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The American Dream Isn’t Dead, It’s Just Different

Three things that can help your children combat income inequality

Now, I know what some of you are thinking, Armond, you are an African-American man, raised in Arkansas, now a business owner, there is no way you believe that the American Dream is dead—you are correct. It is not dead—it’s just different. The fact is, it is getting harder for the poor to become middle class and for the middle class to become upper class.

Today, I want to recognize that the financial state of our country is dangerous, but I also want to argue that you can still improve your life. It will take more focus on your part until things improve in America.

Let me reflect a little bit.

I remember being at one of my friend’s houses talking about our careers. His explained that, since I am self-employed, I had “pulled myself up by my bootstraps” and created my own success. I looked him in his eyes and told him I didn’t feel that was the case.

I honestly feel lucky. Yes, I worked hard, but I can look back and see that I also made some bad choices in life as well. Things could have gone the opposite way for me. I was granted amazing opportunities—I literally had nothing to do with some of them. It doesn’t mean that I was above failure. It just means that I had lots of opportunities to succeed. My success wasn’t based on any of my specific attributes, except, maybe, that I am the kind of guy who takes advantage of an opportunity.

First, I want to define income mobility. Basically, it is the children’s ability to make more money than their parents. It is every parent’s dream to have their kids be faster, smarter, make more money, and be more successful than us. Relative mobility is better in Canada, Denmark, and the United Kingdom than in the United States. Canada ranks at 13.50%, Denmark at 11.70%, and the United Kingdom at 9%. The United States sits at 7.5%—and it’s getting worse.

So, that night at my friend’s house as I explained to him, I will explain to you now; there are several reasons I am lucky to be where I am today.

I’m lucky because:

1. Parents matter
2. Where I grew up matters
3. Where I went to college matters

I’ll use my personal story to explain how I was able to move up in America. I am also using Raj Chetty’s Study to justify how I was given a better opportunity over my peers.

Now before we get into an argument over this, I will admit that as a kid, I could look to my left and my right and see other people with the same opportunities as me. I will also make the argument that I happened to listen to the right people—that matters.

Parents matter

I don’t know about you, but I find it hilarious that being born into this world is a lottery system in itself. If you are born in America with parents who have money, you have already hit the jackpot! If you wind up poor, that says more about you. You had a better opportunity than the poor kid struggling to figure out how to become successful—you’re the one who messed that up.

So, in my personal lottery, I was born in America, but my parents were poor.

Here are the facts:

There is a strong correlation between the income of parents and the income of their children. That means it wasn’t looking good for me. However, parents do matter. Who knew that my father would get a bug up his butt and join the Air Force at 20 years old? He made this decision because he couldn’t buy my brother a Christmas gift—that bothered him.

My father worked; he had worked hard all his life. He and his brothers worked in my grandfather’s garage since he was five years old. As a matter of fact, when my father was eight years old, my grandfather had a heart attack. My grandmother took my father out of school that day so that he could finish putting a motor in a car for a customer. Can you imagine being pulled out of school at eight years old to install a motor in a car? I can barely get my 10-year-old to set the alarm clock and get out of bed on time.

Being poor doesn’t mean that you are lazy no more than being rich means that you work hard. My father was not a stranger to hard work, and then the opportunity came with the Air Force. What the Air Force did for my family and me is it immediately changed our income status.

Look, I wasn’t even born at the time.

I had no power in the decision making. I wasn’t even the catalyst. Hell, at least my brother can say that he made my father successful—I got nothing! What my father’s career change did for me was put a roof over my head, put food on the table, and clothes on my back.  In essence, I had a steady environment; my father never had to pull me out of school to put a motor in a car. My entire world was steady so that, as a kid, I could do what I did best—focus on my schoolwork and my development.

When you are poor, that isn’t always the case. You may or may not have a roof over your head, or you may have to sleep at friends’ houses for a while, and you may not have food on the table; however, has anyone else ate beans flavored with one piece of bacon and salt for a week? Yummy.

Now I know this is going to be shocking to a lot of people, but the black community, especially in the ’70s, wasn’t all that trusting of the government. I know; it shocks me too, but we’re not going to get into that today. I will tell you that I was crazy lucky that my father decided to join the military because his peers were telling him that it wasn’t the right thing to do. Because he went against the grain and decided to join the military, I got to grow up in a place that gave me an opportunity to move up in the world income-wise.

