Andrew at LivingRichCheaply had an excellent post that asked if America is still the land of opportunity, while Bridget at MoneyAfterGraduation had a counter point that the dream is dead and why you’ll never get rich. Income inequality is growing and many Americans are still struggling despite a recession that ended five years ago.
I was born into a well to do family in Vietnam, we had one of the largest houses in the neighborhood with a full staff servicing our needs. When the communists came during the war they seized a lot of my family’s assets. We escaped when I was three by boat in the middle of the night. We waited at a beach, my parents were afraid that the smugglers were going to sell us out to the communists. If we had gotten caught there were education labor camps for the adults and reeducation schools for the children. Since I was only 3 I don’t remember this and I first heard this story around 7. On the boat with several hundred other people out at sea there was also the threat of pirates. Since I was a kid my mom made the pirates sound like Jack Sparrow, they would come on board take a few things then leave. In reality they were the Captain Phillips type of pirates who were far more dangerous.
My father struggled with going from being wealthy to finding work as a gardener and later a janitor. (He eventually became a teacher). He drank and partied with his friends and worked only when he wanted to, the same lifestyle he had in Vietnam. My sister and I was raised by a single mother which is the biggest indicator of poverty.
When I went on field trips most of the kids would buy lunch, I would bring home lunch because we couldn’t afford to buy lunch for $5. You know you’re poor when other poor kids make fun of you for bringing home lunch. In Bridget’s article she points out that 48% of people born into the bottom 20% stay there, however that neglects that the majority of people in the 20% improve their lives.
I returned to Vietnam for the first time 13 years ago where I met up with family members. A few of my relatives were middle class (one is a lawyer, another a shop owner) yet their standard of living was lower than growing up poor in America. If you made $200 a month you were doing well. I’ve never seen poverty until I returned to Vietnam. A cousin whose family wasn’t doing so well had cried that he wish he had the courage to come to America when he had a chance. My father had sponsored him to come to Hawaii, however he turned it down because he was afraid of starting over in a new country. I’m grateful my parents had the means and courage to leave which changed the course of my life.
Income inequality is widening in America.
The widening of the wealth gap coincides directly with the rise of the stock market and real estate values. Growth in the rich’s net worth is not by income but by asset values. The wealthy invests in stocks, bonds, and investments, while the poor invests in electronics, cars and phones. There is no rich people sitting around plotting to keep you poor, the only person holding you back is you. What the wealthy is doing is employing lobbyists to minimize their taxes based on their income level. Majority of the growth in my net worth was due to investments and not income.
The American Dream isn’t dead, it’s changed. Hard work and determination isn’t enough to bring you financial independence. The world is full of hard working poor people, ask anyone who’s ever worked at a minimum wage job full time. Follow these six rules to build your wealth towards financial independence. You also need soft skills to get ahead by communicating to your bosses the quality of your work. Network and foster relationships so that people like you at work. People want to work with others that they like, this is especially true when it comes to promotions. This is why top business executives have similar backgrounds and personalities.
When I recruit I can always tell if someone is from an upper middle class household based on their social skills and the college they attend. There will always be others with more than you, it doesn’t matter as the internet has become the great equalizer. All the knowledge and skills needed to get ahead is a Google search away. 20 years ago I would never have a voice, today a Starbucks internet connection and foregoing a $5 value meal and you’re reading my blog. Anyone can start a business from their home or start freelancing and communicate immediately to millions of people.
I’m not blind that there are very real problems in America, being born in America or anywhere in the developed world you’ve already hit the genetic jackpot. It’s up to you what you want to do with that ticket. Tell Sam who retired at 36, Joe at 40, or Jason who is on the road to early financial independence that the American Dream is dead.
Is the American Dream dead or changed? What are you doing to achieve it?