The American Dream Isn’t Dead. 10 Steps to Achieve It

By Lance Roberts
Lance Roberts
Lance Roberts
Lance Roberts is the chief investment strategist for RIA Advisors and lead editor of the Real Investment Report, a weekly subscriber-based newsletter to over 100,000 people nationwide. The newsletter covers economic, political and market topics as they relate to your money and life. He also hosts The Real Investment Show podcast, and his opinions are frequently sought after by major media sources. His insights and commentary on trends affecting the financial markets earned him a spot in the 2020 Refinitiv Global Social Media 100 influencers list.
July 22, 2022 Updated: July 22, 2022

Commentary 

The “American dream” is dead. That is, if you believe recent surveys which reveal that nearly 50 percent of the younger generation favors socialism over capitalism. To wit:

“Since 2010, young adults’ positive ratings of socialism have hovered near 50%, while the rate has been consistently near 34% for Gen Xers and near 30% for baby boomers/traditionalists.”

Since the financial crisis of 2008–9, an increasing number of Americans are becoming despondent about the state of capitalism in America. It started with the “Occupy Wall Street” movement in 2011, and has continued to grow as political divisions deepen. The rise of civil unrest has deeper roots, as noted by Pew Research in 2017:

“The U.S. economy is in much better shape now than it was in the aftermath of the Great Recession … But by some measures, the country faces serious economic challenges: a steady hollowing of the middle class … and income inequality reached its highest point since 1928.”

If you look at the faces of those pushing back, they are of every race, religion, and creed. Their commonality is that they are the demographic most affected by job losses, income destruction, financial disparity, and debt. That inequality gained enormous traction following the Federal Reserve’s repeated bailouts of banks and other institutions within the financial system. Today, the top 10 percent of income earners own nearly 90 percent of financial assets.

Epoch Times Photo
Source: St. Louis Federal Reserve Chart: Real Investment Advice.com

As the “rich” got richer, the masses noticed their economic prospects failed to improve. It should be of no surprise that those most disenfranchised eventually begin to pick up “pitchforks and torches.”

What the American Dream Is and Isn’t

The American dream is not owning a house, driving an expensive car, or being TikTok famous.

The “American dream” is the idea that the government should protect each person’s opportunity to pursue their vision of happiness. It is the dream of opportunity, the dream of freedom, and the dream of liberty. That dream was embedded in the Declaration of Independence:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

The founders of this nation never claimed that American citizens had the right to a house, free health care, or government welfare.

What they did do was to enshrine into the Constitution and the Bill of Rights some revolutionary ideas that every person, man or woman, had the right to pursue happiness, liberty, and equality. Those two documents created the basis of the “grand experiment” known as capitalism and attracted all those aspiring to a better life.

Or, as James Truslow Adams wrote in his book, “The Epic of America” (1931):

“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. … It is not a dream a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

So, precisely what is the “American dream?”

It’s Up to You

The “American dream” is about the opportunity to achieve a result, not the result itself. Many of the younger generation today feel as if the ability to achieve success is out of reach. According to a 2020 YouGov poll:

“A poll of more than 14,000 people finds that just over half (54%) of U.S. adults think the American Dream is attainable for them. About three in 10 (28%) believe it’s unattainable for them personally, while 9 percent reject the idea of the American Dream entirely.”

The American dream was never about being granted a high salary, given an opportunity, or gifted wealth. However, we were given the “freedom” to start with nothing and, by sheer will, create success. For example:

  • Jan Koum, CEO and founder of WhatsApp, once lived on food stamps.
  • Kenny Troutt, the founder of Excel Communications, paid his way through college by selling life insurance.
  • Howard Schultz, CEO of Starbucks, grew up in a housing complex for the poor.
  • Investor Ken Langone’s parents worked as a plumber and a cafeteria worker.
  • Oprah Winfrey, TV star and entrepreneur, was born into poverty.
  • Billionaire Shahid Kahn washed dishes for $1.20 an hour.
  • Kirk Kerkorian, investor and philanthropist, dropped out of school in the eighth grade to be a boxer.
  • John Paul DeJoria, the founder of Paul Mitchell, once lived in a foster home and out of his car.
  • Do Won Chang, founder of Forever 21, worked as a janitor and a gas station attendant when he first moved to America.
  • Ralph Lauren, fashion designer, was a clerk at Brooks Brothers.
  • Francois-Henri Pinault, CEO of Kering, quit high school in 1974 after being bullied because he was so poor.

