Entrepreneurial Desire Trapped by the American Dream

Written by

The American Dream (Mike Jones album) — Image via Wikipedia

Two separate young professionals that want to be entrepreneurs reached out to me this past week asking for advice. In each case they’re married, have great jobs, a mortgage, and want an angel investor to invest in their idea so that they can quit their day job while maintaining their current lifestyle. The chance of that happening is slim-to-none. Yes, investment from the three Fs (friends, families, and fools) is possible, but they want to avoid that route.

These young men have an entrepreneurial desire but are trapped by the American dream.

Of course, the American dream I’m referring to is home ownership. Home ownership requires them to keep working on their salary since their spouse’s salary alone doesn’t cover their costs. What about selling the home? The home price has decreased so much that they can’t afford to sell it. Their remaining option, which I suggested, is to rent out their house, live in an apartment, and cut their costs such that they can live off one salary and pursue their dream. Both young professionals said they didn’t want to do that.

What do you think? Would you invest in young professionals that want to be entrepreneurs but aren’t willing to make serious personal sacrifices to do it?

Comments

9 responses to “Entrepreneurial Desire Trapped by the American Dream”

April 18, 2011

Dave

I would recommend that they join a startup to have greater financial security and enjoy the fun of entrepreneurialism but without all of the risk. This is a common and well respected path that many take. I love hiring people with entrepreneurial passions and letting them participate in the American dream! Cheers! Dave

Reply
1. April 18, 2011
  
  David Cummings
  
  Great idea! I agree completely.
  
  Reply
April 18, 2011

John Melonakos

I’m not so sure that “home ownership” is the American Dream, though it is a fruit of that Dream. The Dream is more the fact that one can work hard in this country and stand on one’s own two feet. Historically, sacrifice has always been part and parcel with that hard work.

No, what these two people suffer from is not the American Dream. It’s paralysis caused by materialism that impedes them from pursuing the fuller embodiment of the American Dream.

Note that it often makes sense to pursue modest home ownership during entrepreneurial activitiy where the mortgage+insurance+cost-of-home is less than what it takes to rent an apartment.

Reply
1. April 18, 2011
  
  David Cummings
  
  You’re exactly right. Great stuff.
  
  Reply
April 19, 2011

Andrew Watson

I have some (many) of the same encumbrances and I’m currently working on a way to pursue the dream without risking my family’s health and education. Health insurance, or the lack of affordable coverage, is one of the major sticking points, unfortunately.

Reply
1. April 20, 2011
  
  rkischuk
  
  That insurance number changes a bit if you’re still having kids, doesn’t it?
  
  Reply
2. April 20, 2011
  
  rkischuk
  
  It’s kind of a lose-lose, I think. Total costs for our first child were $20k – not sure how much of that could be negotiated down as an individual.
  
  Insurance knows that it costs ~$20k and is going to have to quote you a number where they can recoup that cost, on average, from the premiums.
  
  Ultimately, I suspect maternity coverage would still be preferable since $20k was a healthy delivery, and any complications could send that total cost sky high from there. Manage the small risks, insure the big risks.
  
  Reply
April 21, 2011

Kyle Porter

With big eyes, we bought an overpriced large condo in Midtown in 2007. Since then, we’ve paid it down as fast as possible but we hate the monthly total out-of-pocket mortgage, taxes (yikes), and HOA (double yikes). Without kids yet, we decided to reduce the burden. We are now landlords at cash-flow even (positive w/ tax implications) & we rent a smaller but nice condo for ~ $800/month less. We’ve been pumping up an HSA to cover kid costs down the road and are on wife’s insurance + she has positioned her career to be able to work from home once kids happen. Our cash position has improved & added flexibility + we are reducing our debt by having someone else pay down the condo. All in the name of being ready to go again when the time comes…

Reply
April 23, 2011

Lifestyle Modification to be an Entrepreneur « 10,000 Startup Hours – David Cummings

[…] week I spent some time talking to the entrepreneur that I mentioned before that has his entrepreneurial desires trapped by the American dream of home ownership. This young professional has a business idea, two co-founders, a mortgage, and a finance background […]

Reply