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

Steve Cummings

old money vs new money

There are two sides to wealth. There is old money vs new money. Each one has its place in society, but they have been built differently and act in different ways. 

As you think about it, we talk about the haves and have nots of society. People see billionaires come out of nowhere like Mark Zuckerberg, Jeff Bezos, Bill Gates, and Elon Musk. We are in the area of new money, where money can be made fast and quick. The old era of old money is still looming in the shadows, but it is just not as flashy as those that have hit rich quickly. 

Let’s think about this. What is the difference between old money vs new money? At some point, you have to wonder how they are different? What does this type of money look like?

What is Old Money?

Old money is the wealth that has been passed down from generation to generation. This is the inherited money that helps keep rich people wealthy. These are the people that have grown up affluent in society. They are not from blue-collar working families or even middle-class families. Their families have had wealth with them for as long as they can remember. 

These can be families such as the Vanderbilts or even the Rockefellers. As money gets passed down, so does tradition, wealth creation strategies, and eventual affluence that comes with the wealth. 

These people are part of high society and do not need to flash their cash from street to street. 

America is relatively new compared to most of Europe. Still, as we look at families in Europe, the wealth has been passed down from generation to generation allowing their families to keep wealth and even power. This is something that is held precious to specific traditional values and pride.

What is New Money?

If old money is considered that which is passed down, then new money is the money that has been acquired in the first generation. These are those super famous athletes, entrepreneurs, musicians, and even prominent corporation CEOs. They can be the self-made millionaires of the world or even the wealthy businessman that has made it big.

When I think of new money, I think of people like Jeff Bezos, Steve Jobs, and Mark Zuckerberg. These guys were entrepreneurs that gained tons of money through innovation, entrepreneurship, and creating large corporations. 

Big-time athletes and celebrities are also some of these new money individuals. They come from almost nothing and hit it big. Their loads of money allowed them to have massive homes, flashy cars, and show that they have money. It is something new to them. 

You don’t even need to think about the billionaires in society, but also think about those multi-millionaires that have become some of the richest people in the world. 

To the elites of society, these new money people will always be considered those below their status. The new riches have brought them up into the upper class, but acting with posh and circumstance is not their way or attitude. It is the recent abundance of money that has created their wealth.

Is Old Money Still A Thing?

There are plenty of old money families still running around in the U.S. Europe is full of more old money than the U.S. As we think of some of these families, you recognize the names. 

You have the Rothchilds, Rockefellers, Du Ponts, and the list can go on. These families continue to hold a place in society as their money has been passed down into trust funds for their descendants. 

As the new age has come, New money has been the driving force of the economies around the world. Technology has helped advance the movements of many people. We can think of Jack Ma in China becoming one of the fastest-growing Billionaires in the world. As we look at the U.S., the Walton family was once started by Arkansas farmer Sam Walton that helped create one of the largest corporations in the world. 

Jeff Bezos is worth over $200 Billion, and he continues to create, innovate, and make ways to generate more money.

Put old money is the money that is inherited from older generations, and new money is the money from self-made individuals like Jeff Bezos.

As we look at the amount of new money being created, we also need to realize that there is a difference between old money vs new money. Their traditions are different. They act differently, and they have also created other avenues of wealth.

Here are 5 Differences Between Old Money vs New Money:

1. Old Money Preserves, New Money Spends

spending money

As we have seen with many celebrities and even athletes, there is a need to spend your money. When you are suddenly enriched with tons of money, you are not in the mindset of knowing what to do with it. 

I am reminded of the story of David Carr being the number one draft in the 2002 NFL draft. He had a massive signing bonus and gave his dad a calling. He asked his dad to take all of this signing bonus out of the bank in cash. As a 22-year-old, who had become a millionaire, he could not fathom the amount of money that had been placed into his possession. 

This is the reason that many lottery winners go broke. They have no way or network that has been established to preserve their wealth. It is something foreign to them. 

Old money individuals have always lived with wealth. They have people that taught them how to manage their wealth. Money is used to create more wealth and to preserve the wealth for future generations. It is a difference in the mindset of these individuals.

2. The Social Perception

The perception of the two classes of money is very different. A lot of the old money folks are some of the elitists from the Northeastern part of the U.S. They have been settled on that side of the country for generations accumulating more and more wealth. These folks have inherited their money and so, therefore, have homes in the Hamptons or even Martha’s Vinyard. It is a high-class society. 

The new money folks are those that are not in that high-class society. They may have grown up poor or even came from middle-class families. These are those fairy tale people that you have heard of. The entrepreneurs worked their way up through grit and ingenuity. They can be looked down on by those in the Old Money part of society.

3. Inheritance vs Earned Money

As we continue to talk about the differences between old money vs new money, we see that they have different ways of obtaining their wealth and fortune. Old money is all about having their wealth inherited over generations. We see this in Europe and even in the northeastern part of the U.S. The families with dynasties tend to pass on their wealth so that future generations will have money. 

