# American Dream: The History, Evolution, and Definition

> **Definition**
>
> The American Dream is the belief that anyone can achieve success through hard work in a society where upward mobility is possible for everyone.

## What Is the American Dream?

The American Dream is rooted in the belief that anyone, regardless of origin or socio-economic status, can achieve personal success in a society where upward mobility is possible for all. It emphasizes attainment through sacrifice, risk-taking, and hard work.

Originating from James Truslow Adams' vision of a life "better and richer for everyone," this dream reflects ideals embedded in the Declaration of Independence. However, it faces criticism over accessibility amid rising income inequality and evolving economic landscapes.

### Key Takeaways

*   James Truslow Adams popularized the term "American Dream" in 1931, describing it as a vision of a better, richer, and fuller life with equal opportunities.  
    
*   Homeownership, education, and entrepreneurship are often seen as key components of achieving the American Dream.  
    
*   Economic disparities and rising income inequality have made the American Dream seem less attainable for many people in recent decades.  
    
*   Despite criticisms and changes over time, the American Dream remains an influential concept that inspires individual ambition and entrepreneurship.

![American Dream](https://www.investopedia.com/thmb/gSm5k36842Ye4tsld_yNjLFCNss=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/American-Dream-ADD-Source-1354a3da787248f89b8811f87c91ec5f.jpg)

*— Investopedia / Joules Garcia*

## Exploring the Roots and Evolution of the American Dream

The term was coined by writer and historian James Truslow Adams in his best-selling 1931 book "Epic of America." He described it as "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

Adams went on to explain: "It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motorcars and high wages merely, but a dream of social order in which each man and woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position."

The idea of the American dream has much deeper roots. Its tenets can be found in the Declaration of Independence, which states: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”

In a society based on these principles, an individual can live life to the fullest as they define it. America also grew mostly as a nation of immigrants who created a nation where becoming an American—and passing that citizenship to your children—didn't require being the child of an American.

## The Ups and Downs of Achieving the Dream

### The Good

Historically, the books of post-Civil War writer Horatio Alger, in which impoverished but hardworking teenage boys rise to success through pluck, determination, and [good fortune](https://www.investopedia.com/articles/pf/11/tips-for-dealing-with-sudden-wealth.asp), came to personify realizing the dream.

Today the dream is more varied and much more personal. It's often thought of as building a fulfilling life that balances financial stability with personal purpose. Living the dream means you have the freedom to make life decisions, aspire for more, accumulate wealth, live with dignity, and align with personal values, even if those aren't widely accepted. For many, it simply means acquiring a home as a symbol of what it means to "make it" because that represents stability, independence, and the chance to grow equity. So, to achieve the dream, Americans need security, opportunity, freedom, and prosperity.  

> **Fast Fact**
>
> The American dream promises that one's birth circumstances, whether native or immigrant, don't entirely dictate their future.

### The Challenges

Calling it a "dream" suggests these ideals haven't been realized for many Americans or aspiring Americans. Criticism that reality doesn't match the [American dream](https://www.investopedia.com/articles/pf/10/middle-class.asp) is as old as the idea itself. The spread of settlers into Native American lands, slavery, the original limitation of the right to vote to white male landowners, and a long list of other injustices and challenges have undermined the realization of the dream for many who live in the United States.

Since the 1970s, rising income inequality and inflation have made the American dream seem less attainable for those not born affluent. According to U.S. Census family income data, real family income began to grow much more among the top income group than among other segments of American society.

These realities, however, do not diminish the luster of the American dream as an ideal and a beacon to all nations.

Pros

*   The American dream promises freedom and equality.
    
*   The ideals of the American dream are motivating, including the freedom to be in charge of one's own life.
    

Cons

*   The reality of the American dream often falls short of the idea itself.
    
*   As income inequality has increased, the American dream has seemed less attainable.
    

## Ways to Quantify and Achieve the American Dream

For some, achieving the dream means pursuing our entrepreneurial spirit. For others, it's balancing work and life demands. Whatever your dream looks like, reaching it requires a foundation of financial stability, education, and personal growth. That starts with developing practical skills. That might mean formal training, building an emergency fund, sticking to a budget, or consistently saving and investing..

The dream is still alive and achievable. The key is to define what it means for you, make a plan, and take action.

1.  **Start Small:** Begin with looking for quick wins. That jolt of accomplishment will supercharge your motivation. Review your spending and savings habits. Tackle high-interest debt like credit cards, which can erode your progress. In many cases, paying that debt down is the smartest investment you can make.
2.  **Set Goals:** Different parts of your dream will have different time horizons. Short-term goals might include finishing college or planning a wedding. Mid-term goals could involve buying a home. Long-term goals often include preparing for retirement. Write these goals down, and break them into smaller steps. Schedule regular check-ins with yourself to stay accountable.
3.  **Find the Right Investments:** Research the best brokers and investment options that fit your needs. Consider balancing your portfolio with stocks, bonds, and other assets. Automating savings helps build consistency, and consulting a financial advisor can provide a customized plan aligned to your goals and risk tolerance.

