A highlight from Is the American Dream DEAD?!

The Money Guy Show
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Answers. It's brian preston. The money guy. yeah brian. I'm excited about this show. Because i think this is going to be one. That's a little surprising right. So a lot of folks have saying you know things are different. Times are different. Were a new paradigm shift and one of the things that's been affected by. That shift is the traditional idea of the american dream boat. If we were defining american dream walk through. What exactly was the american dream. And why is this even a thing. Yes so the american dream you know back in the day it was a marker of success. It was the thing that said. Hey if you know. If i am starting out on my journey i'm going to pursue this thing and if i accomplish these things it will mean i was successful. I've done the things that i was supposed to do of ended up in the place. I'm supposed to be. And that was the american dream. And i see. Daniel put the white picket fence in thumbnail there. So we're talking about the basics like owning home. We're talking about getting married. And then having a family was where those that really kind of the corner of the american dream career family home ownership like if you had those three things. You're moving in a positive direction and why we're those societal norms kind of what was considered good. Yeah i think the big reason they were. They were individually markers of success and there were some interesting things. There's an interesting study that came out that said if you had these markers of success and they define them as number one graduating high school number two working fulltime after high school so that would be a full forty hours a week after getting high school diploma and the number three being married before you began having children and also not having children before you attain the age of twenty one if you could do that. The statistics would suggest you at a higher probability. Higher likelihood of having long-term financial success was only. I mean it also kept you out of the ditch financially so lots change pandemic. Will you know more of a smaller global world. What is this i mean. Why would we even run a show that hits on this. What's the actual results. What's the shock-and-awe stat on why these things were so powerful in the past. So this is what the study found out. Data from the brookings the urban institute for those that follow all three norm so high school diploma. No kids before marriage or no kids. Before twenty one in working full-time the poverty rate among those around people who satisfy all three of those is a shocking two percent. Well if so that means that ninety eight percent of the folks if they just did those three things they were above the poverty right there were not living in that sort of realm. That number is bigger than i would have thought it meaning smaller than i would have thought in the fact that ninety eight percent of people. If you just graduate high school have a job. Get married and have children in that effect. Meaning you get married before. The children come ninety eight percent. You're not going to be poor. That's right and i think it even cuts on the other side again. Why was the if. That's the of the american dream. Why was the american dream of thing. This study brooke institute found that for those that break all three of these norms so meaning. They don't get a high school diploma. Don't work fulltime. And then have children either earlier before they get married. They actually have a poverty rate of seventy nine percent of folks who break all three of the someone when we were pulling this together and daniel showed me this law. The first time i was like. When was this done. Is this from nine. One thousand nine hundred eighty six. How old is this data and daniel assured me. He's like no this. I pulled this. This is as of two thousand eighteen. They update this every few years. So it's kind of amazing to think about these simple behaviors. King keep you out of poverty and if you need perspective or context the poverty rate in the united states is thirteen point seven percent so you can quickly see that this saves you this. This cuts the opportunity to be living a life in poverty. Down to where it's is. I mean it's a seven of what it would've been. That's something to dive deeper into. So let's talk about this. Because i wanna know. We know what the basics of the american dream were. How's that evolved. How's that changed is is. We've kind of reached this new modern world that we live in so we thought would be interesting to talk about the individual components that made up the american dream. What they were why they were that way and then potentially if it has schiff has changed how has it changed in the first one. I don't think is incredibly surprising. It was employer loyalty staying with one employer for a long period of time and a lot of circumstances previous. It was staying with an employer for an entire career. Do you think brian that has continued to be the case or has that changed through time. This is definitely evolved. experience share. Think about my father in law. He got the coal gold. Watch moment where you know you work at a place so long you worked at a utility company that he literally got a rolex on his retirement date and that was always what you saw. That people were working towards. There's no way that's that's the case anymore. I feel like so much evolved. So much has changed. The loyalty toward your employer is is is just different. This is actually now proven even in the statistics according to data from zippy ah the average person will change jobs twelve times in their lifetime. So it's no longer start with one employer and i work with that employer for a forty or fifty a working career. There's a lot of movement. There's a lot of change amongst the jobs that people are caring so i don't have employer. Loyalty is quite as big of a thing now as it once was well. Let's talk about. Why has this evolve because there have been some macro things that have happened in the business world. that have changed why. It's not as important to stay with one employer so kind of reviewing what was successful in the past. Why did people stay with one employer. Only who. I think the big thing. There were some financial reasons to do that. And one of the ones. I think that was the largest. Maybe golden handcuff. If you want to call the reason is easily the pensions. We had defined benefit plans. Where if you're willing to work with an employer for twenty thirty forty years that hey so long as you're here you putting your time you take care of us in your career we will take care of you in your time will guarantee some stated level of benefit for you. Well i think companies began to wise up and recommencement these. Pensions are kinda expensive. They're hard to kind of continue to carry out specials. We have a workforce. It's living longer longer longer so we are seeing a lot less pensions today. A lot less. Pensions over the last couple of decades that we had previously catalyst factor in there is go look at the legislation that brought us. 401k's that all came about in the late seventies early eighties and we even had a stat of the number of pensions. That used to exist. But then the change and the evolution of how many 401k's have grown to kind of replace that relic of something that we all kind of. I mean i'm still jealous of our. You know some of our clients that come in his teacher users you know civil servants and police officers as far you know firemen and women. I mean it's kind of amazing how this evolved just looking at the staff. Yeah let's wilders. In nine thousand nine hundred. Seventy five. The total number of defined contribution. That's like a four one k. Type plan was about eighty six hundred bone. You look at the total number of defined benefit. Pensions it was about twenty thousand and these are four large employers that had greater than one hundred employees. Well fast forward now into the twenty teens and you can see that. Pensions have dropped from twenty thousand. Pensions out there publicly available. So only about seventy seven hundred and yet defined contribution plans 401k. Four three b plans for those employers has skyrocketed from that eight thousand six hundred nineteen seventy five all the way up to almost eighty five thousand by the end of twenty. Eighteen is really telling on this.

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