Money Rehab with Nicole Lapin - Hot Take: New Money Is Better Than Old Money

Episode Date: January 19, 2024

The “old money aesthetic” is having a moment. At the time Nicole recorded this, #oldmoney had nearly 12 billion views on TikTok and #oldmoneyoutfitfashion had 433 million views. But despite all of that, Nicole has a hot take: for the first time in centuries, new money is more coveted than old money. She explains. Want the kiddos in your life to become money masters? Check out Greenlight, the best money app and debit card for families (and get one month free!): http://greenlight.com/moneyrehab Investors: want to get a 1% bonus on your investments? Check out our sweet deal with Robinhood at http://robinhood.com/mnn  Is mental health a resolution for 2024? Get 10% off your first month of therapy with BetterHelp at: http://betterhelp.com/moneyrehab  Want one-on-one money coaching from Nicole? Book a meeting with her here: intro.co/moneynewsnetwork 

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. I'm Nicole Lappin, the only financial expert you don't need a it's time for some money rehab. The old money aesthetic is having a moment. We saw this in some pop culture moments last year that got some major airtime on Instagram, like Sophia Richie's wedding, anything having to do with The Crown season six, even Gwyneth Paltrow's courtroom outfits. At the time I'm taping this for you, the hashtag old money has nearly 12 billion views on TikTok, and old money outfit fashion has 433 million views. But despite all of that, I have a hot take. For the first time in centuries,

new money is more coveted than old money. Before I ask you to hear me out, we need to define some terms here. Obviously, we're going to have to define old money and new money. But first, we have to put a number on something a little more existential, wealth, because that's what we're really doing when we're talking about old money versus new money. We're talking about two different types of wealth. Even though we might not have an easy definition for old money in the back of our mind, we know it when we see it. We picture women wearing 50 shades of beige, knit collegiate sweaters, men wearing polos and sunglasses. This is Rockefeller money. We know old money isn't millionaire next door status. We're talking about something a few

tiers above what it means to be rich. There are lots of different ways to define this kind of wealth, but for purposes of my case, let's go with the way big banks define wealth. Banks define ultra-high net worth people as people who have a net worth of more than $30 million. Now for the harder question, how do you define old money versus new money? And when, if ever, does new money become old money? Some economists have taken a stab at a criteria for these labels and have defined old money as someone whose wealth dates back three generations in their family. And new money is what's left, the people who built their wealth themselves or inherited from the generation before. But I have my own rule. My rule is, if you know the last name but not

the first name of the person who actually built wealth, it's old money. If you know the last name but not the first name of the person who actually built wealth, it's old money. If you know the first and last name of the person who built wealth, it's new money. I'll show you how it works. Here are some examples of some old money families. Rockefeller, Carnegie, Vanderbilt, Ford, DuPont, Mellon. For how many of those legacy families do you know the first name of the person who actually built the wealth for the family? One? Maybe two? Let's contrast that with some new money names. Bezos. Gates. Musk. Kardashian. Buffett. Zuckerberg. Swift. You know the first names of all of those, of course. Because old money, by definition, goes several generations back, there's a higher likelihood that there are more people under the old money umbrella because

with more generations, the family tree can get bigger. But as I think we can all agree after trying to remember the first name of the OG Vanderbilt, it's Cornelius, by the way, the last name carries a lot more weight than the first name. This can be really powerful and has historically given old money families all sorts of privileges. But with so many under one family tree, the public starts to lose track of individual members, which leaves room for imposters. In the early 2000s, a con man was caught pretending to be a member of the Rockefeller family. He had taken that identity to try and meet a wealthy woman to marry, which, by the way, totally worked, and he married a Harvard-educated financial lawyer. That type of impersonation would never work for a new money

name because, let's be honest, we would totally notice if a new adult Kardashian popped up out of nowhere. Which isn't to say that there isn't any fraud in new money, because there is. New money and old money imposters both pretend to be someone they're not, just in different ways. Old money imposters might use a fake name. New money imposters might keep their name, but fake their success. Elizabeth Holmes, Sam Bankman Freed, Charlie Jarvis, Bernie Madoff, Adam Neumann, most Instagram influencers. All new money frauds. Okay, definitions are done. Let's get to my hot take. In the early 1800s, there were some cultural prejudices around old money and new money. During that time, also known as the Gilded Age, old money definitely looked down on new money.

