When The American Dream Died
More than one hundred and fifty years ago, Alexis de Tocqueville, a French aristocrat, wrote about the power of the American Dream and how millions immigrated to America from all over the world in pursuit of that dream.
In Europe and Asia, at the time, there were basically two classes of people: the royals and everyone else. If you were born into the peasant class, you could never be a royal, no matter how hard you worked.
The American Dream represented the opportunity for someone who was a peasant to become American “royalty,” someone who could own property, control production (of goods or services of a business they could own), and work hard to create the life of their dreams. The American Dream—the spirit of entrepreneurship—is the driving force behind capitalism.
This dream was the spirit that caused people to leave their homelands and immigrate to America. While most were happy to join the American middle class, America did create its own nobility—entrepreneurs like Henry Ford, Andrew Carnegie, Thomas Edison, Walt Disney, Steve Jobs, and Mark Zuckerberg.
Alexis de Tocqueville believed that Americans could tolerate the gap between the rich and the poor as long as there was the hope that a person could move from peasant to middle class—and maybe even become rich.
In 2007, When The Markets Crashed, The American Dream Began To Die
As the economic crisis lingered and more people lost their jobs, homes, businesses, and retirement funds, the spirit that had been the driving force in this country began to die.
The bedrock of middle-class status was to own a home. Today, millions of homes are worth less than the amount of the mortgage. Millions of people have lost their homes and are renting. Today, more people are moving out of the middle class and joining the ranks of the poor, rather than moving into the upper middle class or joining the rich.
In 2011, the number of Americans living in poverty grew to 46.2 million people. Approximately one in six Americans now lives in poverty, and the number is growing. When a person has no property, they join the ranks of the poor and become dependent upon the government to take care of them. Unfortunately, some turn to crime, crime in the streets and white-collar crime in business.
As more people lose their personal property, the more likely it is that the philosophies of communism, socialism, and fascism will fester within America. And capitalists will become the new enemy.
America became a great nation because people came here in search of opportunities for a better life. They wanted to succeed. They wanted to be capitalists. Then something changed. Today, rather than work hard in pursuit of the American Dream, many feel they are entitled to the American Dream.
The Next Generation Is Already Behind
All over the world, millennials, not just American millennials, seem to think the world owes them a living. Many people go to school, receive a great education, get a job, and then expect either the company they work for or the government to take care of them for life.
The growing entitlement mentality has played a role in the way individuals view personal financial responsibility.
These questions come to mind:
- To what extent are the financial problems faced by Greece, France, and the state of California a result of an attitude of entitlement?
- Why do some of the best entitlement benefits go to our leaders—the President of the United States, our Congressional leaders, and other government workers? Once a President or congressman is elected, we the taxpayers take care of them for life. I ask myself: If they are qualified to be our leaders, why can’t they take care of themselves?
- Why do our public servants feel entitled to financial security for life? When did the shift from public servants to self-serving servants occur? How many public servants work for job security and benefits rather than to be of service?
- Why do CEOs and other corporate executives feel entitled to bigger and better financial packages than their employees? If they’re smart enough to be high-paid employees, shouldn’t they be smart enough to take care of themselves?
- Why do people feel that they are entitled to have their government or their employer take care of them for life?
Where does this attitude come from? Probably from a lot of places, including our classrooms.
A real cure to the sickness of entitlement is a financial education and a renewed spirit of entrepreneurship. We can no longer wait around for the American Dream to happen to us; we need to fine-tune our financial education and go hard after the dream.
Millennials’ problem is not the slowing economy or the growing wage gap. What their real issue is, is that they’re playing by the old rules of money.
They are trying to play a new game with old rules. It just doesn’t work! The old rules that their parents played by a promise that if they went to school and got good grades, went to a good college, then graduated and got a good job, and steadily worked hard, that they would be rewarded with a cushy retirement package and plenty of money to live.
It may have worked for their parents in 1970, but today that old “American Dream” is a bigger fantasy than ever.
Millennials need a new financial plan, one that teaches them the new rules of money.
We live in a different world than the 1970s. So it only makes sense that we need new rules and strategies to help the next generation not only match pace with the last generation but surpass them.
If millennials really want to rise up, they have to embrace the right side of the CASHFLOW® quadrant and become business owners and investors. They have to practice the rules of the rich.
How? By learning the new rules of money.
The New Rules Of Money
In today’s world, there are new rules of money. Think of all the changes that have happened in the world over the last 40 years. How could anyone think that the way to get ahead today is by doing things the same way their parents did them?
Robert wrote about the new rules of money in his book Conspiracy of the Rich. Below are the 8 new rules that millennials need to learn if they have any hope of thriving in today’s world:
- Rule #1 – Money is Knowledge
- Rule #2 – Learn how to use debt
- Rule #3 – Learn how to control cash flow
- Rule #4 – Prepare for bad times and you will only know good times
- Rule #5 – The need for speed
- Rule #6 – Learn the language of money
- Rule #7 – Life is a team sport. Choose your team carefully
- Rule #8 – Since money is becoming worth-less and less, learn to print your own
Learning these new rules of money will help millennials navigate a drastically different world. They still have the opportunity to surpass their parents, but they can’t do it the old way. They can’t rely on their parents’ advice and rules. They don’t just need to outearn their parents—they need to outthink and outgrow them as well.
Editor, Rich Dad Poor Dad Daily