I’ve received a few emails lately that ask basically the same question: why does Old Money live the way it does?
I may have addressed this in a previous post (or two), but the question is a critical one, and answering it is important. Most of the people asking have read The Old Money Book and understand the concepts I’ve articulated in it. But to embrace it on a personal level often requires a clear picture of what motivates a set of behaviors in the first place.
So here we go:
Old Money is private. When somebody’s grandfather (or grandmother) made their fortune, they may have bought the big house, the big car, and talked loud and long about their success. Their children may have done a little of that early on, but they soon learned that conspicuous consumption and trash talking are quick ways to alienate friends and motivate enemies. By the time the third generation comes of age (the real first generation of Old Money) they’ll be well-versed in discretion: manners and education will be the marked characteristics, not bad behavior and bling. No need to make yourself a target. No need to prove anything. Stay under the radar and enjoy life.
Old Money often lives off investments. If you’re in a position to receive dividend or investment income every month for the rest of your life, you first realize how fortunate you are: you don’t have to get a job to pay the bills; you have some options; you have an opportunity. One of the first things you do as an Old Money Guy or Gal is figure out how you can live on the money you have coming in.
How much are you going to spend on rent? Do you really need to spend money on a new car if you can drive an old one and have more discretionary income? How can you spend your money so you spend it less frequently and get a better value on the things you do purchase? This value-oriented, often frugal lifestyle is at the heart of Old Money culture. This is where the used (often inherited) cars and traditional clothing come in: don’t buy it unless you have to, and only buy something that’s going to last so, ideally, you never have to buy it again.
Old Money Guys and Gals often have the ultimate luxury: they’re free. They can spend their days doing whatever they want, as long as they manage their money wisely. They learn quickly to live within their means. They learn quickly the real importance of material possessions. They learn quickly that happiness comes from work, friends, family, and doing things.
Old Money wants to stay that way. Growing up in an Old Money household offers a distinct, non-financial advantage: it is an education unto itself. People who have made a lot of money are sometimes smart. Sometimes they can articulate the concepts that contributed to their success and pass those onto the next generation in terms of raw financial intelligence and moral principals that help their offspring lead successful, productive lives, sometimes not. Okay, more often not.
In a household where wealth has been created and preserved for several generations through the adoption, acceptance, and implementation of the Core Values I talk about in The Old Money Book, you’re likely find an abundance of communication between young and old. How to live, what to watch out for in business and in life, the importance of ethics, education, and hard work…these topics are discussed early, often, and in no uncertain terms. By the time they are adolescents, children have a clear picture of what their family has accomplished, how lucky they are, and what is expected of them.
In The Proper Bostonians, author Cleveland Amory recalled a conversation with a Boston lawyer who worked his way through Harvard by tutoring scions of Boston’s Old Money families. He knew them, and their parents, well. He was unabashed in his admiration. “It is strong stock,” he said, “that can produce the same traits of character generation after generation.”
He wasn’t speaking in the relative short term, of second or third generation wealth that had managed to survive without decline or decimation over a few decades. He was speaking of families who’d made their fortunes in the 1800’s and whose descendants were still getting an education, excelling at a profession, and contributing to Boston society 150 years later.
Strong stock, indeed.
- BGT
You make some very good points, Byron. Growing up in an old money family is an education unto itself. In our family we believe that money is to be used for things that enrich your life, particularly education and travel abroad, and certain expenditures that may become necessary like meeting living expenses during retirement and maintaining family owned homes and properties. It is not to be frittered away on clothes, jewelry, electronics or other lifestyle accoutrements that retailers and advertisers try to convince us we must have.
I think one of the most important Old Money lessons is that, no matter how much money you have, you can not buy a meaningful life. Nor will anyone hand one to you. You have to find your own purpose, create your own meaning, build your own life. Having money is nice, but you can’t let “being rich” be the whole purpose of your existence. You have to take care of the people and things that matter to you; you have to get on with the business of living a good life. As your aunt said, “real silver requires polishing”.
Great comment, Amy. I especially like the statement, “You can’t buy a meaningful life.” Well said. – BGT
Amy, your comments are as insightful as Byron’s, and I enjoy them very much. “You can’t buy a meaningful life nor have it handed to you” says it all.
