How Does the American Dream Differ by Generation? – AOL.com
sanjeri / Getty ImagesHow Does the American Dream Differ by Generation?
By Alan Joseph, Sun, January 4, 2026 at 10:04 AM PST
If you asked your grandparents what the American Dream meant, they might opine on the classic tale of hard work leading to homeownership with the white picket fence, perhaps in a quiet neighborhood where everyone knew each other.
But your parents may have a different view. They may focus on the relief and peace of mind that comes with paying off their mortgage.
For young people today, the American Dream feels increasingly out of reach. While they still value traditional milestones, rising costs and an ever-changing economic landscape have made some give up on the idea of chasing the American Dream.
What is the American Dream?
“The American Dream” was coined 94 years ago by James Truslow Adams, according to the Library of Congress. Nearly a century later, the concept is still as relevant as ever. Despite the mutability of the term and how different generations perceive it, the broad assumption about the American Dream essentially boils down to upward economic mobility: If people work hard, success is within reach.
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What Young People Feel About the American Dream
A UCLA study from this year found that 60% of Gen Zers believe attaining the American Dream on their own would be difficult due to economic barriers. For Gen Z, the American Dream means good mental and physical health, personal fulfillment and financial success. Yet, 74% believe it’s harder to be happy now compared to previous generations, with financial stress being the biggest reason.
This sentiment should not be dismissed, as it raises important, broader questions about the nation’s long-term outlook.
If upcoming generations lose faith in their country’s institutions or in the long-held belief that hard work leads to financial stability, the social contract at some point will begin to erode.
But not all hope is lost, according to an expert whom GOBankingRates spoke with.
Rethinking the Dream
To investigate how young people can regain a sense of control and become financially secure, GOBankingRates spoke with Robert R. Johnson, CFA, and professor of finance at Creighton University.
Johnson warns young people not to lament over the American Dream, which he believes is an amorphous concept that has evolved. Instead of chasing antiquated goalposts, Johnson maintains that young people can, in fact, achieve financial security.
One timeless strategy, Johnson said, is investing in the stock market through low-cost, highly diversified index funds. He believes this is a better alternative to investing in real estate, which he said carries “large financial risks,” by exposing investors to an “undiversified, indivisible and often illiquid asset.”
Johnson also emphasized the importance of taking advantage of tax incentives through 401(k) plans and IRAs. Learning how to use these accounts effectively can help young people grow their investments more efficiently while benefiting from potential employer matches.
Key Takeaways
The American Dream has shifted across three generations. What emerges from Johnson’s insight is that upward economic mobility is still attainable — but through modern strategies.
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