When you think of old money, you likely imagine someone like Thurston Howell III, the stuffy blueblood from “Gilligan’s Island” who’s accustomed to being catered to. And when you consider new money, you probably picture a well-heeled tech bro or social media influencer — someone who amassed wealth quickly, even if they’d be considered “gauche” in more refined circles.
As you build your own wealth, you may think you have more to learn from new money — those kings and queens of hustle culture. However, old money has some tricks up its sleeves that are actually more conducive to creating and sustaining wealth, including tips that new money can benefit from as well.
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1. They Know the Difference Between Cost and Value
It makes sense that anyone who ever grew up silently praying that their old jalopy would make it through another year would want to buy a powerful, elite sports car as soon as they make it big. And besides, they’ll look cooler than the old-money guy in his stalwart old Volvo.
Unfortunately, all that splurging can eventually drain a bank account, putting someone back in a cycle of living paycheck to paycheck, no matter how big those paychecks are. Old money knows that preserving your wealth long-term means avoiding flashy purchases that dazzle the eye but deplete savings. They’re more likely to invest in a durable, long-lasting vehicle that helps them save on repairs and replacements over time.
In a BuzzFeed article where community members shared their own takes on the differences between old and new money, one user opined: “If they drive something like, oh, an old Volvo estate or something utilitarian and old, then they’ve got money. The ones with the old money know the value of good investments and the value of things — and not just the cost.”
You don’t have to come from legacy wealth to be a savvy spender. Being cautious and frugal with your purchases is wise, regardless of how many commas are in your bank statement. Focus on quality purchases that will last for the long term.
2. They Know Smart Investing Is the Foundation of Generational Wealth
If there’s one thing people from old money understand, it’s that growing wealth over time is absolutely vital — after all, they wouldn’t be “old money” without generations of smart money moves in their family histories. That’s why they prioritize investing as a way to diversify and grow their portfolios, ensuring they can pass down wealth.
Many from generational wealth focus on safe and long-term investments and build a broad portfolio featuring a blend of stocks, bonds and real estate. It’s not uncommon for new money to go for flashier, more speculative investments that carry greater risk — partly because these choices seem bolder and more impressive, and also because new-money individuals often lack the same depth of financial literacy as their old-moneyed counterparts.
You don’t need a family lineage of financial wizards to learn about investing. Connect with a trusted financial advisor to develop your own approach to investing, and start out with lower-risk investments to help ease into the process.
3. They Value Financial Literacy and Teach Their Kids Early
For people from wealthy families, money is quite literally their birthright, so they often emphasize giving their children a comprehensive education in finance, even if it’s learning at their parents’ knees. A solid foundation in financial literacy empowers each new generation to continually build and pass on the family’s wealth.
Since self-made, new-money folks often lack formal education in finance, they may be more prone to big splurges (although, let’s face it, who doesn’t daydream about playing James Bond in an Aston Martin?) and risky investments.
Even if your grandmother didn’t teach you the ins and outs of the market before you started kindergarten, you can still teach yourself. With countless podcasts, books, websites and social media content devoted to personal finance, you can find a way to expand your financial knowledge.
4. They Know Estate Planning Is Key to Building a Legacy
Popular movies and TV shows might have you believe that when the elder of a wealthy family passes away, it’s a free-for-all among the conniving heirs (“Knives Out,” anyone?). However, many families with generational wealth seek to avoid just these kinds of shenanigans by creating comprehensive estate plans.
To keep the money train rolling toward future generations, they develop a clear, defined vision for how their wealth will be distributed to family members and charitable organizations to continue building the family’s legacy and connections. Meanwhile, new money may get so wrapped up in the thrill of newfound wealth that they overlook the importance of planning for the future.
You don’t have to be passing on millions to create an estate plan that will leave your loved ones in better shape. Consult with a trusted estate planner or financial advisor to draw up your own plans.
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Despite stereotypes of old money as people who are hopelessly out of touch, especially compared to the innovators and entrepreneurs of new money, they actually have much to teach about maintaining and growing wealth. With a mix of frugality, commonsense investing, emphasis on financial literacy and proper estate planning, you can also build your finances and turn personal funds into generational wealth.
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This article originally appeared on GOBankingRates.com: 4 Things Old Money Knows That New Money Doesn’t
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