It’s interesting, but not terribly surprising, that first generation immigrants to America are disproportionally represented among America’s millionaires. What’s more interesting is how quickly that ambition and work ethic is assimilated out of the following generations. Those valuable, money-making characteristics are often conspicuously absent even among their own children.
America is fantastic at spinning out college-bound expert consumers. The culture is so ingrained in every aspect of American life and so appealing that even the kids of self-made wealth fail to launch.
Among the young adults who do benefit from great ambition, the modern American dream seems to be spending 6-10 years in college to become a “professional”, more likely than not working for someone else.
I fell prey to this belief. It’s not that higher education is bad. On the contrary, going to college may be necessary to pursue the career best suited to your talents and passion and many people complete higher education without debt, although they’re in the minority at 40% of students. Some bright students even attend college part-time or during the evenings while entering the workforce full-time during college.
However, higher education has been morphed into a consumer activity where we rack up tens of thousands of dollars of debt at inflated interest rates and maybe work a part-time job on the side to support our less than frugal student lifestyle.
We are upsold on double majors, service-learning classes, special certificates, and doctorate degrees all so that we can wear a special purple stole at graduation before we write out another check to the university that is bleeding our student-loan infused bank account dry while teaching us outdated material.
I correlated higher education with higher wealth. I always knew I would go to college and get at least a master’s degree. So you can imagine how disillusioned I was when the now obvious truth came out: the sooner you start working, the sooner you start investing, the wealthier you end up. While higher education may be positively correlated with higher salary, it is negatively correlated with net wealth (don’t get mad at averages, if you beat out this statistic, pat yourself on the back).
The barriers to wealth post-college degree make sense. Traditional higher education delays entry to the workforce, especially if you attend a prestigious school and become an attorney or a doctor because not only do you delay your earning potential during school, you continue to delay investment while paying off those stupid student loans. The real head scratched is the student who is sold on delaying income AND taking out student loans in order to get a degree in the humanities or social work (like I did).
The American dream shouldn’t be to work up the ladder to the c-suite of a corporation while your nanny raises your children or work 80 hours a week at a plastic surgery practice while your trophy wife burns through next year’s paychecks.
If I’m not mistaken, the American dream revolves around the freedom to reap the rewards of your own ingenuity and effort. It’s the possibility for every man and woman to take advantage of the free market to drastically change your destiny through very hard work, even if you fail several times (since the average millionaire has gone bankrupt 3.5 times).
The American dream of rags to riches is a dream for a reason – it is hard to achieve; were everyone to do it, it wouldn’t be a dream but would rather be reality.”
– Robert Fulton, American Engineer & Inventor
Gaining independence, true financial security, and experiencing genuine freedom requires at least a committed focus on investing and delaying consumeristic gratification. Should you accomplish that, you can probably count yourself in the top 20% of American households, if not 10% since a whopping 76% of Americans are living paycheck to paycheck.
But considering that 80% of American millionaires are self-made and 2/3 are self-employed (by 1996 data, which is probably even more compelling now), the genuine American dream has a pretty healthy entrepreneurial component if you’re up for the challenge. If you’re not, at least make sure your doing what you love, college degree or not, and socking away cash to maintain your own American dream.