you break through into a high paying job in your late 30s to early 40s.
This also doesn't account for asset ownership like stocks, which reduces the amount you need to earn considerably. If you contribute $500/mo into your investment portfolio, that will grow to $3.3 million over 45 years at a 9% interest rate. That reduces your annual earning requirement to about $45k per year.
The article wisely mentions that its estimated lifetime earnings and social security payments don’t include investment earnings. For those saving wisely, those are not insignificant. A $1 million nest egg could earn $100,000 annually alone
A lot of people in the economics forum who don't understand that this is an index of lifetime consumption and not necessarily what it costs to have what you want.
Nonsensical rage-bait, just like the rest of the internet. The only way you get a 1.2 million figure on cars, is being one of those people who buys a car way out of their budget, frequently, and then you compare what all of that money would have returned in the best stocks.
Feels like a crazy over estimate. Still, absolutelly gutting that the second biggest line item is simply getting to work in the first place. Something people in other developed countries are generally able to do cheaply or for free by having walkable and bikeable cities, robust public transportation, and trains.
Our obsession with cars, and refusal to design cities such they aren't strictly necessary, is making us poor.
Or you can just buy a used car and not need to upgrade every year? Paid 15k for a used Versa 9 years ago and have been using it ever since. Total cost is probably under 30k. I couldn’t imagine how someone is going to spend 1.2 million on cars. That’s just stupid
That includes gas, maintenance, and insurance. Plus, this is the ‘dream’ - not the most efficient way of meeting a requirement. 2 cars, 50 years of car ownership, $12,000 per car year = $1.2M
We have to start being discerning about the intentions behind the people and accounts pushing these narratives. What is there to be gained, and by who, when we as a country believe everything is horrible, there's no hope and you might as well be nihilistic about the future of our country. On top of that, it's all lies
Well it seems like you’re suggesting the American economy isn’t actually bad and it’s just lies. Other commenter is pointing out it’s actually historically bad.
Because it is. We are in an incredibly dangerous economic point, and how are we handling it? Just piling on top of the deficit, further fueling the wealth gap, and cutting services in the meantime.
Throw in AI job displacement and we are speed running to a societal breakdown. That doesn’t mean we can’t stop it with competent leadership, but I think most people are feeling very pessimistic given who is in charge at this pivotal point in human history.
This particular analysis is done by Investopedia. If you look at the lifetime cost breakdown some may seem a little high like yearly vacations and new car cost, but that’s why it’s called a dream I guess.
They’re convincing people that their overspending is justified based on “research”. How are they going to fund this overspending? By borrowing whether it be credit cards, klarana, financing etc.
Like who the fuck is spending nearly 200k annually on vacations? Also two kids are not going to cost a nearly $1 million unless you’re going to send them to a private out of state college which most people won’t.
To push for awareness and change. Make people angry. Get them moving. Lots of people in this country still believe everything is fine and that anyone struggling simply did life wrong and are lazy worthless scum.
And also, economically speaking, doomer content is better for clicks.
This article is completely ridiculous and relies on assumptions that don’t include a large portion of the US. If you want a comfortable life for far less, move to Nebraska or OKC.
Why move to Nebraska or OKC? $5.3M isn't that much money for those of us who have an education. Doomers need to face facts: a lot of people have a LOT of money, and it's there for people who make smart choices and work hard.
What kind of garbage source is this, first of all most people rent not buy a home and even then in most areas of the country it doesn't cost 1.2 million. Secondly, raising children doesn't cost 1 million at all and some people's dream don't even involve children so this is useless for them. Thirdly, how does yearly travel cost 180k, at max it's around 2-3k yearly and in other countries it's even lower than that. Fourthly, many people don't have pets so the 40k doesn't matter, and finally owning a new car doesn't cost 1.2 million becuase that is for rich cars, cars on average are around 60k which even I agree is a little too much. So essentially the American dream is around 2.6-3.8 million which is obtaniable with a bachelor's degree according to the source.
Wrong, they keep their cars for a few decades then they switch, which gives at max 2-3 cars lifetime which is over 120-180k which is nowhere near 1.2 million
I grew up in a very rural town and many of my friends had two different cars from the time they turned 16 to graduated from high school. My parents have owned at least 25 cars over their lifetime, I don’t think that’s unusual for 50 years
Me maybe for example. I doubt I'll get to 20, but I'm 38 years old, an American and the new cars I've owned so far.....
2008 Honda Fit
2012 VW GTI
2016 VW GTI
2014 Mazda CX-5 (wife drove and made
payments, but I purchased)
2021 Kia Sorento
2022 Toyota Highlander
2023 Toyota Prius ( wife drives, I bought)
Not 2 or 3 in a lifetime and I'm sure I'm not the only one. I'm at 7 so far and had a used 1997 GMC Sierra additionally to start me out that was given to me
Nah I know myself too well and cars are a weakness of mine admittedly. I don't have payments on either of my current though and on the ones in the past where I did they were still easily affordable at my income. Not claiming my maneuvers have been financially wise decisions necessarily but my money and my prerogative. Very much meeting my financial goals otherwise and not letting cars or car payments stop me from reaching those
How, because I wanted to I don't know. Yes, it is an entirely personal choice and I have no regrets about purchasing any of them. I became a millionaire at 35, and set up for early retirement and I've worked part-time for the last 7 years. So while they're costing me of course, I don't have car notes on my cars that I own now and I like cars and getting something fresh every so often. I spend a lot of time in my vehicles and do large summer road trips and smaller road trips throughout the year where I want what I want. They're not setting me back from meeting my financial goals otherwise so why not
Lifetime cost, including repairs, property tax, etc... You are not that far off
And for rent? 1.2 million over 60 years is 1666$ per month. For a full family home that's not that insane in many parts in the US. Some might argue it's cheap
A house is like 400-500K. Interest rate is above 6%. Assuming 20-30 year fixed, plus property tax, plus maintenance, plus all the other dumb shit, and you’ll get to 1.2 mil easy over 30 years.
The colloquial American Dream historically was a small bungalow (1200sqft) in the suburbs with a motorcar and three kids.
You know we've achieved that because everyone in this thread has massively moved the goalposts. The expectation is a 2400sqft home, two cars, two kids sent to college.
lol what? In a major city I bought a condo on 12/hr in 2020. Yes it's gone up since- but with far less than 5M I have a 3 bed 2 bath and it's all I need, my fiancee is moving over, etc. I have a paid off car, 401k, IRA, etc.
And will be retiring early.
The key is, yes, increasing income, but also living like people used to do: small house/condo, used car, keeping old cell phones (mine is 5-6 years old at this point), etc.
The raising children cost usually includes housing that provides 1 room per kid plus paying for college, which is what gets that number so high.
Take 2 kids for example. The difference in rent for a 1BR apartment vs a 3BR apartment in my area is $1k, and full fare at state school is $35k per year for 4 years if costs stay flat. 12k x 18=$216k, and 35 x 4=$140k x 2=280k. That's $500k right there, and you still have to feed, clothe, and entertain the kids.
You don't need to pay for their college. That's an optional cost. The only things a kid absolutely needs are a home, food, water, clothes and a loving family that takes care of them. Entertaining kids is cheap too, especially the younger they are.
If you make enough to help out for college, great. If not, that's still OK
65% of households own their home so your very first point is wrong. Only a third of people are actually renters. Your costs for travel are completely divorced from reality. Again with pets 66% of Americans have pets. Your entire argument is saying that if you ignore the things that literally 2/3 of the population has and have costs completely divorced form reality the number could be much lower.
Some of the numbers actually seem fairly accurate. For example the vacation one. If you figure average life expectancy, minus the first 18 years of your life you wouldn’t pay for this (generally), it comes out to be a little over 3k per year for vacations. Some years you might skip vacations, and others you might spend 5k or more, or go on a couple small week vacations of top of a normal one, so it seems pretty accurate.
Meanwhile other categories seem totally off base. For example the $1,205,600 for vehicles. That’s almost 20k a year, every year, your entire adult life. Thats the equivalent of buying a nicer new $60k car every 3 years. The median time someone in the U.S. keeps their car is 8 years though. No one is spending that kind of money on cars unless they are wealthy, are extremely bad with their finances.
If you drive for 60 years and get a new car every 6 years at $60K, factoring in maintenance that’s under 700K. However if you swap every 3 years it will meet the 1.2M figure.
Cars on American roads are actually getting older on average though.
Agree that the numbers look a lot different without kids or in lcol areas. I can totally see where the numbers might come from though: House might cost $500k but by the time you factor mortgage interest, easily double and the prop tax and insurance and maintenance. Unfortunately starter homes where we are start around a million. Childcare for us is 30k/year each, add on disposables, toys, activities, clothes, extra food, healthcare, college fund, it’s about a million for 2 kids over 18 years. For travel, flights alone for a our family is $3k, $5k if international— then there’s hotel, food, activities—this is easily $20k/year for a couple ok non luxury vacations. For cars, figure 2 cars every 10-15 years at 60k— maybe a couple used ones for the kids, $400k for cars but add on the expensive part of insurance and now gas/repairs, maybe not 1.2 million but at least $600k over a lifetime. It definitely adds up. Then there’s the healthcare black hole.
The American Dream isn’t disappearing. It’s being bought up. Funny how we put a ceiling on Social Security taxes, because apparently there’s a point where asking wealthy people to contribute more is unfair. But when governments drown in debt, banks need rescuing, and public services collapse, suddenly we’re all in this together! Never mind that concentrating wealth, squeezing workers, and shifting costs onto the public helped create the problem. Then the same concentrated wealth comes riding to the rescue, buying up infrastructure, housing, utilities, and everything the government can no longer afford. And renting it all back to us. Apparently there’s a limit to how much we can ask the wealthy to contribute, but no limit to what the public can be asked to sacrifice. Privatize the profits, socialize the losses, then charge us rent on the rescue.
And then boom! The American Dream is now a subscription service.
College grad here in my early 40s, ~$210k HHI. I haven't mathed all of this out, but I feel like this is fairly accurate.
Wife and take home about $12k after taxes , and life basically costs $5k just to cover our recurring monthly expenses plus a couple extras before we buy food or gas for our cars. Mortgate+electricity is $3k. Car payment is $600. Car insurance is another $200. Internet is $70. Life insurance for both of us is $150, so we're at $4k as a baseline. We have about another grand in recurring spending between a family gym membership ($120), cleaner 2x per month ($140 per visit), YTTV ($80), Netflix ($10, cell phone subsidized), spotify ($12), pet health plan/insurance ($150), and some other smaller but predictable expenses.
We admittedly do save roughly $4k per month for retirement, emergency fund, plus retirement funds and 529s for the kids, but we're making up for when we weren't making as much or prioritizing what we were making towards retirement as well as we should have we were younger.
Leaving $3k of everything else is not my idea of a luxurious life though.
Still a better dream than anywhere else or people would stop coming to the US ... (No they dont). American dream is still there and waiting for people who reach out to achieve it.
Better than anywhere else? I don't think the standard of living in the US is above places like Switzerland or Norway. "American Dream" is really not a thing in other western countries. People move to and from the US for many reasons.
Salaries offered by American companies can be very competitive, though. Sometimes the best deal is to work for an American company outside the US where standard of living is high and you have things like universal healthcare, over 30 days actual PTO, safe environment and decent educational system for your children.
But Switzerland or Norway dont really want immigrants and refugees. The US alone has taken over 52 millions. Switzerland has around 2.7 millios, and Norway has only 900k immigrants (not even 1 million yet).
In the end, the fact is, people do not stop coming to the US legally AND illegally, which means the American dream is still there but it is just harder and it is now for people who really want it.
My point is that people moving to the US does not indicate the US has "a better dream". The "American Dream" is not really a thing in other western countries. It's an American idea.
When I see American people who have moved to my home country, I don't assume its because we have "a better dream" or that they've lost their belief in the "American Dream" either. That would be silly, wouldn't it?
People move abroad for many reasons. Perhaps they found an interesting career opportunity or a spouse here.
Inflation has some of yall in denial cause u don't know how money works. Why do u think el presidente out here robbing the war chest? Him and his rich friends see the writing on the wall
Most Americans are lucky to see 2-3 million in lifetime earnings. The cost being 5.3m+ just shows how unattainable the American dream is now.
Basically anyone millenial and younger not earning six figures is fucked and will be working till they die. Only 18% of jobs pay 100k or more. Meaning 4/5 people have no path to retirement.
