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What is the difference between old money and new money?
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In this article, we will break down the notion of Old Money vs New Money so you know all there is to know about it!
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Let’s understand what makes new vs old money!
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What Is Old Money vs New Money
Many wonder what old money and new money mean.
Essentially, you can define old money as money that you inherit (it’s money that is there and is “old” sort of) and new money is money that you have earned (money that is “new”).
In other words, old money comes from the older generation whereas new money comes from you or the most recent generation.
For example, a person that has acquired his or her wealth through inheritance has acquired “old money” whereas a person who has worked to make money and acquire wealth is a person who has “new money”.
This aspect deals with the “source” of the money.
There are other aspects that differentiate the nouveau riche vs old money which is:
- The person’s perceived social value
- The person’s spending habits
Before we get into the differences old money vs new money behavior and other aspects, let’s look at further understanding old and new money.
Old Money Meaning
Old money means that your money was inherited and comes from an older generation.
There are many families that remain wealthy and rich for generations living on the old money and trying to build new money.
Old money can be accumulated through real estate investments made in the past (and that have appreciated with time) or businesses that were started a long time ago and continue going strong.
For example, the Vanderbilts and the Rockefellers are old money families that have acquired their wealth through inheritance (money and assets passing down generations).
In some societies, families having acquired old money tend to be highly respected, may be considered as elite, or high-class.
New Money Meaning
New money means that you have worked to make the money.
Typically, those with new money are self-made millionaires (or even billionaires) who did not have a lot of money to start with but have created their wealth and fortune.
Since new money families have not acquired their wealth through inheritance (or perhaps their families were not necessarily part of the social elite), their perceived social status is slightly below old money families.
On the other hand, new money individuals (entrepreneurs, business founders, and self-made millionaires) tend to be respected as individuals who have built substantial wealth for themselves.
For example, you have individuals like Jeff Bezos, Elon Musk, Warren Buffett, or Bill Gates who are part of the new money category and are self-made billionaires.
Differences Between Old Money And New Money
The differences between old money and new money can be classified into three categories:
- Money source
- Social perception
- Spending habits
Let’s look at each of these differences.
The first difference between new vs old money is the source of wealth.
Where does the money originate from?
If the money is passed down from one generation to another, you have old money.
If the money was acquired within the person’s lifetime through work, sale of goods or services, investments, start of a business, or otherwise, then you have new money.
Old money is generally associated with wealthy families whereas new money is associated with celebrities and entrepreneurs.
The second important difference between new and old money is the perceived social values of the people having money.
Families with old money tend to be viewed as more respectable and refined.
They are viewed as families rooted in wealth and riches (thus are social elites or high-class families).
The members of old money families have always lived their lives as wealthy members of society.
On the other hand, individuals or families that acquire new money are not perceived as respectable and refined.
Since they are individuals and families that have come from lower classes into higher classes in society, they are not perceived the same way.
Although new money families may have the same amount of money (or more) as old money families, they are viewed slightly inferior in terms of their social class.
Another important differentiating factor between old money vs. new money families is how they spend their money.
Old money family members have always lived a rich and wealthy lifestyle.
As a result, they tend to purchase luxury goods with little concern about its real utility or usefulness.
On the other hand, new money family members may have come from humble beginnings and will only purchase goods that are essential for them to live and be happy.
New money individuals are not included to spend money lavishly or on luxury goods to the same extent as old money individuals.
Why Is Old Money Vs. New Money Important
The importance of old vs. new money really depends on how you look at it.
Whether a person has acquired wealth through “old money” or “new money” does not change the fact that they are both equally rich and wealthy.
So on this aspect, both old and new money may be comparable in importance.
However, on the perceived social class and values, there are nuances.
If the social class is important for you, then you’d prefer families having old money as they are generally perceived as wealthy families, upper-class, sophisticated, educated, and important members of society.
On the other hand, self-made millionaires and billionaires may not be viewed the same way.
However, today, many of the wealthiest individuals in the world are new money millionaires and billionaires.
As a result, the perceived social values and class may not be as important as it was 50 years ago or more.
The other aspect that you can view as important between a self-made wealthy person and a person from a wealthy family is with respect to spending habits.
Those that have earned their own money are more frugal in their spending than those who have acquired their money and wealth by inheritance.
Perhaps the importance of understanding old money and new money is to see if a person’s spending habits will allow him or her to keep the generational wealth.
Characteristics of New Money Vs Old Money
Let’s look at how new money and old money individuals and families are characterized.
Here is a list of differences between new and old money:
- The new money is looking to build further wealth whereas the old money looks at maintaining wealth through long-term investments
- The new money spends frugally whereas old money spends based on the family tradition
- The new money does not buy luxury goods whereas the old money spends more on luxury
- The new money has earned wealth through hard work whereas old money was able to bank on the family name
- The new money is looking for new ways to acquire wealth whereas old family will stick to the family investment philosophy
- The new money may be less polished and sophisticated than old money
- The new money can develop relationships with anyone whereas the old money will be more scrutinized on who is getting into the family
- The new money has struggled to acquire wealth whereas the old money has only fought to keep the wealth
- The new money has specialized knowledge whereas the old money has general knowledge
- The new money is able to take risks whereas the old money is averse to risk
New Money Vs. Old Money Examples
There are many examples of families that have sustained their wealth over the generations and have passed them down.
You also have many individuals that have acquired significant wealth through their own hard work in the current generation.
Let’s look at some examples of old money vs new money.
In Europe, the most famous old money family is Britain’s Royal Family.
You also have the Rothchild family.
In the United States, you have the Vanderbilts and the Rockefellers.
Other families with inherited wealth are:
- The Byrd Family of Virginia
- The Carter Family of Virginia
- The Randolph Family
- The Roosevelt Family
- The Cabots
- The Lowell Family
- The DuPont Family
- The Astor Family
- The Forbes Family of Boston
With regards to new money billionaires, millionaires, and celebrities, here are some examples you may recognize:
- Jack Ma
- Jeff Bezos
- Larry Page
- Sergey Brin
- Marc Zuckerberg
- Bill Gates
- Warren Buffett
- Elon Musk
- Bernard Arnault
- Carlos Slim Helu
- Amancio Ortega
- Larry Ellison
- Michael Bloomberg
New Money vs Old Money Takeaways
The old money and new money classification is a way to differentiate wealthy people and families (perhaps no longer as relevant today).
“New money” refers to people who have earned their money and fortune.
“Old money” refers to people who have gotten access to money and fortune as it was passed down to them from one generation to another.
Today, the reality is that the nuances have become more and more immaterial as so many have acquired their wealth in the current generation and our social views have changed over time.
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New vs Old Money
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