This post may contain affiliate links. We may be compensated if you choose to utilize a link on this page. All opinions are mine.
Raise your hand if you’ve ever heard of the American Dream? I raised my hand, did you?
Cheers To The New American Dream
Robert Kiyosaki Of Rich Dad Poor Dad hates it, your parents taught it. Who do you believe? If you examine the facts, you’ll find it easy to form your own opinion. My parents grew up during the great depression which means they were always strapped for money, always fearing the unimaginable and scared to death of insecurity. Fast forward to 2017, the stock market is at the highest point it’s ever been and Americans have taken on more debt than before the 2008 crash.
The American Dream – The Facts
Here are the steps to the American Dream:
- Get good grades so you can get into a good college
- Succeed in college so you can get a good job
- Land a good job and work hard so you have security
- Work for 40 years so you can retire
Our parents’ generation has convinced an entire other generation that following these steps is the only way to a happy life. But you know what’s happening? Millennials have figured out that 1) this isn’t the only way to a happy life and 2) if you follow this plan YOU WILL GET STUCK. And that’s where the term ‘Rat Race” comes from. The rat race is the definition of the cyclical process that builds upon the American Dream.
Once you have a good job, you can buy a nice home, start a family, drive nice cars and go on lavish vacations. Every time someone in the rat race gets a raise or bonus check what do they do? They buy more stuff! Lifestyle inflation is a very real thing and it’s kicking America in the ass.
Have you ever met someone you thought was so cool because they owned nice things? Or because they were always wearing the nicest clothing? I recently wrote a guest post about my experience with a couple I know from my gym. They seemed so cool. I thought they were well off and I wanted to be just like them. Then I realized that I had no idea who they were or what their finance situation was. Could I make more money than them? Could I have a higher net worth? Surely not…but hey, I guess I’m not supposed to know these things.
Working a 9-to-5 job your entire life means you’re putting in hard work for some company you don’t own and for someone that isn’t you. You’re putting a price on your time and never being worth more than a yearly salary that’s defined by salary bands and yearly raises less than inflation.
Student Loans Are Crushing Millennials
I’m not here to debate whether a college degree is worth the increasingly expensive bill. Every person is different which means their decision whether to pursue college is a personal one. There are plenty of examples of successful college graduates and those who didn’t attend a university that have also been immensely successful. To each their own.
What I do know is student loan debt is crushing millennials. Part of me wants to blame the previous generation or two for drilling it into our heads that not attending college wasn’t an option. But nonetheless, the fact remains that millennials are strapped for cash due to their ignorance about taking student loans. When I was applying for FAFSA and getting denied, I didn’t care about student loans because I didn’t know any better. I knew that college was a necessity and I needed to get through school at all costs, and that included taking out $96,000 in student loans.
Financial Independence Creates Freedom, The Real (New) American Dream
Why not spend time living a frugal life while you’re young, eliminate your debt and create a system that makes you money while you’re away? Why not develop passive income streams that replace your 9-to-5 job instead of clocking in at the office?
Even with the cards stacked against us, millennials will rise above these challenges and become the most financially savvy and independent generation yet.
Build Wealth Through Frugality
If you’re looking for a place to start, here are several people that are using frugality to become financially independent:
- Millennial Money
- Distilled Dollar
- Finance For Geek
- Making Sense of Cents
- Dollar Diligence
- Millennial Money Man
Frugality means kicking lifestyle inflation to the curb and making smart money choices. Don’t spend your money on things that decrease in value. Stop buying the most expensive cocktails at the bar. Do not be like the rest of American and let debt hinder your future.
Purchase Income Producing & Value Increasing Assets
Instead of throwing all your extra income at your debts, I prefer to make more strategic decisions with my money. Investing is a long-term game so you should make every move as if you’re looking at the impact way down the road. If that’s true (which it is) then you should put your money where it will yield the highest return. The caveat here is that many people need to pay off debt because they are struggling to make ends meet and are living paycheck to paycheck. If that’s the case, the smart decision is to get yourself to a point where your paycheck isn’t stretched so thin.
Making the choice between debt payoff and investing can be an incredibly difficult task. On one hand, it feels amazing to eliminate debt and free up your monthly budget. On the other hand, investing your money in income producing assets that also increase in value is often a better choice for long-term growth.
Ultimately the choice is yours, but having the guts to analyze and make the right choice is worth celebrating.
The American Dream – Reimagined
As a millennial, I know that the American Dream my parents taught me is no longer feasible. For many my parents age, getting their pension after 40 years of working was their retirement plan. Pensions hardly exist anymore and the government can’t be trusted to secure a financial future for you. Never, ever, allow anybody but yourself to determine your financial future. Cheers to the new American Dream.
Are you willing to commit yourself to a life of smart choices and live like nobody else so that in the future nobody is living like you?
-My Strategic Dollar