The American Dream Is Defective

Tim Denning

You can’t get a refund either. Here’s an optimistic alternative.

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Photo by Ferdinand Stöhr on Unsplash

What if the American dream is broken? I live in Australia and we’ve adopted the American Dream. Here’s what it looks like.

Get into debt

Go on a date with a banker and knock yourself out with debt. Bring your material dreams forward to the present and pay a high price for them. Look at the debt on your tiny phone screen and have blind faith you’ll be able to pay it back one day. Apply lottery thinking. Or maybe Dogecoin will pay off the debt.

Find a job with a 6-figure salary to pay the debt

You find out the salary of a job afterwards. They don’t write the salary on the job ad because they want to see what you’re willing to compromise your dreams for. Not telling you what you’ll get paid is how they mess with you.

You walk in assuming fair pay. You walk out feeling like you’re going to have to compromise. Why? You need the money to pay the debt. A debt is a promise. You’re a human and hardwired to deliver on your promises, so you pay the debt and prioritize it.

Buy a good car to show your life is going well

The badge glued on the front of the car is a status symbol. The fact you don’t need an expensive metal box with four wheels to get from A to B is beside the point. The fact every person doesn’t necessarily need to own a car is beside the point too. Ownership is the point.

Ownership is how you measure how well you’re doing at the American Dream. When it comes to getting the metal box serviced, you pray to god the mechanic is going to be honest (until luxury car servicing becomes a subscription business, then you’re in trouble).

Get a huge house

You buy a house with plenty of space, a dining room, maybe even a verandah. A house with four walls on a block of land is supposed to be the American Dream. Australia is obsessed with property too. We read real estate brochures instead of picture books as 6-year olds.

A study published in the Wall Street Journal blew my mind. We pay huge amounts of money to mortgage our dreams and buy homes with rooms we barely use. Most of your time is spent in the kitchen, and the family room (because it houses your tv).

Living rooms, dining rooms and porches get almost no use. Buying a big house full of rooms you don’t use is strange.

Buy an investment property

Once you’ve got one house it’s time to buy more. A colleague of mine earns minimum wage, yet he has four investment properties.

He’s trying to supersize the American Dream for maximum pleasure. He’s deeply unhappy though. He never sees his family so he can keep up the payments on all the properties. Because he doesn’t earn much money he can only afford to buy investment properties in poor suburbs. When the global health crisis struck, his tenants were the first to stop paying their rent.

The idea is, if you live a terrible life now, then in a few decades you can retire rich off your investment properties.

Buy property, buy property, buy property, they say.

Work really hard until you retire at 65

The American Dream always lies in the future (pun not intended). You’re always doing stuff to get you there, but you never quite know when you’ll arrive. This reality keeps you motivated to keep chasing the dollars needed to enable a dream painted by people who don’t care about you.

65 is the magic number. It’s when everything happens. You can finally buy the caravan and travel through countries and see nature. If you have kids they are grown up and have forgotten how absent you were from their lives. It’s okay. You got the campervan with a microwave.

65 is young.

You’ve got your whole life ahead of you assuming you didn’t gamble on your health with fried food, excess meat, and coca-cola. Ooops. You did? You’ll be fine. We got a pill for that, pal.

Trade time + Buy stuff you don’t need + Be away from your family = The American Dream

The American Dream is extremely defective. This is no way to live.

The Edited American Dream

Here’s what many people are discovering:

Use money to buy back your freedom

Freedom is having the time to do whatever the effing hell you want.

You can buy stuff with money or you can buy your time back. I traded 20% of my annual income to work four days instead of five. Best decision I ever made. On that one day off I discovered who I was, and what I want to be.

Too much time at work gives you zero time to think about your Replacement American Dream.

Avoid traditional debt

Traditional debt is used to buy cars and homes. You’re taught to put down a 20% deposit on a home and borrow the other 80%. This formula puts your back against the wall. Us bankers say, silently behind closed doors, that you’re “leveraged up to your eyeballs.” This means if one tiny thing goes wrong in your life, you will feel financial pain. When you feel financial pain, as I have after losing everything, you start acting desperate. People run in the opposite direction.

Nobody wants to be part of a person’s failed American Dream.

Those who’ve discovered zero debt, or even less debt, have uncovered lower levels of stress. Less stress feels better than an imaginary American Dream made of statuses and objects you can’t take to the afterlife.

