The Differences Between Old Money and New Money
vemuda.com - Hi guys, welcome to our mini blog. Today we are going to talk about old money vs new money. Without wasting your time, we are going to bring you to understand about old money and new money, check it out.
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.
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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 post, we’ll be diving into the differences between the two, and now let’s get into it.
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
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.
7. 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.
8. 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 reading. With that being said, have a great day, and see you all in the next one.