New money, on the other hand, is mostly earned. Their wealth was not inherited, but they used their skills and took risks to amass a great deal of wealth and riches. These folks can be some of the big guys in Silicon Valley like Elon Musk, Mark Zuckerberg, and Jeff Bezos. It can also be some of the big-time athletes and celebrities we tend to think of with a significant amount of wealth.

4. Stealth Wealth

As we talk about the differences between old money vs new money, the one difference everyone can notice is Stealth Wealth. Stealth wealth can hide that you are rich. Some celebrities dress down, take public transportation, and even eat at home. Some people will disguise their wealth for others not to discover that they have wealth. 

You will see stealth wealth with the old money crowd. Most of the old money crowd wants to preserve their money. It is not about flashing it around. They are about trying to make sure that the money lasts for generations. 

The new money crowd is often seen buying many things. They have nice cars, big houses, and plenty of flashy items that they show off. The new money folks are also often paying for something for their entourage of friends and family. With the newness of money in their pocket, they have not yet learned financial etiquette that will help them to keep their money. 

Athletes and celebrities with new money often see spending large amounts, which is not considered stealth wealth. People see how much they have. If you want to be unknown, be like Ronald Read. 
Ronald Read was a gas attendant and janitor. He amassed over 8 million dollars in his life, and no one had a clue that he had that much money. He donated his money to several charities, and that is what I call stealth wealth.

5. Generosity is a Benefit


Speaking of giving to charities, we often find this difference between old money and new money. When you think about old money, it is all about preserving the money to pass down. Most likely, the old money folks are the ones that are not giving that much to charity. 

As we think about new money folks, they are all about giving to charity. It is the gift that they had received to make it big, and they are paying it forward. This is like my story of Ronald Read I just talked about. 

One of the most famous new money givers is Andrew Carnegie. Most of you would figure he is old money, but he grew up poor in Scotland, and his family moved to Pennsylvania on borrowed cash for possible work for his dad. He loved to read, and after he sold off his businesses, he used that money to create libraries all over the country so others could read for free. 

Having much at the end of life and realizing where you had started is where charity comes from. You see numerous old money folks that tend to keep their money in the family. Yes, plenty of old money families have charitable organizations, but you usually hear about the charity done by those in the new money categories.

Final Thoughts:

As we talk about old money vs new money, you have to realize that a bunch of these items discussed are generalizations. There are people in both categories that break the rules. Learning about the general characteristics of each group can help us to learn about how to act, how to live life, and how to make plans for wealth. 

Most people are not going to fall under the old wealth model. According to CNBC, 68% of the world’s richest people are self-made. That means that 32% of the wealthiest people inherited their wealth. 

According to a survey done by Ramsey Solutions, 80% of millionaires in America are self-made. So as we think about it, we often do not see the Old money folks trotting around. They are in the stealth wealth mode and trying to preserve their wealth. The wealth of the world is being created right now. It gives us hope. This hope allows us to pursue dreams and take risks. The old money folks are not numerous, so we know we have a chance to create something big and then give to charity and pass some of this wealth down as generational wealth. 

Learning is one of the most incredible things. We know how to act, give, and create for the future as we learn about these two concepts. 

So what are you? Old money or new money?

7 thoughts on “Old Money vs New Money: What’s the Difference?”

  1. I was privileged to work for a billionaire family for a couple of decades and have a couple of other billionaire friends. All of these inherited their money but have multiplied it through companies and investments they’ve run and made. They’ve served as CEO’s and Board Chairs for corporations founded by their predecessors and so they’ve greatly contributed to the family’s ongoing wealth. In their cases they are very generous and have set up large family foundations that donate tens of millions of dollars to nonprofit charitable causes. I was on the phone with one of them this morning who is working with a foundation I’m part of to really improve the community from a health perspective. They are trained from birth to handle their position in the world but other than that they are very nice and respectful regular people. At least the ones I’ve known are.

    • You are right that there are plenty of people that take their inherited money to grow the business of their family. You can look at the Walton family. They have grown the Walmart brand larger than Sam Walton could have ever dreamed about.

      As with being generous, I think I know plenty of Old money people that have given to others. They have been contributing to charities and organizations as well. As a generalization, my research has shown that new money people are more down to earth coming up from their humble backgrounds. The most powerful families in the U.S. do have large foundations for charities. I do wonder how often they go out and work on the ground level with the charities. I see more of the new money people working hand and hand with the charities. This is from my perception. I can be wrong and I admit that.

  2. I keep thinking about this “generational transfer” that’s going to happen like that’s a ridiculously massive event.

    I have a feeling that won’t happen for another 20 – 30 years or so so old money will continue to be old and will not change hands to young people and the ones who are just getting into the job market.

    We shall see.

    • I feel you are right. My parents are accumulating more wealth, and by the time they pass away, I will probably be in my late 50s or early 60s. It is that baby boomer generation that has plenty of wealth that will be passed down. For now, we work hard to make our wealth. We are part of the new wealth movement.

  3. Interesting article Steve, always good to investigate the different categories of wealth when accumulating it.

    I’d love to see an economic research paper into self made millionaires in the US and then compare it to that survey data.


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