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Old Money vs New Money: What’s The Difference?

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In this article, we compare Old Money vs New Money:

Many of us have heard the terms “old money” and “new money,” but what is it exactly, and how do they compare?

For example, were you born into money, or did you earn it?

There is a significant difference between old money and new money, which is how the individual acquires it.

However, it is more intricate than simply inheritance vs earnings.

So, let’s explore Old Money vs New Money and which is better!

Old Money vs New Money Comparison Graphic


Old Money vs New Money

The main difference between old money and new money is how they acquired their wealth. Old money is inherited through the family while new money has been earned.

Individuals that come from old money are usually accustomed to wealth because it’s what they’ve seen since childhood. But on the other hand, new money individuals are generally not accustomed to wealth and therefore feel the need to live a more lavish lifestyle.

Individuals with new money likely spend more on flashy items. This is because they remember the hard times before gaining their wealth. Therefore, acquiring these items makes them happy.

Old Money vs New Money Comparison Chart

Old money is so used to wealth that fancy items don’t bring them the same satisfaction. Instead, they are more concerned with reputation and status amongst the family.

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What is Old Money?

Old money is defined as wealth that’s been given to an individual. This wealth is usually acquired through generations and passed down from one family member to another.

Old money will also represent a social class they belong, and the old money ensures the individuals can live a wealthy life in an affluent society.

Individuals with old money don’t come from the average blue-collar or middle-class family. But instead, they grew up with wealth and have not experienced financial hardships.

Old money families are upper-class compared to new money individuals, for example, the Rockefellers.

The Rockefellers made their fortune in the oil industry in the late 19th century and early 20th century. Today, the family is worth approximately $11 billion.

Their fortune is held in a trust that ensures the family’s wealth remains intact for future generations.


Old Money Privileges

Having old money comes with certain privileges.

These include:

  • Quick access to significantly large amounts of money
  • Ease of travel to anywhere in the world
  • Memberships to elite clubs

They keep a close circle and don’t often leave their bubble because they relate to one another and understand the rules of discrepancy.

Old money families are planners and think generations ahead, whereas new money just achieved their fortune and usually desire to spend it now.

Wealth is not the only thing that gets passed down from generation to generation:

  • Traditions and Values
  • Wealth Development Strategies
  • Social Class and Status
  • Business and Societal Connections
  • Power

The top three oldest family fortunes in the United States are:

  • Du Pont Family: The family’s wealth began in 1802 when French refugee E.I. Du Pont founded a political gunpowder mill in Delaware. Their net worth is approximately $14.5 billion.
  • Mellon Family: Irish immigrant Thomas Mellon made his fortune from real estate and banking in 1841. The family’s approximate net worth is around $11.5 billion.
  • Rockefeller Family: John D. Rockefeller struck it rich in oil in 1858, and their net worth is around $11 billion.


What is New Money?

Since old money gets passed down from generation to generation, new money is a fortune that got acquired in the first generation. While businessmen and women easily made new money in the 18th and 19th centuries, today, the industries have broadened, and opportunities for wealth are more accessible.

Tech billionaires, entrepreneurs, professional athletes, or CEOs accumulating immense wealth are examples of new money.

Those with new money are the first in their ancestral lineage to have wealth.

They are self-made millionaires or billionaires who hit it big with smart investments decisions, ideas, or talents.

New money gets described as wealth that got earned, not acquired, and their social status is listed below old money.


Examples Of New Money

Examples of new money billionaire’s in the United States:

  • Bill Gates: Gates founded Microsoft with his friend Paul Allen in 1975. Today, his vast net worth is estimated to be $85.7 billion.
  • Warren Buffet: Buffet was only 11 years old when he purchased his first stock investment. Today, he is chairman and CEO of Berkshire Hathaway, and his net worth is estimated to be $70.1 billion.
  • Elon Musk: Musk is the CEO of Tesla and Space X and is currently worth approximately $282 billion. He is the richest man globally and worth $100 billion more than Jeff Bezos, Amazon founder, worth $183.6 billion.

Mark Zuckerburg ($84 billion), Jeff Bezos ($177 billion), Steve Jobs, and Elon Musk have all made significant wealth throughout their career.

They have paved the way for new money individuals looking to acquire wealth through entrepreneurship.


New Money vs Old Money Habits

New money individuals tend to be flashy with their cash. However, this doesn’t apply to all new money individuals (i.e., Warren Buffett).

Athletes, celebrities, and young entrepreneurs purchase expensive cars and large homes to show what they have because it’s new to them.

Old money individuals, society’s elite, often look down on new money and consider them below their status, even if new money’s net worth is significantly higher.

They consider that money leveled them up to a higher class, but they have a different mindset and got brought up in a completely different society.

Since old money has been acquired and passed down over multiple generations, their money has diluted over decades as families grow, and so does their philanthropic work.

For old money to survive, the successors have to use what they inherited to create their dynasties.

Andrew Mellon is an excellent example of increasing his inheritance to establish an empire. He helped to finance companies, such as the New York Shipping Corporation, Standard Steel Car Company, and Gulf Oil, to name a few.

After World War I, he was also heavily involved in politics and served as the United States Secretary of the Treasury for 11 years.