Nah this article is clearly angled toward massaging millennials’ victim mentality. You can get by with far, far less in most of the US.
If anything the American dream is more attainable than it’s ever been, but the standards for meeting it have been (unfairly in my opinion) revised upwards.
This bot be karma farming hard.
Hmmm let’s see which states and cities blows up costs of living and what policies they’ve enacted 🤔
Ah yes, constantly raising taxes for programs that are tied to fraud with policies that actively hurts poorer citizens and push businesses out which causes them to raise more tax on the common people. I guess we have our answers here.
Don't go to college. Go to a trade school, get an apprenticeship, etc.
That liberates you from substantial costs in time and money, reducing that $5.3 million dollar number and giving you capital to invest and work with quicker.
Not everyone wants to BE in a trade. Many folks would like to be engineers, physicians, architects, educators, etc. All professions that we sorely need.
gym_fun | 11 hours ago
I’m sorry but this headline is rage bait. You have a spending problem if you need $1.2 millions for new cars, even in lifetime. Are those the same people who complain about living paycheck to paycheck on $300k income?
Super_Mario_Luigi | 11 hours ago
Most of the internet is rage bait
lolexecs | 9 hours ago
Yep, it’s the F.E.E.D. or, as they call own might say at Meta/insta/tiktok/youtube, “Fuck Everything Engagement Decides!”
It’s kinda sad how the era of human curation has come and gone. And while it wasn’t perfect (or even close) many people don’t quite realize what has been lost when we decided to swap in behavioral optimization.
Instead of human editors determining what is newsworthy, you have FEED
Instead of merchandising, carefully selecting that sweater just for you (See: Cerulean) you have 1M sweaters to choose from.
Instead of A&R working to find novel new acts, you have streaming algos that hew towards what you already like.
TheTimberFactory | 6 hours ago
I think in time, the populace will recognize that the internet is not real anymore and is there to make money off you.
Call it enshittification of the internet if you will and it will be about control.
RIP_Soulja_Slim | 5 hours ago
I would suggest that the populace both knows that and doesn't know it at the same time, unfortunately what it results in is human nature and cognitive biases taking over and making us all a bit dumber.
For instance, we read a bullshit article that's in line with our politics, personal struggles, cognitive biases, etc and we conclude it's a great factual article.
Then, we read a factual article that's in conflict with our personal politics, doesn't line up with our struggles, or conflicts with various biases and we automatically tend to conclude that it's bullshit, biased, and further evidence that the internet is not a real place anymore.
It's going to be a real place that serves to further confirmation bias and further isolate individuals from information that conflicts with their feels.
CaptCrash | 10 hours ago
I’m assuming that this is actually two vehicles, one for each adult in the household. My back of napkin calculations come short of this 1.2 million but I can see how more aggressive calculations could get to 1.2 million with slightly more frequent car refreshes (I used every 10 years for 60 years as it made the calculation easy) and how you choose to model fuel costs. You can probably also justify using a higher new car price than I did (40k for ease because I knew the median was higher than that. After googling it’s a tad over 50k). It’s not unreasonable to justify using the median, saying over the course of the lifetime you’d expect to be on average “the median”.
It feels a little cheat-y to say two vehicles for 2 adults compared to one income, but then again “American Dream” definitely was only one working adult at one point so I’m willing to give it a pass. I think the 1.2 million is aggressive but within realm of reason. The real problem becomes when every number is aggressive.
weatherwar | 9 hours ago
Do back of napkin calculations for the same in 1975.
Average car got 12mpg ^^^https://www.fhwa.dot.gov/ohim/onh00/onh2p8.htm)
Gas cost $3.65/gal ^^^https://www.eia.gov/totalenergy/data/annual/showtext.php?t=ptb0524
Average age of a car was 5.5 years (1977) ^^^https://www.bts.gov/content/average-age-automobiles-and-trucks-operation-united-states
Interestingly the "American Dream" from the 1950s, 60s, and 70s as colloquially used also means 1 car: https://www.bts.gov/browse-statistical-products-and-data/info-gallery/share-household-vehicles-available-1960-2023
RIP_Soulja_Slim | 7 hours ago
>How we estimated it: Assumes that two adults own and operate vehicles bought new in 10-year cycles from age 22 to 75. The data on the average new-vehicle loan amount and loan term are from Experian. AAA is the source for each person’s costs over those 53 years at 15,000 miles per year: fuel ($103,350), maintenance and repairs ($87,768), full-coverage insurance ($89,782), and license, registration, and taxes ($43,089). The calculation excludes vehicle resale value.
Here's the blurb from investopedia.
So they assume you need to buy two brand new cars every decade, each drives 15k miles/yr, and zero accounting for resales values lmfao.
No. I didn't buy a new car until I was 38, even then it was because the specific car I wanted had little benefits from going used/lightly used. And I've been more than able to buy new for a while.
This isn't "the American dream", it's an exercise in purposeful rage bait for dumb readers. At it's core - their assumption has you spending as much on vehicle ownership as you do on home ownership. That is almost never the case, for anyone.
HumorAccomplished611 | 4 hours ago
I guess it could be a "dream" to have new cars every 5 years (alternate between the two) but realistically its not normal.
RIP_Soulja_Slim | 4 hours ago
Also, buying every car from age 22 on brand new is just nonsense. Most people are broke in their 20s, the median income for the 20-25 age bracket is ~41k/yr. The median income for 35-55 year olds hovers in the upper 70k range.
Being broke in your 20s is entirely normal, that's how life works, pretending like one should be buying brand new cars then is just hilariously bad.
max_power1000 | 4 hours ago
Maybe not brand new, but new to you? My wife and I shoot for something fresh off a 3-year lease and drive it for a decade, with one of us getting a vehicle every 5 years.
GalaXion24 | 6 hours ago
I think two vehicles for two adults does make sense as a part of the American dream given the state of American urban planning.
SilverCurve | 10 hours ago
A household earning $125k over 40 years would have this $5m.
The headline is quite rage bait because it’s not clear when this hypothetical couple start. If they started 40 years ago, they don’t need $5m for the same lifestyle, because houses and cars and income were nominally much lower. If they start now, it’s not hard to earn $5m over the next 40 years.
Luftritter | 9 hours ago
Isn't that the income from one of the upper percentiles? Also 5 million now would not purchase the same in 40 years due to inflation.
Mikeavelli | 8 hours ago
$125k/year is around 60-80th percentile depending on where you live.
RIP_Soulja_Slim | 4 hours ago
Yeah, household at 125 is not nearly as abnormal as people think.
Age also matters here. 35-60 tends to be the brackets where people are in their highest earnings years. Median wages (not household income, individual income) in the 35-45 bracket and 45-55 brackets are both over 70k.
This projection for instance presumes you're buying new cars from age 22 on, but in reality most people don't get to the point where they're comfortable buying a new car until their late 20s or 30 years old.
SilverCurve | 8 hours ago
About one third of US households make $125k or more. This is household income, meaning a couple each makes $65k is counted.
About inflation: income should rise alongside cost. Some years ago this same report said $3.5m is the American dream. I bet they would come back some years later and update it to $6m, $7m, etc. But the top 1/3 of household income should rise too to match with that. Truth is, whatever we define as American dream is just the upper middle class lifestyle.
RIP_Soulja_Slim | 4 hours ago
> This is household income, meaning a couple each makes $65k is counted.
Household can be fucky like that, which makes it not the best measure at times. For instance a single person is a household, but also a couple is a household. So household income figures are some mixture of couples and single people.
This is because household income stats are derived from tax returns, which aren't more granular than this.
But, the median individual income for people in their mid 30s to 60 years old is above 70k. That's the median. So if you take two median workers, their combined income from age 35 to retirement is a bit over 140k.
Because households have some non working spouses, lots of single households, and no age bracketing on the income figures, you get a bit more noise than other measures.
BLS median weekly earnings is a great resource: https://www.bls.gov/charts/usual-weekly-earnings/usual-weekly-earnings-current-quarter-by-age.htm
Important to take the age aspects in to consideration, young people in entry level jobs usually aren't making much, plus there's part time retirees as well as college/high school workers in the mix in various measures. You can see the noteworthy progression as one enters prime earnings years.
CoolLordL21 | 7 hours ago
Technically, they would not as they have to pay income taxes.
Ok_Principle5942 | 5 hours ago
BLS has the average household spending $13,318 on transportation per year. That works out to less than half of what they are claiming over 40 years.
https://www.bls.gov/opub/ted/2026/housing-and-transportation-accounted-for-50-percent-of-household-spending-in-2024.htm
Presumably one spends a bit more "living the American Dream". But I can't imagine the Dream requires you to double your spending.
TheVenetianMask | 10 hours ago
Buying and maintaining. So it'd include licenses, insurances, repairs, gas.
OfficialDuelist | 10 hours ago
Including interest, maintenance, gas, etc... If you paid $80,000 for every car you ever bought, you'd need to purchase 15 vehicles in your lifetime to hit $1.2m
Assuming you drive for 70 years, that would be a new car, with a total bill, gas and maintenance included, every 4.5 years
Basically every presidential election you get a brand new car, and by the time the next election comes, you've spent $80,000 on that car.
That just seems totally unrealistic in any practical world.
edit: Not to mention average drive puts less than 15k miles per year on their vehicle. So, lets say that's a brand new car every 60,000 miles? There would be basically $0 in maintenance at that rate because your car would be essentially new by the time you got the next one.
edit edit: I mean shit, in this weird scenario just lease your cars every 2-3 years and never pay maintenance. Google says it's $4k-$7k a year to lease a Ford F150, a very common large and unnecessary vehicle Americans like to drive. Lets say you pay $7000 every year for 70 years that's still only $490k for your whole life, and that's a wildly stupid way of handling your transportation needs.
RIP_Soulja_Slim | 7 hours ago
Not that your sentiment is wrong, but man it drives me insane how many people on this sub just make absolutely wild guesses about this sort of stuff, write some confident comment about it, and have it hit top comment because nobody else bothered to literally just spend 3 seconds checking the literal sources.
The article links directly to this source: https://www.investopedia.com/the-2026-american-dream-cost-rises-4-percent-12154346
Which has this:
>How we estimated it: Assumes that two adults own and operate vehicles bought new in 10-year cycles from age 22 to 75. The data on the average new-vehicle loan amount and loan term are from Experian. AAA is the source for each person’s costs over those 53 years at 15,000 miles per year: fuel ($103,350), maintenance and repairs ($87,768), full-coverage insurance ($89,782), and license, registration, and taxes ($43,089). The calculation excludes vehicle resale value.
Obviously that's also a bullshit way to measure vehicle ownership in "the American dream", but like come on guys, it takes seconds to gather this information, rather than amplify some random redditor who spent way more effort and time making wild guesses and dropping a confidently incorrect post.
This is exactly why disinformation spreads like wildfire on this sub, people put 10x as much effort in to guessing than they would spending a few seconds to read.
FuggleyBrew | 7 hours ago
Seems pretty reasonable actually, the resale value should partially be captured in the average loan value. There is some discussion of new vs new-to-me, but it is the dream right?
RIP_Soulja_Slim | 7 hours ago
After a decade??
FuggleyBrew | 4 hours ago
How do you mean? The common resale value is included in peoples assessments, they either privately sell the car and use it as the downpayment, or they trade it in for part of the downpayment. Even after 2 decades the car still has residual value, but if your measurement is of the vehicle loan price thats captured within it.
RIP_Soulja_Slim | 4 hours ago
You think it's reasonable that you buy a new car, own it for a decade, and the resale value of said new car at the end of that period in time would be captured by loan value??
You think that a reasonable assumption is that people who've owned a car for a decade have lending against that vehicle that's still most of it's value? Walk yourself through what you're saying. You buy a brand new Honda Accord in 2016, let's say you get the EX-L at like ~30k in 2016. Today that car is worth around 12-14k. And you're suggesting that "the resale value will be captured by the loan value". You understand that to have this be true you'd have needed to do like 15 year financing, right?
In what world, anywhere, is this "reasonable"?
e: not to mention, this is still erasing value from the modeling and adding cost, even if it was an accurate portrayal - which it 10000% is not lol.
>Even after 2 decades the car still has residual value, but if your measurement is of the vehicle loan price thats captured within it.
I have absolutely no idea what this is even trying to articulate, are you some sort of AI that's on the fritz or something?
