The American Dream is alive but it will cost you $130k a year

The American Dream has been a focal point and topic of debate since the financial crisis of 2008: citizens and politicians alike are asking whether it's time to redefine what success looks like in the U.S.

According to Howard Gold, columnist for MarketWatch and founder of GoldenEgg Investing, the white picket fence and security that hard work can bring is still alive, but it will cost you... a lot. In a USA Today article, Gold calculated that for a family of four living out the American Dream costs just over $130,000 a year.

"This isn’t about being rich,” Gold tells Yahoo Finance. "It’s about providing security and a good life for your children and opportunities for your children... this is probably what a good middle class to upper-middle class life in America would cost."

Considering that the average household in the United States makes $51,371 per year, it seems that the dream is unobtainable to most. In fact, according to Gold’s estimates only one in eight, or about 16 million, American households achieve this standard of living.

“A lot of this is subjective,” Gold admits. Costs vary according to location and ideals. "In Indianapolis or Tulsa your cost of living is much lower than if you live in New York or San Francisco where arguably living the American dream would cost a lot more than this," says Gold. “I even got a Twitter comment saying, ‘You should come visit us in Pennsylvania; we’re living the American Dream on $40,000 a year.’”

“Everybody should have to write that check every three months. We would live in a changed world.”

Close to two decades ago, I took early retirement. Our CPA advised me not to work the first calendar year due to a good payout. They didn’t allow us to count the money as salary and to use my 401k.

Our CPA said without the 401k shelter, my new monthly pension, plus the payout that year due to my early retirement, and my wife’s salary, we would be borrowing to pay for our taxes. My wife maxed her 401k and medical cafeteria benefits, and paid her max to her IRA. I took my massive $2,000 IRA limit that year and paid an extra year’s mortgage.

We still had to borrow from my 401K, to pay for our extra taxes for that year.

The next year, I started consulting as an independent contractor. I made what appeared to be good money until we wrote out those quarterly checks for both sides of the SS, Medicare tax, California income tax and federal income tax. We calculated that I needed to write those checks for 60% of my gross to keep from owing more or getting penalties for underpayment.

I had to do a lot of air travel with my consulting. Air travel became worse each day. One day in May 2011, there was a bomb scare at the United Terminal at LAX. There were thousands of us outside the terminal in the street waiting to find out what was happening and later for our luggage.

Fortunately, I used my cell to call the car rental agency to pick me up a few blocks from terminal to get my rental car to go to the Hyatt Regency. I had no luggage nor projectors for the dinner meeting that night I was in charge of. I had on a pair of Croc Sandals with no socks, a Giant T Shirt and a pair of shorts. That was my dress for dinner that night.

During the time on the streets at the terminal, I wondered how many 1000’s of us could get slaughtered if a group of snipers/bombers decided to take us out.

While waiting for the rental car agency vehicle, I called my travel agent. She contacted United to have my luggage sent to the Hyatt Regency.

My luggage with everything including my meds, showed up at 2 am that night at the Hyatt. Fortunately, my dinner guests were under standing.

On the flight home, dear old United tried to have me sitting between two very healthy Samoa lads, who were trying out for the Raiders. After a strong protest, I rode back to the Bay area sitting in a flight attendants’s pull down chair, which is very uncomfortable for more than a few minutes.

The day after my pleasant trip back home, my CPA called my wife and I in. The Clintoons had upped the taxes on brackets like ours. Also, my company would start deducting from my pension, what my Social Security payment would be at age 62, later that year.

Our CPA’s advice to was basically to stop working and delay getting my social security until the next calendar year to avoid getting hammered even more tax wise.

My wife started to argue, and our CPA, a long time friend told her to do what she suggested or take one of some bad options:

1. My wife could quit work to lower our gross income, and that was not going happen.
2. We could go to Mexico or Nevada and get a divorce and file separately. That was not going to happen.
3. Trade my OJ Simpson Bronco in for a cheap pickup with two Homer Buckets. Put my wife in the truck bed with the Homer buckets filled with 20$ bills, drive into a poor section of town so my wife could throw the money out as we drove by the homeless. Have someone video the buckets before, during and after the money throwing distribution for a tax write off. everybody should have to write that check every three months. We would live in a changed world.
4. We could sell our nice home in a great bay area and move some place where it was a much lower cost of living and live on my pension, SS and my wife’s new start over income. That didn’t fly either.

So I took our CPA’s advise and quit working.

So I wrote my last big quarterly check to pay taxes, SS and Medicare and retired.

If I knew how long I’d live I’d probably be retired today. It’s not so much about having enough today under the current, mean or average rates of return it is the certainty that the next few decades will be equally or more uncertain than the last few.

Most people don’t understand consluting. It must cost more than what employees are paid in salary for the simple fact that it is spot market and you have all the employee cost employees do. Most of said employees have not one single idea in their pin heads what they actually cost their employer.

The other problem is that said pin head employees hire conslutants and avoid hiring them or keeping them around or not eventually getting downright resentful of the conslutant because all they see is the invoice and know that their paycheck isn’t that big.

Dolts. Said employees often being dolts, drones, are lacking in specific skills or experience is why the conslutant is there in the first place.

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