As part of their "special edition" content, Yahoo! Finance is running a four part series from Forbes.com titled "Buying the American Dream." It looks at what it costs to live the American Dream in four regions of the U.S. (northeast, south, midwest, and west)
How they define the American Dream is interesting:
We're breaking down the costs of maintaining a nice, but not opulent, life--private schools for the kids, a large house in an upscale neighborhood, a weekend retreat, a pricey night out once a week, a couple of very nice cars.
We find more detail about that dream in the details of their methodology:
We tabulated the annual costs for a family of four with one child in a private college and one in eighth-grade and attending a private school. If your kids aren't college-age yet, this gives you a chance to plan ahead. Our fictional clan has two houses--one in a nice neighborhood and one in the country or at the beach.
And on the weekend house...
We also wanted our imaginary family to have a weekend retreat. So we chose a likely location for a country or beach house (Lake Tahoe, Jackson Hole). Some resort areas, like Idaho's Sun Valley, draw affluent visitors from around the country and the world, so vacation home prices were sometimes higher than the costs of primary homes in the state. We looked at last year's median sales price when we could obtain it, and used it to estimate what a nice second home might cost today. We used the same mortgage assumptions as we did for the primary home.
And on the cars to own...
Our family has two very upscale cars; a sporty BMW 325i sedan and a capacious Lexus RX 330 with front-wheel drive, both 2005 models.
And on eating out...
Since the Fictionals like to eat at nice restaurants, we figured out how much it would cost them to have dinner each week (including appetizer, main course, dessert, a bottle of nice--though not amazing--wine and tip) at a pricey local place. We then multiplied that figure by 52 to get the annual spending total.
And on vacations and travel...
This high-income family also likes to travel. We had them take three vacations each year: A week-long winter stay in Palm Beach for the parents; a romantic three-day jaunt to Paris in the spring; and a seven-day ski vacation for the whole family.
And on schooling the kids...
We figured our family would send its children to private colleges, which could be anywhere in the country. For this, we used the average annual cost for a resident student at an American college, including room, board and other expenses, according to the 2004 Annual Survey of Colleges performed by The College Board.
After reading through the section on the West, I've decided that I'm still pretty far from living the American Dream in California:
The costliest place in the region (dude!) turned out to be California. We have to hand it to West Coasters--it must be hard to be laid-back when you have to pull in nearly $370,000 per year after taxes to live well.
I guess I should have bought A LOT more Google stock back when it was cheap, huh. My 30 or so shares have to go way, way up in value before I have any hope. Maybe if I had bought 30,000 shares...
Then again, I'm also short a wife and two teenage kids, so I guess there's a lot of time before I have to strike it rich!
Not that I'm really think this whole "american dream" has much to do with what I personally want out of life. But it's still fun to see what's required to live up to a stereotype.
Posted by jzawodn at November 10, 2005 02:14 AM