Visualizing the Cost of the American Dream in 2024

[CaliforniaGuybrarian]

Just saw this and feel like it belongs here:

https://www.visualcapitalist.com/cost-of-the-american-dream-in-2024/#google_vignette

[twinstudy]

The American Dream is to have the opportunity to live a comfy life, not to have the comfy life itself. That's why it's called a dream.

Anyway, the car payments thing got to me. Save up for the car in a tax-effective way, buy it outright, and then you pay only depreciation and maintenance and insurance. I'm not American, but in my country all those costs (besides the outright cost) are deductible for a car that's used for business use and the definition of business use is easy to satisfy. And depreciation itself is almost nil. My current car's value has depreciated only 25% in the 7 years I've owned it, so that's barely 3% per year. And I get to claim it on tax anyway.

Never understood the mantra that cars are expensive. If you do it right, they're cheap. Even expensive cars are cheap to own.

[reeshau]

Owning a car

Payments from age 29-74, excluding fuel and repairs: $811,440

Since we are excluding fuel and repairs (insurance?  The details just say "new car payments.")

Buying a $20,000 good, used car every decade from 29-69: $100,000

There, saved them $700k.  And I didn't get very Mustachian.

[twinstudy]

Owning a car

Payments from age 29-74, excluding fuel and repairs: $811,440

Since we are excluding fuel and repairs (insurance?  The details just say "new car payments.")

Buying a $20,000 good, used car every decade from 29-69: $100,000

There, saved them $700k.  And I didn't get very Mustachian.

I had a look at the depreciation calculator here (https://caredge.com/porsche/911/depreciation/) and you could buy a high-end Porsche 911 every decade, suck up the $100k depreciation hit over the next 10 years and your cost over the 45 year time span would only be $450,000. And this is on the basis that the 911 will depreciate (as per the website) from $165,000 to $65,000 over 10 years, which is not my experience. 911s hold value like nothing else (besides Ferraris).

How you can spend $800k on car payments over 45 years is beyond me.

[JAYSLOL]

The American Dream is to have the opportunity to live a comfy life, not to have the comfy life itself. That's why it's called a dream.

Anyway, the car payments thing got to me. Save up for the car in a tax-effective way, buy it outright, and then you pay only depreciation and maintenance and insurance. I'm not American, but in my country all those costs (besides the outright cost) are deductible for a car that's used for business use and the definition of business use is easy to satisfy. And depreciation itself is almost nil. My current car's value has depreciated only 25% in the 7 years I've owned it, so that's barely 3% per year. And I get to claim it on tax anyway.

Never understood the mantra that cars are expensive. If you do it right, they're cheap. Even expensive cars are cheap to own.

Yeah, that seems crazy to me. I got a great little used 90s Toyota in 2002 for $3500 cash, i still have it and it runs just like the day i got it and is still worth at least a grand. Thats like what, under $10 a month in depreciation cost? I just don’t understand people that upgrade cars everyday 4 years and have $400 or $600 or $800 a month payments.  My car has barely cost me anything in maintenance too, I spend less a year to keep it on the road than people with brand new cars that they buy “for the reliability” spend on a couple warranty-approved oil changes from the dealership.

[spartana]

The American Dream is to have the opportunity to live a comfy life, not to have the comfy life itself. That's why it's called a dream.

Anyway, the car payments thing got to me. Save up for the car in a tax-effective way, buy it outright, and then you pay only depreciation and maintenance and insurance. I'm not American, but in my country all those costs (besides the outright cost) are deductible for a car that's used for business use and the definition of business use is easy to satisfy. And depreciation itself is almost nil. My current car's value has depreciated only 25% in the 7 years I've owned it, so that's barely 3% per year. And I get to claim it on tax anyway.

Never understood the mantra that cars are expensive. If you do it right, they're cheap. Even expensive cars are cheap to own.

Yeah, that seems crazy to me. I got a great little used 90s Toyota in 2002 for $3500 cash, i still have it and it runs just like the day i got it and is still worth at least a grand. Thats like what, under $10 a month in depreciation cost? I just don’t understand people that upgrade cars everyday 4 years and have $400 or $600 or $800 a month payments.  My car has barely cost me anything in maintenance too, I spend less a year to keep it on the road than people with brand new cars that they buy “for the reliability” spend on a couple warranty-approved oil changes from the dealership.

