How would you define the American Dream?
Most people would probably mention things like owning a home, having a well-paying job, paying for a good college for your kids, and maybe the occasional family vacation to someplace like Disney World. On the surface those aren’t unreasonable goals, but they’re getting harder to reach. Affordable housing near good public schools is nearly impossible in many places, college tuition keeps rising, and even family vacations aren’t cheap anymore.
In recent years the idea of the American Dream has shifted. Homeownership isn’t the default goal it once was, especially after the 2008 housing crash. A college degree is being questioned more. Instead of pricey theme-park trips, people might dream of a week at a national park or even homeschooling their kids. Scaling back can be a healthy choice, but for many the dream feels out of reach. Growing wealth inequality has left a lot of people struggling with poverty and homelessness in one of the richest countries in the world.
Expectations of the American Dream are changing for some clear reasons: the global economy is rearranging industries, fossil-fuel jobs aren’t as reliable as before, technology plays a bigger role in success, and many jobs now demand more skills. The bar for getting ahead has risen. Economist Raj Chetty even points out that social mobility is easier in places like Canada because there’s less economic distance between the bottom and the top — in the U.S. the gap is much wider.
Books like The Millionaire Next Door made a splash when they came out and still offer useful lessons: simple habits can build wealth. I don’t think one book can fix systemic inequality, but the examples can inspire people who feel squeezed by today’s realities. I decided to revisit some of those old ideas and see how well they hold up.
Don’t buy status. There’s no reason the American Dream should require pretending you’ve arrived. Marketing pulls us toward the latest gadgets and shiny new cars, and social media pushes us to broadcast experiences. But you can live comfortably and still be frugal. My family drives two paid-off cars that are getting long in the tooth, we live in a modest 1,400-square-foot house, and we still use gadgets from years ago. Living small and avoiding major lifestyle inflation makes goals like early retirement possible.
Educate yourself. Instead of waiting for someone to teach you, take charge of your own learning. I used a tuition reimbursement program for half my MBA, read non-fiction for pleasure, and kept curious about many topics. You never know which bit of knowledge will pay off. Education doesn’t have to mean a fancy degree — though a graduate degree can show commitment to self-improvement — and your circle of friends can be a form of education, too. Surrounding yourself with people who know about things you want to learn can be incredibly valuable.
Pick a career you care about, but know the trade-offs. If your passion is helping people, you could work in nonprofits or healthcare, but some fields pay more than others. If you love writing, be ready for sacrifices and a leaner lifestyle at first. That’s okay — many people change paths and find success by taking bold steps to follow what matters to them.
Plan for the unexpected. Life throws curveballs: illness, accidents, divorce, unplanned pregnancies. The best defense is reducing your risk where you can and building savings so you don’t rely on credit cards when things go wrong. Take care of your health, plan family size intentionally, and save early. Starting to put money away in your 20s is the single most important thing for long-term financial success. I began contributing to a 401(k) early, gradually increased my percentage, and that habit became the foundation of my wealth.
Avoid high-risk gambles that can wipe you out. Things like cryptocurrency, gambling, or putting all your retirement money into one stock might pay off, but the odds aren’t in your favor. The steady, boring path often wins: low-cost index funds and keeping fees low. Using low-fee funds and avoiding unnecessary advisor fees can make a big difference over decades.
If you do take risks, educate yourself first and keep them measured. Real estate has been a part of our plan — we used home equity to buy rental properties, paid off lines of credit before moving on to the next purchase, and focused on factors like location and cash flow. Research, learn from others’ successes and failures, and don’t swing for the fences without a safety net.
Use insurance wisely. Insurance is a necessary safety net, not something to overpay for. Insure the big, unaffordable risks and self-fund the small ones if you can. Don’t skip term life insurance if anyone depends on your income, and consider supplemental health coverage as you get older. But drop collision and comprehensive on older cars if the premiums don’t make sense.
Don’t fall for lifestyle inflation. When you get a raise or a bonus, resist the urge to immediately buy something big. Pay down debts, fund your kids’ education accounts, or save for the future instead. Small, sensible rewards are fine, but avoid blowing windfalls on things that won’t last. Think of it as hammering away at debt instead of being the next cautionary tale.
Choose practical housing and transportation. Staying in a starter home and improving it yourself can save a lot. Drive reliable, affordable cars and consider biking or living closer to work and amenities to cut costs. Buy durable, timeless clothes and take care of them. And work on your relationships — divorce can be financially devastating, so invest time and care into making partnerships work.
Be careful with debt. Some debt can be useful — student loans for a degree that boosts earnings or a mortgage for an income-producing property, for example — but avoid adding unnecessary debt. If you need a car, buy one you can afford in cash or choose a sensible used option. If housing costs are out of reach where you live, rent for a while. When it comes to paying for kids’ college, have them contribute through scholarships, work, or some student loans so they share the responsibility.
The American Dream looks different for everyone. For some it’s big houses and luxury; for others it’s financial freedom and control over time. Ultimately, the things that bring lasting satisfaction tend to be relationships, helping others, and using your time purposefully. If someone asks you what the American Dream is, tell them it’s about meaningful connections and a life spent on things that matter, not just shiny symbols of success.