AMERICAN DREAM

STICKER SHOCK

A HIGHER PRICE TAG

THAT PUTS WEALTH OUT
OF REACH FOR MOST

TOM MATHEWS
ANDY HORNER
 L

HERE’S A PERSONAL QUESTION…
HOW MUCH MONEY DO YOU HAVE?
HERE’S ONE THAT’S EVEN MORE PERSONAL…
DO YOU HAVE ENOUGH?

Enough for what? What are we all striving for in this country? To live the
American Dream! Will you and your family miss out because you won’t
have enough money to live the life you’ve always wanted, give your
children the future they deserve, or make a difference as you’ve
always imagined?

HOW MUCH MONEY IS ENOUGH?


HOW MUCH DOES IT REALLY COST TO LIVE

THE AMERICAN DREAM?

Be warned: It’s a price tag you may find shocking, or even disturbing. 

But before you despair that living your American Dream is an impossibility,
make sure you read all the way to the end. Deal?

We’re going to calculate the exact dollar amount that it will cost you 

to live the American Dream today. Let’s start by answering the one 

question that determines the happiness of everyone in this nation:

WHAT IS THE AMERICAN DREAM?

© 2015 WealthWave, all rights reserved.

 “THE AMERICAN DREAM 

IS A PHRASE WE’LL HAVE TO
WRESTLE WITH ALL OF OUR LIVES.
IT MEANS A LOT OF THINGS TO
DIFFERENT PEOPLE. I THINK WE’RE
REDEFINING IT NOW.”

RITA DOVE
AMERICAN POET & AUTHOR

© 2015 WealthWave, all rights reserved.

HOW DO YOU DEFINE ‘THE AMERICAN DREAM?’
How did we as a nation first envision the
concept of the ‘American Dream?’ 
 freedom and opportunity to pursue a good
A quick glance at the Declaration of
Independence is a good starting point. In
this document penned by America’s
founders, we find the statement, “We hold
these truths to be self-evident, that all men
are created equal, that they are endowed
by their Creator with certain unalienable
Rights, that among these are Life, Liberty
and the pursuit of Happiness.” Life. Liberty.
The pursuit of happiness. The American
Dream was originally and simply stated as
the freedom to live our lives as we wish,
independent from the control of others.
However, during the economic
boom of the early 20th
century, the American
Dream evolved into
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an American fantasy. The guarantee of
life for one’s self and family mushroomed
into the promise that if you graduated
from the right school, married the right
person, and landed the right job, you
could have it all. Images described in
books like The Great Gatsby or those
depicted in classic Ford and Coca-Cola
ads from the 40’s and 50’s instilled a
quixotic belief that life, liberty, and
happiness could be found in a credit card
and an armful of shopping bags from the
Mall of America.
Whether it was the horrific attacks on 

9/11 or the deep economic
repercussions of The Great
Recession, the lofty
idealism of the 1900’s
has come back down
to earth. It’s a new
dream that’s more
pragmatic. It’s one
that looks a lot 

like the original. 

Here’s how
Americans define 

it today…
 “IT’S NOT HAVING WHAT

YOU WANT, IT’S WANTING 

WHAT YOU’VE GOT.”

SHERYL CROW

SOAK UP THE SUN

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THE


AMERICAN DREAM ACCORDING TO 

AMERICANS TODAY

According to a recent survey by Xavier University’s Center 


for the Study of the American Dream1, Americans themselves
gave the following four definitions for the Dream:

A GOOD LIFE FOR MY FAMILY

FINANCIAL SECURITY

FREEDOM

OPPORTUNITY

Xavier’s survey reveals that the American
Dream today centers around the pursuit
and protection of one’s personal values,
experiences, and individualism. It’s not
about ‘having it all.’ It’s about having it your
way. Perhaps American author, Thomas
Wolfe, summed up today’s mindset best in
his masterpiece, You Can Never Go Home
Again, in which he wrote, “So, then, to
every man his chance – to every man,
regardless of his birth, his shining, golden
opportunity – to every man the right to
live, to work, to be himself, and to become
whatever thing his manhood and his vision
can combine to make him – this, seeker, 

is the promise of America.”
Today, the good life is whatever Americans
– as individuals – want it to be. All they ask
for is the chance to live it for themselves
and preserve it for their families.
As reasonable a request as this new dream
is, it comes with a hefty price tag that may
still be out of reach for most Americans.
But before we tally up the price itself,
an explanation for why it’s so high can
be found in the ruins of the old model
of retirement and the fallout from
The Great Recession.

© 2015 WealthWave, all rights reserved.