How Old and New Money Manage Their Finances

Old money and new money individuals manage their finances entirely differently.

Here are some key differences between the old money vs new money:

  • New money is about investing and spending right now. Old money is thinking generations down the line. New money individuals seek a fast, high-risk investment for a large return, whereas old money grows wealth sustainably. They see their wealth as the “family’s wealth,” not individual wealth.
  • New money is flashy and spends money quickly. They have no problem talking about money and loud about investments. Old money families teach their children not to talk about money and not show their wealth.
  • New money loves the publicity that comes with fame and fortune. Old money families protect their privacy and keep their family name and reputation clean. They will pay for this level of privacy.
  • New money wasn’t raised with the prestigious education and etiquette that old money children did. Instead, old money children get told what to wear, how to behave in public and formal etiquette.
  • New money individuals are open to meeting new people, and others can relate to them. However, old money families fear that new people coming into their spaces can affect their private lifestyles. Therefore, old money children are encouraged to marry into families of the same caliber.


Old Money vs New Money Spending

When old money spends, they follow the same traditions and patterns throughout their lives. So, when they spend money, they tend to stay within their comfort zones.

They have their go-to luxury hotels, resorts, clothing brands, and designers.

Since they feel it is the family’s wealth, they have a higher sense of responsibility to preserve and grow it. However, this does not mean that old money doesn’t like to spend money.

They purchase expensive realty, jewelry, and other luxuries, but much of it is smart financial investments.

Since new money doesn’t have access to trust funds from the moment they are born, they often spend frivolously on a lavish lifestyle.

New Money Purchasing Habits

For example, Nicolas Cage reportedly lost his $150 million fortune between 1996 to 2011 on expensive artifacts, real estate, and cars.

In 2007, he got ordered to pay the IRS $6 million, and they placed tax liens on his properties.

Another famous new money player that lost a fortune is Michael Jackson. A forensic accountant estimated that Michael Jackson owed somewhere between $400 and $500 million in debt.

He had to file a foreclosure on his Neverland property and had various loans that he couldn’t pay.

Finally, Dennis Rodman and Mike Tyson are a few more celebrities that lost their wealth.


Stealth Wealth

Stealth wealth is when people conceal their fortunes from others. This is a common concept in the battle between old vs new money.

Stealth wealth is a critical concept often used by old money.

When people have money, it is not far-fetched to find people who will do anything to take advantage of this fact.

People with old money are well accustomed to the idea that not everyone is their true friend and that some are hoping to take advantage of their wealth.

Stealth Wealth is a way to hide the amount of money you have. People with old money and even some celebrities live well below their means.

For instance, they take public transportation or drive a more average vehicle in favor of a flashy or gaudy car.

Stealth Wealth can be the way people dress, the vehicles they drive, and more.

This is a clear-cut way the old money crowd can realistically preserve their wealth for generations to come. It is also an easy way to differentiate between the old money and the new money crowd.

There are many reasons why you want to keep your money a secret:

  • People will treat you differently. Old money associate themselves with others in their class. New money individuals may attract people who want to use them and get a piece of the pie.
  • Negotiations are easier. When you walk into a negotiation, you have the knowledge, not the other party.

The new money crowd is more likely to express their newfound wealth in extravagant purchases.

In contrast, the old money crowd is more likely to opt for understated or tasteful purchases.


How To Live a Stealth Wealth Lifestyle

Here is how to live a stealth wealth lifestyle with new money :

  • First, don’t share your income information. No one needs to know what you make.
  • Avoid expensive jewelry and cars. Of course, you should spoil yourself, but keep life simple as you accumulate your new money wealth.
  • Diversify your assets. Do you know the saying, “don’t put your eggs in one basket”? Not only are you protecting your money, but it’s easier to conceal it.
  • Avoid social media. This is a good trick that old money families learned right in the beginning. Social media is a big blinking sign saying, “look at me, I have money.”


Charitable Causes and Philanthropy

While both old and new money has philanthropic ventures, new money individuals are more inclined to be involved in charitable causes.

On the other hand, since old money is focused on wealth preservation, they are less prone to spend money on charity.

New money individuals tend to believe in paying it forward by giving money and time to charitable causes they may not have had access to growing up.

For example, the famous pop star Rihanna has a net worth of approximately $1.4 billion.

She has started multiple charity organizations, such as the Believe Foundation, which helps terminally ill children.

She also donated $1.4 million of her money to help Barbados fight Covid-19.

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Old Money vs New Money Differences

Old money is wealth that families pass down from generation to generation. They are entirely focused on preserving their fortune and privacy.

Being born into an old-money family means being raised with a specific rule book on managing their trust funds, learning financial growth strategies, and protecting the family’s privacy.

New money is individuals who gained a fortune, such as through wise investment decisions, entrepreneurship, talents, or founding tech companies.

They tend to be flashy with their lavish lifestyles and aren’t afraid of publicity.

People with new money are also inclined to make a high risk, high return investment with their money.

So, which is better? Old money or new money?

It all depends on your perception of wealth and what is important to you individually.

New money loves the glamorous lifestyle and being in the spotlight. Old money prefers a quiet lifestyle and isn’t ashamed to pay for privacy.


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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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