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For some of us, living the "American dream" means having a big house, a fancy car, and a high-powered career that allows us to buy the finer things in life. For others, it simply means being able to do something you love every day and still end up with enough money to retire in comfort. While the definition of achieving the American dream is different for all of us, it is almost certain to include a solid financial foundation that lets you live the life you choose.

To help you get on the right track, we asked our team of Motley Fool contributors to share an important step that they believe should be followed to make living your own version of the American dream a reality. Here's what they had to say:

Dan Caplinger: Saving and investing is a key component of gaining the wealth you need to live the American dream, but the vehicles you use in order to invest can make a huge difference in how much wealth you're able to accumulate over the course of your lifetime. In particular, tax-favored retirement accounts like IRAs and employer-sponsored 401(k) plans can dramatically increase the size of your retirement nest egg simply because of the tax benefits that they offer.

In an ordinary taxable account, you have to pay income taxes on the interest, dividends, and capital gains that your investments generate, and having to pay higher taxes means you have less money remaining to take advantage of the power of compound returns. Those taxes don't start out as much, but as your account balances grow, the drag from taxes can get severe. By contrast, using tax-deferred vehicles like traditional IRAs or 401(k)s let you delay having to pay taxes until you withdraw money from your account, and tax-free retirement accounts such as Roth IRAs allow you to avoid having to pay taxes entirely. By setting yourself up early to enjoy the benefits of minimizing your taxes through judicious use of tax-favored retirement accounts, you'll be able to reach the American dream that much faster and live the life you want.

Brian Feroldi: When it comes to housing, the rule of thumb we're told to follow is that housing-related costs shouldn't exceed more than 30% of a household's income, yet almost 41 million American households spend more than this number on their housing each month. Placing that kind of drag on your finances can make it much harder to achieve long-term financial independence. While many of those households are in that sticky situation because of rising rent costs, anyone who is a member of that group because of a mortgage should seriously consider making extra payments to get rid of it as quickly as possible. 

In today's low-rate environment, you may think it's a better use of capital to invest the money instead, as the returns are likely to be higher in the stock market than can be achieved by paying off a mortgage early. Others argue that the tax deduction available from mortgage-related interest payments lowers the net cost of a mortgage further, which means it actually makes sense to keep it around.

While both of those are true, paying off your mortgage offers a guaranteed rate of return, which is something the stock market can't claim. However, of even more importance is that doing so will significantly lower your future monthly expenses, which provides far more flexibility in your monthly budget to do as you see fit with your income and can go a long way in helping you achieve your own version of the American dream.

Adam Galas: To me, the American dream means achieving financial independence in which one's investments can provide a growing stream of income that can replace your salary and let you live comfortably and without fear of material want. 

One of the most important steps to achieving the American dream is learning to budget and periodically re-evaluate your monthly expenses, to make sure you're maximizing your enjoyment from each dollar spent. 

You'd be surprised how quickly relatively small expenses can add up. For example, one cup of coffee per day, one restaurant meal per week, one pizza delivery per week, a daily 20-ounce soda, and an $8 daily fast-food lunch can easily come to $650 per month. 

I'm not saying you can't have those things, if they truly bring you happiness and your income is high enough to afford them. However, many people just absentmindedly purchase those kinds of conveniences without considering the opportunity cost. 

For instance, investing the $650 per month those minor expenses total into a low-cost index fund that earns the S&P 500's historical (1871-2014) return of 9.1% would total $130,000, $440,000, $1.2 million, and $3 million after 10, 20, 30, and 40 years, respectively. 

With such an enormous sum, one could easily build a diversified portfolio of quality dividend stocks and MLPs that yield 5% to 6% and can provide up to $180,000 per year in dividends and distributions. That's more than triple the average American's household income

Keep in mind this is what's possible just from eliminating a few daily or weekly expenses from one's budget. Many people, if they really consider their long-term goals and what makes them truly happy, could potentially cut much more out of their monthly spending and achieve financial independence much sooner.

Jason Hall: Too many people think the American dream is built around "stuff," and they end up acquiring things with expensive debt, especially credit cards. 

