A lot of people are talking about the old money and new money today. But what are these? Are they a type of monetary unit used back in the day? Of course, they’re not. When we’re talking about it, the term refers to a group of wealthy people. The word “old” doesn’t always relate to their ages. It is something more than that.
Old money is wealth gained through generations. Some would be granted their fortune from their parents, and the ones before them. This continuous line of richness is made possible due to several profit-making methods, especially investment and business.
But, how about new money? This is the kind of wealth that’s not obtained from older generations. In short, it’s the richness you successfully gain by yourself, with your own resources and effort. Of course, other than skills, a good chunk of fortune also plays a pivotal role in this type of wealth.
Of course, the true meaning of them goes beyond the short paragraphs we’ve mentioned above. Thus, in this article, we would like to explain about the old and new money, and knowing what are the similarities and differences between the two.
Understanding The Old Money
Before we talk much deeper to find the differences between old and new money, let us first understand the first one of them. The term old comes from the amount of wealth that has been passed down through generations. We can see a lot of examples in companies that have been run by sons, fathers, and their older parents.
How Is The Lifestyle?
The reason why many people gaze their looks over the old money is because of the elegance. People with this type of wealth would take their pride on top of everything. They have something that shouts respect. Although behind the scenes, they need to carry a burden by continuing the family business by making sure that everything keeps going.
Due to the amount of wealth and power, the people who carry the status are often influential, which may affect the financial structure of a particular area, or even a country to some extent.
The mindset of old–money families is not always about their money. What matters is how good their ability is to carry out their fortune to future generations. This would result in more solid financial planning and decisions to not waste what they have carelessly.
Understanding New Money
These are basically the newly rich individuals. These are the people who put effort and determination before everything in order to finally gain their own fortunes.
The wealth they may obtain doesn’t come as an inheritance. Instead, is the end goal of their continuous work that may take a lot of their time and resources. Of course, achieving this goal would be much harder as they don’t have something most people would consider as a privilege.
A few examples of new money are the successful individuals in entertainment, business, technology, and sports fields.
How Is The Lifestyle?
One thing that may differ between them is their lifestyle. Although it’s not the same with all new money families, the absence of behavior for preserving their wealth for future generations could make them tend to spend more to gain the spotlight.
We often see it in new celebrities, actors, or other rich individuals who would spend their sudden wealth on something luxurious, like fancy cars, vacationing in exclusive hotels, or buying expensive things to enhance their looks.
If we compare it with old money, the mindset of this type of wealth might be different. They would think that their wealth now is gained through their hard effort. Of course, they would feel they deserve it. Thus, there’s no clear task in maintaining the wealth for future generations as the old money does.
Understanding The Key Differences Between The Two
Of course, the differences between old and new money are beyond the money alone. The wealth old money gain is generational wealth, something that’s passed down from generations. These individuals are born with privilege and their task is to prolong or preserve them for the next generations.
New money is hard-earned wealth. These individuals need to work hard to reach their financial goals, without help from their families, most of the time. Thus, although new money can also be tied to social class, it might not be as respectable or known as the old money.
Another difference is the source of wealth, which is tied to the explanations above. The old money receives their wealth from the previous generations, while the old money needs to work their way out in order to finally reach their financial goals and statuses.
Are There Any Similarities Between Them?
Although both have very clear differences, when you take a closer look, there are some similarities between them. One is their financial independence. No matter whether it’s passed down or hard-earned, these are the same successful people who have reached their financial independence.
The second reason is the spending habits. Both old and new money would like to spend their money on things, and most of the time, those are the things many would consider luxurious. Not a few people have spent their money on buying expensive cars or rare items. Aside from personal happiness, they would buy these things to increase their financial and social statuses.
The Financial Management
The financial management of old and new money has a certain similarity. No matter how they obtained their wealth, these people would avoid spending too much that they can handle. They would spend not because they have the resources for it.
Although they possibly have more wealth than everyone else, money is still money. When they’re not careful with their spending, bankruptcy is not something but a certainty. With the wealth they have, they would spend what they have for investment or expanding business.
These are their effort to preserve their fortune for the next generations, whether they’re old or new.
There are some differences we may find between old and new money, what’s apparent is their source of wealth. However, despite their differences, their habit with wealth and mindset are what matter, especially to preserve their wealth for the next generations. In the end, it’s not the source of wealth that matters, but what you will do with it.
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