What is old money?
Old money basically refers to inherited wealth. When a family has old money it means
they have wealth that has been passed down for many generations. In a way,
old money also describes a social class. Old money families are more often than not
considered to be more upper class as compared to those with new money. The Rockefellers
and the Vanderbilts are examples of old money families who have been wealthy for generations.
The rules of old money change depending on many factors which aren’t limited to
finances. Whether you’re considered old money or not depends on the historical era in question
and your general location. European old money for instance, are mostly nobility,
and these are the royals and aristocrats who have amassed wealth and have titles. The most
famous being the British Royal Family and, to a smaller extent, the Rothschild’s. Old
money examples, however, changes when you cross the Atlantic. In the States,
families considered as “old money” would be relatively young by European standards,
which makes sense since America is younger than many of Europe’s royal bloodlines.
This means that while the European families were accumulating wealth,
Columbus had only just begun discovering the American continent. This is one of the reasons
why historically, Americans haven’t thought much of royalty and titles.
Instead, the old money families reached financial prominence more recently through
companies built on successful commercial ventures. The Rockefellers, for example,
amassed a lot of wealth through their oil venture, which started in the nineteenth century,
while the Vanderbuilts obtained theirs from their railroad empire that began in the same century.
What is new money?
New money is a term used to describe those who didn’t inherit their wealth but rather
earned it. It is a term that is mostly use to describe self-made millionaires or billionaires.
Most pop culture icons, internet sensations, NBA players (or any sportsperson for that matter), and
contemporary entrepreneurs are just some of the many new money examples. Instead of having money
passed down to them from their ancestors, they amassed their wealth within their own lifetime.
Much to the displeasure of those who pride themselves as coming from old money,
new money is often richer and this is something that’s frowned upon by
the former. They are often seen to lack class, prestige, traditions,
and values that are associated with families who have enjoyed their wealth for generations.
Regardless of the fact that new money has more wealth they tend to be less respected and seen
as less worthy. So, while the Vanderbilt’s and the Rockefellers have prestigious institutions named
after them, people like Jeff Bezos are seen merely as individuals who happen to have lots of money.
Having said that, in today’s video, we’ll be diving into the differences between the two.
So make sure to give this video a big thumbs up for that YouTube algorithm,
and now let’s get into it.
Their Source of wealth
One of the easiest ways to differentiate between old money and new money is the source of it. As
previously mentioned, old money has been passed down through generations, while new money has
been recently earned. In America, you’ll find that a majority of the old money families are
descendants of industrialists, while new money can be found in entrepreneurs and celebrities.
Their Social perception
Another difference between the two is their social standing. There’s usually a lot more to old money
than just the number of generations the wealth has been inherited. Old money families are often found
in the North-East and are traditionally thought to be more refined, educated, and respectable.
New money families have more of a rags-to-riches kind of story and are often associated with those
within the west coast. These families didn’t always have money but instead, obtained their
success from business or entertainment and made their own wealth. Although new money families
might be as wealthy as the old money families, societally, they are not seen as upper class.
Their Spending habits
One of the most significant distinctions between old and new money comes down to
how they spend their money and the way in which their wealth affects their lifestyle.
Families with old money tend to be more frugal with their wealth. They grew up knowing that
their money isn’t theirs, but rather the family’s money. And it’s upon them to ensure that the
wealth is passed down to the next generation. This doesn’t necessarily mean that they don’t
spend extravagantly: they, of course, live in luxurious homes, drive expensive cars
and wear the best clothing. But, they tend to spend more practically and view large
purchases as investments rather than splurges. If you’re looking in from the outside, you might
not realise just how wealthy these families are. They may seem like any other family and often make
an effort to stay out of the spotlight. Families with new money are more likely
to consider their money theirs to use as they please as opposed to something they
have to pass down for generations. New money is often associated with more frivolous spending,
or in other words, they’re known to “show off” the money. We’ve all read or heard about
the numerous celebs who became millionaires but then lost it all within a short period of time.
A good example of old money is the founder and owner of Walmart, Sam Walton. When he
passed away his family’s worth was roughly twenty-three billion, and this wealth was saved
and passed on as new generations were born. New money folks have only just gotten used
to having excessive amounts of money. They’re more concerned with how and where to spend it
rather than how to invest, save and create generational wealth. Getting caught up in
the ‘now’ makes it a challenge for them to think about saving for the future.
