The American Dream is Dead (Here’s What to Do Instead)
Episode Summary:
The American Dream—the promise of stability, homeownership, and a comfortable retirement—was once the ideal path to success. But in 2025, that dream is no longer attainable for most people. Skyrocketing home prices, stagnant wages, and a failing retirement system have made it nearly impossible for the average person to follow the traditional path to financial security.
So what’s the alternative? Financial freedom.
In this blog post, we’ll break down why the old American Dream is broken and show you how to create a new path—one where you take control of your financial future, build passive income, and achieve financial independence much earlier than traditional retirement.
Why the American Dream No Longer Works
The old-school formula—get a degree, land a high-paying job, buy a house, and save for retirement—isn’t working anymore. Here’s why:
Housing is Unaffordable – In previous generations, homes cost about 2-3 times the average annual salary. Today, home prices have outpaced incomes drastically. In many cities, homes cost 7-10 times the average salary, making homeownership out of reach for most people.
Retirement is Broken – The average American has just $65,000 in retirement savings, while most experts say you’ll need at least $1.3 million to retire comfortably. Plus, Social Security is projected to run out of money by 2033, meaning future retirees will have even fewer safety nets.
Corporate Jobs Are Not Secure – The traditional 9-to-5 job is no longer the safe bet it once was. Mass layoffs are common, pensions are rare, and company loyalty doesn’t guarantee financial stability.
Delaying Life Until Retirement is a Trap – Many people work for 40+ years only to retire at 65, when they may no longer have the health or energy to fully enjoy life. What’s the point of waiting until you’re old to finally live?
The system is failing. So what’s the solution?
The New Path: Financial Freedom
Financial freedom means having enough passive income from investments to cover your living expenses, making work completely optional. It gives you the power to live life on your own terms, whether that means quitting your job, traveling the world, or spending more time with family.
Here’s how to get there:
1. Calculate Your Freedom Number
To achieve financial freedom, you need to know your target number. Use the 4% Rule, which suggests that if you withdraw 4% annually from your investments, you won’t run out of money.
Take your annual expenses and multiply by 25 to get your “FU number.”
Example: If your annual expenses are $60,000, you need $1.5 million in investments to retire comfortably.
2. Invest in Cash-Flowing Assets
The key to financial independence is building a portfolio that generates passive income. Here are some of the best ways to do it:
Rental Properties – Buying real estate that generates cash flow can replace your job’s income over time.
Dividend Stocks & ETFs – Investing in dividend-paying stocks provides a steady stream of passive income.
Crypto & Alternative Investments – While riskier, assets like Bitcoin and Ethereum have shown strong long-term appreciation.
Side Hustles & Business Ownership – Starting your own business or monetizing a skill can help you escape the paycheck-to-paycheck cycle.
3. Live Below Your Means & Invest the Difference
The simple formula: Spend less than you earn and invest the rest.
Avoid lifestyle inflation. Just because you earn more doesn’t mean you should spend more.
Every dollar invested today has the potential to grow exponentially through compound interest.
4. Create Multiple Streams of Income
Relying on just one paycheck is risky. Instead, diversify your income sources:
Real Estate Income (rental properties, Airbnb, house hacking)
Stock Market Investments (ETFs, index funds, dividend stocks)
Online Businesses (content creation, e-commerce, digital products)
Freelancing or Consulting (leveraging your skills to earn extra money)
5. Adopt the Right Mindset
No one is coming to save you. The government, your employer, or Social Security won’t guarantee you a secure future.
Time is your greatest asset. The earlier you start, the easier it will be to build wealth.
Financial literacy is key. Read books like Rich Dad Poor Dad by Robert Kiyosaki, The Psychology of Money by Morgan Housel, and A Simple Path to Wealth by JL Collins.
Final Thoughts
The American Dream is dead, but that doesn’t mean you’re doomed. By taking control of your financial future, investing in income-generating assets, and building multiple streams of revenue, you can achieve financial independence much earlier than traditional retirement.
I’m on this journey myself, and I’ve committed to becoming work-optional by age 40. It’s not easy, but it’s 100% possible. The key is to start now.
Want to Take the Next Step in Your Real Estate Journey?
If this post resonated with you, let’s connect! Find me on Instagram @cashflowsaga to chat about your financial freedom goals—I’d love to help however I can.
Looking for more resources? Download my free investing tools or explore my 1:1 coaching program, Rental Property Investing 101, to fast-track your success.
Stay committed to the journey, my friend. Your future self will thank you! 🚀
