Updated: Mar 7, 2021
Not too long ago, the American dream was to get married, buy a single-family home, have a couple of kids and a dog, and find a good company to work for. The goal was to get hired and stay on until you reached the retirement age of 65. At that time, you could take your social security and your retirement pension and live comfortably. It certainly wouldn’t bring you a lavish lifestyle, but at least your working days would be behind you.
Of course, there were several variables that had to be in place. First, the company you worked for had to stay profitable, so your job remained secure and the ideal matching retirement fund contributions would be made. In addition, you had to hope that you would maintain your good health so that you’d be around when the time came to retire. If not, there would be some insurmountable barriers to enjoying a pleasant retirement.
A Different American Dream
In the 1990’s, the American dream of the 1960’s ’70’s and ’80’s began to change. Many people wanted to work for themselves. Entrepreneurship skyrocketed. People began changing jobs often, leaving the area they grew up in, and began moving to another part of the country. The new American dream also began changing as people increasingly developed a strong desire for an earlier retirement. Sixty-five years was too old to start enjoying life, forty-five sounded much better.
The question was, how could anyone make that happen? Once people realized that it was possible to give up their guaranteed paycheck and become a full-time investor, all bets were off. The new American dream was born, and passive investing took off. However, while many people began investing, they also realized that it takes time to build wealth. There wasn’t a “fast lane” to that early retirement.