 “FOR THE VAST MAJORITY 

OF AMERICANS, THERE IS A
SENSE THAT ACHIEVING 

THE AMERICAN DREAM IS
BECOMING MORE DIFFICULT…” 2

MARK ROBERT RANK

WITH THOMAS A. HIRSCHL AND KIRK A. FOSTER

AUTHORS OF CHASING THE AMERICAN DREAM

© 2015 WealthWave, all rights reserved.

THE


IMPACT OF THE GREAT RECESSION

If 9/11 changed how safe Americans feel
physically, The Great Recession changed
how secure they feel financially. Prior to
the recession, the steadiness of stock
market growth, company pensions, and
Social Security formed a tried-and-true
‘3-legged stool’ that Americans depended
on to create ample retirement income. As
long as the stock market trended up and
as long as company pensions and Social
Security remained intact, this model
worked. But from 2000 to 2010, the stock
market tumbled twice creating a decade 
 Forget retiring rich. For many Americans,
of lost gains. Fortunes disappeared.
Retirements were ruined. What if the
market tumbles like this again? Who could
afford to lose ten years of growth if the
goal is to retire on income from 401(k)s,
IRAs, or mutual funds? The other two legs
of the stool aren’t doing any better.
Company pensions are now all but gone
and Social Security appears less
sustainable than ever. The old model has
crumbled. Americans everywhere are
wondering where retirement income will
come from, and if they’ll have to keep
working into their 70’s, 80’s, or even 90’s.
the new dream is merely a matter of
obtaining financial security.

75%
8 10
OF
AMERICANS POLLED
 OUT OF
BY THE BROOKINGS AMERICANS SAY THE
INSTITUTE SAID 
 GREAT RECESSION
‘THE DREAM’ WAS CHANGED THE WAY
HARDER TO ATTAIN.2 THEY LOOK AT LIFE. 2
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“[AMERICANS] WANT TO FEEL

THAT THEIR CHILDREN ARE
GOING TO HAVE A BETTER

LIFE THAN THEY DO.” 2
© 2015 WealthWave, all rights reserved. You may not reproduce, print, re-transmit, copy, distribute, publish or sell the content of any electronic or printed version
of this publication without prior written consent. Visit wealthwave.com to learn about WealthWave.

THOMAS A. HIRSCHL

© 2015 WealthWave, all rights reserved.

PUTTING IT TOGETHER BEFORE ADDING IT UP

We now know that according to retirement has collapsed, achieving

Americans themselves, the new American
Dream is characterized as having financial
security and personal freedom for
themselves and their families. We've also
established that since the old model of
financial security and personal freedom
may still be too big of a dream for most
Americans. To know if it is or isn’t, we 

must return to our central question…

HOW MUCH DOES IT ACTUALLY COST 


TO LIVE THE AMERICAN DREAM TODAY?

© 2015 WealthWave, all rights reserved.

THE PRICE TAG OF THE NEW AMERICAN DREAM

In a recent article by Howard R. Gold,

USA TODAY2 tallied the cost of living the
American Dream, beginning with… AMERICAN DREAM
——————————————————————
Quantity: 1 Family
HOME OWNERSHIP Timeframe: 1 Year
It’s at the heart of the American Dream. Payment Method: Cash
Start with the median price of a new house
at $275,000 (not including a 10% down HOME OWNERSHIP $17,062
payment). Assume a 30-year mortgage at
4% interest and yearly maintenance costs
of 1% of the purchase price, and your first
line item is $17,062 per year.

$ 17 ,0 6 2 / y r .

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THE PRICE TAG OF THE NEW AMERICAN DREAM

UTILITIES & APPAREL

USA TODAY2 included average annual AMERICAN DREAM
expenditures for utilities (gas and electric) ——————————————————————
at $1,956 and clothing at $2,631, a yearly Quantity: 1 Family
total of $4,587. Timeframe: 1 Year
Payment Method: Cash
HOME OWNERSHIP $17,062
$4,587
$ 2 1, 6 4 9 / y r . UTILITIES/APPAREL

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THE PRICE TAG OF THE NEW AMERICAN DREAM

GROCERIES
Next, figure in the U.S. Department of AMERICAN DREAM
Agriculture’s2 moderate-cost annual ——————————————————————
grocery bill of $12,659 for a family Quantity: 1 Family
of four. Timeframe: 1 Year
Payment Method: Cash
HOME OWNERSHIP $17,062

$ 3 4 ,3 0 8 / y r . UTILITIES/APPAREL $4,587
GROCERIES $12,659

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THE PRICE TAG OF THE NEW AMERICAN DREAM

TRANSPORTATION
Owning an all-wheel drive SUV that would AMERICAN DREAM
comfortably fit a family of four is estimated ——————————————————————
to have a price tag of $11,039 – annually – Quantity: 1 Family
according to AAA.2 Timeframe: 1 Year
Payment Method: Cash
HOME OWNERSHIP $17,062

$ 4 5 ,3 4 7 / y r . UTILITIES/APPAREL $4,587
GROCERIES $12,659
TRANSPORTATION $11,039

© 2015 WealthWave, all rights reserved.