Hi Byron:
I have a question maybe you or some of your OMG readers may be able to answer. Does personality type play a role at all as to how well children of old money families learn these lessons? Whether it is the basic Type A or Type B personality or the more thorough Myers Briggs personality types, it would seem that a child’s “natural bent” would play a role in how well they applied the values taught and learned. Have you seen differences in siblings of the same family? Almost every family has a ‘rebel’ I would think.
Thanks!
Hi SM,
If I can put my two cents in (get it?) my husband and I are both OMGs. I’m fourth generation and he’s fifth generation, so I know something about this. I am also very familiar with the Myers Briggs Type Indicator. I have not observed any correlation between personality type and how well people handle their inheritance. I think that much more important than individual personalities is the family’s philosophy regarding money and the examples we set for our children by how we live and what we spend (and don’t spend) money on. In our family, for example, everyone gets a good education, everyone works and no one inherits a lot of money at a young age.
I believe it is essential for people to make their own way in the world and to learn to stand on their own two feet, financially, emotionally and intellectually. It is especially important for inheritors to learn to live within a budget and to establish themselves in a career. This approach has served us well, but every family has their own way of doing things. The sad fact is, however, that most family fortunes do not survive past the third generation. I think that has more to do with the lessons children learn from their families about money and how to live than it does with personality types.
I do think that someone who is impulsive, undisciplined and focused in the short term may have more financial difficulties than someone who is cautious, prudent and thinks long term, but age and experience can be a big help with these problems. As you pointed out, many families have a rebel, but even rebels can grow up to be responsible stewards of wealth. Or, as someone said previously on this blog “hard work irons out stupid”.
By the way, I enjoy your blog. Some of the people you write about deserve honorary OMG status even if they’re not actual OMGs.
Thank you Amy. I believe you are right. Growing up with a set of expectations from your family and community applied across the board equally to all will in fact iron out any rough edges a young person might have. Thanks for your input!
Fascinating subject to one who is not old money. The Old Money Book refers to old money as individuals whose families have enjoyed wealth and privilege for three generations or more. Byron gave a very thoughtful description of privilege a few days ago. But what about wealth? Does a million dollars net worth qualify? Or a hundred thousand? Some of the minimalist living lifestyle blogs say $10,000 a year provides all the happiness needed. Is that “wealthy”? Or is it a question that if asked, automatically means you aren’t. Just curious and am hoping some of the OMGs take the time to give an opinion. Thanks.
Hi Charles,
Ten thousand dollars a year isn’t much to live on. Even if you only make minimum wage, if you work a standard forty hour work week, you’ll make more than $10,000 a year. But Byron isn’t writing about exact dollar amounts. He’s writing about the values, priorities, habits, attitudes and philosophy of the old money way of life. I sometimes think that having old money is like living in a house where you can see a big mountain off in the distance. The mountain may be very big and very real and it may be a significant part of the landscape, but it’s still just part of the background of your life. It is not the primary focus your life. It’s not the centerpiece of your daily activities. It’s an important part of the background, but it’s still in the background. This is why some people can manage to be true OMGs even though they don’t have all that much money. The size of the mountain isn’t the most important thing.
Hello Amy, Thank you for your reply. I understand what you are saying about values, priorities, etc., and I do agree. I think my confusion begins when I read some of Byron’s blog entries that point in the other direction and make the size of the mountain seem important. Easy example: go to the top of the blog and see the entry on the Shaggy Dog sweater. Checking the J. Press website, even on sale it is expensive. Then read this blog entry (Living Old) under the heading Old Money lives off investments, second paragraph. How do you (OMGs) reconcile a Shaggy Dog sweater with “value oriented, often frugal lifestyle”, “don’t buy it unless you have to” philosophy, unless the “size of the mountain” is indeed important?
Please don’t misunderstand. I am not bashing the rich. Certainly, if one has inherited wealth or has earned it honestly, then enjoy it, richly and responsibly, like fine whiskey.
So, going back to values, priorities, etc., and comparing to the “size of the mountain”, one’s priorities might be saving for private education, piano lessons for a child, paying the rent on time (every month, no excuses), or the Shaggy Dog or Ghurka wallet, or Rolex watch (my Seiko keeps time just fine, thanks) But not all of the above. My preference would be that more people buy their clothes at Target and pay for the piano lessons.