Trying to achieve every part of your dream at once can feel overwhelming. Instead, break big goals into smaller, manageable milestones. Progress builds momentum, and momentum builds confidence. Whether your dream is buying a house, paying for a wedding, raising a family, traveling, owning a car, caring for pets, affording quality healthcare, or securing your retirement, you can make it happe, one step at a time.

## Global Influence and Unique Factors of the American Dream

Sociologist Emily S. Rosenberg, in her book "Spreading the American Dream," outlines five global components of the American dream. These include the following:

*   The belief that other nations should replicate America's development;
*   Faith in a free market economy;
*   Support for [free trade agreements](https://www.investopedia.com/terms/f/free-trade.asp) and foreign direct investment;
*   Promotion of a free flow of information and culture; and
*   Acceptance of government protection of private enterprise

Several factors have helped the U.S. gain a competitive advantage, supporting the American dream. The U.S. benefits from geographic isolation and a temperate climate. It has a culturally diverse population that businesses use to foster innovation in a global landscape. Abundant natural resources—including oil, arable land, and long coastlines—generate food and income for the country and its residents.

## What Is the Original American Dream?

The phrase “American dream” was often used by Progressive-era reformers of the 1900s. Rather than exalting the pursuit of wealth, they sought to tame monopoly capitalism and protect workers and communities from robber barons. This concept was popularized by writer and historian James Truslow Adams in his best-selling 1931 book "Epic of America_._" He described it as "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

## What Are Examples of the American Dream?

Examples of the American dream include owning your own house, starting a family, and having a stable job or owning your own business.

## Is the American Dream Still Achievable?

It's widely debated if the American dream is still achievable, and what that achievement even entails. Indeed, today, many people wonder if they can keep up with rising housing costs and interest payments on loans needed to purchase things like homes and cars. Moreover, American's need to save for their own retirement and pay large out-of-pocket costs for healthcare and higher education, which can leave families saddled with high-interest debt that is hard to crawl back from.

## How Has the American Dream Changed?

Over time, the American dream has shifted from an ethos of equality and solidarity to one of individualistic competition to succeed materialistically, fueled by consumption. In the 1990s and early 2000s, mortgage company Fannie Mae began promulgating the notion that buying a home was a cornerstone of the American dream, and use the term prominently in ads selling home loans. This ideology led to the housing boom and ultimate bubble that popped ultimately, leading to the 2008-09 financial crisis.

## The Bottom Line

The American Dream continues to embody a core national ethos, promising that anyone, through sacrifice and hard work, can achieve personal success and fulfillment. Rooted in principles of freedom and equal opportunity, it [influences the U.S. economy](https://www.investopedia.com/ask/answers/061815/how-does-notion-american-dream-influence-us-economy.asp) by promoting entrepreneurship and individual ambition. However, the concept is evolving, [reflecting generational shifts](https://www.investopedia.com/ask/answers/062215/what-does-american-dream-mean-different-generations.asp) and societal changes. Despite challenges like income inequality and economic barriers, homeownership, business ownership, education, and healthcare access remain integral elements of this dream. As a symbol of hope and possibility, the American Dream persists as a motivating force, encouraging individuals to strive for a better life.

> **Article Sources**
>
> 1.  James Truslow Adams. "The Epic of America." Page 404. Taylor & Francis Group, 2017.
>     
> 2.  National Archives. "[Declaration of Independence: A Transcription](https://www.archives.gov/founding-docs/declaration-transcript)."
>     
> 3.  Constitution Annotated. "[Amdt14.S1.1.2 Citizenship Clause Doctrine](https://constitution.congress.gov/browse/essay/amdt14-S1-1-2/ALDE_00000812/)."
>     
> 4.  United States Census Bureau. "[Real Household Income at Selected Percentiles: 1967 - 2014](https://www.census.gov/library/visualizations/2015/demo/real-household-income-at-selected-percentiles--1967-to-2014.html)."
>     
> 5.  Emily S. Rosenberg. "Spreading the American Dream, American Economic and Cultural Expansion, 1890-1945." Chapter 1: Introduction to the American Dream. Hill & Wang, 2011.
>     
> 6.  Sarah Churchwell. "Behold, America, The Entangled History of 'America First' and 'the American Dream'." Hachette Book Group, 2018.
>     
> 7.  Ad Forum. "[Fannie Mae - 'American Dream'](https://www.adforum.com/creative-work/ad/player/34290/american-dream/fannie-mae)."