Old Money

Old money is defined as "the inherited wealth of established upper-class families" or "a person, family, or lineage possessing inherited wealth".^[1] The term is typically used to describe families that have been wealthy for multiple generations. Locations such as Greenwich, Connecticut, Long Island's Gold Coast, Westchester County, New York, the Upper East Side of Manhattan, Boston's Back Bay and Beacon Hill, Wellesley, MA and Philadelphia's Main Line are often associated with old money.

The concept of old money coincides with the term wealth. Wealth is described as the assets held by an individual or household. It is an important dimension of stratification because it may be passed on from generation to generation, ensuring that a family's offspring will be financially stable in the future. Families with "old money" use accumulated assets or savings to bridge interruptions in income, preventing downward social mobility.^[2]

Old money applies to those of the upper class whose wealth separates them from those of lower social classes. According to the pioneering anthropologist W. Lloyd Warner, the upper class in the United States during the 1930s was divided into two distinct groups: the upper-upper class and the lower-upper class.^[3] The lower-upper class was made up of those who did not come from traditionally wealthy families. They made their money from investments and business ventures rather than from inheritances. The upper-upper class was made up of families who were viewed as aristocratic and "high-society" families.^[3] These families had "old money" and had been rich for generations. These wealthy families lived off the income from their inheritances rather than from a salary such as those from the lower-upper class.

During the early part of the 20th century, the upper-upper class (those who held "old money") were seen as more prestigious than the lower-upper class.^[3] This is demonstrated in F. Scott Fitzgerald's novel The Great Gatsby, in which Tom represents the established old wealth, while Gatsby represents the nouveau riche. This distinction in prestige is no longer as apparent in today's society.^{[citation needed]}

Old money is a contrast to the nouveau riche and parvenus. These fall under the category of "new money" (i.e., those that do not come from traditionally wealthy families). Some recognizable examples of families with "old money" include the following:

• The Rockefeller family: While founder John D. Rockefeller was of modest origins (and thus initially considered "new money"), he made billions in the oil business in the late 19th and early 20th centuries. Over time, the Rockefellers became considered "old money" as their wealth was passed down from generation to generation and their lineage still remains extraordinarily wealthy.

• The Du Pont family: Their fortune began to grow in 1803, but they became an extraordinarily wealthy family by selling gunpowder during the American Civil War. By the World War I, the Du Ponts produced virtually all American gunpowder. In 1968, Ferdinand Lundberg declared the Du Pont fortune to be America's largest family fortune.^[4] Today, E. I. du Pont de Nemours and Company is ranked 81st on the Fortune 500 list of the largest U.S. corporations.^[5]

• The Vanderbilt family: made their fortune initially in the railroad industry and later through other investments. They have been a prominent wealthy family in the United States for over 200 years.

• The Rothschild family: An international banking and finance dynasty of German Jewish origin that established operations across Europe, and was ennobled by the Austrian and British governments.

Although many of these "old money" individuals are not as high on the list of Forbes top 400 richest Americans as they once were, their wealth continues to grow. Many of these families were able to increase their holdings due to investment strategies and pooling their money together.^[6] For example, the Rockefeller family was believed to have a net worth of $1 billion in the 1930s, and it grew to $8.5 billion by the year 2000. In 60 years, four of the richest families in the United States increased their combined $2–$4 billion in 1937 to around $38 billion without owning any large shares in emerging industries.^[7] Those with a million dollars in the bank can earn as much unearned income through interest in a year as the nation's average household income.^[8]

Some argue that inheritance plays a much more important role than income in the economic distribution. Economists claim that the largest transfer of income in the history of the world will be seen as the older generation leaves wealth to the baby boomers. Inheritance has been estimated to make up 6% of the US GDP each year.^[9] The current generation is wealthier than any generation before. This increase in wealth and inheritance indicates a rise of "old money" in American families. Stephen Haseler argues that America is becoming an inheritance culture in which much of one's economic opportunity is from family inheritance and not personal achievement.^[10]

References

Further reading

• Aldridge, Nelson. Old Money: The Mythology of Wealth in America. New York: Allworth Communications, 1996.