FuggleyBrew | an hour ago
>You think it's reasonable that you buy a new car, own it for a decade, and the resale value of said new car at the end of that period in time would be captured by loan value
Yes, I put $3,000 down, buy a car for $20k, shows up as a loan for $17k, loan gets paid off in 3-5 years and in ten years I sell the car, lets say for $3k, buy a new car for $20k, I take out a loan for $17k. It is showing up in the loan value because the resale value gets deducted from the loan expense.
>lending against that vehicle that's still most of it's value?
I didn't say any of that.
>You understand that to have this be true you'd have needed to do like 15 year financing, right?
Buy a car for $30k, sell a car for $12k as part of the transaction, the AAA loan cost will only show $18k, meaning the loan value captured (excluded) the residual value ($12k) of the car.
This is very simple, and entirely reasonable to not subtract the resale value again, because it is already in the equation.
RIP_Soulja_Slim | an hour ago
> Yes, I put $3,000 down, buy a car for $20k, shows up as a loan for $17k, loan gets paid off in 3-5 years and in ten years I sell the car, lets say for $3k, buy a new car for $20k, I take out a loan for $17k. It is showing up in the loan value because the resale value gets deducted from the loan expense.
My man are you struggling to read here or what? What contrived scenario is this?
Did you read the methodology? It includes none of that. It's an accounting of brand new average transaction prices + costs of ownership averages across a decade, with zero consideration for resale value.
There's no way you understand the basic ass math here and think it's a reasonable representation of reality.
Because I think this has flown way over your overly confident head - what the modeling says is every 10 years you buy a Toyota Rav4, maintain that payment + interest, keep it for a decade, incur ownership costs, then throw it in the trash. That's it.
And here's you, several comments deep saying that's a "very reasonable" thing to assume. Does that sound smart? Be serious my man...
>I didn't say any of that.
No, you explicitly did, but somehow you seem to not understand the thing you're arguing about.
>Buy a car for $30k, sell a car for $12k as part of the transaction, the AAA loan cost will only show $18k, meaning the loan value captured (excluded) the residual value ($12k) of the car.
For the love of god, please go read the actual methodology that you rushed in to this conversation to defend. Please, stop embarrassing yourself trying to argue and go read it. There is no way you read their modeling methodology, or even read the part I had quoted, and thought that somehow was in line with whatever you're saying here. You're just writing fanfiction and trying to use that to justify calling extremely unreasonable modeling "reasonable".
Brother either you are one of the most confused people I've ever encountered on reddit or you have not spent a single second reading the thing you rushed in this thread to argue is "very reasonable".
>This is very simple
I agree, which is why I'm having trouble understanding how people like you exist in this world.
knumd | 4 hours ago
Have you seen what used cars are selling for these days? My friend just sold his 2014 Prius for $9k.
RIP_Soulja_Slim | 4 hours ago
Right, I have no idea how bro thinks it's reasonable to not include resale value. Or why on earth the loan would still be present at a decade in lol.
Generally speaking with increased vehicle longevity decade old cars are worth quite a bit. A decade old CRV has a KBB of ~15k, it was barely 30 brand new. Lots of other mainstream vehicles showing similar trends, ~40-60% depreciation across a decade isn't insane. So you translate that across 10 vehicles and you're missing ~150k+ in value lol.
HumorAccomplished611 | 4 hours ago
I mean youre ignoring the resale value on roughly 10 cars. Even after 10 years theyll still have around 40% of their value. Probably more if you trade in. (maybe not doing a crazy 15K per year miles though)
RIP_Soulja_Slim | 4 hours ago
Just FYI, I'm not ignoring anything - I'm quoting the actual methods used here. They're explicitly ignoring that.
And yes, that alone is a massive lift, not to mention that buying two new cars in this cadence is not a normal thing.
There's some dude in another part of this thread trying to argue with me that the resale value is taken up by the loan lmao. IDK how some people function being this uncritical of what they read.
Pace_Salsa_Comment | 9 hours ago
This is talking household, so two cars.
OfficialDuelist | 9 hours ago
Ok, but then you have to consider 50% of households are duel income.
Even still, even two cars, $1.2m is an outrageous amount of money. If both people leased a car for $7000 a year for 7 decades, you'd still be $200k short by the end. And if gas/insurance somehow closed the gap, then ok sure, you spent $1.2m on transportation, but you had to lease 2 of the most expensive variety of F150s every year, your entire life.
RIP_Soulja_Slim | an hour ago
> Ok, but then you have to consider 50% of households are duel income
"Households" are just the wrong way to look at this.
If you want to approximate income for a two adult household you need to not rely on household income stats. The census bureau's definition of a household is based on who lives within a house. Single people who have their own place are a household. ~30% of the Census bureau's dataset for households is single member households.
So, any household income stat is skewed heavily by that inclusion. Let's say every single person makes $100,000. Because the dataset has 30% inclusion of single households, your average household income here is going to be $170,000. But every single household with two earners will be making $200,000.
Note: medians require actual variability in the data so I'm not fucking with making a dataset to illustrate how it hits median, but with the law of large numbers your median and mean are the same with a normal distribution - medians are better for income because the distribution skews so heavily upwards, but the single member household presence still creates similar downward skew to the median as mean.
Basically, using official stats of a household's income is going to get you a lower income figure than what a median married household actually makes. The stats are correct, they're just not measuring what people are trying to use them to measure here.
FuggleyBrew | 7 hours ago
Yes, you should compare this to quintiles of lifetime household income, because this analysis contains lifetimes of household expenses. That will include periods where one of the two members of the household is not working for reasons of unemployment, parental leave.
RIP_Soulja_Slim | 3 hours ago
The issue is that household income isn't really a good gauge of what a two person household makes.
These costs are obviously all sorts of fucked up, but they're modeled for a two parent/two child household. I am a single(not married) person, but for purposes of household income statistics I am a household. My girlfriend is also not married, I hope, and for purposes of household income she is also a household. If we hang out with a married couple friend of ours, they are two incomes in one household.
So, If we all make the same amount of money, the household average is going to be below what any two incomes of ours combined are. Let's assume the four of us make even 100k salaries. That's a dataset of three households, two that make 100k, one that makes 200k. It's four workers that all make 100k, but three households. So, the average household income is 133k. It's not a large enough distribution for a meaningful median (and this sort of contrived dataset is going to give you a fucked up median regardless) - but the average paints the right picture within a reasonable distance here given the lack of outliers.
In the US about 30% of households within this dataset are single person households. So it's a significant portion of the data. Furthermore, there's no information around age related progression - on average a median 35-60 year old makes like 30% more than a median 25 year old.
TLDR: Use BLS median weekly earnings, household income is really useful, but really doesn't tell the story people think it does.
FuggleyBrew | an hour ago
If you and your girlfriend pool your resources and make joint financial decisions, I believe from the BLS's perspective you are a household even if you are not married.
>Furthermore, there's no information around age related progression
Isn't there lifespan data progression? I have seen that quite extensively before, although I am not 100% sure if I saw it from the BLS or Census.
>Use BLS median weekly earnings
That would make most of your objections worse. Taking an estimate of lifetime household income would appear a very reasonable way to quantify the general direction of these costs.
RIP_Soulja_Slim | an hour ago
The Census bureau is the one who publishes household income stats, not the BLS. Their definition rests on actual physical households, but their income statistics is heavily derived from actual tax returns as well. Regardless, the important piece here is that ~30% of households in this data set are single people, so you can see how it would significantly detach these figures from the reality of what a median two income married couple looks like.
IDK what you mean with lifespan data progression, the important aspect of this is that you hit your prime earnings years in your 30s and maintain that until retirement. Median incomes encompass everything from retired part timers to high school kids. The BLS median wage stats isolate age brackets, and you can see the considerable difference between median income vs medians within primary earnings years.
>That would make most of your objections worse.
There's no way you think this and understand any of the stats in question.
>Taking an estimate of lifetime household income would appear a very reasonable way to quantify the general direction of these costs.
Did you read anything I wrote to actually understand it, or just to argue? Because it feels like the latter. Try reading it to understand.
Better yet - create a dataset of incomes, normal distribution, individual incomes. Then combine your data such that 2/3 of the final distribution is two income datapoints and 1/3 is single income data points. Run medians and averages, then run medians and averages with only two income datapoints. See how different they are?
I feel like way way too many people here spend too much time trying to debate someone and nowhere near enough time trying to understand what they're reading.
FuggleyBrew | an hour ago
>I feel like way way too many people here spend too much time trying to debate someone and nowhere near enough time trying to understand what they're reading.
You offer nothing but ad hominems and complain others are here to argue.
>IDK what you mean with lifespan data progression, the important aspect of this is that you hit your prime earnings years in your 30s and maintain that until retirement
Generally keeps rising into the 40s but maybe you can get really bent out of shape by that fact too.
But we see the earning charts for every generation and the uplift they have between generations. While we don't have data points for all generations (because they havent lived that long yet) we can map out a prospective course for them based on previous earning profiles and estimate how much they will earn compared to previous generations and put it against this forecast of how much they will pay over a lifetime.
>There's no way you think this and understand any of the stats in question.
Weekly earnings is far more disconnected from looking at annual household earnings over time.
Sure, some households are small and this doesnt apply, but are those households always expected to be small? Is it fully separate from them deciding to be smaller?
Also in your example of you and your girlfriend, in many cohabitating situations we would call that a household or consumer unit, not two individuals. But if you think that we should compare it to households of two of more people, reasonable enough adjustment to the comparator.
OfficialDuelist | 7 hours ago
I may be misunderstanding you. There's a lot of variability in cash flow over a household's lifetime. What's that got to do with the proposed lifetime expense of 2 vehicles being put at $1.2m? I was just commenting the projected cost is way too much in any real world scenario.
FuggleyBrew | 4 hours ago
Two new vehicles, replaced on a 10 year cadence, prices based on average new vehicle loans including interest, insurance, maintenance, gas.
I will quibble and argue "new to me" cars should be included - especially when younger, but its not an completely unreasonable set of assumptions, especially when framed as the aspirational number.
Yes, that should be compared to household incomes, not individual, but its close to what the top 30-40% earn.
Pace_Salsa_Comment | 9 hours ago
This is literally the proposed cost of living the American dream. The average price for a new vehicle in America just under $50,000. Replacing your cars every 5 years so both household vehicles are covered by the manufacturer's warranty is extremely common for househol that can afford it. That's not a stretch for the American Dream.
weatherwar | 9 hours ago
> Replacing your cars every 5 years so both household vehicles are covered by the manufacturer's warranty is extremely common for househol that can afford it.
You're just massively moving the goalposts and even attaching a disclaimer "for househol that can afford it."
That's not how this works.
Pace_Salsa_Comment | 4 hours ago
I'm using the goalposts established in the article. I really don't understand what point you're trying to argue, but it doesn't seem relevant to the discussion of the article.
OfficialDuelist | 9 hours ago
If "The American Dream" is making enough money to build a future and have the financial capacity to live comfortably with a good work life balance, buying 2 new cars every 5 years that somehow cost you $50,000 each is not a prerequisite to doing that. That would be a luxury expense a household might choose to indulge in. The whole conversation is framed around what is necessary to achieve the american dream.
That's completely out of the norm, and totally unnecessary. People that do that are going to get a lot of money back when they trade that vehicle in, albeit at a loss, and still a financially stupid move.
And even if they decided to do this, by the end it would still cost them nowhere near $1.2million.
Pace_Salsa_Comment | 9 hours ago
I don't know what to tell you. This figure is consistent with the most recent AAA report I've seen. It seems obscenely high for somebody who hasn't had to buy a car recently. I drive a 2015 Hyundai, so these prices are pretty shocking to me, but so were rent prices after moving back to a relatively LCOL city after 10 years. Everything is just way more expensive.
https://newsroom.acg.aaa.com/aaa-releases-annual-report-on-vehicle-costs/#
OfficialDuelist | 8 hours ago
I mean, I get it, it can be that high if you go that route, but we're conflating the necessary cost of living, eg having a vehicle in the US, with a opposite end of that necessity, which is buying a new vehicle, and an expensive variety at that, and continually doing that forever.
Using the $11,577/year metric doesn't last if you're not buying a new car every 5 years, right? I guess, my question to you is, why would buying a new car every 5 years be necessary in the American Dream? Maybe I'm totally misunderstanding what is implied by the American dream.