Lower your expenses

Subscriptions have increased our expenses.

We subscribe to stuff and then forget about it. I have a Loom subscription I hardly use, yet I happily pay each month for it because the deduction is automated. Apps that charge you subscriptions win by getting you to sign up for an annual plan for a perceived discount that locks you in. They mess with your sense of financial savviness.

You can make more money or just lower your expenses.

Option two is so freaking easy, and you don’t need any books or gurus to help you do it. I found the best way is to take away a lot of your expenses, and add them back as you need them. You’ll find a lot of things you were buying are non-essential.

Invest a percentage of your money

The financial system has changed. You can’t put money in a savings account anymore because you get a negative return, thanks to inflation and the zero interest rate environment we live in.

The financial system has forced you to become an investor (even if you don’t want to) to protect your purchasing power. Savings accounts didn’t require a financial education. Investing does require a financial education due to the added risks.

You now need to understand all assets: gold/silver, stocks, bonds, index funds, Bitcoin/Ethereum and real estate. Then you need to decide how much of your money to allocate to each option. Diversification will be key and that’s based on your risk tolerance and understanding of what you’re buying.

Dare to explore Web 3.0.

Websites full of information = Web 1.0.
Social media and phone apps = Web 2.0.
Blockchain, decentralization, and owning your data = Web 3.0.

You start by understanding Bitcoin and Ethereum and then grow from there. You avoid the naysayers and read the books by yourself.

Those who live 100% in a centralized internet world will continually manipulated and silenced. Those who venture beyond centralization will discover a world without borders, where biases driven by incentives are radically transformed.

Build a side hustle around a passion

Some cringe at the term “side hustle.” I don’t care. Labels bore me. A side hustle is simply a passion you pursue on the side that might make money one day — let’s not get fancy or shame creators for daring to dream.

Any skill you have can be utilized online. It’s not about learning a skill and making 6-figures in 30 days. This isn’t reality. The point of a side hustle is to see what it’s like not to be responsible to a single entity for all the money you earn. A side hustle is really diversifying your investments — the investment being your time.

When we think about money it’s common knowledge not to throw all of it into one asset, like Bitcoin, in case it goes to zero. Why would it be any different to investing all of your time in one company? It’s not. Time is an investment too. Investments should be diversified to manage risk. That’s the point of side hustles.

Flip from a competition to a team sport

The American Dream causes us to turn life into a competition. When everybody is your competitor you’re always trying to beat them with money and status.

When you ditch the American Dream you can see your fellow human as a teammate. That changes everything. Teammates work together to build stuff and solve problems. It’s the process and not the shiny toy that gets you out of bed in the morning.

Live within your means

Why can’t tiny be awesome?

My friend lives in the U.S., not far from a highway. Every time we chat on zoom there are always loud exhausts in the background. The oversized exhausts are attached to oversized pickup trucks typically driven by one person. They rev their loud engines. The driver exerts power and status on the road. The problem?

A lot of the other people on the road drive the same trucks. So, everybody has to keep buying bigger and bigger objects to stay ahead. I picture it like a road full of kings and queens sitting on their thrones. When the majority have a throne it’s not a special feature anymore. Get it?

Many people are going the other direction in life. They are discovering what it’s like to live with enough and reject the American Dream. They’re discovering what it’s like to live within their means and not be entirely dependent on the trajectory of the American economy fuelled by money created out of thin air to buy fake American Dreams that will eventually end the same way the 2008 recession did — in ruins.

Final Insight

The American Dream is full of cracks when you analyze it. I feel bad that Australia has copied the American Dream. Thankfully, optimistic alternatives are emerging. There are different ways to get more out of life than mortgaging your soul and paying it off until you’re 65.

Revelation: Your time is more valuable than money.

The fastest way to build your own dream is to buy back your time, reduce traditional debt, lower your expenses, swap your savings account for a diversified portfolio of everyday assets, explore Web 3.0, experiment with a side hustle to diversify your time, turn life from a competition into a team sport, and live within your means.

You’ll reach death faster than you realize. Stop trading time for money to live a defective American dream that will never make you happy.

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Aussie Blogger with 100M+ views — Writer for CNBC & Business Insider. Inspiring the world through Personal Development and Entrepreneurship www.timdenning.com

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