How to Get Ahead In America (1st of a 12-Part Series)
The United States of America is a country where an individual wanting to improve his social or economic status, or simply get ahead one way or another, can make the choice to do so and then, through personal conviction and effort, create a new and better life around that choice. For centuries, poor, hungry, and courageous immigrants from around the world have come to America intent on transforming themselves into living, breathing examples of this fact. And they continue to come: in 2006 alone, the United States of America accepted 1,266,264 legal immigrants as permanent residents – more than the rest of the world combined.
Most Americans alive today are the product of this kind of life-transformation immigration. Over 40% of Americans alive today (more than 121 million people) can trace their ancestors’ immigration back to a single point of entry – Ellis Island in New York harbor – over a single 32-year period from 1892 to 1924.
However, not everyone in America today is the product of life-transformation immigration. Important exceptions include Native Americans, whose ancestors were resident in North America before any British or European colonists ever arrived, and many African Americans, whose ancestors were forcibly shipped to America under threat of brutality and death during the country’s despicable history in the slave trade. With these exceptions, an American today is an American simply because he or she, or one of his or her ancestors, made a choice to immigrate to the United States of America in pursuit of a new and better life. There is strong evidence that immigrants to the United States of America found the life they were looking for: over time, many generations of Americans have thrived to create and share in the largest accumulation of private wealth the world has ever seen – $56.2 trillion dollars as of the end of Q1 2007.
Something More: Financial Security and Freedom
Today, it seems many multi-generation Americans have given up making a conscious choice to further improve their status along America’s socio-economic continuum, which stretches from the 36.5 million Americans living in poverty on one end and the three wealthiest Americans, Bill and Melinda Gates and Warren Buffett, on the other (for those who may have misgivings about the wealthy in America, it should be noted here that all three of the wealthiest Americans are donating upwards of 99% of their substantial wealth to charitable foundations that will benefit American society and the entire world for many generations to come). For the majority of Americans near the midpoint of the socio-economic continuum, the United States of America is a pretty comfortable place to live. This is especially true when contrasted with dozens of countries in Asia, Africa, and Latin America where a majority of citizens today live in abject poverty. In short, many generations removed from life-transformation immigration, most Americans today lead lives that billions of human beings around the world can only envy from afar or cannot even begin to fathom. One can understand then the typical American’s inertia and desire to simply enjoy life near the midpoint.
Yet, many multi-generation Americans have indeed made the choice to try and pull further ahead financially. Simply put, these Americans want something more than what they have squeezed out of the American experience to date. That something more is the financial security and freedom that pulling further ahead can provide them. It’s the security to survive unexpected, unfavorable financial events without going broke. It’s the freedom to do what they want, when they want, where they want, all without having to ask someone else for permission to go out and do it. And, being Americans – who are idealized around the world for their creativity, innovation, and optimism – they feel strongly such financial security and freedom is well within their grasp.
My Choice, My Success
Count me in as one of those multi-generation Americans who has
made the choice to pull ahead financially. I made my choice in 1988 when, as a
senior in high school, I decided I wanted to attend an expensive private
university instead of one of Texas’ more affordable and perfectly fine public
universities. The private university I chose had a reputation throughout Texas as
being a school for “rich kids.” Indeed, many of the students came from families
whose wealth easily enabled them to pay the university’s high annual fees (and
then some: each year I attended, two or three students showed up for their freshman
year driving brand new Ferraris that their parents had given them, naturally,
as prep school graduation gifts). While I was fortunate to come from a family that
had more than enough love and emotional support to give me, my family did not
have near enough wealth to pay the university’s high annual fees. Merit scholarships got me part of the way, but not far enough to cover all the costs. What to do? I
decided to take a financial risk. I placed a bet on myself. At the age of 18,
with no job and only $200 in my checking account, I took on the personal
responsibility for paying back more than $35,000 in student loans -- with the monthly loan payments to start on the first day of my freshman year.
In short, at the age of 18 I had a large negative net worth (-$34,800), a full load of university classes, and a large loan payment to make each month. While my situation was completely self-inflicted, it was certainly a challenging financial situation in which to be at such a young age. Thankfully, time heals all wounds, including wounds in wealth. I have made much happen for me since 1988. In November 1994 I paid off all my school loans -- two years ahead of schedule. Today, according to U.S. Census Bureau statistics, I am in the top 10% of all Americans as measured by both income and wealth. It’s not a bad place to be by the age of 37. Of course, I am no Warren Buffett, nor is my rags-to-riches story as inspirational as the barrier-blasting life story of Oprah Winfrey. In fact, I am nowhere close to being a billionaire...yet. Regardless, I am a living example -- among millions of such examples in America -- that a multi-generation American can make a conscious choice to get ahead financially and then go out into America and make it happen within a reasonable time frame.
The 12 Refusals That Helped Me Pull Ahead in America
So, how did I do it? Well, it is too long and too boring a story to tell you here. In brief, my financial success boils down to long hours of hard work and personal sacrifice, with critical investing lessons thrown in for exponentially good measure. But, based on my experience, I am confident that you can accelerate your potential to replicate or exceed my financial success if you are willing to adopt my “12 Refusals That Helped Me Pull Ahead in America.” Here they are:
1. Refuse to be the “Average American” in terms of income and wealth.
Clearly, there is nothing wrong with being the “Average
American” when the typical American today leads a pretty sweet life compared to
the lives of so many others around the world. It’s no surprise then that Kevin
O’Keefe, author of the book The Average American: The Extraordinary Search for the Nation's Most Ordinary Citizen
Still, to pull ahead financially in America, you must possess, at a minimum, the desire to be “above average” in household income and wealth. More importantly, you must possess the drive and stamina to fulfill that desire. The levels of desire, drive, and stamina you will need to become “above average” naturally depend on the distance between your current income and wealth and that of the typical American household, as depicted in the table below.
From the table, you now understand the typical American household’s level of income and wealth. How does your household compare – is your household below, on par with, or ahead of the typical American household? If you and your household are already ahead on all of these national benchmarks, congratulations – you already have what it takes to get ahead in America. If you and your household are below or on par with one or more of the national benchmarks, you have some work cut out for you. If you truly want to get ahead in America and are willing to do what it takes to do it, you now have two simple, but not easy, charges:
1. Refuse to be anywhere but ahead of the national benchmark for income earned.
2. Refuse to be anywhere but ahead of the national benchmark for net worth.
To make your refusal a reality, you must engage in both smart and hard work. You must go out into America and take advantage of the innumerable economic opportunities available to you to increase your income. At the same time, you must defer immediate gratification in favor of long-term gratification – financial security and freedom. This means saving more of your income so that you can invest in valuable, wealth-building assets and/or pay off debts you owe to others. These actions, doggedly pursued, will help you get ahead financially in America.
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Next Up: The 2nd Refusal That Helped Me Pull Ahead in America.
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