Chasin’ the Dream
A letter to my two sons…
Well done so far boys. You both seem to have strong relationships with friends and family. Only in your late 20s yet you’ve laid great foundations for career success. You’re well on your way to… well, what? That is the topic of this letter.
I know how I’ll reply to others over the years when I’m asked how you both are doing. But what’s really important to me is how I’ll answer a more personal version of that same question to myself over a cup of morning coffee 10 years from now. How are you going to chase the dream, and more importantly, just exactly what will the dream be?
I recommend you take a few minutes to read Ben Carlson’s recent post on his website A Wealth of Common Sense. It’s titled “The Business of Life is the Acquisition of Memories” and it’s a great read, particularly from my perspective. The loss of his younger brother last year certainly affected Ben’s perspective, too. Trust me, you might be impressed someday by looking at your personal asset spreadsheet, but it will never move you emotionally. Once you have enough to protect yourself and your family, the added “0s” won’t really mean that much.
I also want you to be aware of an important development taking shape. To understand it, I point you to Nick Maggiulli’s recent post at his site Of Dollars and Data. It’s titled “The Upper Middle Class Trap” and it’s a very important read. Turns out that despite all the gloom and doom in the media, the “upper middle class” (defined as those families with incomes between $133,000 and $400,000) is growing fast – from 10% of American families in 1979 to 31% now. But here’s the twist: That means there’s a lot more people ready, willing and able to drop meaningful money on status items like private schools, elite colleges, luxury homes and country clubs. The result is that all of those “status symbols” have gotten a lot more expensive to attain (bigger demand).
And just because something gets more expensive doesn’t mean it really increases in value. Here are some examples: In the last 10 years a new single-family home shrunk in average size by 11% while the price per square foot shot up by 74%. A few weeks ago, I walked through the airport and glanced at the “exclusive” premium lounge for high-end travelers. It was packed with people and a line of folks waited outside. A good friend of mine in Florida could not get us on his community’s private golf course because all the tee times were taken. He lives a stone’s throw away from the course and we had to play miles away, at a public course. And elite schools? Don’t get me started. In 1990 the acceptance rate at Harvard was 14.3%. In 2024 it was 3.5% due to more people chasing the same number of spots. Private equity is just getting acquainted with the youth sports obsession of the upper middle class. Your travel soccer club cost us about $2,000 a year. I won’t be surprised if it will cost you $20,000 for your child to “keep up” athletically (private coaching, premium equipment, elite sports camps, etc.).
Before you fall into line to chase all these things, ask yourselves if it’s really worth it. You both went to public schools and kicked butt. I have great golf and hiking memories with you that primarily took place on public courses and trails. Yes, your mom and I fly first class more frequently now, but my favorite travel memories are the four of us packed in a minivan slowly making our way to southeastern Kansas to visit family. (Why I could never convince any of you that you can get a decent sandwich at the right gas station is beyond me).
Listen, I’m not trying to slow you down. Professional and financial goals are important. Go for it while you are young! But remember, it’s very easy to get on the treadmill of material success without even knowing it. By design, a treadmill gets you to expend a lot of time and energy without getting anywhere. Don’t fall for it. In fact, do me this favor: As the years pass and you periodically check your asset spreadsheet, pull out your phone and spend 5 minutes scrolling through the family pictures you have there. Start with a different set of pictures each time and take a few minutes to remember the context. That’s your real net worth, and I promise you those memories will be much more valuable than any number of “0s” you will find on that spreadsheet.
I’m open to meeting for lunch to talk about these things in person. Heck, I’ll even bring the sandwiches…just don’t ask me where I got them from 😉.
All the best,
Dad
Fun Fact: Speaking of memories, it turns out we forget nearly 50% of new information within an hour, and up to 70% of new information within 24 hours
