When the discussion about old money vs new money springs up, many people believe that there are simply two sides to the origin of wealth. The basic explanation is that new money is earned while old money is inherited. While this explanation gives a fair idea of what these terms mean, that’s not all there is.
Let’s learn a bit more!
What Is Old Money?
Old money refers to wealth and fortune passed down and sustained within families over many generations. European ideas of old money include royalty, aristocrats, and nobility such as the Rothschilds and Britain’s Royal Family.
However, old money is a tad different in the United States. The country is young, so the US old money obtained wealth through successful commercial ventures.
For instance, the Rockefeller family rose to affluence and prominence by producing oil in the 19th and 20th centuries. The Hearst family is worth $35bn, and the Kennedys are still going strong.
What Is New Money?
New money is a term used for recently acquired wealth or fortune. Affluent people in this category earned their money instead of acquiring it through inheritance and are often referred to as self-made billionaires or millionaires.
New money, also known as Nouveau Riche, was used in a derogatory fashion, as this class of wealthy people had to work for their wealth to climb the social ladder. Traditionally, new money is tagged inferior to old money because new money seemingly lacks the prestige, values, and traditions attached to generations of wealth.
Furthermore, the label is also used to identify self-made affluent people. Celebrities and entrepreneurs often fall under the new money category. For instance, Jeff Bezos is the new money, as well as Falguni Nayar, Elon Musk, Robyn Fenty, Marian Ilitch, Mark Zuckerberg, Jack Ma (the founder of Alibaba) etc .
Old Money vs New Money Behavior Examples
How these two wealthy categories behave, i.e what they spend their money on and how they act, is worth considering to understand both terms in-depth.
How Do Old and New Money Manage Their Finances?
Regarding spending habits, each label’s trends differ. For instance, old money spending is set in stone, governed by traditions. They have their go-to hotels, resorts, legacy brands, etc.
As a stereotype, old money families are considered frugal, as they’ve been raised to view their wealth as the families’ wealth. Therefore, they feel responsible for passing the wealth to the next generation. However, this doesn’t imply that they don’t spend extravagantly, as they buy millions-worth real estate, custom-designed cars, expensive jewelry, and other luxuries. Most importantly, in old vs new money comparisons, they are seen as practical spenders since they consider large purchases as serious investments.
New money generations, on the other hand, have not been used to having access to huge funds from the moment they were born. It is far from shocking that they would spend their money frivolously on flashy cars, extravagant designer clothes, or luxurious travels. Moreover, there have been instances where celebrities and artists squandered their wealth in the shortest possible time. Examples include Nicholas Cage, Mike Tyson, and Denis Rodman.
Thus, for new money people, spending money is primarily an experience while old money sees money primarily as a means of investment, even if the purchased item is for personal use.
Old money vs new money houses are different in a way that the oldies use their homes for lavish receptions whereas new money prefers to treat their guests outside their homes. Special occasions are usually celebrated in a posh restaurant, possibly with a bit of publicity. Old money houses have dining areas designed for gala dinners.
Old vs New: Social Perception
Old money vs new money statistics indicates that 87% of people earning over $90,000 annually don’t consider themselves rich or poor. Moreover, a recent analysis revealed that people earning over $300,000 annually could be tagged wealthy. Despite this, the social perception between old and new money differs. Old money families are often viewed as refined, respectable, educated, and wealthy. An old-money family typically makes efforts to stay out of the spotlight, unless the basic purpose of it is to enlarge their wealth. For instance, Paris Hilton used the media to build her own brand.
However, new money people often have a grass-to-grace story, implying that they didn’t come from wealthy or respectable families. As a result, new money families aren’t considered upper-class, irrespective of their wealth, until they become old families themselves.
It is easy to distinguish the wealth source when comparing new vs old money — new money is simply, well, new, i.e. recently earned! That said, athletes, celebrities, and upcoming entrepreneurs fit in this category.
As stated earlier, old money families inherit their wealth from fortune handed down through generations. Many old money families in the States descended from early industrialists.
New Money vs Old Money: Leisure & Hobbies
The newly rich will probably purchase first-row seats for an NBA game and have their photos published all over Page Six. A member of the old rich family grew up playing polo, tennis, skiing or riding horses. While soccer, football, or basketball can be played almost anywhere with a pair of sneakers and a ball, sports such as golf or horseback riding require much pricier equipment.
Consequently, the new money community is more difficult to approach.
Why Does Old Money Hate New Money?
The question is perhaps a bit too harsh and stems from certain prejudices which probably originate from the fact that, as a community, old money is more private and closed than new money. We have just explained one of the potential reasons — the classes simply have different pastimes.
Moreover, new money typically thrives on people’s attention and adoration as they splurge on luxuries. The old money is more conservative, shunning activities that may affect the family’s wealth and reputation. In other words, these two typically have little in common.
Bear in mind, though, that these are not set in stone. Bill Gates, for instance, certainly does not prefer the spotlight unless it’s related to business or philanthropy.
We can deduce that old money families achieve a great feat handing down generational wealth. Therefore, it’s prudent to follow in the old money families’ footsteps for financial success, but also look up to the entrepreneurship character of the new money.
Learn valuable lessons from old money vs new money rivalry and take them to your advantage, even if you may not wish to make an empire out of your family name.