Old Money vs. New Money

by Elizabeth on September 24, 2012 · 9 comments

They don’t go on vacations; theysummer.They always look impeccable, even if they’re just wearing jeans and a t-shirt (which they usually are). And they never,ever talk about money. I’m talking about America’s royalty – the old money crown. In a geopolitical climate that’s become a battle of the 99% vs. the 1%, I’ve started to notice a bigger difference in socioeconomic circles: old money vs. new money.

Example #1: Credit Card Bragging Rights

I was reading one of my favorite blogs, Money After Graduation, when a post about a credit card – of all things! – caught my attention. Bridget was attending a party when:

“[A man] whipped out his black American Express and started showing it off to everyone. You know, not to point out he had one but just because it was made out of metal and that’s ‘so cool’.”

The first thing that struck me wasn’t how cool the card was, or wonderment at how he got to have such a high-end piece ofplastic metal; nope, the first idea that popped into my head was, “Howveryuncouth.” Without knowing anything else about this man Bridget had described, I immediately found myself deciding that he must be new money.


Because in my (albeit limited) experience, the old money set simply doesn’t discuss money. Sure, you know they’vegotit – scads and scads of it – because they drive high-end cars, live in high-end homes, and take high-end trips. But you very rarely see them talk about it, brag about it, flaunt it.

Example #2: Trickle-Down Theory

In an April op-ed at U.S. News and World Report, James Rickards discussed just how old many came to be, well,so old. His theory is called the rule of thirds:

“This is shorthand for dividing one’s wealth into one-third land, one-third gold, and one-third fine art. Obviously some liquidity is needed for day-to-day expenses and some room can be made for a speculative portfolio, but the basic idea that land, gold, and art outlast and outperform riskier assets such as stocks, bonds, and cash seems sound when viewed from the perspective of centuries and not just years or decades.”

Rickards goes on to say that whenever you involve a third party in wealth – whether that be a broker or simply just credit, the great equalizer – that you’re going to ultimately lose out on some of your wealth; in other words, you won’t be able to hold on to that money and watch it grow in order to pass it on to the next generation.

This theory came to mind the last time my parents came to my house for a visit. My dad, as always, started opining my political beliefs, and reminded me to, “Vote Republican; if you do, your grandmother and I will die richer, and you’ll benefit.”

Ahhhh, sothat’s how the trickle-down economic theory works…

Old and New Money, By The Book

The standard definitions of old money and new money are pretty simple – their names say it all. But it’s how these two distinct groups see each other that’s the real test. Herbert C. Pell, a Depression-era politician and diplomat (as well as one rich SOB), once said this about the old/new money debate:

“Property in this country is drifting into the pockets of those who can keep it and out of the hands of those who can merely acquire it. It is obvious that the standards of the ‘keeping’ class will be different from those of the ‘getters’ and on the whole they will be better for the country at large.”

In other words, old money seems to think that new money are merely pretenders, “posers” as I’d have said back in the 90s. And what it all comes down to, naturally, are standards. Think Kennedy money (which some economists may argue is still relatively new in the broader sense) compared to Kardashian money; both families certainly have a lot of assets (no jokes about Kim’s backside), but the way they use their money is wildly different. One pours it into political battles and charitable causes, while the other flaunts it with flashy clothes, jewelry, and homes. The former largely likes to remain private, while the latter is the poster family for airing your dirty laundry in the most public of manners.

Turning The Definitions On Their Heads

America’s supposed to be the nation where all dreams are possible; where the child of an immigrant can rise out of the ashes to amass enormous wealth, power, or prestige, where we aren’t tied to the finances or scandals of previous generations of unscrupulous family members.

And, I believe, it still is.

The thing is, I feel like the distinction between old money and new money is becoming, as Pell said, more a matter of standards than anything else. It’s a matter of etiquette. It’s not who has what and how much of it, but whether or not we holdourselves to a higher standard. I’ve met plenty of people who are cash poor, but goal rich; they have the knowledge, the motivation, and the manners to achieve anything they set their minds to. It doesn’t matter that they came from a double-wide in the Texas backcountry, born to two parents who’d never even graduated from high school.

As long as we behave with decorum – and maybe hold our noses a little higher in the air – we canallcarry ourselves as if we’re old money… provided we follow the number one rule of the old money crowd, and never,ever tell anyone how much we have in our portfolio.

(Darn it, I’m a personal finance blogger… I spend mylife sharing the secrets of my financial past, present, and future… I guess you’ll never confusemewith old money.)

Reader, do you ever notice differences between old money and new money? In what ways?


{ 9 comments… read them below or add one }

1 my honest answer September 24, 2012 at 8:18 am

This difference is very pronounced in the UK. I always think it can be summed up in how you acquired your sofa. If it was given to you, or bought second-hand, you’re probably old money. If you bought it from a large furniture retail (especially on credit!) you are new money.

Similarly, when the sofa gets worn, your reaction would be:
Old money: throw a nice blanket over the worn parts (preferably tartan)
New money: buy a brand new one (preferably on credit). Tell anyone and everyone you’ve got a new sofa.


2 krantcents September 24, 2012 at 5:26 pm

The difference between old and new money is debt! Old money owns the asset outright, new money probably has debt to own it. New money sees it as cash flow where old money pays cash.


3 Elizabeth September 24, 2012 at 7:21 pm

I think you hit the nail on the NOSE!


4 Pauline September 25, 2012 at 6:17 am

Old money maintains a lifestyle and new money tries to attain that level, usually with poor taste. A 17th century mansion will always have a charm a 2012 Mc Mansion lacks. Old money is happy to be where they are but won’t brag, will invest in education for the next generation, and keep a low profile.


5 Slackerjo September 25, 2012 at 9:01 pm

I will admit this, I sometimes I pretend I am Old Money. I am not old or new money. I have plenty of savings and no debt and I do not struggle to pay any bills. If something came up, I’d quietly write a cheque from my savings and go about my day. I wear simple clothing, ride a bicycle most days, my car is dorky and I live in a 1 bedroom apartment. I could buy a house but I choose to live in an apartment. I could buy a way cooler car, but to me a car is a car is a car. As long as it gets me to from point A to point B, who cares. Money is a non issue for Old Money.New money always tries to impress. I want to be like Old Money.


6 Roshawn @ Watson Inc September 27, 2012 at 8:36 am

Interesting on many accounts.


7 Roshawn @ Watson Inc September 27, 2012 at 8:39 am

I didn’t finish my comment : -)

Like you, I share a little bit too much at times, yet I don’t talk about numbers to most people. I guess I don’t care who thinks I have what (more about that tomorrow in a new post). The black card example was definitely uncouth.

Your comments about social mobility are very interesting too; I’ll release a post about that next week. It will somewhat address some of these wildly heled assumptions.

I guess, I’m all about this topic. Thanks for the great read.


8 Marcie December 10, 2012 at 10:56 am

My husband, I adore him, but sometimes he says a bit too much and makes us look like new money. We are neither old, nor new money, but nobody has to know that. He often spouts how much we’ve paid for something to his friends (who are also neither old nor new money). I’ve tried telling him that this is behavior that makes us look new money and boorish, but he just doesn’t think before opening his mouth. He just likes to go on about his day, chatting and socializing, which is fine, he just needs to STOP telling people how much we’ve paid for things or how much something he was admiring, cost. *SIGH* It’s so cheesy.


9 Foxy Finance January 21, 2013 at 11:09 am

I have friends in both old and new money. The biggest difference I see is that old money never goes after materialistic goods in order to find happiness. Either that or it’s in their nature in not blowing their cash on poor investments!


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