Nearly $3.5 million is the cost of the so-called "American Dream," according to a new report from Investopedia. The sharp rise in inflation has made the price of meeting traditional adult life goals (two children, education, a home, health care and a car) higher than the average American's lifetime earnings:
Rising costs have made the typical "American Dream" out of reach for many. In fact, the average lifetime earnings of Americans across all education levels is approximately $2.3 million. That's over one million short of the estimated cost of the American Dream.
Costs that most affect the American Dream
According to the study, "the classic 'American Dream,' primarily includes two children, a house, and a car," and this currently "costs more than most earn in a lifetime." To make the calculations, the researchers relied on the estimated costs of "10 aspects of life that people may need or choose for themselves." They stressed that "it is not a reflection of all costs associated with life in the United States today, and may include elements some may not choose for themselves."
However, even though not all Americans want to have the same lifestyle, it is clear that costs have been rising, and most people want similar things. The main aspects that increase the cost of being able to fulfill the American dream are:
- Mortgage: The average mortgaged home will cost $796,998 (according to the study, this price assumes the buyer put down a 10% down payment and has a 30-year fixed rate of 7.2%).
- Raising two children: $576,896 in basic expenses (not including paying for college for the children, which would be about $42,000 more).
- Cars: If a person purchases six vehicles over their lifetime, it would cost $271,330.
- Wedding: Average ceremony prices are $35,800 (if married life includes having a pet for at least 15 years, it would be $67,935 more).
- Retirement: The average person needs to have around $715,968 saved for retirement. Funerals cost an average of $7,848.
Caleb Silver, editor-in-chief of Investopedia, told the Daily Mail that "While everyone's idea of the so-called "American Dream" is unique, the rising cost of everything a family might reasonably want and need to afford, like health insurance, owning a vehicle, buying a home, raising children and sending them to college, continues to put that dream further out of reach for most households."
