Everyone wants to live comfortably and happily. For many, that looks like accumulating wealth. Who doesn’t want to be the next rags to riches story after all?
Being “rich” is a destination many of us hope to achieve, but we don’t always think about the differences in wealth, notably the spectrum of wealth and how long one’s wealth has been around. So, old money vs new money. What’s the difference?
Old Money vs. New Money
Old money refers to families who have been wealthy for multiple generations, while new money refers to families who have only recently become wealthy. When it comes to new money vs. old money, Hollywood stereotypes have probably shaped what picture comes to mind. But do these depictions hold any truth?
What is old money? Old money refers to generational wealth. These individuals and their family members are seen as the upper class. Many old money families have a more traditional approach to their inherited wealth and maybe less flashy in their spending. Old money folks often place a high value on education and hard work, and they may be more likely to give back to their communities through philanthropy.
Some well-known old money families include the Rockefellers, the Vanderbilts, the Rothschilds, and the DuPonts. In popular culture, old money families are often depicted as snobbish and pretentious. However, not all old money families are alike, and many are very down-to-earth.
Take the DuPont Family, for example. The Dupont family has a long history of philanthropy, donating money to causes such as education, the environment, and medical research. The Duponts have also established several charitable foundations, including the DuPont Fund and the DuPont Legacy Foundation.
The DuPont Fund is one of the largest private foundations in the United States.
New money refers to self-made millionaires (and even billionaires) such as Bill Gates and Mark Zuckerburg, who made their own riches. Individuals and families with newfound wealth may be more ostentatious in their spending and may not place as much emphasis on tradition as those with inherited money. New money families may also be more likely to invest in riskier ventures, such as tech startups.
New money examples include professional athletes, movie stars, musicians, and self-made business owners who run successful commercial ventures. Unfortunately, in popular culture, new money is often depicted as being gaudy and crass, making frivolous spending choices. Additionally, they’re shown to spend extravagantly to keep up with high-class society.
However, not all individuals with new money are alike, and many are very humble. These people have generated their wealth themselves and have risen from the lower and middle classes.
Old Money vs New Money: Key Differences
While both categories include individuals with money, there are key differences between the groups.
Inherited vs. Self-made
One key difference between old money and new money is the wealth source, or how these wealthy people accumulated their wealth. Old money is typically inherited by a family’s next generation, while new money is often self-made individuals. These differences can lead to varying attitudes towards work and wealth. For example, old-money families may be more likely to view work as a duty, while new money families may see it as a means to an end.
Old money families often have a history of wealth that dates back multiple generations. As early industrialists, the Rockefellers, for example, made their fortune in oil. The Vanderbilts built their wealth through shipping and railroads. And the Rothschilds gained their riches through banking.
In contrast, new money families often have a history of wealth that is much shorter. The Kardashians, for example, made their fortune through reality television and branding. The Trumps built their wealth through real estate and entertainment. And the Waltons made their fortune through Walmart.
Another key difference between old money and new money is how they approach spending. Old money families are often more conservative in their spending, while new money families may be more flashy. Old money families may also value experiences and philanthropy, while new money families may prefer material possessions.
For example, old-money families may take luxurious vacations but be more likely to stay in a five-star hotel. On the other hand, new money families may take a more extravagant vacation but stay in a less expensive hotel. Old money families may also donate to charitable causes, while new money families may not.
Old money families are often portrayed as being more snobbish and pretentious, while new money families are often seen as hung up on social perception, social standing, and buying flashy cars. However, not all families fit into these stereotypes. Old money families can be down-to-earth and humble, while the newly rich can be charitable and generous. It’s important to remember that not all families are the same, regardless of how they came by their financial success.
Both groups value hard work, determination, and a strong work ethic. They also tend to place high importance on education. However, old money families may be more likely to value tradition and history, while new money families may be more likely to appreciate innovation and change.
Old money families are often seen as being more reserved and formal, while new money families are often seen as more outgoing and relaxed. However, not all families fit into these stereotypes. Old money families can be friendly and welcoming, while new money families can be cold and aloof. It’s important to remember that not all families are the same, regardless of how they got their money.
Old money families tend to live a lifestyle following tradition passed now between the generations, drive nice cars, and maybe more likely to send their children to private schools.
On the other hand, new money families often embrace a more modern lifestyle. They may own apartments in the city, drive showy cars, and maybe more likely to send their children to public schools. Unfortunately, new money families are also more likely to spend impulsively.
Does It Matter if You’re Old Money vs. New Money?
At the end of the day, it doesn’t matter whether you or your family is old money or new money. However, it is important to be aware of the stereotypes and expectations of each label, but keep in mind that stereotypes are rarely accurate.
Old Money vs New Money FAQ
Does Old Money Look Down on New Money?
There is a stereotype that old money families look down on new money families, but this is not always the case. Instead, old money families may be more likely to judge others based on their values and lifestyle choices rather than how much money they have or social class.
Is There a Disparity in Wealth Between New Money and Old Money?
While it is difficult to generalize, old money tends to be more wealthy than new money because the family’s wealth is passed on to future generations. This is because old money families have had time to accumulate more wealth, while new money families are still building their own wealth.
How Does Old Money Stay Rich?
New money families typically get rich through hard work, determination, and a strong work ethic. They may also inherit wealth from their families or come into large sums of money through business ventures.
They stay rich by living below their means and practicing smart spending habits, investing their money wisely, and passing their wealth down to the next generation.
How Many Generations Is Considered Old Money?
There is no definitive answer to this question, as it varies from family to family. However, many people consider old money families to be those who have been wealthy for three or more generations.
The Bottom Line
Old money vs new money is a controversial topic with many stereotypes and expectations attached to each label. At the end of the day, it doesn’t really matter whether your family is old money or new money. What matters is how you choose to live your life. If you’re happy and healthy, that’s all that matters. So old vs. new money, it makes no difference. Be yourself!
Samantha Hawrylack is a personal finance expert and full-time entrepreneur with a passion for writing and SEO. She holds a Bachelor’s in Finance and Master’s in Business Administration and previously worked for Vanguard, where she held Series 7 and 63 licenses. Her work has been featured in publications like Grow, MSN, CNBC, Ladders, Rocket Mortgage, Quicken Loans, Clever Girl Finance, Credit Donkey, Crediful, Investing Answers, Well Kept Wallet, AllCards, Mama and Money, and Concreit, among others. She writes in personal finance, real estate, credit, entrepreneurship, credit card, student loan, mortgage, personal loan, insurance, debt management, business, productivity, and career niches.