THE PRICE TAG OF THE NEW AMERICAN DREAM

MEDICAL/HEALTH
Combining health insurance premiums AMERICAN DREAM
and out-of-pocket medical expenses, the ——————————————————————
Milliman Medical Index2 reports an annual Quantity: 1 Family
cost of $9,144. Timeframe: 1 Year
Payment Method: Cash
HOME OWNERSHIP $17,062

$ 5 4 ,4 9 1/ y r . UTILITIES/APPAREL $4,587
GROCERIES $12,659
TRANSPORTATION $11,039
MEDICAL/HEALTH $9,144

© 2015 WealthWave, all rights reserved.

THE PRICE TAG OF THE NEW AMERICAN DREAM

LEISURE
If you don’t make time for a little rest and AMERICAN DREAM
relaxation, you certainly aren’t living the ——————————————————————
American Dream. The annual extras2 of a Quantity: 1 Family
family vacation at $4,580, entertainment at Timeframe: 1 Year
$3,667, eating out at $3,662, TV/internet/ Payment Method: Cash
mobile phone services at $3,100, and a
few miscellaneous expenses thrown in 
 HOME OWNERSHIP $17,062
at $2,000, all add up to the modest sum 

of $17,009 per year. UTILITIES/APPAREL $4,587
GROCERIES $12,659
TRANSPORTATION $11,039
$ 7 1, 5 0 0 / y r . MEDICAL/HEALTH $9,144
LEISURE $17,009

© 2015 WealthWave, all rights reserved.

THE PRICE TAG OF THE NEW AMERICAN DREAM

TAXES
Extrapolated from a tax formulation AMERICAN DREAM
developed for Citizens for Tax Justice,2 
 ——————————————————————
an American household at the earning Quantity: 1 Family
level used in our hypothetical example 
 Timeframe: 1 Year
can expect to pay 30% of their annual Payment Method: Cash
income in federal, state, and local taxes.
Income, property, and sales tax are HOME OWNERSHIP $17,062
included. It all totals $32,357 per year.
UTILITIES/APPAREL $4,587
GROCERIES $12,659

$ 10 3 ,8 5 7 / y r . TRANSPORTATION $11,039
MEDICAL/HEALTH $9,144
LEISURE $17,009
TAXES $32,357

© 2015 WealthWave, all rights reserved.

THE PRICE TAG OF THE NEW AMERICAN DREAM

EDUCATION
Based on ‘various rules of thumb,’ 
 AMERICAN DREAM
USA TODAY2 calculated that saving for a ——————————————————————
college education would cost $2,500 per Quantity: 1 Family
year per child (all of which were assumed Timeframe: 1 Year
to be pre-tax dollars) – and that current Payment Method: Cash
educational expenses would be $4,000
per year for two children. Educational HOME OWNERSHIP $17,062
savings and expenses together for two
children would total $9,000. UTILITIES/APPAREL $4,587
GROCERIES $12,659
TRANSPORTATION $11,039
$ 11 2 ,8 5 7 / y r . MEDICAL/HEALTH $9,144
LEISURE $17,009
TAXES $32,357
EDUCATION $9,000

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THE PRICE TAG OF THE NEW AMERICAN DREAM

RETIREMENT
Knowing that one day you may not want AMERICAN DREAM
to or be able to hold a job, it’s critical to ——————————————————————
start saving for retirement. People under Quantity: 1 Family
the age of 50 can make an annual pre-tax Timeframe: 1 Year
contribution to a retirement plan up to Payment Method: Cash
$17,500 per year.2 It’s an amount that falls
just under 15% of our American Dream HOME OWNERSHIP $17,062
example’s household income – and it’s
right at the number recommended by UTILITIES/APPAREL $4,587
many financial professionals.
GROCERIES $12,659
TRANSPORTATION $11,039

$ 13 0 ,3 5 7 / y r . MEDICAL/HEALTH $9,144
LEISURE $17,009
TAXES $32,357
EDUCATION $9,000
RETIREMENT $17,500

© 2015 WealthWave, all rights reserved.

THE PRICE TAG OF THE NEW AMERICAN DREAM

$130,357 PER YEAR!

