Is the American Dream within reach? The price tag is a hefty $3.4 million, according to Caleb Silver, editor-in-chief of Investopedia. However, the median lifetime income from ages 25 to 65 is only $2.3 million. Silver explores strategies to bridge this gap in a stock market discussion with Yahoo Finance's Jared Blikre and Broke DiPalma.
This post was written by Jimi Corpuz
video transcript
Investopedia has quantified it, so let's analyze it.
The American Dream costs $3.4 million.
The problem is that the median lifetime income for people between the ages of 25 and 65 is 2.3 million.
That's a pretty big gap, Caleb, tell me how you arrived at this number and why you decided to go here.
This is something that kept coming up, and as we looked at some anecdotal data and did some searches around that, what we started to look at was people saying, “How do I get to that?” It wasn't about that.
It was this sentiment that led many to feel that Americans ahead of them would never know they were better off than their parents.
They worked hard and now they're in college and now they're in debt.
They cannot meet their living expenses.
They probably won't be able to afford their first home.
That's why they feel it's out of reach.
So, together with our data journalism team, we quantified reasonable expectations for how much that dream would cost. And these are reasonable expectations.
We're talking about things like the cost of a child's wedding or a funeral.
right.
I will buy 6 used cars in my lifetime.
In other words, it would be no surprise if you owned the car for 1012 years.
Well, you might buy over $9 million in health insurance for your family and send a few kids to college for just a few years.
Most people only graduate from college for a few years.
All of this adds up to $3.4 million in today's dollars.
Yeah.
Yeah, that's a big number.
And given the fact that you can earn that over a lifetime, the median income only comes to about 2.3.
So that's more than a million dollars difference between what it costs to live and run a household with reasonable expectations.
You have to raise a few kids to pay for these expenses, have a few pets, and bridge the gap between what you would actually make if you were only making the median income.
How can we bridge that gap?
That question must be met.
That's an investment, isn't it?
That's one way to bridge the gap.
You have to make your money work for you.
So it's not just you and your labor that will be around for the rest of your life.
