Three Signs The American Dream Is Fading

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One of the best books I’ve ever read is the autobiography of Charlie Chaplin.

That’s probably not what you were expecting. But it’s true.

Chaplin’s book is a remarkable story of his impoverished childhood in England, subsequent migration to America, and rise to wealth and worldwide stardom.

Chaplin lived the textbook American Dream.

American Dream

He came from nothing, took huge risks, and leveraged his tremendous talent, hard work, and pioneering spirit to become successful.

But that was the early 1900s. And Chaplin’s was a different America.

Today the desire to live the American Dream still persists. And of course plenty of people still become famous or successful.

Ironically Barack Obama is a great example– a mixed race guy who came from nothing to eventually become the President of the United States.

But for the average person, the American Dream is rapidly fading.

It’s not just about wealth and fame, after all. For many people, the American Dream means owning their own home, starting a business, or seeing their children do better.

But the hard numbers show that each of these elements is in decline.

1) Children are doing worse than their parents, not better.

We already know the sad story about student debt levels reaching yet another all-time high.

But there’s some interesting new research released just last week from Stanford University comparing income levels between parents and children to see who was earning more money by age 30.

For example, the research shows that, when adjusted for inflation, 91.54% of people who were born in 1940 were earning more at age 30 than their parents did at the same age.

Conversely, just 50.03% of people born in 1980 were earning more at age 30 than their parents did at the same age.

The study shows a long, steady decline in income, concluding that:

“Children’s prospects of achieving the American Dream of earning more than their parents have fallen from 90% to 50% over the past half century.”

2) Income and upward social mobility are stagnant

There’s a lot that’s been written about America’s “wealth gap”, sometimes known as wealth inequality or income inequality.

In other words, the vast chasm between rich and poor in the Land of the Free is at a level not seen since the Great Depression.

That sounds really bad, and it’s been enough to fuel a populist movement to tax the rich and redistribute wealth.

I’d respectfully point out, though, that when it comes to finance, equality is a bullshit ideal to strive for.

There will always be people of different talents, and different talents yield different rewards.

I’m never going to be able to run as fast as Usain Bolt. He has the natural talent, so he’s going to win all the gold medals.

I shouldn’t expect someone to pass a law restricting how many medals Bolt can win, nor demand that they give me a medal just for participating.

But… and this is a big but… I –should- be able to take matters into my own hands.

As long as I have the will and desire, I should be able to wake up at 4am every day to hit the track.

I might not break any world records. But with time and effort, I will get faster.

And that is precisely the point.

America used to be the place where people who worked hard could achieve higher incomes, become wealthier, and move up in life.

This is known as income or social MOBILITY.

Sadly, this is also in decline, and the trend has been heavily documented over the years.

The most recent research published earlier this month measured the increase in people’s income between two distinct 34-year periods in the United States.

Between 1946 and 1980, for example, the average American’s income increased by 95%.

Between 1980 and 2014, however, the average American’s income increased by just 61%.

For the poor and middle class, though, the numbers were even worse.

Between 1946 and 1980, income for the bottom 50% more than doubled. But between 1980 and 2014, their income increased by just 1%.

Similarly, middle class incomes increased 105% between 1946 and 1980. But between 1980 and 2014, middle class income increased just 42%.

For the top 1%, incomes increased 47% (below the average) between 1946 and 1980. But between 1980 and 2014, their incomes increased 205%.

The numbers paint a pretty clear picture: America is rapidly becoming a country where, if you were born poor, you’ll die poor. And if you’re born rich, you’ll die rich.

This is banana republic stuff… the exact opposite of the American Dream.

3) Home ownership is at its lowest level since 1965

Another part of the American Dream is owning your own home, hence ‘a man’s home is his castle.’

That too is fading, according to US Census Bureau statistics which show that the US home ownership rate is at its lowest level in more than 50 years.

Now, I’m personally in the camp that renting a home is not some terrible curse. It provides more flexibility and less maintenance hassle.

But the numbers show that the decline in home ownership doesn’t seem to be a choice so much as it is a necessity.

Home prices are now rising much faster than income levels. And given that the average American has less than $5,000 in savings, coming up with a down payment is nearly impossible.

Given the recent rapid rise in interest rates, this trend will likely persist.

This list goes on and on.

The number of new businesses being created is shrinking.

People have to change jobs much more frequently and supplement their income with ‘gigs’, rather than having a lengthy career.

Retirement savings is at appalling low levels.

However you define the American Dream, it’s fading.

And it’s time to acknowledge the American Reality.

Do you have a Plan B?

If you live, work, bank, invest, own a business, and hold your assets all in just one country, you are putting all of your eggs in one basket.

You’re making a high-stakes bet that everything is going to be ok in that one country — forever.

All it would take is for the economy to tank, a natural disaster to hit, or the political system to go into turmoil and you could lose everything—your money, your assets, and possibly even your freedom.

Luckily, there are a number of simple, logical steps you can take to protect yourself from these obvious risks:

No Brainer Strategies to Ensure You Thrive No Matter What Happens Next

  • Invest outside the mainstream and make 12% with minimal risk
  • Protect your assets and become invincible to financial crisis and frivolous lawsuits
  • Legally slash your tax bill up to $1.2 million each year
  • Obtain a valuable second passport… for free

Learn about these and many more strategies in our free Perfect Plan B Guide.

Article by Simon Black, Sovereign Man

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