That’s the cost to live the American Dream AMERICAN DREAM
as defined today by Americans themselves ——————————————————————--
and as calculated by USA TODAY.2 Quantity: 1 Family
Timeframe: 1 Year
How many people do you know who Payment Method: Cash
make that much in a year?
HOME OWNERSHIP $17,062
Of course, the American Dream is
subjective. Some might be content with UTILITIES/APPAREL $4,587
far less. Others may need far more. But to
offer a good life and financial security to GROCERIES $12,659
your family – to have the freedom to
pursue opportunities that matter to you – TRANSPORTATION $11,039
you must come up with enough money to
fund your dreams. MEDICAL/HEALTH $9,144

If ’enough’ is just over $130,000 per year, LEISURE $17,009

can you afford the American Dream? Even
if you can now, what about in retirement? TAXES $32,357
Are you on track with your savings so 

that if you quit working at 65 you’ll have
EDUCATION $9,000
$130,000 to live on every year for 20 or 30
more years?
RETIREMENT $17,500

If you’re like most Americans, your answer

——————————————————————-
to these challenging questions would be
TOTAL $130,357
‘no.’ You don’t make enough. You’re not
saving enough. And the fact is – if you’re
like most Americans – you don’t yet have ——— Thanks for shopping -——
a strategy to turn your ‘no’ into a ‘yes.’

THE KEY WORD IS ‘YET.’

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 “TO ME, THE AMERICAN DREAM
IS BEING ABLE TO FOLLOW YOUR
OWN PERSONAL CALLING. 

TO BE ABLE TO DO WHAT 

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YOU WANT TO DO IS 

of this publication without prior written consent. Visit wealthwave.com to learn about WealthWave.

INCREDIBLE FREEDOM.”

MAYA LIN

AMERICAN SCULPTURE AND LANDSCAPE ARTIST,
DESIGNER OF THE VIETNAM VETERANS MEMORIAL

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HARSH


REALITY: MOST AMERICANS ARE FAR OFF

Consider the following reality for the average American household. Regardless of how big
and beautiful their dreams may be, most U.S. taxpayers fall painfully shy of $130,000 in
annual income. The truth is, there’s not a single state in the U.S. in which the average
household earnings of the bottom 99% are even half that much.

Here’s a look at the average annual income of the bottom 99% for various U.S. states:3

NEW YORK
$44,049

CALIFORNIA ILLINOIS MASSACHUSETTS

$45,775 $46,080 $52,758

HIGHEST: MARYLAND $61,528

LOWEST: WEST VIRGINIA $33,109
ENTIRE UNITED STATES: $43,713
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A
 STATISTIC THAT HITS CLOSE TO HOME

ONLY 16 MILLION U.S. HOUSEHOLDS,

AROUND 1 IN 8, EARNED $130,000 IN 2014,
ACCORDING TO THE U.S. CENSUS BUREAU.2

If $130,000+ per year is required to live the And even if they pulled it off by clocking in
American Dream today, but the average 70 or 80 hours at multiple jobs, how is
American household only earns $43,713, sacrificing free time, missing out on kids
what’s the real world outcome? growing up, and always feeling worn out
living the good life? For the average
Sadly, there are a lot of people who have American, is the hope of the 

had to put their dreams on hold or have Dream now just a 

had to forget them altogether. Worse, we national lie?
now have an explanation for why so many
families across the U.S. are struggling
financially, surviving paycheck to
paycheck, and suffering under the stress 

of working long hours at jobs they don’t
enjoy. When you’re barely getting by, the
American Dream can feel like a big, fat lie.

Aside from hitting the lottery, how will 


the average American close the gap
between where they are today – making
somewhere in the mid $40,000’s or
$50,000’s – to get to $130,000?

© 2015 WealthWave, all rights reserved.

 “IF YOU DON'T BUILD YOUR DREAM,
SOMEONE WILL HIRE YOU 

TO HELP BUILD THEIRS.”

© 2015 WealthWave, all rights reserved. You may not reproduce, print, re-transmit, copy, distribute, publish or sell the content of any electronic or printed version
TONY GASKINS

of this publication without prior written consent. Visit wealthwave.com to learn about WealthWave.

AUTHOR

“THE FUTURE BELONGS TO 


THOSE WHO BELIEVE IN THE BEAUTY 

OF THEIR DREAMS.”

ELEANOR ROOSEVELT

AMERICAN POLITICIAN, DIPLOMAT, ACTIVIST, AND

LONGEST-SERVING FIRST LADY OF THE UNITED STATES

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“ACTION IS THE FOUNDATIONAL

KEY TO ALL SUCCESS.”

PABLO PICASSO
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“ALL OUR DREAMS CAN COME

TRUE, IF WE HAVE THE COURAGE
TO PURSUE THEM.”

WALT DISNEY

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