My question remains regarding the basic definition of Old Money, so I will ask it a different way. Would earning median income in the U.S. with almost no (I say almost only because to meet Byron’s three generation minimum, something would have to be inherited, no matter how small) inherited wealth, preclude one from being “Old Money”?
Hi Charles,
I will try to give you one drop from the ocean.
Regarding nominal value, any given number is good. OM is not about money. Let”s take education for instance. Take a look at Lego blocks. If you take a closer look you will see time tables and trigonometry. By the time the little ones start schooling they already know mathematics, geometry and trigonometry. Same goes with reading. By the time children start school they already read many books with their ears. They were exposed to thousands of words (expanding their vocabulary), they were exposed to different styles and syntax variations, which helps children developing cognitive and critical thinking. Our boys were fluent readers in two languages before they started grade one so now we work on other language. They compare Lego catalogues, check prices and what is new. Good opportunity to explain what is marginal utility, inflation……. and how money work.
Inch by inch, day by day you prepare children for being independent and responsible for themselves their behavior and thoughts. You slowly introduce architecture, history, classical music, art, swimming ………
And then you have traveling. It is great when you go to Florence or Milan and your almost 9 and 6 years old will show you difference between Doric and Corinthian orders. Or they can recognize Handle, Vivaldi………. and will tell differences between baroque and impressionism……… You show your children different cultures, food, languages……….
All that sweating, different smells, tastes, different people……………..headaches, trains, airports, dusty roads, rains, heat…..
You do it only for one reason: to provide your children with psychological balance and emotional well-being. Extending and expanding their horizons you are building human and intellectual wealth and capital and this is far more important than financial capital.
Once your children are well polished it does not matter how much they will inherit; they will know on what to spend and how to enlarge it.
It is all about quality, not quantity.
OMGM
I would very much appreciate if someone can explain why you people count wealth in currencies that depreciate and loose purchasing power? That is really a mystery to me. Thanks.
Thank you OMGM. I think we are thinking along similar lines. Yet…in Byron’s book he states, “To be Old Money definitely requires money,…”. The book itself interjects the concept of an implied level of monetary wealth. Your last statement regarding “you people” is stated as a question. Please explain who “you people” are, so that I might try to answer.
I will start with “you people”. First: OMGs are not the only ones who read this blog. Second: I hear people around me and around the world demanding more money and higher wages. Third: there was nothing personal.
And monetary wealth? What is money? Store of value? Unit of account? Medium of exchange? Legal tender? Is it cash in your pocket? Is it number on the screen? Is it future payment? Is it commodity? Is it dollar, euro, pound, ruble, renminbi….? What was money before and what is money now? Obviously you need some liquidity to function on day-to-day bases. It is called liquidity because you liquidating it – getting rid off and acquire goods and services. What is left liquidate and obtain assets (preferably hard assets).
Every OM family has different history and different experience. American OM families are different from European. Governments can make ash money or potato peels money but we know what money is.
Perhaps you might find some details in “Problems of modern democracy” by Edwin Lawrence Godkin, 1897 or Youssef Cassis’s books regarding Private Banking. Please note Private Banking not private banking.
OMGM
Nothing personal was taken. I only needed to know the context you were writing from. I know now that you meant all non-OMGs. Since you said “I would very much appreciate if someone can explain why you people count wealth in currencies…”, I will give my thoughts.
For all non-OM people and even most OM people, currency (dollars, euros, potato peels, numbers on a screen) is a direct determinant of their ability to pay rent, buy food, clothing, recreate, etc. Unfair, perhaps, but a reality. Whether a currency depreciates is irrelevant. Most merchants will simply not accept anything other than the local currency. Even in a hyper-inflationary economy, people’s lives will be tied to the currency to the point that bartering gives better value. Thank you for the book recommendations. I will put them on my list.
