Does it Really Take $5 Million to Achieve the American Dream?
I came across an interesting article last week in USA Today referencing a survey done by the online platform Investopedia. As that name suggests, Investopedia is encyclopedic in terms of the various financial topics it delves into. They went out to answer the question “What does it take to achieve the basic American dream?” They asked 1,263 adults to identify goals that they associate with the American dream and most came up with these eight categories:
- Retire comfortably.
- Afford quality healthcare.
- Own a home.
- Raise a family.
- Own a new car.
- Take an annual vacation.
- Care for pets.
- Have a wedding.
The folks at Investopedia then attempted to tabulate the lifetime costs of each goal, looking at data from federal agencies, think tanks and industry groups. Based on that research here are the lifetime costs associated with each goal, from largest to smallest:
- Retirement: $1.6 million.
- Owning a home: $957,594.
- Owning a new car: $900,346.
- Raising two children and paying for college: $876,092.
- Healthcare: $414,208.
- Annual vacations: $180,621.
- Pets: $39,381.
- Wedding: $38,200.
If you add all those up, you get $5,043,323 needed over your lifetime to achieve “the American Dream.” USA Today goes on to point out that the average American with a bachelor’s degree earns roughly $2.8 million over his or her career. Wow, those two numbers don’t add up well. And the costs are going up. Over just the last year the lifetime cost for purchasing and maintaining new cars went up by about $88,000 while the lifetime homeownership cost went up by about $28,000.
Before you fret too much for yourself or your kids, be aware that there is some controversy associated with this study. Some experts believe that the numbers above are those enjoyed by the top 10% of income earners and that everyone else can achieve their dreams at a lower cost. I still think that the numbers above serve as good reminders of just how much of a financial commitment goes into enjoying the life to which many of us aspire. Keep the faith, you can achieve the American dream if you haven’t already.
Fun fact: As we usher in the new year you should know that 2026 will actually have 53 weeks instead of 52. That’s according to the ISO standard which counts week starting on Monday and ending on Sunday. The extra week is occurring because January 1, 2026, fell on a Thursday making the year contain 365 days but more than 52 Monday to Sunday cycles.
