In society, we often see the rich, the wealthy, and those that look like celebrities. These people go around and flaunt their money. That is what we perceive from specific individuals. Many rich people do not flaunt this money. They are part of the older side of wealth. To look at they are from the old money part of society. Those that were born with money and strived to continue to keep it. These are the folks that were born with inherited money or in other words generational wealth.
We often hear the names of great families when thinking of old money. Rockefeller, Rothschild, or Vanderbilt are names that ring in our ears when we think of some of the most wealthy families in the U.S.A. Their money came from earlier when their families had built great wealth. As you look in history, many families have come from long lines of riches. These old money families exist and therefore have a place when we talk about money.
So what is this old money?
What Is Old Money?
Old money is the money that has lasted lifetimes to be passed down from generation to generation. These are the heirs and heiress of super-rich individuals that had created wealth a long time ago. This is the money that has been saved and invested over and over again. The people in the upper part of society are often connected to old money.
We can see it in families. Their wealth is passed down through wills, estates, and trust funds. As their money gets passed down, the children and family members can live vastly comfortable lives full of affluent society.
We should not judge these people at all. Being part of the U.S.A., the old people we think of are part of 2-3 generations worth of new money. America is a more contemporary country overall, so the families living in Europe and other parts of the world have more traditions and societal influences that have become a nuance in American society.
When we think about it, not all of us have the privilege of being born into a wealthy family. We have to work hard to achieve great wealth and become financially stable. Lots of new people have entered the realm of the richest people in the world. There are new millionaires created all the time. The billionaire class is growing with many people being added. They have accumulated and amassed great wealth through investing, saving, hard work, and becoming some of the wealthiest people in the world through innovation.
These are the new money people. People like Jeff Bezos, Warren Buffett, and Mark Zuckerberg are among the Forbes list of Richest people. They were neither rich nor poor but strived to work themselves to be the wealthiest people in America.
So what is new money anyway?
What Is New Money?
New money has referred to the people that have recently acquired wealth, and it is unique to them and their families. These are people like Bezos and Zuckerberg. Their families did not pass down massive wealth to them, and they used their ideas, innovation, and business to accumulate much wealth.
New Wealth can also refer to athletes and celebrities. These people may have come from nothing, and with their talents and skills, they have created much wealth for themselves.
The new money people are not like the old money people there are many differences in lifestyles, and ways of living. The differences between old money and new money can be numerous, but there are many similarities.
Here Are 3 Differences between Old Money and New Money:
There are many differences and similarities between old money vs new money. They often start from similar paths, but they look different as the money ages from generation to generation.
1. The Source of the Money
When you look at where the money comes from, you will notice that old money is usually from generational wealth, and it is the wealth passed down from generation to generation.
A person within the family has created much wealth for the whole family and continues to ensure that the lineage of wealth is passed down. This can be done through trust funds and other mechanisms to have vast wealth being passed down.
On the other hand, new money is not started from this generational wealth, and it is created in a shorter period. If you look at people like Jeff Bezos or Elon Musk, these guys started companies that generate tons of wealth, becoming billionaires.
This can also be seen through athletes playing ball in the neighborhoods and at school. Once they can make it big in the professional leagues they will have massive contracts that can enrich their lives.
As you saw, there is a significant difference in how these two have money flowing in. One has the wealth passed down, and the other went off and created the wealth for themselves.
2. Societal Norms
When we think of wealth, there are often two images that come to our heads. We see the flashy, spending money, buying big mansions and lots of cars type of wealth. The other type is the posh, respectable Yale type of money that we may see with people from North-Eastern U.S.
That shows two different types of wealth. The old money is often seen as a respectable part of society. They are the ones that live in the North East of the U.S., with big houses in Martha’s Vineyard or even a residence in the Hamptons. They are assumed to be well educated as well.
The new money individuals are usually those that did not necessarily grow up in money. These can be seen as those that go from nothing and rise above to achieve much wealth.
There is a difference in how people act within society. It is a nuance of having money with those that are new to it. The old money folks have seen and felt money over the generations and feel entitled to more respect.
3. The Spending of Money
Spending money is something that was just talked about. As we see through both sets, spending is something that looks different among people.
Typically, people that have come from generational wealth or old money have a more frugal spending habit. They grew up with cash and did not seek to spend it everywhere, and they know how to stop spending so much money and have learned through generations of education.
On the other hand, the new money is seen as more flashy. These are the people that have gone from dirt poor or middle class to the richest around. Celebrities or athletes tend to have massive mansions and lots of cars. As you see even folks like Mark Zuckerberg or Jeff Bezos may buy lots of real estate or even new toys like a massive yacht.
The significant differences are in the ways people spend money. Knowing that you have created so much wealth, it only seems fitting that you would spend lots of money, and Mike Tyson was known to spend about $400,000 a month. This, in turn, can set up a disaster if you spend more than you earn.
What Can We Learn From Old Money or New Money?
It is a question that has popped into my head many times. Is there a point that we can learn from how both live?
Lessons From Old Money
As I think about it, living a frugal life instead of a more exuberant one can allow your money to grow longer and sustain more generations. Having generational wealth can allow your future offspring to have opportunities that we may not have afforded as a child. These are things that you can take from old money folks.
They are insisted on keeping wealth within the family. It has been seen that after a couple of generations, wealth can be spent. Still, if good financial literacy goes along throughout the ages, then your family can continue to sustain itself.
Some Lessons From New Money
As we think about the lessons learned from new money, wealth is not something that only those from old money can create. We all have an opportunity to go and create wealth—the new money generation of silicon valley billionaires, athletes, and celebrities that come from nothing.
That is motivation and inspiration to work hard, take risks, and make things happen. It is often a self-defeating prophecy that you grew up poor and, therefore, die poor. Once you look at those new money people, you realize that could be me as well. It gives hope, and confidence, and inspires us to achieve dreams.
What Should Our Mindsets Be?
Looking at the concepts of how old money came about, we must learn from both new money and old money. They show us that you must change the way you think, and there must be a new mindset on how to accumulate wealth and preserve it. Amassing wealth is not easy, and just being able to invest with little money can help even the lowest start to make money.
Financial success starts with learning about personal finance. It would help if you wanted to build wealth to create more of it. People are often against the concept of accumulating more assets, and they have seen people become corrupted by cash, but you must realize that money is a tool, and it is what the wealthiest people have used to become rich.
People like Andrew Carnegie knew this. He used his wealth to help people, create libraries, and donate large sums to education, leading him to be one of the greatest philanthropists in America.
It would be best if you learned how to use it to have wealth.
Old money is an excellent tool for passing down wealth. It teaches us many ways to preserve wealth and leads our family about the concepts of money, and it allows generational wealth to be passed down.
It is a stark contrast with new money as new money is a first-generation type of money. These people have made it big against all odds, and those are the people who will create their old money generation.
In the next couple of generations, we will see the fruits of our labor and see that some of the wealthiest people in the world will pass down their money in the form of inheritance which will stream into various old money generations.
So as we learn from both of these, we must take the good and learn from the bad. As we learn the lessons taught by these people, we need to know that as we work hard, we can make things possible.
Where do you stand on this? Are you from old money or new money?