Well said. I pay rent, buy food ….. in euros. But why should one hold his wealth in currency? There is no reason! My predecessors experienced Austria-Hungary disintegration, WWI, hyperinflation, WW II, escape from Sachsenhausen, normalization, communism, lost farms, manors, houses, mountains, forests… Yes the currencies depreciate, but an ounce was an ounce at 47 BC and an ounce will be the same ounce tomorrow. Louis d’or, thaler, pre 64 dimes, quarters, halves still have the same weight and the same content. OM families ultimately requires monetary wealth. Money are about psychology. As I said American OM families have different experience from European. Regarding Byron’s book and blog – important things are between lines. Financial independence does not mean only independence form debt it can also mean independence for the government.
https://archive.org/details/problemsofmodern00godkuoft pages 225 – 274
Hi Charles,
To answer your question, OMGs usually don’t buy very much, but what they do buy is usually very high quality. So If you’re going to buy a sweater, buy a high quality sweater (like a Shaggy Dog) that you can wear for many years. In the long run that’s better than buying lots of cheap sweaters that constantly have to be replaced.
Since you mentioned it, I do not consider Rolex watches to be old money. Most of the models they make are too flashy. But that’s just my opinion; I’m sure there are OMGs who disagree with me.
The term “old money” usually refers to the fact that there are certain values and beliefs and a certain style of living that one frequently finds among people who have grown up in families that have had substantial wealth for at least three generations. There is no exact dollar amount that is necessary to qualify as “old money”. It’s more about what you do with the money you do have. Certainly there are OMGs who earn the U.S median income and there are OMGs who earn nothing at all and live entirely off their inheritance. There are people who grew up in old money families who now have virtually nothing left of the family fortune but who retain some the qualities and traits of old money. And there are some people with recently acquired wealth who are fast learning the lessons of old money. For further elucidation on this point, see Byron’s blog post called “Join The Ultimate Aristocracy”.
That is so true. I knew a man from a communist country whose grandparents were OM and they survived some very ugly times, but once they got past barebones survival they continued to value quality, beauty, culture, education and as much privacy as possible in a Big Brother environment. His father even found a way to eventually invest in properties (!) and leave money for his children. There is something about my friend’s demeanor that says OM, and the OM folks at our school recognized and acknowledged him. Because of his communist education he gets along with people of different backgrounds but feels naturally drawn to OM and other folks with money and is accepted because he does not envy them and is a cultural peer. So, no. You don’t have to have money, just OM values and worldview.
By the way, investments do not always have to be money; they may be jewelry, art, land, or other high value collectibles.
Thank you for that interesting story. It’s amazing how resourceful people can be, even in the most difficult of circumstances. – BGT
Charles if you look at the material it is clear it will last at least 20 years. I have expensive shirts, true. But I have them for 20 years! They keep shape and color. My newest shirt is 5 years old and my sons will wear it. All bought on sale. Is not that a value? Can you imagine how much money I saved?
We are not rich, Charles, we are a little bit different. Living off investments sounds easy, but one who lives off investments is trained not to spend. It is responsibility not fun.
My family is not OM at all, but have always valued quality over quantity. We live in a cold-winter region and figured out that to be comfortable you have to layer in good quality clothing. I’ve been wearing the same basic winter wear for 15 years and my LL Bean jacket still looks new; the buttons never fall off, the pockets never get holes and the color and shape remains the same. At this point, a quarter inch of the inner quilt lining needs to be restitched, but I plan on passing this coat down to my niece. It’s not about buying expensive in one fell swoop just to do so, it’s about quality, which is so much cheaper in the long run.
It’s all there: Irving Fisher, The Money Illusion, 1928 (I have 2007 copy), chapter III
chapter I, naturally
Thank you Amy and OMGM for your views. I think I have actually learned something about the OMG mindset and lifestyle, admittedly based on a tiny sample of two. Popular culture teaches that Old Money falls within one of two categories: 1) an OMG is loaded with money earned by an ancestor and is submersed in luxury and wanton spending or 2) has an ancestor who earned a lot of money, but the descendants are now slowly sliding towards poverty while maintaining appearances with a creaky old house somewhere that needs lots of maintenance. While these stereotypes are undoubtedly represented by some segment of the population, I think I see that Old Money has more to do with Old Family than with money. I can’t point to a rich old ancestor in my family, but I can steer myself, my children and grandchildren to be OMGs in the future.
This post generated some really great discussion. I have enjoyed reading and have learned a thing or two. 🙂