They aren’t used to having money at their disposal
and this means planning and saving for the future is often more challenging.
Hushed or loud
Have you heard of this saying: Wealth whispers, but money talks?
This perfectly encapsulates the two categories. Old wealth families rarely talk about money. They
are taught from an early age not to mention money and it’s almost considered taboo. Old
families do not want to risk standing out so they prefer to play it safe.
New money is different because they are always shouting about their wealth. They are often vocal
and willing to discuss their wealth to anyone and everyone who is willing to listen. They will drive
down the street with a flashy red Ferrari and purchase enormous mansions because they didn’t
grow up with much. This stems from the lack of financial security they were brought up with.
The kind of childhood a person went through, to a large extent, impacts their adult life.
They want to experience everything they missed out on as kids and usually believe that money is the
solution to all their problems. They wear wealth on their shoulders as a symbol of status to show
the world, just how rich and successful they are. But of course, this doesn’t apply to all of them.
Being in the spotlight vs backstage
Whereas new money prefers to be centre stage, old wealth prefers staying behind
the scenes. Old wealthy families believe it is vital to protect their family name.
Shame upon the family needs to be avoided at all costs. This means they prioritise privacy
over everything. They will pay to maintain a clean family image and have privacy. They
are always keen on keeping a low profile and do whatever’s necessary to remain anonymous.
Then we have new money who scream from the tabloids and social media.
Seeing as most new money individuals come from the entertainment industry,
it’s no surprise that they have the spotlight on them. This is the source
of their finances. This being said, there are some new money families who have accumulated a
comfortable amount and then completely ditched the limelight for a quiet life in the suburbs.
Entertainment
Old money is regarded as cultured for a reason. Their source of entertainment may
come from a night at the opera or a classical ballet show. Many of them fund museums and
donate art pieces which is another source of entertainment. Polo games and horse races are
another favourite for this class. Think of their entertainment as something of quiet refinement.
While someone who is a new money member can also enjoy these things,
you’ll also notice that they take their money to fund new experiences. Jet setting
around the globe in first class, going to multiple Michelin star restaurants,
getting VIP tickets to clubs and concerts. These are some of the ways new money enjoys their time.
How old money stay rich
Old money families stay rich through a combination of investments and trusts that
are passed down through generations. These are combined with the sharing of strong financial
management principles. There is an expectation that the younger generations will continue
to manage the family’s wealth in a way that ensures it can sustain itself moving forward.
So, if you’re rich and you want your kids and their kids to stay rich,
you put some serious time into teaching them how to attract money. You’d also make sure
that the assets in which your money is held are pretty sure to continue to grow in value which
is why something like property is often the preferred option for many of these families.
The one thing that old money gets right is financial literacy. Most of us are robbed of
this during our school years. A family that has made billions upon billions for generations is
not going to allow their wealth to crumble so easily. Old money parents ensure their
kids learn how to properly manage money so that the money continues to flow in.
New money as an insult
The term ‘new money’ and ‘nouveau riche’ can be used as an insult. As the name suggests,
it’s geared towards individuals who have just recently come into a status of wealth.
At the end of the day, unless you let it get to you, there’s really nothing
embarrassing about being new money. All of the richest people we know today are
new money. When you have billions of dollars built from your own blood,
sweat and tears, does it really matter if someone tries to insult you about it?
Should you really care?
Families that come from old money take a lot of pride in the fact that
their wealth has been passed down for generations. But when you look at it,
the majority of the world’s billionaires are self-made.
Entrepreneurs like Jeff Bezos, Elon Musk, Bill Gates, Larry Page and Sergey Brin,
just to name a few, have become billionaires from the ground up.
Although they might not have the social standing that old money families possess,
there’s a lot to be said about someone who has created their own wealth through hard work.
The significance of old money and new money labels becomes less important as the number
of self-made millionaires increases. Worry less about the labels and focus more on the
lessons you can learn from both cohorts. Well, thank you all so much for watching,
give this video a like if you haven’t and subscribe if you are new.
With that being said, have a great day, and see you all in the next one.