The American dream is no longer about getting rich, owning a home for small business owners, survey finds — here’s what the cost-of-living crisis has these folks chasing instead
The “American Dream” is a story of self-made success. It’s the opportunity for every U.S. citizen to have a good career, own a home and build wealth and prosperity.
But for many Americans, that dream is growing more and more distant — thanks to major economic challenges like high inflation, rising interest rates and elevated consumer debt.
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These challenges have changed Americans’ definitions of success, according a GoDaddy survey. GoDaddy quizzed 1,000 small-business owners from across the nation to learn their motivations and perceptions about the American dream.
Their answers contradict the traditional notion that the American Dream is to own a home with a white picket-fence.
A third of U.S. small business owners think the American Dream has changed significantly in their lifetime — here’s what many Americans say they are pursuing today.
The American Dream: A New Definition
Over half of entrepreneurs surveyed (56%) think they’ll have achieved the American Dream when they’re living comfortably — which requires a certain level of financial security and wealth.
Many ways exist to build wealth. You can save some of your income each month in a high-yielding savings account, a Certificate of Deposit (CD), or a retirement account that offers tax advantages, such as a 401k or IRA. Dividends are a great way to generate passive income.
Of course, it takes some time to reap the benefits of savings and investments — which could be why Gen X and boomers are more focused on living comfortably (after many years of building wealth) than millennials and Gen Z.
Even the cost of living comfortably is on the rise, along with almost all other prices. A recent Smart Asset report found that you’d need to earn $68,499 annually after taxes in order to live comfortably. That’s 20% higher than the average amount of $57,013 needed in 2022.
Meanwhile, 54% of respondents defined the American Dream as “feeling happy in life,” and 49% said it involved “freedom to follow my passions” — two social shifts brought about by the pandemic, when people started to prioritize a better work-life balance.
Homeownership has become less accessible
The American Dream has always been built on the foundation of home ownership. It symbolizes independence, financial security and prosperity — but it was only the fourth-most popular indicator of success in the GoDaddy survey.
Unsurprisingly, boomer and Gen X Americans place more importance on homeownership than millennials and Gen Z — perhaps because they’re already living comfortably in their forever homes.
It was a lot easier for older generations to buy their homes — which they scooped up for pennies on the dollar when compared to today’s record house prices.
The average price for a starter home soared to a record $243,000 in June — up more than 45% pre-pandemic prices, according to real estate brokerage Redfin.
When combined with elevated mortgage rates, today’s sky-high house prices have made homeownership less attainable, particularly for younger Americans who are saddled with hefty student debt and yet to accumulate much wealth.
Click here to read more There are ways you can pay off your student loans faster if you have more than $25K in debt.
Gen Z Americans would rather spend their hard-earned dollars on other things, like education and travel.
Realizing your dream
There are many obstacles that stand in the path of the American dream. The GoDaddy survey speaks only to small business owners, who are often considered a litmus test for the viability of achieving the American dream — and 80% of them say inflation is a major challenge.
Others mentioned issues such as: lacks of access, discrimination and lack of education.
Despite the many obstacles that are preventing Americans from achieving their American Dream, 62% (of the entrepreneurs) who participated in the GoDaddy Survey were confident. Meanwhile, 23% are neutral about their chances and 14% think it’s more of a pipe dream.
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