Where I grew up matters

Once again, it was decision time in the Croom family—where were we going to live? My older brother was having trouble in school. Of course, we couldn’t afford private school so we needed a school district that would accommodate our family’s needs. My father was told that there was only one school district that could accommodate our needs in a town called Cabot, Arkansas. My parents believed it was one of the best school districts in the state. Not only did I get to leave a poor school in a poor neighborhood in East St. Louis, but I didn’t have to live in that poor neighborhood either.

My dad decided that we were going to move to Cabot, Arkansas. Once again, my father was told that this was the wrong decision and that we would face inequality, but Cabot had the school district that would accommodate our family’s needs, so we moved. I believe that we were one of the first black families to move to Cabot. I know for sure that there were no black folks when I moved there.

This is significant. First, I would like to point to the Geography of Upward Mobility in the United States.

As you can see, where Little Rock sits and where East St. Louis sits, they are a dark red, which means that it is harder to move up in income from those places. I, at the very least, moved up to orange. I also want to point out to you that my dad’s decision moved me into a nicer neighborhood. Nicer in the sense that it had better schools and houses. If you don’t believe that please again read this study.

In this study, it shows that my family’s choice to move while I was young mattered. Also, my starting kindergarten there mattered.

When boys grow up in poor neighborhoods, it has more of a negative impact than the same plight has on girls.

Again, I was crazy lucky that my father decided to move to that town. Even though people were telling him not to do it. There is no telling where I would be if I had grown up in that poor neighborhood.

My father saw the benefits of stepping out on a limb to join the military.  He was brave enough to move to a town where he knew he wouldn’t be welcomed and I am thankful for that.

Where I went to college matters

As a kid, I didn’t know the importance of making good grades. All I knew was that if I came home with a D or F, I was in trouble.

It wasn’t until I moved schools within Cabot and started going to school with my best friend that I started to get it. Within my circle of friends at this school, it was cool to make good grades. As a matter of fact, we competed. I wasn’t making good grades to get into college, I was trying to beat my friends. All of a sudden, my grades went up, and I started performing better in school. Once I proved to myself that I could do it, there was no stopping me.

So far, my dad’s decision to join the military and move us into a better neighborhood had benefited me; then, my father got the bright idea to take me to his boss’s house. His boss talked about how he had gone to the Air Force Academy and how I could make it there too. Shockingly, I thought this was cool. This fueled my new goal of going to the Air Force Academy. My grades went up some more. I really wasn’t clear about how I was going to make it to the Air Force Academy. I just knew that I needed to continue making good grades. My grades went up some more. Even though I wasn’t clear about how to achieve my goal, my father, on the other hand, took it upon himself to learn more about how to get into the Air Force Academy.

Crazy thing about being in the military and out of a poor neighborhood—you actually start learning about opportunities. You start learning about being in ROTC.  There are people around you that can guide you. If there is no guide, it makes mobility harder. So, when it was time for me to go to college, my father once again took me down to the local recruiting station and asked the question that changed my life.

“How do I make him an officer?”

The man there spent at least half an hour trying to get me to enlist. My father was adamant that I was not enlisting. Finally, another man in the office leaned out and said, “take him to the officer recruiter downtown.” From there, I got an NROTC scholarship that allowed me to go to Tulane University. Guess what? I didn’t even apply to Tulane University. Yep, I had my heart set on Mizzou. Tulane saw that I had an NROTC scholarship and asked me to apply. I didn’t know anything about Tulane University nor the big difference between Mizzou and Tulane, but my father did, and that was a huge deal. For one, poor nor middle-class people have the money to pay for college. It also allowed me to graduate college, completely debt-free. Not to mention, when you go to an elite college, it gives you even more opportunity to earn a higher income.

Once again, if you don’t believe me, please see read this study about the role of college in intergenerational mobility and please see the graph below.

 

 

Again, I wasn’t sitting at the kitchen table, making some of these decisions. The decision to go to the recruiters’ office was not my own. I don’t even remember talking about it. It wasn’t even considered a typical move for my father because of his experiences in the military he wouldn’t have trusted the government with his son’s life. Even through his skepticism, my father understood that the military would allow me to be more successful than him, and again, I am crazy lucky for it.

Look, I would love to show you charts that prove how great I am, but as I sat on the couch explaining to my friend, and as I am explaining to you now, my success was luck. Yes, I worked hard, but no harder than some guy at Evan’s Tires fixing cars—and, I can argue that the guy at Evan’s works harder. The difference is, I hit the parent, location, and school lottery!

Once I graduated from college, it was all on me.

However, joining the Navy gave me a leg up again. I received exclusive benefits for serving my country beyond free college. The Navy opened my eyes to new worlds that I didn’t even know existed. I had several jobs during my stint in the Navy, which allowed me to explore my abilities.

