Sara
The terms “old” and “new” in regard to money has little, if anything, to do with total wealth. It’s more of a mindset, or depending on how you look at it, a set of stereotypes.
So, where did we even get this idea of new money or old money? The terms originated with the divide between the dynastic families of Europe and those who struck it rich in America, but the definition has expanded since then.
New money could refer to the founder of a startup that made it big, someone who creates the latest industry-disrupting product, or someone who finds a new way to produce energy. (Get rich quick idea: invent a phone battery that actually lasts all day. You know, while you’re using it.) Mark Zuckerberg, Jay-Z, the Kardashians, and any singer or celeb who skyrocketed to fame and fortune counts as new money.
Old money, on the other hand, refers to families that have had wealth for several generations or built it up over a lifetime. (Think Carnegie, Vanderbilt, Rockefeller, and Sam Walton.) Maybe it was built up through hard work, sound investments, or savvy business deals, but it’s focused on the long term: low risk, steady gains, and no big, dangerous moves.
These mindsets don’t just apply to making money, but also to spending it. New money people tend to have a more easy-come, easy-go attitude when it comes to cash because it appeared quickly and can just as quickly leave again. Old money people usually believe that if it took time to get it, it should take time to spend it.
It’s easy to play classism and pit old against the new, but it’s like a diversified portfolio: it can’t be ALL high-risk, and you can’t rely solely on the slow-growth investments, either. Where would we be without the careful planners? And who would take risks, if not the new-money entrepreneurs?
You might find old money “snobbish” or new money “reckless,” but really, it all comes down to circumstance. If it took three hundred years for your family to get rich, would you spend it all on fancy cars? Probably not. You’d invest in quality items that last a lifetime, or possibly several. In the same way, if you suddenly woke up with hundreds of thousands or even millions of dollars, wouldn’t you want to do something fun with it before it has the chance to disappear? We’re all products of our circumstances, and this is no different.
So which one are you? Do you like to play it safe and save for the future, or take risks and flash your cash?
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