Pace_Salsa_Comment | 5 hours ago
That's definitely the source of the disagreement. I'm discussing this information with the context of the article posted, which is that achieving the American Dream is getting more and more expensive. We can reasonably disagree that two relatively new/reliable cars is not a part of what you would consider "The American Dream," (I actually agree with you), but we could say that about literally any of the other seven indicators discussed in the article.
The point of the article isn't, "The American Dream is totally attainable, depending on what that means to you." The point is that what we call the American Dream is becoming further and further out of reach for most Americans. To have that conversation, we have to use consistent metrics, and AAA has been publishing this information consistently, making that a perfectly reasonable figure to use, when discussing the change in costs. It doesn't really matter if your idea of the American dream doesn't include new cars. Many people don't consider have children, owning a home, or taking vacations to be a necessity for their idea of the American dream, and that's perfectly reasonable, but it just doesn't matter in the context of this discussion.
mmbon | 9 hours ago
Now now, the 1.2 million would only cover leasing a ferrari roma for 33 years. Thats less than a lifetime, thats lower middle class at most /s
RIP_Soulja_Slim | 8 hours ago
It's a clickbait site basing their article on something someone at investopedia.com did lol. Of course it's ragebait, none of the parties involved are respected in econ at all.
PrestigiousCod5629 | 7 hours ago
$1.2 over 40 years is $30,000
Divided by 2 is $15,000 a year per car in a two car household.
Since this is the American dream, let’s assume the cars are new.
Average new car loan+insurance would have you a bit under $1,000 a month, unless this includes gas for the car this seems like a high estimate, although close.
omniuni | 8 hours ago
There's also interest if you don't buy the car outright. And, to be fair, I don't think they consider the "American dream" buying a used car and driving it into the ground every 15 years.
The-Magic-Sword | 4 hours ago
might involve inflation projections? i think a lot of people feel like their wages aren't rising with inflation, or that its lagging in such a way that they lose out on a lot of money in a practical sense.
Extremelixer | 3 hours ago
Thats roughly 20k per year for a brand new car. Miss me with that shit damn. Personally I dont buy new to begin with not due to cost but due to the markup. I hate having a monthly car payment. Anyone needing 20k per year for a new car is not living responsibly.
GiantLesbian | 5 hours ago
A $40k car will cost you about $57k with a 5 year loan and 7% interest rate. Let’s say insurance is $400 a month and gas is $200 a month. We’ll say $1500 a year for maintenance and repairs. That’s $43.5k over those 5 years. So that’s a total of $100.5k for one car for 5 years. I can see how we get to $1.2 million over a lifetime if we’re projecting into the future (aka taking future inflation into account).
hewkii2 | 11 hours ago
You can pick apart this in many ways, but the main one that caught my eye was “buying and maintaining new cars” for just north of $1.2 million.
Even if you assume it’s two cars and 50 years of this activity , that’s $12,000 per year per car. Even with average new car prices being what they are you’d have to swap out a car every 5 years or so to make that math out.
themiracy | 11 hours ago
AAA actually is sort of the standard keeper for this number. It is about $12k per them:
https://newsroom.acg.aaa.com/aaa-releases-annual-report-on-vehicle-costs/
Aspects of their method are proprietary which makes critiquing it harder but their core assumption is 5 years of ownership per car and 75k miles.
There are strategies to have this number be lower, obviously. I don’t think my number is really this high. But I guess we’re talking about the “dream” here and not creative cost saving.
isaidmypiece_chrissy | 11 hours ago
I also doubt your number is that high, as ours is way below that. That's not to say the number is inaccurate, because I'm thinking of all of the $100k pickup trucks I see on the road nowadays, and you have to figure a good number of people don't have budget friendly monthly payments on them. If your car payment is $500/mo, that means you have another $6k left on the year to cover gas, oil, maintenance, repairs, and insurance assuming they included those in the $12k metric.
senorgraves | 10 hours ago
I bought a 30k car and the payment was 500$ a month, and that was under 4% interest
Those pickups are costing people easily over 1000 a month
isaidmypiece_chrissy | 10 hours ago
So then if anything, that $12k estimate is the low end estimate for those people, they're the ones pulling the average number up!
mmbon | 9 hours ago
A 100k Ford just means you are no longer middle class? Thats just upper class. Upper middle class I would say is one small car for getting to work, a hatchback and one larger car that can also used for travel/holidays like a cheap SUV or a big sedan. Normal middle class is either 1 big car or just both in a smaller version. I don't think anyone in my family ever bought a new car for example, the value loss in the first years is really bad. Always bought 2-4 year old models and then drive them to like 8-10. Lower middle class is maybe substituting one car for a bike with work is <15 miles away. Thats a family of 4 sorted
isaidmypiece_chrissy | 9 hours ago
Pew Research in 2022 "Middle-income households – those with an income that is two-thirds to double the U.S. median household income – had incomes ranging from about $56,600 to $169,800 in 2022. Lower-income households had incomes less than $56,600, and upper-income households had incomes greater than $169,800."
A middle class family making $150k per year can afford a $100k truck spread across 5-7 years. Not that it's a good idea in my opinion, but it's definitely not out of reach.
mmbon | 7 hours ago
Wow, the US population is insanely rich.
Yeah, could, but it would be a bad idea and should not be a model for anything
Rock-n-RollingStart | 9 hours ago
Congratulations on discovering how averages work! Some people have a long commute which increases gas consumption and maintenance costs, while some people drive very little.
isaidmypiece_chrissy | 9 hours ago
Thanks for the contribution!
cykoTom3 | 3 hours ago
A pickup that isn't necessary for work is a luxury
CrayonUpMyNose | 10 hours ago
A lot of people's car payments are way higher than $500. Given current interest rates and long 84, 96, or even 120 month durations, a new car after five years means they are rolling pre-existing debt into the next purchase, increasing their (mostly interest) payments significantly.
Powerful_Meaning8891 | 8 hours ago
The reality and what is necessary are different things. People are welcome to spend above their means, doesn’t mean anything about what is necessary to make for the American dream.
CrayonUpMyNose | 4 hours ago
Are you saying that buying everything second hand and limiting yourself to the bare necessities is the new American dream?
themiracy | 4 hours ago
There is probably a conversation about who needs new cars. A lot of your retirement account millionaire friends don’t buy them. I commented that my annual TCO was probably not $12k - my car isn’t exactly a beater either … it does 0-60 in about 4 seconds, it has less than 30k miles on it, it’s in great cosmetic condition, the battery is in good shape … I’m not driving a Yugo.
I TBH would characterize myself as living the American dream - we own a couple houses, we can travel, we have the bandwidth to engage in national and local philanthropy …. After my parents’ sacrifices in terms of what they left behind to come here, I’m doing pretty well ….
CrayonUpMyNose | 4 hours ago
You are still missing the point. Yes, you can do all that and Lean FIRE or whatever.
This conversation, however, is living the American Dream (TM) capitalized as an existing concept. What you are describing is not that.
cykoTom3 | 3 hours ago
A lot of people don't realize they are buying luxury vehicles.
CrayonUpMyNose | 3 hours ago
Yes, you can live frugally, but that's not exactly what we used to call The American Dream, is it?
Which is the topic of the entire post, so anyone taking about how they only buy used cars is off topic. I have a used car, too.
Doesn't mean I'm living The American Dream the way we imagine it and the way it was possible once, when a home was three annual salaries, college was about what any student could earn in a menial summer job at the local ice cream parlor, and a family car (because a single income was enough to finance a family) was a simple purchase instead of a ruinous long-term financial commitment. Not to mention catastrophic increases in healthcare cost that used to not be as much of a concern as it is today.
cykoTom3 | 2 hours ago
The American dream has nothing to do with luxury cars. In the 50s the American dream was 1, absolutely stripped down basic model car, a 800 sq foot house with no insulation or ac, and enough food to feed your family. College wasn't even in the picture.
Whatever you want to define it as is up to you. But trucks you do not need for work are luxury vehicles. They just are.
passwordlostnoemail | 10 hours ago
Just keep numbers simple and it makes sense. One way to get to 12k/yr:
This is a cost model for buying a brand-new vehicle and then selling/trading it at 5 years/60,000miles, relatively common given warranty expiration timings. Anyway this is the dream right? - 2 brand new vehicles that are paid to be maintained by the dealer that you buy from and also them being replaced every 5 years when the warranties end. No risks incurred in cost, reliable performance, modern amenities, etc.
The car insurance and gas costs being 2k/yr are very fair if not underestimates depending on the actual vehicle fuel efficiency and insurance rates. Compliance and routine maintenance might be a little overestimated, but not much. You will have ~10 oil changes and at least 1 set of tires and brakes/rotors, 5 years worth of annual inspections/registrations, etc. It can add up. Remember we are just dropping it off at the dealer at the regular intervals and just paying the bill here, it is going to cost a little extra.
The last one is the most variable - it depends how expensive the purchase price was and the overall depreciation curve and how much you had to put on loan. For instance a 40k loan at 5% over 4 years would eat one of those 6k years just in interest paid over the loan. Brand new cars lose value. This is only 30k over 5 years to cover rolling sale taxes/fees, depreciation, interest, etc. on a brand new vehicle. This estimate is like saying you buy at 50k brand new and sell at 30k when it is a 5yr/60mi vehicle and pay a decent amount in interest/taxes/fees along the way.
themiracy | 9 hours ago
Your number also highlights the double whammy kind of situation that people fall into if they take a loan at a higher unsubsidized interest rate, especially on a new car that experiences more rapid depreciation - you are paying interest on the loan (locked to the purchase price) and you are “also paying” depreciation.
If you buy in cash you are still paying opportunity cost of that cash, and depreciation, but not directly paying interest. Depending on the interest rate, one might be better than the other or the other might be better than the one.
But you do have to capture all the costs, either way.
nicetriangle | 10 hours ago
A number I've seen multiple times was around $14k so $12k does not seem ridiculous to me.
holymacaronibatman | 9 hours ago
I can somewhat believe this, I just ran the numbers earlier this year on replacing an old car. It turned out to be cheaper for my specific use case to just not replace it and rent a car for when I need to take long road trips.
jiggajawn | 7 hours ago
I've always come to this conclusion when running the numbers as well.
I could rent a vehicle of my choice on Turo nearly every weekend and would come out ahead compared to owning a car.
bill_gonorrhea | 8 hours ago
What is the American Dream? I feel like people have conflated it to something that is purposely unrecognizable.
The “American Dream” is the belief that anyone, regardless of where they start, should have the opportunity to build a better life through effort, with the freedom to choose what that life looks like.
It’s often associated with a stable job, owning a home, raising a family, and giving your children more opportunities than you had. But the broader idea is opportunity, dignity, and upward mobility, rather than simply becoming wealthy. It’s not a check list
alilhillbilly | 4 hours ago
The American Middle Class is the American Dream kind of ultimate manifestation of the American dream.
The American dream is that you can work hard and - especially for immigrants - level up from the working class into a middle class type experience pretty quickly as long as you're willing to work hard and have some initiative and smarts.
The American middle class was at one point like 70% of the country but it meant that you could own some kind of home if you were a married couple, you could afford for one person to go to work while the other stayed home to attend the house and the children because that's a full-time job, you can take one to two vacations a year even if it's in the backseat of a station wagon, you can afford to retire modestly, you can afford to send your kids to college, you can afford healthcare, and like 1 to 2 vehicles.
A generic life. The idea was that the American dream enabled this.
And for 40 years we have steadily done everything we can to destroy every pillar that sure that system up.
Huge_Ad_7 | 8 hours ago
I've already bought my home abroad and just looking for steady pay from us and good-bye usa
Ticksdonthavelymph | 11 hours ago
K. I’m gonna be really happy to retire 10 years early with less than 1/2 that but okay sure. Retirement doesn’t mean living in Manhattan or San Francisco
snoogins355 | 11 hours ago
I'd settle for three fiddy. $350k
probablymagic | 10 hours ago
These kind of statements are so wildly out of touch with reality it is crazy people post them. You don’t need $5M dollars to live a fine life in America. That is super rich.
Ketaskooter | 10 hours ago
5m in household income over a 40 year career. Doesn’t sound so crazy put that way does it
probablymagic | 10 hours ago
The median American gets nowhere near this. These people are nuts. They’re basically saying “the American dream” is to be in the top few percent of earners. That is very silly.
Setting aside the numbers, the idea “the American dream” is defined by material things is kinda gross. If that’s all it is, then it doesn’t matter at all and we need a better dream.