Most importantly, being in the Navy gave me a certain level of bravery to step out on my own. My education and my military experience combined exposed me to people who could guide me in the right direction. I did not know that the military was going to give me those tools. I don’t think my father knew I would be gaining those tools either, but I was lucky.

Why are we talking about all of this? What does income inequality or the lack thereof have to do with your ability to manage finances? I would argue that your ability to manage your finances and improve yourself are more important than ever to your children. Not only is your net income important, but your ability to guide your children is consequential—parental guidance matters.

Other than the fact that the black community doesn’t trust Uncle Sam ☺, your takeaway should be:

1. Becoming a better you by stepping out of your comfort zone matters
2. Parental Guidance Matters
3. Managing your Money Matters

Become a better you by stepping out of your comfort zone

Interestingly enough, everyone feels like they can step out of their comfort zone. Well, except for the things that they don’t feel comfortable stepping out on. When humans are given lots of options, we tend to bury our heads in the sand. I know it sounds counterintuitive, but more options aren’t better. It is better to try to narrow everything down to just three good options.

We are going to be faced with hard decisions every day. In the book, Smarter Faster Better the author states, “if you give people an opportunity to feel a sense of control and let them practice making choices, they can learn to exert willpower. Once people know how to make self-directed choices into habits, motivation becomes more automatic.” There is nothing magic about this. If you want to see yourself perform better in different situations, you have to put yourself in different circumstances. I know it sounds a little cliché, but if you want to go against the grain, you have to practice going against the grain.

Once you do it and see that your whole world doesn’t explode, when it’s time to make that decision again— it becomes easier. Otherwise, you’ll get stuck in your comfortable lifestyle, your comfort food, your comfort blankets. Admit it, when anyone tells you to make a move even remotely out of that comfort zone, you don’t want to do it. When you refuse to step out of your comfort zone, not only are you missing out on an opportunity but think about the opportunity that your children are missing out on. If my father had not stepped out of his comfort zone and joined the military or been brave enough to leave our hometown, my brother and I would have missed out on incredible opportunities. My advice—step out of your comfort zone every once in a while.

Parental guidance matters   

Let me be frank, my children are idiots. I was an idiot as a child too. I didn’t know anything even though I thought I knew everything.

My parents put me in the position to receive guidance from the right people, and that includes them.

The environment in which you raise your children matters. Their peers matter. It isn’t the end-all, but it does matter.

In the book, The Influential Mind, Tali Sharot states, “one of the strongest ways we impact each other is via emotion. Sharing ideas usually takes time and cognitive effort. Sharing feelings, however, happens instantly and easily.” If you spend time with your children, you will get the emotion thing down. I trusted my father and knew he had my back. I didn’t need to question his motivation. I didn’t like him all the time, but I trusted him; he had an influence on my life. I wish he would have spent a little more time talking to me about life and how he saw the world, but he did the best that he could.

Before you start passing down information, you should also be open to learning new things and being OK with being wrong. Sharot also states that the most influential individuals are often the most open-minded. If you want to have a significant impact on your family, step out of your comfort zone by being willing to learn new things and also be OK with being wrong.

Managing your money matters

Managing your money, the right way matters more than ever to your family. With upward mobility becoming more and more difficult, you have to make sure you place your family in the most flexible financial position. The way to achieve this is to establish the following:

1. Vision
2. Goal Setting
3. Live below your means
4. Self-Improvement

Vision

“Your vision will become clear only when you look into your own heart. Who looks outside, dreams; who looks inside, awakes.” –Carl Jung

Even if you are the financial leader in your home, you and your spouse need to plan your family’s vision. I am not talking about goal setting yet. I am talking about visualizing yourself in the future; what will you be doing? What do you want your future to look like?  I am also not talking about material things.

I am talking about ultimate happiness.

Will you visit your children wherever they are?

Do you envision your children happy?

What kind of impact will you have on society?

Will you be hosting Sunday brunches for your family?

What legacy will you leave?

Will you be worried about money?

Where might you live?

What kind of relationships will you have with your children?

What will financial freedom look like?

If you are not visualizing the sweet nirvana of life, then you need to start. Without this type of hope, all is lost. If you and your spouse can’t come to terms with what is important to both of you, then it will be hard to move forward.

My father always talked to my brother and me about his future grandkids.

