As depressing and utterly hopeless as this may sound, the answer is without a doubt – yes, the American Dream has been murdered. Before you delete this email or click through to the next thing on your to-do list for the day, I encourage you to read on because this is in no way a pessimistic thought process.
A recent CNNMoney analysis of the new Census Bureau data revels that even when you remove the effects of collapsing housing prices, the median net worth for a US household declined by 25% between 2005 and 2010.
Clearly this was driven by a plummeting stock market which destroyed the retirement accounts and taxable investment portfolios of millions of Americans. When you factor in the decline of housing, the median net worth actually fell by 35% over the same time period.
In a similarly related study by the Federal Reserve, the median aggregate family net worth dropped by approximately 40% from 2007 to 2010. The Fed survey was a much smaller data set, but the results are staggering nonetheless.
Basically this puts the median family net worth about the same as what it was in 1984 according to the Brookings Institution.
Obviously none of this is good news. From an economic growth perspective this creates some very real problems in America. As you all well know, the wealthier we feel the more money we spend. Considering about 65% of the US economy depends on consumption, this can have severe long term negative consequences for Americans.
Additionally we have out of control governments spending money they don’t have funding programs and agencies many of us don’t support. The total US Federal debt has grown from $5.7T to $13.6T from 2000 to 2010. That’s a 139% increase in 10 years! Did your wealth grow by 139% in 10 years? Did your quality of life improve by 139%?
The world is in a battle of who to blame. The ‘Occupy Wall Street’ crowd blame the bankers and financial sector. Republicans are blaming the Democrats. Democrats are blaming Republicans. Libertarians are blaming both of them.
Unfortunately it’s human nature to not want to accept responsibility for our own actions. If we look in the mirror and just say, “I screwed up, I spent too much money. I went into debt to buy houses, cars and vacations I couldn’t afford.” – we would damage our own egos by admitting fault. We would feel stupid and lazy.
It’s hard to admit you are fat because you eat the wrong foods and never exercise. No one wants to come to terms with the idea they are broke because of laziness. Have you ever heard a guy say, “My wife and kids hate me because I’m a stupid asshole?” Not likely.
The reality is we are all at fault.
The question is, “What are you going to do about it?”
About a year ago I wrote an article titled, “The Great Reset is in Full Swing”. The idea is that we are living in a world of turmoil and in the midst of major structural changes. The problem is we are living in that world now and it is hard to have a bird’s eye view when in the middle of the battle.
The Great Reset, as I call it, is a major shift. People are waking up to the reality that maybe governments are not really able to make major life decisions for them and direct their lives. Maybe healthcare and education should be up to the parents to decide and not some bureaucrat working in an office in Washington.
The debt crisis will have catastrophic effects at some point in the future. Most of Europe, Japan and the US are insolvent. It’s only a matter of time before they are either forced to make massive cutbacks or just outright default. You may think it has already been catastrophic, but I think we are in for a real, massive, sovereign default like nothing the world has ever seen.
Strangely enough, I am hugely optimistic about this. Yes, you read correctly, I am optimistic about a major world government going bankrupt. It won’t be the first time its happened and if history is any indication we are going to see a huge increase in wealth and prosperity following that event.
Of course this could happen in Spain, Italy, France or Japan in the next year. Or it could happen in 3 years. Or 10. Who knows? Who cares?
The American Dream as we know it is dead though. The unwritten rule in America is that if you get a good education, work hard, save your money, and invest – you will live a better quality of life than your parents.
It was good while it lasted. If those recent studies by CNNMoney and the Federal Reserve are any indication, the American Dream died sometime in the past 10 years. And considering what the US government is doing now, the defibrillator battery is dead.
Folks, you now have the opportunity to realize “The New Global Dream”. The old American Dream was financial security and safety. Blahhhhhhhhhhhhh.
The New Global Dream is about financial independence and adventure.
When I was growing up (late ’70s – ’80s), my parents made very good money running a construction company. They had many employees working in a very nice office. They commuted 30 minutes to work at 8am and came home at 5pm. We lived in a beautiful suburban home at the country club. We had a condo at the beach and went on vacation to places like Myrtle Beach and Orlando. It was a nice life.
Today I am the parent. We make good money running a virtual business with partners and clients from all over the world. My business is completely portable and can be run from my laptop sitting on the beach in Bocas Del Toro, Panama or the McDonald’s in Prague, Czech Republic.
I don’t have an office. Technology has made this possible. With a light, portable laptop, smartphone, Skype, and various software – my capacity to work from anywhere is limited only by my ability to connect to the internet.
I have a very flexible schedule. Yesterday morning I woke up around 8:00am and leisurely had my coffee and breakfast in my pajamas. Then I spent some time reading a book.
My 4 year old was up way too late the previous night (bad parenting I suppose) so he didn’t wake up until about 10:00am. Once he was up we played a bit and watched some cartoons before I took him to his pre-school (late as usual – he is too fun to play with in the morning). The remainder of the day I spent responding to client emails, a conference call with my partner, recorded one video, and I wrote this article.
We live in a very cool apartment in the center of the city within walking distance to anything I could ever want to do on a day-to-day basis. We travel a bit – so far the family has been to 6 or 7 countries this year and I have been to 2 others on business trips. Later this year my wife and I will travel to Panama to our anti-conference; Global Escape Hatch – Panama 2012, in Bocas Del Toro and we will also visit a couple of other countries on that trip.
My parents lived the American Dream with the good job, the nice house, and the security that was promised in the unwritten contract of America.
Today we live the New Global Dream. We live from anywhere, travel where we want, chose the clients and business partners we want, and have financial independence. We have accepted the death of the American Dream and are excited about the future.
Will you continue to chase the American Dream as if it is still alive; or will you awaken to the reality that it’s a dead, rotting corpse in the graveyard of world history?
Contact us today to schedule your free 30 minute asset protection consultation. Until next time, live well.
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