The American Dream Defined



The Statue of Liberty, Ellis Island, the white frame house with the white picket fence.

It’s The American Dream, the pursuit of happiness that led millions of displaced Europeans to the east coast of the United States in the 18th and 19th centuries, and continued when millions more were displaced as a result of World Wars I and II.

The American Dream still exists in the 21st century, but its definition has perhaps changed, and it changes sometimes depending on who you ask.

Spectrem asked women with a net worth of $1 million in its extensive study of affluent females titled Successfully Growing Your Business with Wealthy Women. The investors were asked to list all the factors that make up The American Dream, plus all of the outside influences that could keep someone from achieving that fairytale goal.

“Many of our studies ask investors concrete questions about portfolio decisions and investment preferences, but occasionally it serves advisors to know how investors dream,’’ said Spectrem president George H. Walper Jr. “There are people who achieve The American Dream and others who pursue it endlessly, but it is informative to know what those words mean, especially when investors work with advisors to achieve that goal.”

The most dramatic response to the survey question was not one that was responded to positively but one that did not receive the resounding response that might have been expected.

Eighty-one percent of wealthy women said The American Dream means “having sufficient assets to retire when I would like.” It’s an undefined response in terms of time, but says that The American Dream is to be able to make decisions about working or not working that are not slowed down or stopped by economic necessity.

Notably, Millennials and Gen X investors hold that principle in even higher regard, with 85 percent saying they want to have the assets they need to retire when they feel the time has come to do so.

The second-most popular response is the newsmaker. Only 68 percent of wealthy women, and only 55 percent of those aforementioned Millennials and Gen X women, believe that “owning a home’’ is the definition of The American Dream. 

Apparently, The American Dream has changed.

Sixty percent of wealthy women believe The American Dream means achieving the highest educational opportunities that are available. This response, most popular among investors from the World War II era (71 percent) and those investors with a net worth over $5 million (77 percent), is not about ownership or finance but about the quality of life. Another segment of wealthy women who agreed on the value of education were those who worked full-time out of economic necessity but wished they had not needed to do so.

“Being able to retire at the age I want” is a target-based view of The American Dream. Whether retiring at 50 is your dream, or you want to stay in the work place until you are 70, 58 percent of wealthy women want to be able to retire on their schedule.

It is also noteworthy that the wealthy women were much less likely to see The American Dream as something to be passed on to the next generation. Only 46 percent of women selected “future generations will do better than the current generation” as a definition of The American Dream.

Top Takeaways for Advisors

You are not promising investors you will get them to their definition of The American Dream, but it can be useful to know how investors view their loftiest financial goals. Over time, advisors will also learn how American viewpoints are changing on the topic of The American Dream; just as the Spectrem study points out that owning a home is not the be-all it used to be, so too may advisors find out that young investors have other viewpoints that don’t mesh with standard and long-standing American fantasies of prosperity.



©2017 Spectrem Group