Forget the next generation living better lives than their parents did. That ended with Generation X, the 1986 Immigration Amnesty, and NAFTA. But the next two generations are seeing even the standard to which their great-great-grandparents were accustomed is now beyond them.
Recent analysis by Investopedia revealed that you now need a whopping $3.4 million to cover the costs of traditional American dream milestones such as marriage, raising children and owning a home. But most Americans fall short of that target by over a million dollars. The average lifetime earnings of Americans across all education levels is closer to $2.3 million, according to Investopedia, leaving a big financial gap that’s forcing people to reassess their life goals.
One look at the attainability of a basic element of the traditional American dream — homeownership — is telling.
According to real estate brokerage Redfin, 2023 was the least affordable year for home buying on record. To buy a median-priced home, worth $408,806, with the median U.S. income $78,642, you would’ve had to spend a record 41.4% of your earnings on housing costs, up from 38.7% in 2022 and 31.0% in 2021. To buy that same home without spending more than 30% of your income — a popular rule of thumb among personal finance experts — you would need an annual salary of $109,868, according to Redfin, which is $31,226 more than the typical household makes in a year.
It was a nice run. But Americans should have listened to Ben Franklin. Once the 1965 Immigration Act passed after 40 years of relentless agitation, the fate of the USA was sealed.