UndercoverstoryOG | 9 hours ago
120,000 thousand hhi over 40 years is 5 million. plenty get that
probablymagic | 9 hours ago
That would put you in the top 10% of earners in America as an individual, and the top third of earners as a household. It also doesn’t count for the fact that you would be paying around a quarter of your income in taxes, so that’s not actually your take-home pay.
jeffwulf | 9 hours ago
The median family income is 110k a year. 120k isn't much above that.
weatherwar | 8 hours ago
The median household income is $87,460.
https://fred.stlouisfed.org/series/mehoinusa672n
jeffwulf | 7 hours ago
I said family, not household. And median family income is 110k.
https://fred.stlouisfed.org/series/mefainusa646n
probablymagic | 9 hours ago
The median household income is $87k. Again, pre-tax.
jeffwulf | 7 hours ago
I didn't say household. The median family income is 110k.
https://fred.stlouisfed.org/series/mefainusa646n
probablymagic | 6 hours ago
The FRED distinction is that a family is a narrower category than a household, and families tend to have higher incomes because they are more likely to contain multiple earners than a household.
We typically talk about household income relative to COL because households are more diverse and inclusive of different lifestyles, but of course many households that are also families will be above that.
Ketaskooter | 6 hours ago
Its a materialistic dream and most people don't live like that but its a solid indicator how out of reach a model house and new vehicles are getting from the average worker. Analyzing the car indicators, people are keeping new and used cars longer and the average car age on the road is also increasing constantly. The trends clearly show that certain staples of American life like cars are outpacing wages.
probablymagic | 6 hours ago
Honestly, people buying new cars shouldn’t be complaining their “dreams” are unattainable. Literally nobody has to do that.
We also gotta keep in mind, things like cars and houses are of much higher quality and houses much larger than they used to be. There’s definitely a housing affordability problem with housing because of how we regulate it, but we should be driving cars a lot longer than we used to because they are much more reliable for much longer, and safer to boot.
But people dream of that new car smell…
jpoolio | 8 hours ago
It's out of touch with YOUR reality. But, that doesn't make it less true IF you want to own a home, pay for college for your kids, and comfortably retire at a reasonable age.
5 million over your working life is not "super rich" and it's sad that people think it is. Even 5 million in the bank is not "super" rich, especially when you get older and at peak retirement savings.
INeedSomeTacoC | 6 hours ago
> Even 5 million in the bank is not "super" rich
It literally is though.
Every single statistic will show that being in the top 1% in total wealth in America if you have that much in the bank, regardless of age.
In a room of 1,000 random people there is a good chance that you're the richest one.
jpoolio | 6 hours ago
Someone retiring with 5 million because they spent 40 years saving in their 401k is not "super" rich. They are wealthy but not obscenely so, especially depending on where they live.
The issue here is the definition of "super". I think of the "super rich" in regards to purchasing power and wealth hoarding.
Mary and Todd with their 5 million for retirement is not living the lavish life like Joe, who has 50 million, driving a McLaren, with a mansion on each coast.
The issue is that being a couple like Mary and Todd, who will be ok in retirement, even if they have expensive Healthcare bills (because that is what eats your money when you get old), should be attainable to more than 5% of the populous.
The top 1% begins at 11 million. The top .1% begins at 63 million. That is super rich.
Barnyard_Rich | 6 hours ago
Interesting, I'm seeing top 1% at $38 million average wealth, and $13 million median wealth.
And that's people who have built that wealth up to this point. This measurement just takes the numbers we have now and projects them, which is closer to reality than including numbers from 40 years ago.
Annual income, assuming you have to actually earn your money rather than being born wealthy, would be $659,050 to $787,712 depending on the source.
INeedSomeTacoC | 6 hours ago
Yup.
So $13M median.
Don't just compare cash in the bank to total wealth, that's disingenuous.
At $5M in the bank, you own your house, your cars, likely have other investments, have a maxed out Social Security plan, and so on that probably a bit more than doubles your wealth.
Barnyard_Rich | 6 hours ago
Well yeah, taxes, accidents, medical alignments...
That's why income is the far better measure than wealth for someone just starting out economically. It's also why the income number isn't just $5 million divided by income per year. That's why saying $125,000/year for 40 years is enough to retire on is just wrong.
INeedSomeTacoC | 5 hours ago
Yea, but we were talking specifically about how rich someone with $5M in the bank is.
I don't know what the rest of your comment has to do with this sub-discussion at all, quite frankly.
Appropriate-Ad-4148 | 37 minutes ago
Don’t forget the 3 in 5 statistical chance that someone that wealthy ALSO has a rich parent that spoiled the shit out of them to the point they didn’t need an income until they were like 30. Meanwhile, living a six figure lifestyle wanting for nothing.
ItGradAws | 10 hours ago
Idk where you live but starter homes are going for 800k around where we live. These interest rate hikes added 60k to that price.
Worldly-Most31 | 9 hours ago
So don't live there
ItGradAws | 9 hours ago
Yeah let us just move to bumfuckville where they don’t have any jobs. Great idea!
Nukemind | 8 hours ago
I'm not saying to move across the nation but lots of cheap housing in places that aren't "Bumfuckville". San Antonio, Dallas both have cheap housing, hell for a condo you can get sub 100k depending on the area (and not bad areas), 3 bed 2 bath can be sub 250. St Louis isn't bad. Denver was pretty pricey when I lived there but still. Lots of major cities that aren't bad and some even in purple states and/or blue cities.
Bob_Marshall | 7 hours ago
I moved to San Antonio for work during the 2009 downturn, I hated it there but it was very livable on a limited income even for a family of three. I was laid off in CA and there was no way I could stay without draining my savings in a heartbeat.
Barnyard_Rich | 6 hours ago
For those who wonder why use Texas specifically, it's because they allowed a massive amount of home building during the early to mid-2020's, and are now reckoning with a housing crash:
https://www.fastcompany.com/91594460/housing-market-home-prices-falling-64-major-markets
8 of the 64 housing markets losing value are in Texas, so it is becoming an easier place to buy. Another 15 markets are in Florida. So a full 39.5% of all markets where housing is becoming cheaper are in Texas or Florida.
These are very specific examples that aren't replicated throughout the country.
Azmtbkr | 8 hours ago
RTO has really fucked over a lot of people. I’d love to live in bumfuckville, but have to be in an office now to attend the exact same Teams meetings that I would if I were working from home…because reasons.
probablymagic | 7 hours ago
You are allowed to get a different job.
ItGradAws | 8 hours ago
That’s what I’m fuckign saying. I’m catching flack for having to uproot our entire jobs to go an an area with “cheaper” housing while taking a major pay cut at the same time. Yeah that don’t fuckign math in addition to these places being worse in every measurable standard of living.
angrysquirrel777 | 6 hours ago
Americans for the last 250 years have constantly uprooted their lives to chase their dreams and stay where the going is good. We're very famous for it actually.
ItGradAws | 6 hours ago
Yeah so I’m where the jobs are good, let me move to bum fuck no where. What a dumb fucking argument.
WheresTheSauce | 8 hours ago
Insane false dichotomy.
ItGradAws | 8 hours ago
That’s bullshit and good jobs aren’t fucking everywhere
jeffwulf | 9 hours ago
I live in major metro area and start homes go for like 400k.
probablymagic | 10 hours ago
Yeah, it’s a very dumb time to be investing in residential real estate. Don’t do that.
That said, mortage rates going up ass money cost, but they are actually holding down prices. People can’t afford to pay any more than they are now. This is why we should expect pretty flat home values for the foreseeable future.
Flayum | 9 hours ago
Buddy, that's why it's an analysis of the classic "American dream" not being possible anymore.
Can most afford to buy a nice house for their 2-3 kids and 2 relatively new cars? No. That's the entire point buddy.
It used to be possible and now, even for college graduates, it's not. Again: That's the entire point. If you want to redefine what the American dream is, then that's another discussion.
UndercoverstoryOG | 9 hours ago
way too many college graduates with worthless degrees that are funded with debt.
Barnyard_Rich | 6 hours ago
My absolute favorite argument on the internet because it caused tens of thousands of people to get degrees in IT, which is now considered a worthless degree because there are far too many workers for the shrinking number of jobs.
You guys really nailed that one!
probablymagic | 7 hours ago
You mean borrowing $200k for a sociology degree isn’t going to get me a six figure job, a house, and two kids? I’ve been scammed!
Flayum | 8 hours ago
Sure, just say: "only a small minority of Americans with in-demand skills can afford the 'American dream' compared to the past".
UndercoverstoryOG | 7 hours ago
no many of the degrees we have now aren’t skill related and thus no jobs needed to fill for those degrees
Flayum | 6 hours ago
Huh? None of this has anything to do with my statement above?
probablymagic | 9 hours ago
Buddy, this is dumb as shit, sorry. You’re being monetized because you want to hear your life is hard. Thanks for viewing the ads.
Flayum | 9 hours ago
You didn't respond to anything I said, try again. This time using your brain, please.
probablymagic | 9 hours ago
I mean, you’re wrong and saying dumb shit. So I responded by letting you know that. You’re welcome to correct that behavior, or not.
“Try using your brain” is good advice for yourself.
Flayum | 8 hours ago
Yet you still haven't replied to any actual points.
If what I said was so dumb, it'd be super easy to counter all the points. But you're just spiraling, which suggests you don't actually have any way to counter.
probablymagic | 8 hours ago
I always find it funny when people spout bullshit on the Internet, and then when they’re called on it, are incredulous that the other person didn’t go do a bunch of research and provide citations for them.
If you want to do research on this topic to inform yourself, you can simply do that. You don’t need people on the Internet to do it for you.
Flayum | 8 hours ago
All that text and you still can't manage to address any of the points I made, not even a bit.
How should a third person know which of us "needs to do research"? I would probably err on the side of the person making an argument over "oh it's obvious, you're being dumb".
UndercoverstoryOG | 9 hours ago
absolutely no where near super rich
badboigamer | 8 hours ago
The American dream has shifted and it’s not to be rich and consume, it is to be loved and supported and live a meaningful life in your community.
octopus-opinion987 | 11 hours ago
The numbers make sense if you read the source methodology, and remember this is the “dream” not the norm.
Most couples don’t buy brand new cars every 5 years (or they shouldn’t, anyway). Maintenance gas repairs and insurance.
Raising kids includes the costs of needing housing with more bedrooms, medical insurance which is astronomical, childcare, college at a public univ which is now frequently 40k including tuition room board and fees. And thats not even the “dream” which would usually be the expensive private at 90k+ per year, per kid.
If anything, the article is under-reporting the costs of the dream. My dream is the house on the waterfront, and international vacations every 6 months and smaller ones every month or two. Easily 10m.
mmbon | 9 hours ago
It makes sense if you put it into context that this was always a dream and never reality, its not middle class. Its like the from dishwasher to millionaire,which is also not reality. So when politicans say we want the american dream back, this cannot be what they mean, cause this never existed for a middle class american
weatherwar | 8 hours ago
Has "the American Dream" ever been a literal interpretation? I also would edit the dream for me personally: 120 acres in a beautiful, private, but convenient place in Montana.
I have never heard the colloquial American Dream include two new cars every 5 years. That may have been the dream back in 1950 when the average lifespan of a car was actually 5 years and the majority of households only owned one car.
CompEng_101 | 8 hours ago
Any attempt to quantify what a communal dream is is going to vary. IIRC, the investopedia methodology doesn’t really justify why they pick those things and they change the underlying’basket of goods’ every year.
ohhhbooyy | 5 hours ago
So they are double dipping with housing? They include housing as a separate line item and include again in the childcare? That doesn’t make sense unless the kids have their own home for some reason.
The real mind blown is the annual vacations at 200k. The person who wrote this has to be some privileged individual to think that’s the “American Dream”.
OddlyFactual1512 | 12 hours ago
If one is able to afford a comfortable life in The US, they are able to afford a very, very good life in a large portion of the world. Not only is it much more affordable, but there are far fewer assholes to suffer.
prime_alki | 12 hours ago
Americans, even poor have ability to save what they can then live in other countries and live better than locals
leathakkor | 11 hours ago
I don't know if I necessarily agree with this. I just moved abroad to a very low expense country. And I still think it would take $600,000 to make it work here without being miserable. The jobs that do pay a lot are minimum 10-hour days sometimes 15 and they don't pay overtime. And the amount of money that they pay is not great.
So in order to be able to afford a comfortable life you need a lot more money to supplement your income.
And if you're not going to have a job you're going to need at least $600,000.
