Key Points Related to Old Money Versus New Money

old-money-vs-new-money

There are two sides to money and one is called old money, and the other is called new money. You must have heard of both these terms. Both of them have their importance and place in our society. Each one has been built in diverse ways and also acts differently.

Nowadays, many people are becoming billionaires such as Jeff Bezos, Ellon Musk, and Bill Gates. Making money has become fast and quick, unlike the old era when it was a very difficult and slow process. To understand old money vs. new money, you must know the concepts and definitions.

What Is Old Money?

As a broad term, old money means the wealth that is passed down from only one generation to another in a family. In simple meaning, it is hereditary wealth. Whenever you hear that a family has old money, it means the wealth that has been inherited from ancestors. This term is also used to describe the social class.

People who have old money are considered a part of the upper class in society, more so than those who have new money. There are a lot of examples of such families who are well-known to have old money.

  • The Rockefellers of the USA
  • The Gettys of the USA
  • The Rothschilds in France
  • The Agnellis in Italy

What Is New Money?

The term “new money” refers to the wealth that a person earns, and it is not inherited or gifted by ancestors. People who have new money are considered self-made millionaires or billionaires.

In social status bands, people with new money are sometimes attached to a lower standard than those who have old money, maybe due to money. The term “lower upper class” is commonly used for new money people.

The most common professions people have made new money in are technology, sports, entertainment, and so on. There are many examples of tech billionaires, athletes, and movie and television stars who have all their wealth as new money.

Significant Differences Between Old Money and New Money

While discussing old money vs. new money, key differences can be narrowed down to some significant points such as the source of the money, spending habits, investment styles, and perception.

  1. Source of Money

The source of both old and new money is very easy to understand, and knowing the source of wealth also helps you differentiate between old and new money. The old money is simply the inherited money passed down to new generations. On the other hand, new money has been earned in recent years.

If you look into families with old money in the United States, you will see that most of these families are progenies of early industrialists. In contrast, individuals or families with new money will mostly belong to innovative technologists, entertainers, or entrepreneurs.

No defined number of years can classify a wealth as old money or new money. But there are some other prominent differences that help you recognize old money versus new money.

  1. Spending Habits

One of the essential differences between old money and new money is how wealth is spent and how it impacts owners’ lifestyles. Conventionally, old money families are diffident and thrifty while spending wealth.

These families grow up knowing that their wealth doesn’t belong solely to them, but family money. That is why they spend it precisely and sensibly. Furthermore, they are burdened with the obligation of transferring this money onto the upcoming generation. This also impacts the way they spend money.

This doesn’t mean that these people are close-fisted. There are a lot of families with old money who are extravagant (excellent spenders). Still, they know how to spend and invest practically. When it comes to knowing the habits of families or individuals with new money, you will see some noticeable differences. These families see the wealth as their own because they have earned it by themselves.

They don’t consider themselves obliged to pass down money to the next generation. These families commonly spend money playfully, and it is very common to find them living in luxury homes, driving expensive cars, and showing off their wealth. If you’ve seen people such as Mike Tyson, Elon Musk, 50 Cent, and many others, you can easily understand how they became rich within a few years.

You can easily see their spending habits as they have luxury and expensive houses and cars, and they enjoy spending money. This change in their living and spending habits can be traced back to the days they started getting rich.

  1. Social Perception

Another significant difference between old and new money is owners’ social perception and social standing. Both types of wealth make people stand out in the crowded world and be easily identified.

Old money is more than a thing passed on from ancestors to the next generation. Families who possess old money have greater value for education and status. These families are mannered, respectable, and have a proper lifestyle standard.

New money families may be as affluent as old money families, but they are mostly not considered in the upper class of social status. On the other hand, new money families possess several grass-to-grace stories. Most of these families did not always have wealth, and some came from impoverished backgrounds. They managed to earn great wealth by smart and hard work and created opportunities for themselves.

  1. Investment Style

One more prominent difference between old and new money is how they approach investments. There is a clear dissimilarity between investment styles and preferences of both kinds of families.

Old money primarily emphasizes forever, which means they look for long-term and consistent returns from investments. They do not care about quick returns and massive investments. They like to move at the speed of a turtle, making sure that everything is managed along the way, and their wealth must keep on growing even if it is passed down to the next generation.

Families or individuals who have new money focus on earning competitive and quick money. This means they are willing to take big risks for high returns while investing. New money emphasizes the here and now, which means that they believe the present is the best time to make more money.

  1. Trend and Traditions

People who have old money have a defined set of trends and traditions in their spendings and lifestyles. They follow the ancient practices included in their legacies and are less often seen in modern places such as hotels, resorts, and brands. The new generation usually follows the same profession as their ancestors, and they even choose the same schooling for their children.

New money is daring, wild, and exploratory. People who have new money run toward grabbing more and more attention, and they follow every new trend. They are often found having fun at luxury resorts, vacation places, brands, hotels, and malls.

Key Takeaways

Despite knowing so much about old money vs. new money, something always leaves you thinking and astonished. On one side of the world, you see how old money families follow ancient traditions and values, live on their ancestors’ values, and enjoy royal standards.

On the other side of the world, you see people who became rich in a few years and are having luxurious lives with new money. They spend hundreds and thousands on expensive gadgets and live a majestic life. This is how the money of the world is distributed among wealthy people.