We brag of being the best country in the world; the leader of the free world; at the forefront of innovation as well as our ability to spread democracy. The land of opportunity! Yes but precious few fully understand what said opportunity is. Many strive to achieve the American Dream but of these how many have a true understanding of what is required to succeed? In a capitalistic economy the foundation is provided, but that foundation is the ability to educate oneself or start a business. You are are required to compete at very high levels. Education being bricks afforded you but you are required to do the building yourself, by no means a handout. As they say you need to have some "skin in the game".
The American Dream is not a finished product you can buy somewhere. No quite the contrary. You are required to plan; strategize, hard work and commitment are prerequisites for the long journey. There are no quick fixes nor are there any short cuts. Not a sprint but a marathon and your endurance is constantly tested. Yes I know many feel the lottery will get them where they need to be but seriously how is that option working for you so far?
Many complain about the struggles of paying bills is a hindrance to achieving their goals but how many of us take the time to review our expenses to see if our spending habits support our end goals. Whether your goals are to buy a home or financial independence, you need to plan as well as commit to achieving said goals.
Over the weekend a friend told me he had joined the gym. Being an avid "keep fit" person I asked which gym it was. I must confess being in the wealth management profession I habitually mentally compare the cost of things as well as a person's ability to meet the costs they are committing themselves to. While my friend's commitment to working out is in itself great news, lately he has not taken great care of his health. Sadly too the same disconnect has been applied to his financial well-being.
Where people go wrong on their journey to achieve the American Dream is the inability to take full advantage of the availability of products for most income levels as a way to reign in expenses. My friend selected a gym where his monthly costs are around $200, which cost is way above his income level. There are very good gyms for a tenth of his current cost that will avail him exactly the same amenities. He says this avails him what he needs - a private room to exercise! But that can be achieved working out at home without unnecessarily parting with large amounts of money.
He admits that it is a heavy expense for him to take on but I doubt very much that he will give it up any time soon. In the very same way he will not be adjusting his goal to achieving the American Dream even though clearly his expenses do not support his goals. It is important to remember that to build wealth you not only need to find ways to increase your income but reducing expenses is equally important.
Our parents' generation achieved American Dream because they were very goal orientated while being very frugal too. Today's generation is not only constantly bombarded with commercials for products that they do not need but they also feel a deep need to keep up. The disadvantage is the inability of many to know what their personal entry level is. Social pressures are daunting but not so hard to overcome if one is goal orientated. If you are unwilling to reduce your expenses then you need to aggressively work at increasing your income so that you have disposable income to buy what you desire.
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