I am sure that there are cheaper places to live so maybe you could get by with 400 but medical expenses still come up.
And the average person simply cannot save 400,000 by the time they're 40 or so.
If you're doing it when you're 60 the ability to learn a new language is just not going to be there and it's going to be even more costly to move abroad.
On top of that if you want to fly home twice a year to visit family that's $1,000 each trip minimal. So all of a sudden you're very cheap cost of living goes up when you go back to the US and you need money saved for that.
I'm not saying it's not possible I'm just saying that people drastically underestimate how much planning money and time is required to move abroad. And especially money where they hear you can live somewhere off of $30,000 a year. You better have much more than that able to be spent when you get there because you're going to need a car or a motorbike. You're going to need to bribe local officials occasionally.
It's not as simple as blogs make it out to be
PunkPirate56364 | 9 hours ago
But English is a very widespread language.
I live in Croatia, Dalmatia. A lot of foreigners moved to our island, from Germany, Poland, Italy, Belgium, Nepal, Thailand, South Africa, Ukraine...
We all speak English.
And medical insurance is ridiculously low. If you don't want to wait for certain procedures you can use private health providers and pay out of pocket, and it's still much cheaper then medical procedure in US with insurance.
If you buy a house, a couple could live very decently with €20000 a year.
leathakkor | 7 hours ago
Wait until you complex medical treatment via emergency room and an ambulance. And the ambulance driver doesn't speak English enough for you to describe a seizure. Where I live English is very prevalent but you still need the native language or life will be infinitely harder when doing things like finding a local repairman that doesn't gouge you. It's really a necessity if you really want to be successful.
brute-forced | 11 hours ago
Where did you move? Did you buy a home there or renting, etc
leathakkor | 11 hours ago
SEA. Renting for 450$ a month bills and utilities included.
In a lot of countries it's illegal for foreigners to own land. What they do sometimes is work out a 99 year lease. Other places will do a company where you buy the entirety of the house but you have to partner with a local business and the local business owns 51%. And you take all of the costs. So the company has actual ownership and you have all of the liability.
I would advise against ever buying a house in a foreign country unless you have full ownership and a lot of them don't allow that. So you're stuck renting or marrying a local. And putting it in their name. But I've also heard stories of people marrying the locals and then they travel abroad and when they come back the house is sold in the partner has taken the cash.
OddlyFactual1512 | 11 hours ago
Which makes me wonder why more don't. I left, not because I couldn't afford it, but because the collective attitude and mentality were in the toilet. It's so much nicer living where people aren't so angry all the time.
I_Enjoy_Beer | 11 hours ago
Because generally, from what I have researched, it is difficult to legally emigrate to the kinds of countries Americans would want to live in.
dfiner | 11 hours ago
A decent chunk of why they are so angry is because major countries like Russia, Iran, and China have made it their mission to sow discord via social media disinformation and misinformation campaigns, incessantly, for years. There’s no reason to believe they won’t turn their sights more heavily on other western countries once they feel they are done with the US.
Hypekyuu | 11 hours ago
man those data center strikes
Imagine a world in which we actually stopped foreign governments and ai companies actively making the internet unusable?
Hypekyuu | 11 hours ago
I'm a person who does that and man, it's still hard.
You cant move everything with you after all
OddlyFactual1512 | 9 hours ago
Sell it. If it's keeping you from a better life, you don't own it. It owns you.
weatherwar | 9 hours ago
You can't sell your family and friends.
OddlyFactual1512 | 8 hours ago
Read the comment I replied to. The word "everything" is the one that will make you realize that your comment is a straw man.
Hypekyuu | 6 hours ago
u/weatherwar was right though. I could elaborate, but he provided sufficient detail/examples
HowdyDiarrhea | 9 hours ago
Just curious, where?
Jorpsica | 11 hours ago
Where are you getting this information?
madeapizza | 11 hours ago
Yes the US is the only country with assholes. The US is so bad that the rest of the world is trying to move there, and the US is somehow bad for turning them away
BroughtBagLunchSmart | 11 hours ago
We have a specific type of assholes. Combine church + the post WW2 american advantage that boomers think they had something to do with + 70 years of right wingers gutting education means our assholes are an extremely stupid and racist kind of assholes. Just look at MAGA. The worst people in the universe.
coke_and_coffee | 7 hours ago
Buddy, other countries have their own versions of MAGA and they are very often MUCH worse…
madeapizza | 10 hours ago
lol
--TheCity-- | 10 hours ago
Yea about that whole "the rest of the world is trying to move there". I have some news for the boomers; that was partially true a long time ago and I know faux news has been repeating it for decades, but ya it's all in your head.
OddlyFactual1512 | 8 hours ago
The US is near the bottom in nearly every category that's desirable, but if there were a way to tally assholes/capita they would be at least 4x the #2 rankimg.
coke_and_coffee | 7 hours ago
Source?
coke_and_coffee | 7 hours ago
Yeah, only America has assholes! AMERICABAD! amirite!???
Sashaaa | 11 hours ago
Well done on randomly calling Americans assholes. Classy.
Flayum | 10 hours ago
But true. Stupid assholes too!
And I say this as an American.
coke_and_coffee | 7 hours ago
Literally the most economically prosperous and innovative society to ever exist on earth.
But yeah, nothing but “stupid assholes”, lmaoooo
Flayum | 6 hours ago
I mean, being successful doesn't prevent the overwhelming majority from being stupid assholes?
OddlyFactual1512 | 9 hours ago
It wasn't random.
Noeyiax | 10 hours ago
mmm it sucks that most people earning potential is already determined in life since they can cap it with artificial laws and rules... lifetime earnings are usually $1M to $3M anything more and "you're lucky or top 1%" :( unlike a video game.. if that makes sense . and pay inequality continues to get worse
isaidmypiece_chrissy | 11 hours ago
As other people point out, it's how you define "American Dream" that determines how much it will cost. Most of us won't do at least 2-3 of the things in the article's breakdown as part of our own American Dream (like the "Buying and maintaining new cars = $1,205,627") so the 5.3M number is closer to like 3.5M or something way more regionally influenced.
HypocrisyWarrior | 11 hours ago
Some say Americans should be grateful because they make more money than rest of the world and would be wealthy if they moved to another country. But the thing is, the vast majority of Americans will continue to live in America, packing up and becoming a digital nomad isn't option for most people. Also, just because the standard of living in your country is higher than the next doesn't mean you should not strive for better.
Forgemasterblaster | 10 hours ago
I think you miss the point of the conveniences most people have in America. Even poor folks in parts of the US have houses with modern conveniences like central air, large lots, etc. The floor for the standard of living is very high in the US.
Why would you become a digital nomad when if you’re not tied to a location, you can live very comfortably in lower cost of living places in the US. You’re paying federal income taxes either way.
mistressbitcoin | 8 hours ago
Because it is funner to live in exciting more HCOL places in a different country, than in tbe cheapest places in the US.
A lot of people become digital nomads to visit all those places.
Forgemasterblaster | 7 hours ago
Eh, I’d argue most of those folks are just younger with less responsibilities and transient. Very few people with families are digital nomads as you need some stability.
I’d gander expats over 50 are less common than 20s. I don’t know any real data that tracks the number of digital nomads, but the core reason they go to HCOL areas is they need internet, amenities, and are younger looking for fun. Provence vs Paris is an easy choice for a young man. Same with nyc vs Tampa. For older folks, it’s a different story.
doyletyree | 10 hours ago
You’re right and, with respect, maybe a bit off re: mobility and resource access.
Most of us are not in a position to relocate the hundreds, or thousands, of miles for a better opportunity.
The cost of housing is becoming an increasingly unachievable goal on every level.
The job market is stacked with overqualified, underemployed seekers.
The cost of balancing higher education with other costs of living is out of reach for most.
Most live in a place without walkable access to a hospital, school, or grocery store, and too few have access to public transportation.
Healthcare can sink you in a single incident, eliminating both your remaining assets and your access to further treatment in an increasingly privatized
Public schools are being hamstrung and sold out while private prisons are gaining ground. Oh, and those prisons are often rife with violence, sanitation failures, and infrastructural failures like a lack of AC in tropical climates.
Meanwhile, most of us are living one major incident away from financial insolvency which, in this society, is tantamount to homelessness.
Speaking from my own experiences with the social safety services available, I can say that they are woefully insufficient in keeping folks in a place of stability while crises are navigated, with the result often leading to homelessness, incarceration, and/or death.
Certainly, many places around the world can claim the same. For some of us, though, the notion of giving up some conveniences for the security a healthier society is awfully tempting.
Yes, all efforts that can be made to change things at home should be made. In the face of present resistance, I do not blame anyone for thinking that it might be time to accept present conditions and do what they can to stabilize their own situation. You have to get your own oxygen mask on first, so to speak.
coke_and_coffee | 6 hours ago
>The job market is stacked with overqualified, underemployed seekers.
Why do people keep repeating false things? Unemployment is SUPER low.
UndercoverstoryOG | 9 hours ago
lol, this might be your reality but it certainly isn’t all encompassing
Forgemasterblaster | 8 hours ago
Yes, there are some people struggling, but it’s at the margins and those people would struggle today or yesterday. Most Americans have anxiety about issues that never happen to them and will never happen.
The paycheck to paycheck nonsense is just something people say. The reality is it’s like discussing your own class. Most people say middle class as it’s socially acceptable. It’s socially acceptable to act as if you’re a step away from a disaster with no fact based analysis.
What’s happened recently is the first real inflation since the 1980s. Its felt acutely. It makes everyday things people take for granted eat more into their liquidity, but it doesn’t create disasters. Just worse vibes.
Anyway, sensational stuff like this is not reality. Its buying into psuedo social science rather than economic analysis.
VarrocksTopModel | 8 hours ago
Paycheck to paycheck nonsense? Over 40% of Americans can’t afford a $1,000 emergency expense
Forgemasterblaster | 7 hours ago
Americans have tremendous liquidity, but are cash poor in many instances. You can easily get credit in America (mortgages, auto, credit cards, payday loans) for the vast majority of us. Anyone walking around sees this daily.
This is not the case for much of the rest of the world, it’s why other counties have higher savings rates. In America, we charge people, but routinely give them credit to extend payment. Other countries offer no credit terms.
Regional data, racial data, and education for the 25 most populous areas in the US easily show the average American has thousands in credit and liquidity at their disposal for an emergency. Whether they use it is a question, but the old $1k in the bank account is anecdotal info about deposits rather than actual spend.
You’re talking about a portions of Americans on the precipice of disaster in areas where they historically they always were this way. So it’s not so much an economic indicator of most Americans, but looking at a section of America where social mobility is impossible for most. The idea 150 million people would just fall apart on a turn is illogical and the type of fantastical financial headlines stupid people eat up as it fits a narrative that things are going to shit.
jhdragon742 | 7 hours ago
Are you actually suggesting the ability to go and get a payday loan is equivalent to having savings to pay for an emergency? You shouldn't need to go into debt for an emergency.
Forgemasterblaster | 6 hours ago
This is the type of logic that is pervasive. We go into ‘debt’ all the time. People use credit as a normal part of life. I’m suggesting Americans have a lot more liquidity than is being presented and that $1k is not at all representative of their spending power for 150 million people.
jhdragon742 | 6 hours ago
And so what's your point with that, that things are fine somehow and we don't need to improve things? That the healthcare system works fine as is, that workers aren't facing an affordability crisis because we can just take out more loans? Why are you making this argument lol, what's motivating this
Forgemasterblaster | 5 hours ago
That people disingenuously act as if 150 million people in America are destitute and financially not capable, which is illogical for anyone who lived here and see the quality of life.
I travel a lot globally. I’ve been places where the per capita annual income is USD$300. Those people genuinely live in poverty. USA half these folks live at a much higher standard.
VarrocksTopModel | 6 hours ago
I’m sorry man, I can’t take this seriously lol. You’re earnestly saying access to payday loans to help for emergency situations is a positive?
Forgemasterblaster | 6 hours ago
Access to credit is the reality and you’re also using an absurd logic that 150 million Americans would be out on the street as finding $1k is that tough. It’s not. It’s illogical thinking.
espressocycle | 10 hours ago
In the US, luxuries are affordable while necessities are often out of reach.
Various-Gazelle4713 | 10 hours ago
Talk about Reddit hyperbole … 🙄
Complete_Meeting8719 | 3 hours ago
Are you American? You seem out of touch. There's way more poor Americans living under slumlords who don't keep buildings up to code, no place to park, and if it has AC, it's not upkept and it's not used because the electric bill is a thing that exists.
