Why The Rags-To-Riches Success Story Is Just A Far-Fetched Dream
A new study by the Pew Charitable Trust’s Economic Mobility Project points out that trying to achieve more wealth than your parents is not much more than an unrealistic dream.
“The rags-to-riches story is more often found in Hollywood than in reality,” Erin Currier, the project manager for the Economic Mobility Project said to MSNBC.
While watching the success story may make a great movie, it’s far from the norm. According to the report, 70 percent of Americans born in the bottom fifth of the income ladder stay below the middle as adults. By contrast, 63 percent of those born in the top fifth of the income ladder stay above the middle as adults.
Overall, only 35 percent of Americans are considered “upwardly mobile,” which means that they have a higher household income than their parents at the same age. Those born in the middle three-fifths on the income ladder are the group that represents the possibility for a financial increase or decrease as adults.
The unsettling report also observes that African Americans have a smaller likelihood than their white counterparts of out-earning their parents.
Despite the lack of higher earning potential of future generations, once adjusted for inflation, most families are bringing in more money than their parents were at the same age. The problem is that the bigger paycheck isn’t resulting in a push up the income ladder.
“Clearly families do have more money in terms of what’s coming in every month, but they don’t have greater savings, they don’t have greater assets – for the most part – than their parents did,” Currier said.
So it seems, the problems lies in a lack of ability to save. Perhaps with more financial education and wisdom, families will begin to see a rags-to-riches dream, turn into reality.