YOU WOULD have heard about the comparison between “old money” and “new money” (also known as the nouveau rich), but why does it matter?
Let’s start with establishing the difference between the two.
Old Money tends to be wealth that is inherited from the family including estates or assets.
Nouveau Rich are those that earned their new-found wealth whether it’s through their own business, the lottery, stocks, trades, or simply by being a world-renowned celebrity. You are first-generation wealth, essentially.
A great pop culture reference to help you picture the nouveau rich is The Great Gatsby or in more recent times, The Kardashians.
What are some of the commonalities between the two? Well, their lifestyles and display of wealth tend to be more flashy, branded bags and clothing in public display, grandiose parties and celebrations, over-the-top extravagance, expensive cars, and envy-inducing photos of their travels.
This group tends to be more present in society than those from Old Money. They thrive off people’s adoration and attention and they love to spend. Is it any wonder that this is a group that we love to hate?
In contrast, old money wealth tends to live by understated elegance and class seems to be at the top of their mind.
You know how we hear stories about uncles walking into the bank in simple clothing and understated wealth, but in fact, they are sitting on billions and billions and billions? They love to save or invest and ensure they are financially secure in the long-term.
They also tend to be more charitable as they have excess wealth that can go towards life-enriching causes. However, the one downfall might be their social elitist mentality.
It’s often hard for them to be seen with the rest of society and many would mistake this air as a form of superiority. Thus, making it difficult for them to relate to people from different backgrounds.
Let’s take Bill Gates for an example, who is one of the world’s richest men. He tends to believe in the “old money” philosophy even though he created his own wealth.
He has pledged to leave his billion-dollar fortune to charity when he dies. This is a step away from the usual norm of entrusting it to his children, however, he believes in teaching his children the lesson of earning your own.
The argument here is there are two very opposing schools of thought when it comes to financial habits and their view of wealth. Just because you have “made it” and have enough wealth to last you a lifetime, does not automatically guarantee you a financially successful person. It really depends on a balanced view of short- and long-term financial goals.
The main concern for the “nouveau rich” is that making money too soon can destroy them.
From their spendthrift and flashy lifestyles to have a short-term view of their wealth, it’s no wonder that many of them could end up spending all their wealth in a matter of years, resulting in bankruptcy or a life of never-ending debt.
Your relationship with money and how you decide to spend or save it can be nurtured from the type of environment you are raised in.
But it is also highly dependent on your view of success and your ability to practice financial habits that ensure your long-term security.
Take a balanced approach to the two views – learn to enjoy your wealth but also ensure you have your head on right and think about long-term success.
Nadia Khan is content manager athttps://www.comparehero.my/ dedicated to increasing financial literacy and to help you save time and money by comparing all credit cards, personal loans and broadband plans in Malaysia.
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