There are millions more like them. The only difference between them and those who have not succeeded is that they had the drive to work, the willingness to sacrifice, and the courage to reach for it.

Capitalism Is Not Perfect

One thing is for sure: capitalism is not an impeccable system.

“Capitalism is an imperfect economic system, because differential performance in the pursuit of economic success, as well as luck, results in there being (a) some people who are less successful as well as some who are more and (b) a few who are glaringly successful,” said Howard Marks of Oaktree Capital Management.

Obviously, I’m someone who has profited from capitalism, so my views could be dismissed as hopelessly biased.

However, I’m 100 percent convinced that the capitalist system has produced the most aggregate gains for our society, exceptional overall progress, and a better life for most.  For me, the best assessment of capitalism is the one Winston Churchill applied to democracy (in 1947): “Democracy is the worst form of government except all those other forms that have been tried from time to time.”

Similarly, Marks said, “I’m convinced that capitalism is the worst economic system; except for all the rest.”

There is a visible gap between the rich and everyone else, due to 40 years of debts, deficits, and ongoing interventions into the financial system. However, that is not a failure of “capitalism;” it is the byproduct of “corporatism.”

Capitalism is the only system that will allow you to achieve unbridled success.

Yes, the federal government can pay for anything you want. The problem is that it requires those succeeding to pay for it.

Think about it: Do you want to work hard, sacrifice, and take on an exceeding amount of risk to achieve success, only then have to pay for those who don’t?

This is why socialism typically fails on a large scale. Hence, “The greater good can only be achieved by making the good greater.” —Daniel LaCalle

10 Steps to Achieve Your ‘American Dream’

As noted, most anyone can achieve success through hard work, dedication, determination, and sacrifice.

I know—it sounds hard—because it is.

Those that achieve success aren’t whiners and don’t blame others for their failings.

They do something about it.

The difference between success and failure is the “will to keep going.”

Therefore:

  1. Be accountable for your current situation. Blaming others only keeps you from taking steps to fix it.
  2. Your life depends on it, literally. If you don’t take control of your life, it will take control of you.
  3. Control your circumstances as best you can. Obviously, not everything in life is controllable. Just try to put yourself in a position to control what happens around you.
  4. You have to really want success. If you aren’t committed, you likely will fail.
  5. Be serious about your endeavor. If you don’t take yourself seriously, neither will anyone else.
  6. Find a guide. In business, find a mentor to help you navigate your career or whatever it is that you are trying to achieve.
  7. Are you a “renter” or an “owner”? “Renters” can walk away without consequence. “Owners” have too much at stake to lose. Be willing to commit everything. If you have no choice but to succeed, you likely will.
  8. Be willing to work—and work hard and steady. Success is not a weekday 9–5 job. It is a 24/7 adventure that will consume your life. If you aren’t willing to “do the time,” don’t start.
  9. You probably need to get rid of your current friends. If you want to know where you will be in five years, look at who you surround yourself with today. Successful people surround themselves with successful people.
  10. Get off of social media. If you want to succeed, get out into the real world, and find the opportunities overlooked by others.

The “American Dream” isn’t dead, at least not yet. You only have to make the decision to take the first step to achieve it.

Lance Roberts is the chief investment strategist for RIA Advisors and lead editor of the Real Investment Report, a weekly subscriber-based newsletter to over 100,000 people nationwide. The newsletter covers economic, political and market topics as they relate to your money and life. He also hosts The Real Investment Show podcast, and his opinions are frequently sought after by major media sources. His insights and commentary on trends affecting the financial markets earned him a spot in the 2020 Refinitiv Global Social Media 100 influencers list.