Don't get me wrong: Credit cards aren't inherently bad. With some great rewards programs available, savvy spenders can actually make money. My family has two primary credit cards we use for almost every purchase, and we will net almost $2,000 in cash back this year.

Here's the key: We spend within our means and pay them off every month. Credit cards are only "bad" when you carry a balance, and when you use them to pay for things you can't afford or don't need. 

Credit cards charge between 15% and 25% annual interest rate in most cases. So every dollar you pay in interest is a dollar you can't use to save for retirement or pay for your kid's college education, a vacation, or some other leisure activity. It's doubly worse if you're paying interest on a frivolous purchase to begin with, throwing good money after bad, as the saying goes.

The American dream is about financial independence -- the ability to live life on your own terms. Expensive debt such as credit cards can be a double-whammy at keeping you from having the life you want. 

Matt Frankel: One thing investors need to do if they want to build wealth is to change their mindset to a truly long-term style of investing.

The reality is that the average investor underperforms the market, something several studies have confirmed. One study, from financial research firm Dalbar, found that the average investor averaged returns of only 3.7% annually over the past 30 years -- a time period during which the S&P averaged 11.1%. Another study by Richard Bernstein Advisors that focused on just the past 20 years found similar underperformance, with returns of less than 3% when the S&P averaged about 9.5%. Even more shockingly, investors actually underperformed three-month Treasury bills during that time period -- an investment that's just a step above keeping money in cash.

The main reason both studies cited for the terrible statistics is that people tend to move money in and out of the markets. Common sense tells us that the way to make money in stock is to buy low and sell high, but investors tend to do the exact opposite. When markets crash, too many people panic and sell at the worst possible time. As Richard Bernstein said, "When chaos occurred, investors ran away." On the other side, many investors chase high returns by buying "it" stocks on hot streaks, just to see their profits grind to a halt.

The takeaway is that the best thing you can do as an investor is to buy high-quality stocks -- and keep them, no matter what the market does. Admittedly, it can be scary to hang on when everyone else is panicking, or to avoid buying hot stocks when everyone else is, but this discipline will make you rich in the long run.

Jordan Wathen: The single best thing I ever did to improve my finances is automate my savings. A percentage of my checking balance is automatically moved into my savings account. From there, another percentage is automatically sent to retirement accounts and the like.

It's often said that when you automate your savings, you'll never know what you're missing. This statement simply couldn't be more true. I never notice what's missing in my checking account, nor do feel I'm cutting too deeply in my budget, but I definitely notice that I'm piling up more and more savings over time.

Vanguard's data has shown that in workplaces where retirement plans are opt-out (meaning employees have to jump through hoops to stop saving, not to start saving), 90% of employees tend to save for retirement, compared with 34% of employees at opt-in workplaces. Additionally, Fidelity's data shows that young people who start automatically saving from day one are significantly more likely (76% vs. 20%) to keep saving.

The single greatest thing you can do to live the American dream is take you out of the equation by automating the steps to get to your American dream.

Sean Williams: One of the most important steps you can make today to put yourself on the path to the living the American dream is to go to college and major in a field that'll give you the opportunity for socioeconomic advancement. 

As my Foolish colleagues have pointed out, investing for the long term, taking advantage of tax-deferred or tax-free retirement accounts, and budgeting are all keys to preserving and building on the capital you've saved. But having a higher income from the start is what can really kick-start your ability to save and invest. 

Instead of college as an exception to the rule, it's become something of a prerequisite in today's job market. According to data from Pew Research in February 2014 (which was in 2012 dollars), the median salary of a millennial aged 25 to 32 with just a high school diploma was $28,000. A four-year college degree or higher netted a median salary of $45,500, all other things equal. Over 40, years that's a $700,000 nominal income difference, and with investments (and reinvestments) we could be looking at a multimillion-dollar difference. 

Keep in mind that going to college doesn't mean you need a degree from Harvard to garner a nice annual salary. You can oftentimes get a substantial return on investment from a local or state college. However, the point is that making the choice to go to college will provide you with more salary leverage and economic opportunities throughout your lifetime than if you don't have a degree. 

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