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What is the difference between new money and old money?
Most people would say that new money is recently acquired, while old money has been around for a long time.
But that’s not always the case.
Some might say new money is flashy, while old money is more low-key.
Others might say new money is about self-promotion, while old money values tradition and family ties.
There’s no right or wrong answer. It depends on your perspective.
But what’s interesting to think about is how these two types of wealth interact.
Do they clash, or do they complement each other?
In this post, I walk you through the differences between old money vs. new money so you can understand what they are and where you fall in the money debate.
Table of Contents
The Differences Between Old Money vs. New Money
What Is Old Money?
When talking about old money, you are talking about inherited or generational wealth.
A family amassed a large amount of wealth and has been able to pass it down to other generations.
In America, most old money comes from early industrialists.
Old money is also a term used to describe social standing.
A family with old money is upper class compared to those without money or a family with new money.
A money family is another term used to describe old money.
These people are considered upper class, with both connections and class.
Their wealth source is likely long passed, but these money families have relied on wealth management to retain and build wealth for many generations.
Old money examples include Rockefeller, Vanderbilt, Ford, and Mellon.
It is also essential to understand that old money in the United States differs slightly from what it means in the United Kingdom.
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In the United States, old money is generational wealth. In the United Kingdom, it refers more to social status or members of the aristocracy.
Characteristics Of Old Money Families
Ironically, old money families are not the names topping the Forbes 400 list of the wealthiest Americans.
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They tend to stay out of the limelight, and while they can buy just about anything they want, they see purchases in terms of investments.
They also put a heavy emphasis on wealth management and investing.
They can pass it along to multiple generations by taking care of their wealth.
What Is New Money?
New money refers to people who have earned wealth rather than inherited it.
You might hear these people called self-made millionaires as they invested in themselves to become wealthy.
While these people may have the same amount of real wealth as those with old money, they are not looked upon as highly socially.
Many old money owners consider those with new money as lower upper class or not as good as themselves.
New money examples include the Kardashians, Tiger Woods, Jeff Bezos, Bill Gates, Mark Zuckerberg, and LeBron James.
Characteristics Of New Money Families
People with new money tend to seek the spotlight.
They like to buy lavish cars, boats, and clothing and make it known they have money.
Their celebrity is popular because it involves rags to riches story.
That said, not all people with new money are frivolous with spending.
Some understand the importance of growing their family’s wealth and make it a point to be smarter with their spending habits.
Similarities Between Old And New Money
The spending habits of wealthy families are much the same.
We see these people make large purchases, wear expensive clothing and drive nice cars.
You might be unable to tell the difference between old and new money houses.
People with money often associate themselves with legacy brands, including clothing, accessories, fragrances, etc.
Another similarity between people with old vs. new money is their financial independence for family members and the next generation.
Regardless of where the money came from or how long the person has had it, close family members will generally be taken care of financially.
Differences Between New Money And Old Money
The conversation about the differences between old money vs. new gets more complicated.
There are some key differences between old and new money.
Social perception is a major one.
Whether or not they deserve it, old money families are given more respect from the general public.
These families are also given leeway in the public eye due to the family’s longstanding wealth.
By contrast, people unaccustomed to a money lifestyle are sometimes lacking high-class society etiquette, so they don’t receive forgiveness for transgressions quite as easily from the public.
New money families are, however, often better known and famous because of the source of their wealth, which comes many times from being in pop culture.
And as we mentioned earlier, these people’s views of their fortunes can be vastly different.
An old money family is more likely to view the money as something to take care of, guarding it for the next generation.
On the other hand, self-made billionaires view money as their riches. They do not feel they owe it to future generations to preserve it.
For example, a person with new money may spend extravagantly on flashy cars and designer clothing.
In contrast, old money individuals don’t necessarily feel the need to do so.
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Furthermore, their money may be tied up in trusts or need family or committee approval before spending on certain items.
The Great Gatsby: An Example Of Old Money And New Money
Maybe it’s been a while since high school English, but you probably still remember the main characters from The Great Gatsby.
This novel provides a harsh yet accurate account of old money and new.
Tom Buchanan is from an old money family. He views himself as more upper-class and respectable than Gatsby.
Jay Gatsby is supposedly self-made, with enough new money for people to question his past and believe the worst about him.
But when love enters the picture and blurs the lines, tragedy results.
Geographical Distribution Of Old vs. New Money
In the past, it was common to see old money families on the East Coast vs. new money owners on the West Coast.
There has traditionally been more family money on the East Coast because their business began in the early days of America.
During this time, New England was the economic hub of the United States.
On the other hand, new tech money and movie stars lived on the West Coast.
However, this doesn’t hold true anymore, as both groups live throughout the country.
What It’s Like To Be Old Money
Unlike the newly wealthy, old money families carry pride and prestige, often based on the accomplishments of ancestors from 100 years ago or longer.
Old money is often accompanied by power and influence, although no real justification exists.
Given the differences between old money and new, it is evident that the perception of money is far more different than what money can buy.
How Do You Know The Difference?
How can you spot the difference between old money and new?
Many old money families can trace their wealth to the country’s founding.
However, no length of time qualifies a families wealth to be called old money vs. new, but here are a few observations about the two:
- At least one generation should benefit from the money to be considered “old.”
- The family’s focus should be on increasing and preserving wealth.
- Have a high net worth and a sustainable high income.
The old money vs. new money debate comes down to newfound wealth or wealth passed down to many generations.
In both cases, these people have achieved financial success, regardless of their wealth source.
So instead of getting caught up in social classes, focus your time and energy on building your wealth and preserving it so you and future generations can enjoy it.