Forgemasterblaster | 3 hours ago
I’m an American. Live in Ny and can tell you the sensationalism here is absurd. The floor is extremely high. We are closing in 350 million people. The expectation is in that people expect the bottom 3rd economically to live like the top 2/3rds in the US. No other country has these out of whack expectations.
As far as slumlords, most housing is not rentals. 1/3 of property is rented. Parking is a luxury based on space. I own a car in manhattan. It’s $300-$1k/month. When I go to the burbs parking galore. AC is a luxury. Go to Europe in the summer. Way hotter places don’t have AC. As far as utilities, electric is pretty cheap here overall for the reliability. The biggest indicator are the data centers. Geo political companies can build wherever and choose the states as our grid is the very reliable.
Complete_Meeting8719 | 3 hours ago
I live in Los Angeles, and you need to look into how people in other states and cities live.
I can't afford to travel to Europe, why would you even suggest that lmao.
Forgemasterblaster | 2 hours ago
Apparently reading comprehension is an issue. The post I responded to suggested Americans move to
other countries and my point is they probably have a better quality of life being lower middle class here than upper middle class somewhere else.
Complete_Meeting8719 | 2 hours ago
Oh. Then yeah my bad carry on.
BathroomMaximum1721 | 9 hours ago
This analysis does not appear to account for capital appreciation of assets owned by Americans (stocks, real estate, bonds, gold and other assets).
uuuuuuuuuuuuuuu7u | 10 hours ago
Digital nomad ? You mean working for American wages while living in a significantly poorer country?
I feel like that's exploitation....kinda
Freud-Network | 10 hours ago
"You're exploiting me by spending money in my local community."
uuuuuuuuuuuuuuu7u | 3 hours ago
Digital Nomads DONT contribute via Taxes so yes. Exploration
HypocrisyWarrior | 10 hours ago
I wanted to word it a little more nicely but yes. Those people make significantly more than locals and don't contribute to taxes. Their immigration status is also...questionable.
Kobayashi-Coffee-Co | 10 hours ago
They contribute to the local economy while taking in no income. Its a net benefit
PunkPirate56364 | 10 hours ago
It's not exploitative. Digital nomads do not pay taxes on their income (or pay small tax).
But they are receiving money from abroad, they spend it in local economy and pay VAT. So they are like exports, pumping money into local economy.
Problem is, a lot of rich foreigners moving in can locally raise prices of housing sky high.
Rich foreigners moving in has benefited out entire country, but locally we got fucked.
iliveonramen | 8 hours ago
I don’t get how it’s exploitive. They spend money in the economy. They dont even take a job that could go to a local.
MountaintopCoder | 8 hours ago
Aside from the issues with the assumptions that have already been pointed out ad nauseum here, it doesn't seem like a totally unreasonable figure.
$5.3 million over the course of a 45 year long career means you need to average $117k in earnings per year. That's not unattainable, especially if you break through into a high paying job in your late 30s to early 40s.
This also doesn't account for asset ownership like stocks, which reduces the amount you need to earn considerably. If you contribute $500/mo into your investment portfolio, that will grow to $3.3 million over 45 years at a 9% interest rate. That reduces your annual earning requirement to about $45k per year.
No_Recognition_5266 | 8 hours ago
The article wisely mentions that its estimated lifetime earnings and social security payments don’t include investment earnings. For those saving wisely, those are not insignificant. A $1 million nest egg could earn $100,000 annually alone
pacman2081 | 5 hours ago
if you want to live like the Joneses, it might cost that much money
40% of us do not have pets
Buying and maintaining new cars - I would buy three $60,000 cars. Add maintenance, insurance and fuel. It is going to be $400,000 max
Owning a home depends on the geography.
MostlyH2O | 48 minutes ago
A lot of people in the economics forum who don't understand that this is an index of lifetime consumption and not necessarily what it costs to have what you want.
simonbleu | 41 minutes ago
In an economics forum
Super_Mario_Luigi | 10 hours ago
Nonsensical rage-bait, just like the rest of the internet. The only way you get a 1.2 million figure on cars, is being one of those people who buys a car way out of their budget, frequently, and then you compare what all of that money would have returned in the best stocks.
polar_nopposite | 10 hours ago
>Buying and maintaining new cars: $1,205,627
Feels like a crazy over estimate. Still, absolutelly gutting that the second biggest line item is simply getting to work in the first place. Something people in other developed countries are generally able to do cheaply or for free by having walkable and bikeable cities, robust public transportation, and trains.
Our obsession with cars, and refusal to design cities such they aren't strictly necessary, is making us poor.
jiggajawn | 9 hours ago
This is exactly why I prioritized access to transit and bike infrastructure when looking at a home.
I haven't needed a car in 8 years and it's been a huge help for retirement planning.
Powerful_Meaning8891 | 9 hours ago
Or you can just buy a used car and not need to upgrade every year? Paid 15k for a used Versa 9 years ago and have been using it ever since. Total cost is probably under 30k. I couldn’t imagine how someone is going to spend 1.2 million on cars. That’s just stupid
CompEng_101 | 8 hours ago
That includes gas, maintenance, and insurance. Plus, this is the ‘dream’ - not the most efficient way of meeting a requirement. 2 cars, 50 years of car ownership, $12,000 per car year = $1.2M
Noveltyrobot | 10 hours ago
We have to start being discerning about the intentions behind the people and accounts pushing these narratives. What is there to be gained, and by who, when we as a country believe everything is horrible, there's no hope and you might as well be nihilistic about the future of our country. On top of that, it's all lies
espressocycle | 10 hours ago
Workers' share of GDP is now the lowest since they started measuring it 97 years ago.
Noveltyrobot | 10 hours ago
Right, two questions. What does that have to do with my comment, and what does that have to do with the article? Two, who are you?
SunAstora | 5 hours ago
“Who are you” is such a weird thing to ask here. If you don’t want strangers commenting, don’t post on a public forum.
GrizzlyP33 | 6 hours ago
Well it seems like you’re suggesting the American economy isn’t actually bad and it’s just lies. Other commenter is pointing out it’s actually historically bad.
Because it is. We are in an incredibly dangerous economic point, and how are we handling it? Just piling on top of the deficit, further fueling the wealth gap, and cutting services in the meantime.
Throw in AI job displacement and we are speed running to a societal breakdown. That doesn’t mean we can’t stop it with competent leadership, but I think most people are feeling very pessimistic given who is in charge at this pivotal point in human history.
thepianoman456 | 4 hours ago
Two questions:
How dare you
You realize this is Reddit right?
weatherwar | 8 hours ago
Generating clicks from reddit doomers.
And it works like charm.
Moral-Relativity | 7 hours ago
This particular analysis is done by Investopedia. If you look at the lifetime cost breakdown some may seem a little high like yearly vacations and new car cost, but that’s why it’s called a dream I guess.
ohhhbooyy | 5 hours ago
They’re convincing people that their overspending is justified based on “research”. How are they going to fund this overspending? By borrowing whether it be credit cards, klarana, financing etc.
Like who the fuck is spending nearly 200k annually on vacations? Also two kids are not going to cost a nearly $1 million unless you’re going to send them to a private out of state college which most people won’t.
Complete_Meeting8719 | 3 hours ago
To push for awareness and change. Make people angry. Get them moving. Lots of people in this country still believe everything is fine and that anyone struggling simply did life wrong and are lazy worthless scum.
And also, economically speaking, doomer content is better for clicks.
Thadlust | 10 hours ago
This article is completely ridiculous and relies on assumptions that don’t include a large portion of the US. If you want a comfortable life for far less, move to Nebraska or OKC.
This doomerism isn’t helping anyone.
theclitsacaper | 8 hours ago
If I had to move to Nebraska of OKC, I'd consider that being doomed.
Thadlust | 7 hours ago
« Salaries are too low and prices are too high »
« Here’s a location with good jobs, decent salaries, and low prices »
« LMAO not like that goofy ass, I deserve to live in a two bedroom in Manhattan for $1,200 a month »
variegated68409 | 42 minutes ago
Why move to Nebraska or OKC? $5.3M isn't that much money for those of us who have an education. Doomers need to face facts: a lot of people have a LOT of money, and it's there for people who make smart choices and work hard.
Matatius23 | 11 hours ago
What kind of garbage source is this, first of all most people rent not buy a home and even then in most areas of the country it doesn't cost 1.2 million. Secondly, raising children doesn't cost 1 million at all and some people's dream don't even involve children so this is useless for them. Thirdly, how does yearly travel cost 180k, at max it's around 2-3k yearly and in other countries it's even lower than that. Fourthly, many people don't have pets so the 40k doesn't matter, and finally owning a new car doesn't cost 1.2 million becuase that is for rich cars, cars on average are around 60k which even I agree is a little too much. So essentially the American dream is around 2.6-3.8 million which is obtaniable with a bachelor's degree according to the source.
AnAncientBog | 10 hours ago
The majority of Americans own their own home in every region of the United States:
https://www.census.gov/library/stories/2023/06/owning-or-renting-the-american-dream.html
HistoricalBridge7 | 11 hours ago
It’s lifetime cost
Matatius23 | 11 hours ago
Who is buying 20 cars in that case lol, most people own 2 or 3 lifetime
snowbeast93 | 11 hours ago
You’re joking, even in tiny little rural town folks would replace cars all the time
Matatius23 | 11 hours ago
Wrong, they keep their cars for a few decades then they switch, which gives at max 2-3 cars lifetime which is over 120-180k which is nowhere near 1.2 million
Phanterfan | 10 hours ago
Owning a car for more than two decades is not the "dream"
You are completely ignoring repair, insurance and fuel cost.
snowbeast93 | 10 hours ago
I grew up in a very rural town and many of my friends had two different cars from the time they turned 16 to graduated from high school. My parents have owned at least 25 cars over their lifetime, I don’t think that’s unusual for 50 years
weatherwar | 8 hours ago
Those aren't new cars.
MrKorakis | 11 hours ago
Not in the US they don't
HistoricalBridge7 | 10 hours ago
This is the American dream. Not roughing it developing country style
vovap_vovap | 10 hours ago
2 or 3 for 50 years? Man!
Forded_Fiction24 | 10 hours ago
Me maybe for example. I doubt I'll get to 20, but I'm 38 years old, an American and the new cars I've owned so far.....
2008 Honda Fit
2012 VW GTI
2016 VW GTI
2014 Mazda CX-5 (wife drove and made payments, but I purchased)
2021 Kia Sorento
2022 Toyota Highlander
2023 Toyota Prius ( wife drives, I bought)
Not 2 or 3 in a lifetime and I'm sure I'm not the only one. I'm at 7 so far and had a used 1997 GMC Sierra additionally to start me out that was given to me
thatclearautumnsky | 10 hours ago
And if you're like me, every one of them is "I'm gonna keep this car until they blow up" but then you don't lol
Forded_Fiction24 | 10 hours ago
Nah I know myself too well and cars are a weakness of mine admittedly. I don't have payments on either of my current though and on the ones in the past where I did they were still easily affordable at my income. Not claiming my maneuvers have been financially wise decisions necessarily but my money and my prerogative. Very much meeting my financial goals otherwise and not letting cars or car payments stop me from reaching those
Powerful_Meaning8891 | 9 hours ago
How… I’ve owned the same car for 9 years now. This is entirely a personal choice
Forded_Fiction24 | 9 hours ago
How, because I wanted to I don't know. Yes, it is an entirely personal choice and I have no regrets about purchasing any of them. I became a millionaire at 35, and set up for early retirement and I've worked part-time for the last 7 years. So while they're costing me of course, I don't have car notes on my cars that I own now and I like cars and getting something fresh every so often. I spend a lot of time in my vehicles and do large summer road trips and smaller road trips throughout the year where I want what I want. They're not setting me back from meeting my financial goals otherwise so why not
n0_punctuation | 11 hours ago
Most people want to buy a home not rent it forever...
Matatius23 | 11 hours ago
Yes and in most areas it still doesn't cost 1.2 million
koalabearpoo | 10 hours ago
Today’s average Home selling price: $502,000
Today’s average 30-year fixed mortgage rate: 7.40%
Assume 20% downpayment, $3000/year in property tax and $1500/year in home insurance
Total principal, interest, taxes, and insurance paid over 30 years: $1.14 Million
apexwarrior55 | 3 hours ago
Yup, and the $3,000/ year in property taxes is conservative. Here in Illinois is closer to 1.9% of the property value.
