Conquering the world? Slaying financial dragons?
Forget it. Americans today would rather have enough to live happily than worry about upward mobility, at least according to recent research from Northwestern Mutual.
The “quiet company” found two-thirds (66 percent) of U.S. adults believe that they can attain “The American Dream,” and only 16 percent feel it is out of reach.
That said, the study also revealed “interesting nuances” about how perceptions of the American Dream have changed, and not just generation over generation. A third (31 percent) of Americans say their definition of the American Dream has changed in just the last five years; and more than half (57 percent) say their view of the American Dream is different than how their parents viewed it.
This is the first set of findings from the 2016 Northwestern Mutual Planning & Progress Study, an annual research project commissioned by Northwestern Mutual that explores Americans’ attitudes and behaviors toward money, financial decision making, and the broader landscape issues impacting people’s long-term financial security. The research was conducted in February among over 2,000 U.S. adults aged 18 and older.
In today’s view of the American Dream, happiness and security are valued considerably more than wealth, opportunity and moving up in social class. When asked about the most defining characteristics of the American Dream today, the top two answers were:
- “Having a happy family life” (59 percent); and
- “Being financially secure” (58 percent)
This far outweighed some of the more traditional notions of the American Dream, including:
- “Having more opportunities than my parents’ generation” (18 percent);
- “Having wealth/making a lot of money” (11 percent); and
- “Moving up in social class” (3 percent)
Interestingly, a full three-quarters of Americans (74 percent) say they would not swap the lifestyle and financial situation they have today for what their parents had when they were the same age.
“The goal today seems to be more about outcomes – happiness, security and peace of mind rather than material wealth or the opportunity to advance,” Rebekah Barsch, vice president of planning and sales at Northwestern Mutual, said in a statement. “The white picket fence is still important, but today Americans seem to care more about what’s going on inside the house.”
Financial Insecurity
While long-term optimism in the attainability of the American Dream is positive, there is also considerable evidence showing that many people do not feel financially secure in the present, and are not bringing high levels of discipline to their financial planning. The study found:
- Nearly a third of U.S. adults (29 percent) said they do not feel financially secure;
- Only one in five (21 percent) Americans consider themselves to be “highly disciplined” financial planners;
- A third (34 percent) consider themselves “disciplined” planners;
- Another third (33 percent) consider themselves “informal”; and
- More than one in ten (12 percent) “do not plan at all” and “have not set any financial goals”
“Financial security has emerged as the very pillar of The American Dream today, and a distinct catalyst toward leading a happy life. But there’s a disconnect between how the relatively small steps of solid planning and strong discipline can lead to big strides toward achieving that American Dream,” Barsch concluded. “Optimism is great, but it needs to be backed up with consistent action.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