Maybe the 2024 American Dreamers want new cars. Or 2 new cars since now both spouses actually drive. Perhaps that includes newer cars for the teens because that 1990s Toyota just isn't safe enough and only the 2023 Volvo is safe enough for little Dick and Jane. Or little Dick crashed the Volvo while texting on $1000 I-phone on his way home from buying a Super Grande mochacino from Starbucks so their insurance went up. Not to mention that he got fancy coffee on his $500 Air Jordens and $1000 ripped up vintage Levi's. Yep no way can you raise kids or buy just one cheap family car or wear clothes or eat food or communicate cheaply today. Impossible. Can't do it. The American Dream is dead.

[Sanitary Stache]

Dying is part of the dream.

[Christof]

That is weird... Most people I know have either cats or dogs. They definitely don't have them at the same time and rarely are people switching from one to the other. And why would the American Dream include paying for cat food for more than 11 years, but not going out for dinner even once in your live?

[JAYSLOL]

That is weird... Most people I know have either cats or dogs. They definitely don't have them at the same time and rarely are people switching from one to the other. And why would the American Dream include paying for cat food for more than 11 years, but not going out for dinner even once in your live?

But how are the writers going to afford their American Dream if they can’t rage-bait readers by wildly inflating meaningless statistics?  Think of the poor writers!

[Telecaster]

And why would the American Dream include paying for cat food for more than 11 years, but not going out for dinner even once in your live?

Or even eating food in general.   

[Tasse]

The cost of the median US home ($412k) costs $394k in interest at 6.75% over 30 years, making the total cost of home ownership $806k. So their $930k for home ownership isn't as egregiously off as the car estimate, but it's still above the median.

The idea that you would spend almost as much on cars as on your house!!!!

An average wedding (couldn't find a median number, alas) costs $33k and an average engagement ring is apparently about $6k, so the $44k wedding is also a modest inflation of the $39k average. (Horrifying.)

I wouldn't be surprised if the child rearing numbers were underestimates of the average, though. Including 8 years of college? That's $200k right there.

[Tasse]

I just googled the average monthly car payment for a new car: $734. As eye popping as that is, multiplying by 12 months and 45 years (we'll assume that our American Dream Haver views paying off their car as the signal to get a new one) STILL only gives us $400k. I suppose if spartana is right that every family needs to do that TWICE we can reach the estimate of $800k.

"Two brand new cars continuously updated for 45 years" is a bit beyond what I consider to be the American Dream.

[spartana]

And why would the American Dream include paying for cat food for more than 11 years, but not going out for dinner even once in your live?

Or even eating food in general.

You eat food?!! Like everyday? Now I know the forum is getting soft ;-).

I did notice they used the word adults when talking about cars so that might be $400k for each adult but not counting teen kids. Still outrageously high to me - especially with no mention of fuel, repairs, insurance and annual registration. I guess 2 new cars every 5 years or so does add up. Although I'll give them a pass on housing costs because there are states like Calif where housing costs far transcend the million dollar mark for a small older home and that's not counting things like interest rates, insurance, taxes,  maintenance and repairs etc.

[AMandM]

An average wedding (couldn't find a median number, alas) costs $33k and an average engagement ring is apparently about $6k, so the $44k wedding is also a modest inflation of the $39k average. (Horrifying.)

I wonder how true that average is. The "average wedding cost" figures I've seen are all based on data collected by wedding websites, but people like my daughters who have much simpler, less costly weddings are less likely to join those websites.

[Tasse]

An average wedding (couldn't find a median number, alas) costs $33k and an average engagement ring is apparently about $6k, so the $44k wedding is also a modest inflation of the $39k average. (Horrifying.)

I wonder how true that average is. The "average wedding cost" figures I've seen are all based on data collected by wedding websites, but people like my daughters who have much simpler, less costly weddings are less likely to join those websites.

Well and the average gets skewed by the really big, six-figure weddings. That's why I really want the median, but no one is reporting that number. The average is a better tool for the wedding websites to pressure people into spending more!

[Morning Glory]

An average wedding (couldn't find a median number, alas) costs $33k and an average engagement ring is apparently about $6k, so the $44k wedding is also a modest inflation of the $39k average. (Horrifying.)

I wonder how true that average is. The "average wedding cost" figures I've seen are all based on data collected by wedding websites, but people like my daughters who have much simpler, less costly weddings are less likely to join those websites.

Well and the average gets skewed by the really big, six-figure weddings. That's why I really want the median, but no one is reporting that number. The average is a better tool for the wedding websites to pressure people into spending more!

This is probably true for all of their numbers.  At least it provides a satisfying reason for why their estimates are so high on houses, cars, college, and the rest.

