Is the American Dream within your reach? According to Investopedia’s Editor-in-Chief, Caleb Silver, it comes with a hefty price tag of $3.4 million. However, the median lifetime income from ages 25 to 65 is only $2.3 million. Silver explores strategies to bridge this gap in a discussion with Yahoo Finance’s Jared Blikre and Broke DiPalma on Stocks in Translation.

This post was written by Jimi Corpuz

Video Transcript

So we're going to break this down, investopedia has quantified.

The American dream is costing $3.4 million.

The problem is the median lifetime income for a person 25 to I believe 65 is 2.3 million.

So pretty big gap there, Caleb, how did you arrive at these numbers and just tell us about uh why you decided to go here.

This was something that kept coming up and what we started to look at when we looked at some of the anecdotal data and the searches around it was, it was not people saying, how do I get to it?

It was this feeling that a lot of people feel that they're not gonna be able to realize the Americans being reach live a better life than their parents.

They work hard, they went to college now, they have debt now.

They can't keep up with the cost of living.

Maybe they'll never be able to afford that first home.

So they feel like that's out of reach.

So with our data journalism team, we went and we quantified reasonable expectations for what that dream would cost and these are reasonable expectations.

We're talking about things like paying for a wedding for a child over time, paying for a funeral.

Right.

Uh, buying six used cars over your lifetime.

That's, it's not crazy if you own a car for 1012 years.

Uh, maybe having health insurance for your family over 900 grand, sending a couple of kids to college just for a couple of years.

Most people only do a couple of years of college.

We put all this together and it costs in today's dollars, $3.4 million.

Yeah.

Yeah, it's a big number.

And when you think about the fact that, well, you can make that over your lifetime, the median income only gets you to about 2.3.

So there's that gap of over a million dollars between what it costs to have reasonable expectations to live and, and run a household, right.

Raise a couple of kids and pay for these things, have a couple of pets and what you can actually make if you're just making the median income and that gap has to be filled.

How do we fill that gap?

You have to fill that question.

That's investing, right.

That's one of the ways to fill the gap.

You have to make your money work for you.

So it's not just you and your labor for the rest of your life.