Some people believe these stereotypes are still true, but I disagree. In recent years, there's been a cultural shift in criticizing privilege, and as a result, there's increasing negative stigma toward old money. I mean, I've noticed so many more negative portrayals of new money, haven't you? Succession is a great example. I haven't watched the show, for full disclosure, but I still know how dysfunctional the Roy family is. Or Saltburn, the sickest movie made in 2023. And the opposite, too. So many more movies are now made to glorify new money. Movies like Joy, The Pursuit of Happiness, Slumdog Millionaire, Wonka, Rocky, all critically acclaimed movies that celebrate new money stories. And you can even see this behind

the scenes in the kinds of language we now use. In the last few years, there have been new terms to dig at old money, like privileged or nepo baby. Well, we call people from new money self-made, which is positive and celebratory. If you could choose which kind of wealth to have, would you rather be called a nepo baby or a self-made millionaire in your obituary? Yeah, me too. But let's be honest, there's stigma no matter what kind of money you have. If you have money, there's stigma. If you don't have money, there's stigma too. But what's most damaging is the internalized stigma and how it can damage your self-esteem and consequently your wealth. There are certain

psychological repercussions that we see new money people have. And let me just say this again, it is awesome to have money. New money, old money, any kind of money is good. I am not losing sleep over people with more than $30 million in their bank accounts. Not to mention the psychological repercussions for people having no money is certainly more severe. But with that said, there is a phenomenon called sudden wealth syndrome that we see in successful new money folks. Like someone who just sold their company for a huge payday, for example. The symptoms are feeling isolated from their friends, feeling guilty about the windfall, and extreme fear of losing their money. And then for old money families, there are

psychological repercussions too. There are common reports of low self-esteem from people who have inherited money because there's this deflating feeling that they didn't earn it and therefore don't deserve it. But ultimately, I think the stigma around old money was always going to be more severe. And this old money, new money correction has been a long time coming because old money is counter to the American dream. Essential to the creation of the US of A was the rejection of the UK and the monarchy there. And the monarchy, by the way, is the epitome of old money. And as a result, the ideal romanticized American has always been one who comes from humble beginnings and builds their own wealth. And now I think that's starting to permeate the mainstream.

And for anyone who's remembering what I said about the hashtag old money getting billions of TikTok impressions and is now thinking, wait a minute, but there isn't a new money aesthetic hashtag. So couldn't we say that old money is more popular? Again, I say, nay, we don't need a new money hashtag. That would be redundant because every freaking post on Instagram is a new money post. Social media is the place where people pretend to have more money than they do. You know what I'm talking about. But putting on fake or even real displays of wealth does nothing but hurt you. Rich people stay rich by acting like they're poor. The richest people I know aren't the ones rich by acting like they're poor. The richest people I know

aren't the ones who have to say they're rich. They aren't the ones posting about themselves in private jets. They are actually very low-key. They're the ones that are flying under the radar. So forget about how wealthy your Instagram makes you look and care more about how wealthy your bank account makes you look. That's real wealth. That's long-lasting wealth. For today's tip, you can take straight to the bank. New money families only become old money families if they can hold on to their wealth across generations. And one of the simplest ways to do that is through creating a will. It is simple, but it's not easy because no one likes to have these existential estate planning conversations. But it is the best way to make sure that the state doesn't eat into the money that you want to pass on to the next generation.

I'll tell you this for sure. You can't be the next Rockefellers without a will. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.

And follow us on Instagram at moneynews and TikTok at moneynew Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.