[deborah]

Median costs for US wedding

https://silkstemcollective.com/median-and-average-wedding-cost/

[Tasse]

Perfect article! Only wish it had more recent data!

[LD_TAndK]

Retirement "costs" $1.6 million based on their assumptions of a 4% withdrawal rate, 2.5% inflation, for 20 years? So the retiree will probably die with a portfolio far in excess of $1.6 million?

Also they're counting the home equity as a "cost" too?

Very misleading to say it costs 4.4 million when at least 2 million of that is investments that aren't actually spent and can be transferred to the next generation.

Guess we all bit on the rage bait

[Laura33]

Well they also fail to point out that some of those costs are spread out over long time periods -- 45-60 years for cars and vacations, for example.  If you spread things out like that, it's basically $70K-90K/yr.  Not cheap when you add on things like food and clothes for the parents (presumably the kids are covered by the "kid" category), but not particularly out of the realm of possibility -- particularly if you don't buy a new freaking car every few years.

[lifeisshort123]

The retirement cost sounds low to me for the lifestyle example shown... I think they are using today's dollars for everything including retirement.  Based on the lifestyle they are showing the necessary retirement dollars I would imagine will need to be closer to 2.75-3 million...

[spartana]

The retirement cost sounds low to me for the lifestyle example shown... I think they are using today's dollars for everything including retirement.  Based on the lifestyle they are showing the necessary retirement dollars I would imagine will need to be closer to 2.75-3 million...

I assumed they were talking about traditional retirement age of 65-ish as well as having the kids launched and college paid for,  the house paid off, etc. Lots of the normal.stuff like that wouldn't be coming out of retirement funds which may be supplemented by SS.  I can't even imagine needing that much.

[Scandium]

And why would the American Dream include paying for cat food for more than 11 years, but not going out for dinner even once in your live?

Or even eating food in general.

You eat food?!! Like everyday? Now I know the forum is getting soft ;-).

I did notice they used the word adults when talking about cars so that might be $400k for each adult but not counting teen kids. Still outrageously high to me - especially with no mention of fuel, repairs, insurance and annual registration. I guess 2 new cars every 5 years or so does add up. Although I'll give them a pass on housing costs because there are states like Calif where housing costs far transcend the million dollar mark for a small older home and that's not counting things like interest rates, insurance, taxes,  maintenance and repairs etc.

But why would car costs be for two people (unless it's $1500/month for one car?!), when several other items seems to only be per person? Burial and retirement appears to be for an individual.
And vacations is $3000/ year, which compared to our vacations with 2 adults, 2 kids isn't that expensive actually. Even a domestic flight can easily be $500/person. Americans love cruises, and from what I know even a good deal is $1000+ per person, x4. They should just have had "Annual trip to Disney; $10,000 * 20 years.
And why is "car ownership" from 29 years old, but "vacations" is from 22? Do people start working and instantly take vacations, but wait 7 years before buying a car? I thought americans got a car ASAP at 16!

[spartana]

And why would the American Dream include paying for cat food for more than 11 years, but not going out for dinner even once in your live?

Or even eating food in general.

You eat food?!! Like everyday? Now I know the forum is getting soft ;-).

I did notice they used the word adults when talking about cars so that might be $400k for each adult but not counting teen kids. Still outrageously high to me - especially with no mention of fuel, repairs, insurance and annual registration. I guess 2 new cars every 5 years or so does add up. Although I'll give them a pass on housing costs because there are states like Calif where housing costs far transcend the million dollar mark for a small older home and that's not counting things like interest rates, insurance, taxes,  maintenance and repairs etc.

But why would car costs be for two people (unless it's $1500/month for one car?!), when several other items seems to only be per person? Burial and retirement appears to be for an individual. And vacations is $3000/ year, which compared to our vacations with 2 adults, 2 kids isn't that expensive actually. Even a domestic flight can easily be $500/person. Americans love cruises, and from what I know even a good deal is $1000+ per person, x4. They should just have had "Annual trip to Disney; $10,000 * 20 years.
And why is "car ownership" from 29 years old, but "vacations" is from 22? Do people start working and instantly take vacations, but wait 7 years before buying a car? I thought americans got a car ASAP at 16!

IDK. I think I got the impression the car costs were for 2 peopl. and 2 cars. Probably because he used the plural "adults" but mainly (for me) I can't wrap my brain around $800k for one person/one car for their lifelong car purchases - especially not including fuel, insurance, repairs, etc. But I don't spend much on vehicles so may be wrong about what the average person spends.