By Lewis J. Walker, CFP®
Ruminating on our country's state of affairs and the political focus on income inequality, the gentleman said, "I think the American dream is dead."
What, exactly, is the American dream? The term was coined in 1931 by writer and historian James Truslow Adams in his book, Epic of America.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 a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not 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."
Investopedia defines the American dream as "the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American dream is achieved through sacrifice, risk-taking and hard work, not by chance. Both native-born Americans and American immigrants pursue and can achieve the American dream. In contrast to other political and economic systems, such as communist dictatorships, America's free-enterprise system makes possible the circumstances that allow individuals to go beyond meeting their basic needs to achieve self-actualization and personal fulfillment."
Given those definitions, the American dream most assuredly is not dead! Our friend who worries about the death of dreams cited a study showing that a large percentage of Americans could not come up with even modest cash to meet emergencies. A 2015 Bankrate.com survey indicated that just 38% of those surveyed could cover a $500 emergency room visit or car repair with ready cash. About 6o% would have to float debt on a credit card or borrow from family or friends. We read of stagnation in middle class wages.
There are frustrations and challenges, and the causes of income inequality are complex. A 12/26/2015 story in The New York Times by Motoko Rich headlined, "As Graduation Rates Rise, Experts Fear Diplomas Come Up Short." Citing a high school in South Carolina with an 80% graduation rate (the nation's high school graduation rate hit 81% in 2012-13), only one in 10 students were equipped for college-level reading; only 1 in 14 ready for college-level math. South Carolina business leaders worry that they cannot find enough qualified workers to fill higher-skilled jobs at Boeing, Volvo, and BMW where new plants have been built. We are not developing the skills needed to fill the more tech-based jobs of today, let alone tomorrow. Many students and job seekers also lack needed collaborative and communication skills.
Read again the definition of the American dream, "achieved through sacrifice, risk-taking and hard work, not by chance." Many successful people took risks to build their dream. They bought stocks, started a business or worked hard in a business or profession, put in long hours, and sacrificed. Risk and reward still are handmaidens. To find success you have to risk failure. Some of life's greatest achievements come out of setbacks. Building a rewarding retirement portfolio requires saving money early and often, prudent debt management, clear goals, lifelong skill building, and patience to ride though ups-and-downs, knowing that not everything will work out. In 1923, Babe Ruth broke the all-time record for the most home runs in a season as well as achieving the highest batting average. That same year Babe Ruth also set a third record-he struck out more times than any other player in Major League baseball!
As we approach the 2016 elections one candidate wants to "make America great again," suggesting that our greatness is past tense. Another candidate wants to initiate a European socialist model. Welcome to "the year of the frustrated voter." But unlike so many societies on our planet, you can vote. You can get involved in things you believe in and make things better. You can live a diligent and moral life in concert with family, fellow travelers in business and the faith of your choice, and your community. You have choices. Ultimately success and wellbeing is a do-it-yourself project.
"Luck is what happens when preparation meets opportunity." But you have to climb mountains one step at a time, with proper tools, a determined attitude, and a good trail map!
Lewis Walker is President of Walker Capital Management, LLC. Securities and advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis Walker is a registered representative and investment adviser representative of SFA which is otherwise unaffiliated with Walker Capital Management, LLC.