Phanterfan | 10 hours ago
One time payment - no
Lifetime cost, including repairs, property tax, etc... You are not that far off
And for rent? 1.2 million over 60 years is 1666$ per month. For a full family home that's not that insane in many parts in the US. Some might argue it's cheap
MaapuSeeSore | 10 hours ago
Why are you so ignorant ?
Average lifetime cost? Long term cost? Nothing is rarely one time pay .
Either a smooth brain or lack the ability to critically think . Jeezus
The average cost of a home is like 600k then add 40- 50 years of upkeep
Taxes exist, insurance exist, paint , cleaning, fumigation , renovation, roof replacement, broken appliance, water damage/accidents, wood rot , water heater replacement , ac & hvac maintenance, etc
espressocycle | 10 hours ago
I live in one of the top 10 most property tax burdened counties in the nation. My mortgage is less than my property taxes.
June1994 | 9 hours ago
A house is like 400-500K. Interest rate is above 6%. Assuming 20-30 year fixed, plus property tax, plus maintenance, plus all the other dumb shit, and you’ll get to 1.2 mil easy over 30 years.
EaseOk3940 | 8 hours ago
and over 30 years, college graduates who earns 80k+ getting raises and investing a small amount make 3 million, to pay for that. What’s your point?
June1994 | 8 hours ago
That 1.2 million USD for a lifetime cost of owning a home is a perfectly reasonable figure.
Wtf is your point about investing? Lmao
n0_punctuation | 11 hours ago
It varies from area to area, doesn't change that owning a home is out of reach for most people.
Powerful_Meaning8891 | 9 hours ago
Considering home ownership rates are 65%, that’s not true
n0_punctuation | 8 hours ago
Whats the average age of a home buyer currently? Who owns the homes being bought?
Puzzleheaded_Tie6917 | 11 hours ago
The American dream is to live like the Rockefellers apparently. No one I know or interact with has ever paid this much for any of those categories.
Looks like pick the answer and find data to shove that answer in as opposed to doing real research and the data determines the answer.
weatherwar | 8 hours ago
The colloquial American Dream historically was a small bungalow (1200sqft) in the suburbs with a motorcar and three kids.
You know we've achieved that because everyone in this thread has massively moved the goalposts. The expectation is a 2400sqft home, two cars, two kids sent to college.
Moral-Relativity | 7 hours ago
Wedding cost is pretty accurate for a nationwide average, especially if you consider some do it more than once.
TheAmorphous | 10 hours ago
5 million isn't Rockefeller money anymore.
You can't do anything with five. Five's a nightmare. Can't retire. Not worth it to work.
warlizardfanboy | 7 hours ago
Well, I got the joke, Greg. Others apparently didn’t.
TheAmorphous | 6 hours ago
It's like being the poorest rich person in America!
Nukemind | 8 hours ago
lol what? In a major city I bought a condo on 12/hr in 2020. Yes it's gone up since- but with far less than 5M I have a 3 bed 2 bath and it's all I need, my fiancee is moving over, etc. I have a paid off car, 401k, IRA, etc.
And will be retiring early.
The key is, yes, increasing income, but also living like people used to do: small house/condo, used car, keeping old cell phones (mine is 5-6 years old at this point), etc.
HarryBallsanya420 | 7 hours ago
It If I had 5 million dollars i would be fine
Zealousideal_Wall627 | 3 hours ago
How can you not retire on 5 mil? You can live for 10 years on 1 mil, put the other 4 in an account and let it double.
Powerful_Meaning8891 | 9 hours ago
Your delusional
max_power1000 | 9 hours ago
The raising children cost usually includes housing that provides 1 room per kid plus paying for college, which is what gets that number so high.
Take 2 kids for example. The difference in rent for a 1BR apartment vs a 3BR apartment in my area is $1k, and full fare at state school is $35k per year for 4 years if costs stay flat. 12k x 18=$216k, and 35 x 4=$140k x 2=280k. That's $500k right there, and you still have to feed, clothe, and entertain the kids.
es-ganso | 4 hours ago
You don't need to pay for their college. That's an optional cost. The only things a kid absolutely needs are a home, food, water, clothes and a loving family that takes care of them. Entertaining kids is cheap too, especially the younger they are.
If you make enough to help out for college, great. If not, that's still OK
NoBrakesHotTakes | an hour ago
"The American Dream" includes paying for your kid's college.
Nobody says you have to, these are all idealized goals.
OskaMeijer | 9 hours ago
65% of households own their home so your very first point is wrong. Only a third of people are actually renters. Your costs for travel are completely divorced from reality. Again with pets 66% of Americans have pets. Your entire argument is saying that if you ignore the things that literally 2/3 of the population has and have costs completely divorced form reality the number could be much lower.
deathleech | 7 hours ago
Some of the numbers actually seem fairly accurate. For example the vacation one. If you figure average life expectancy, minus the first 18 years of your life you wouldn’t pay for this (generally), it comes out to be a little over 3k per year for vacations. Some years you might skip vacations, and others you might spend 5k or more, or go on a couple small week vacations of top of a normal one, so it seems pretty accurate.
Meanwhile other categories seem totally off base. For example the $1,205,600 for vehicles. That’s almost 20k a year, every year, your entire adult life. Thats the equivalent of buying a nicer new $60k car every 3 years. The median time someone in the U.S. keeps their car is 8 years though. No one is spending that kind of money on cars unless they are wealthy, are extremely bad with their finances.
MyotisX | 8 hours ago
The average home in 1940s was literally empty and they did no trips, no restaurants etc We take sooooo many things for granted as basic necessities.
Moral-Relativity | 7 hours ago
If you drive for 60 years and get a new car every 6 years at $60K, factoring in maintenance that’s under 700K. However if you swap every 3 years it will meet the 1.2M figure.
Cars on American roads are actually getting older on average though.
SICpodcast | 5 hours ago
You may want to review the article and data collection again.
NanNullUnknown | 2 hours ago
The point of post is most people in America don’t achieve American dream. What’s the point of saying “Most people…”?
PerceptionSlow2116 | 10 hours ago
Agree that the numbers look a lot different without kids or in lcol areas. I can totally see where the numbers might come from though: House might cost $500k but by the time you factor mortgage interest, easily double and the prop tax and insurance and maintenance. Unfortunately starter homes where we are start around a million. Childcare for us is 30k/year each, add on disposables, toys, activities, clothes, extra food, healthcare, college fund, it’s about a million for 2 kids over 18 years. For travel, flights alone for a our family is $3k, $5k if international— then there’s hotel, food, activities—this is easily $20k/year for a couple ok non luxury vacations. For cars, figure 2 cars every 10-15 years at 60k— maybe a couple used ones for the kids, $400k for cars but add on the expensive part of insurance and now gas/repairs, maybe not 1.2 million but at least $600k over a lifetime. It definitely adds up. Then there’s the healthcare black hole.
cooooquip | 7 hours ago
The American Dream isn’t disappearing. It’s being bought up. Funny how we put a ceiling on Social Security taxes, because apparently there’s a point where asking wealthy people to contribute more is unfair. But when governments drown in debt, banks need rescuing, and public services collapse, suddenly we’re all in this together! Never mind that concentrating wealth, squeezing workers, and shifting costs onto the public helped create the problem. Then the same concentrated wealth comes riding to the rescue, buying up infrastructure, housing, utilities, and everything the government can no longer afford. And renting it all back to us. Apparently there’s a limit to how much we can ask the wealthy to contribute, but no limit to what the public can be asked to sacrifice. Privatize the profits, socialize the losses, then charge us rent on the rescue.
And then boom! The American Dream is now a subscription service.
max_power1000 | 5 hours ago
College grad here in my early 40s, ~$210k HHI. I haven't mathed all of this out, but I feel like this is fairly accurate.
Wife and take home about $12k after taxes , and life basically costs $5k just to cover our recurring monthly expenses plus a couple extras before we buy food or gas for our cars. Mortgate+electricity is $3k. Car payment is $600. Car insurance is another $200. Internet is $70. Life insurance for both of us is $150, so we're at $4k as a baseline. We have about another grand in recurring spending between a family gym membership ($120), cleaner 2x per month ($140 per visit), YTTV ($80), Netflix ($10, cell phone subsidized), spotify ($12), pet health plan/insurance ($150), and some other smaller but predictable expenses.
We admittedly do save roughly $4k per month for retirement, emergency fund, plus retirement funds and 529s for the kids, but we're making up for when we weren't making as much or prioritizing what we were making towards retirement as well as we should have we were younger.
Leaving $3k of everything else is not my idea of a luxurious life though.
Top-Ostrich-3241 | 9 hours ago
Still a better dream than anywhere else or people would stop coming to the US ... (No they dont). American dream is still there and waiting for people who reach out to achieve it.
iqla | 5 hours ago
Better than anywhere else? I don't think the standard of living in the US is above places like Switzerland or Norway. "American Dream" is really not a thing in other western countries. People move to and from the US for many reasons.
Salaries offered by American companies can be very competitive, though. Sometimes the best deal is to work for an American company outside the US where standard of living is high and you have things like universal healthcare, over 30 days actual PTO, safe environment and decent educational system for your children.
Top-Ostrich-3241 | 5 hours ago
But Switzerland or Norway dont really want immigrants and refugees. The US alone has taken over 52 millions. Switzerland has around 2.7 millios, and Norway has only 900k immigrants (not even 1 million yet).
In the end, the fact is, people do not stop coming to the US legally AND illegally, which means the American dream is still there but it is just harder and it is now for people who really want it.
iqla | 4 hours ago
My point is that people moving to the US does not indicate the US has "a better dream". The "American Dream" is not really a thing in other western countries. It's an American idea.
When I see American people who have moved to my home country, I don't assume its because we have "a better dream" or that they've lost their belief in the "American Dream" either. That would be silly, wouldn't it?
People move abroad for many reasons. Perhaps they found an interesting career opportunity or a spouse here.
Quirky_Magazine5196 | 10 hours ago
Inflation has some of yall in denial cause u don't know how money works. Why do u think el presidente out here robbing the war chest? Him and his rich friends see the writing on the wall
teshh | 11 hours ago
Most Americans are lucky to see 2-3 million in lifetime earnings. The cost being 5.3m+ just shows how unattainable the American dream is now.
Basically anyone millenial and younger not earning six figures is fucked and will be working till they die. Only 18% of jobs pay 100k or more. Meaning 4/5 people have no path to retirement.
Thadlust | 10 hours ago
Nah this article is clearly angled toward massaging millennials’ victim mentality. You can get by with far, far less in most of the US.
If anything the American dream is more attainable than it’s ever been, but the standards for meeting it have been (unfairly in my opinion) revised upwards.
howdyouknowitwasme | 11 hours ago
Or the article is out of touch with how most people actually live and what they spend money on.
MrKorakis | 11 hours ago
How most people actually live might also not the modern equivalent of the American dream though making the article correct
CzarWest | 11 hours ago
I mean isn’t that kinda the point — the “American dream” is now out of touch with how most people live and spend money
Powerful_Meaning8891 | 9 hours ago
When you define the American dream as “excessive lifestyle” then yes, it is out of reach.
Most people wouldn’t define the American dream that way.
CzarWest | 7 hours ago
Lmao is owning a home, a few cars, raising kids well and retiring comfortably an “excessive lifestyle” these days?
bro-b | 5 hours ago
120k karma
1.1k posts
6 month old account
This bot be karma farming hard.
Hmmm let’s see which states and cities blows up costs of living and what policies they’ve enacted 🤔
Ah yes, constantly raising taxes for programs that are tied to fraud with policies that actively hurts poorer citizens and push businesses out which causes them to raise more tax on the common people. I guess we have our answers here.
therallykiller | 2 hours ago
Don't go to college. Go to a trade school, get an apprenticeship, etc.
That liberates you from substantial costs in time and money, reducing that $5.3 million dollar number and giving you capital to invest and work with quicker.
GotRammed | an hour ago
Not everyone wants to BE in a trade. Many folks would like to be engineers, physicians, architects, educators, etc. All professions that we sorely need.
Signed, an aircraft mechanic.
TheSuppishOne | an hour ago
Is aircraft mechanic not considered a trade??
GotRammed | an hour ago
It is. I'm advocating for those not interested in trades.
Difficult-Bit-7237 | an hour ago
Not always about what people want sadly. Sometimes life just is