This man couldn’t wait until we had children. He made money moves in his life to make sure that he would be available as a grandfather without being a burden. What money moves are you willing to make? I’m not necessarily talking about traditional investments. I am talking about picking up your family and moving if you have too, canceling expenses to preserve your vision, and assessing your family’s situation to make sure you are functioning at optimal levels. Meaning, are you able to handle most financial situations that arise? You might even come up with a vision statement for your family to help guide your decisions.

Example Vision Statement: To put my family in the best possible financial position so that they can focus on doing the things that will make them happy.

If your family is happy, you will be happy too. Think about your vision for your family so that it is easier to provide direction for your family. If you are not envisioning your vision, then your family may be left without direction.

Goal Setting

“Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor. It’s about stewardship and, therefore, about achieving the good society.” Robert J. Shiller

After you have worked out your vision, now it is time to do some goal setting for your family. This is where having a vision board or a goal board comes in handy. If your vision is the rudder, then your goal is the helm or the steering wheel. This is where having good financial guidance comes in handy. The primary role of a financial advisor is to facilitate the conversation between you and your spouse; he or she will also determine whether or not your goals are achievable, too lofty or if one goal is impeding your ability to achieve a more important goal. They will help you align your money with your vision.

Talk to Your Spouse

You will need to talk to your spouse about all the goals you have that require money. You will also have to discuss your projected goal date. Setting dates helps you come up with a saving mechanism to prepare you and your family to achieve your goals. Now, setting a date doesn’t mean that it is written in blood. Just because you say you want to accomplish a goal by 12/01 doesn’t mean you have to make the purchase then. Especially if you are not ready or financially, unable to do it. Setting the goal gives you and your spouse a concrete target. Also, during the journey, you can make assessments as to whether or not the goal is worthwhile. If you are having to reduce your standard of living so much that it is excessively impeding your quality of life, then reassess: move it back or decrease the initial amount. You can also decide to do away with the goal altogether. By going through the process, you learn and accomplish the following things for your family:

• Their standard of living
• You have more money saved for other goals
• You’re able to avoid a financial decision that could have hurt your family’s mental, physical, and/or emotional health

As I said, family goal setting is crucial for your family. I advise you to get a goal board and hang it up so that you can review it often.

Live below your means

“What I learned from architectural drafting is that everything has to have a plan to work. You just can’t wing it. I can’t get all the materials I need for a house and just start building. Whether it’s a career, family, life – you have to plan it out.” -Ice Cube

You can’t achieve your vision or your financial goals without living below your means. The great thing about working towards your goal, which is 95% of the time what you want. It sets you up to handle any emerging needs. You never really know what is going to surprise you and your family; however, if you practice living below your means and putting money into savings, it puts you in the best possible position.

A body without the proper nutrients can only survive for so long. Your family without the proper savings can only survive for so long. What I mean by this is, people can live a long life, not getting all the proper nutrients, but as they get older, they begin to suffer the consequences of their bad habits. The same happens with family life, if you don’t have the proper amount of savings, then this too will catch up to you and your family sooner or later.

If you are not doing it already, as a rule of thumb, you should be saving around 20% to 25% of your gross income if not more. This will put you in a financial standing to handle needs that may arise.

Self-Improvement

“Nothing has a greater impact on children than the unlived life of the parents” – Carl Jung

I can’t say this enough. The more versatile you are as a thinker, and as a person, the better your family will be. The only way you can self-improve is to continue to grow as a person. As you grow, the more versatile you become. Justine Musk once said, “fear is a powerful beast, but we can learn to ride it.” Self-improvement is mainly about overcoming fear. Putting yourself in a position where you are willing to confront the world. When you decide to improve yourself, you put yourself in a position to try new things. Then, when you are forced to try something new, it is more manageable. Self-improvement isn’t so much about you as it is about being the best you for your family. I urge you to think about your financial, mental, physical, and spiritual health often.

If I were you, I would pick the one that I am weakest at and start improving. Start looking into eating right and exercise if you want to lose weight. Want to grow your mental strength? it doesn’t just mean meditating. Maybe it means reading books or improving your knowledge at work so that you gain more confidence to perform, and for spiritual, put yourself at balance with the world around you. Self-improvement is important.

Conclusion

As you can see, your ability to manage your finances sets your family up to continue the American Dream. The American Dream harder and to attain that it once was, but with proper planning, you can still give your children the best possible chance to achieve—that is all we can hope for our children. True enough, we can do all of this work, and maybe our children grow up to still be unhappy. I hope not, but of course, I am aware this is possible. I think what would give us a little solace is that we did as much as we could to set them up for success and at no point, were we a financial burden to them.

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