How Did Gilded Age Families Lose Their Money

The Vanderbilts – once America's richest family unit – flaunted their wealth to the extreme.

"Inherited wealth is a existent handicap to happiness. It is as sure a expiry to ambition as cocaine is to morality." – William K. Vanderbilt (grandson of Cornelius Vanderbilt)

They clustered the outset great fortune of the Industrial Age. And they went on to embody the excess of the Golden Age, using their money to attain prominence in New York'due south social scene in the late twentieth century.

Members of the Vanderbilt family unit built many of America's about extravagant private homes – such as "The Biltmore" in Asheville, N Carolina, and "The Breakers" in Newport, Rhode Island. They also owned 10 mansions on Fifth Artery in Manhattan, dominating prime real estate in the world'due south wealthiest metropolis.

The family unit patriarch, Cornelius "Commodore" Vanderbilt, managed to transform $100 borrowed from his mother into a $100 million dollar fortune by the time of his death. His inheritance to his family was more than what was held in the U.South. Treasury at the time.

The story of this wealth goes:The

The Commodore started out piloting a passenger boat on Staten Island in 1810. He expanded into the steamboat business and went on to build a railroad empire.

Cornelius was a difficult-driving, rough grapheme. A volume written in the 1980s by a Vanderbilt descendant said he was "illiterate, bad-tempered and foul-mouthed, and inclined, when trapped into a social event, to spit streams of tobacco juice and fondle the maids."

After his married woman's death he married a cousin 43 years his junior at the age of 75.

He also expressed his disappointment with his family publicly. Out of ten children, he just had two boys. And he felt these boys were not up to his standards. He didn't recall they had what it took to grow the family unit wealth.

But he was wrong about that. His son William expanded the railroad business organization and doubled the family fortune to over $200 one thousand thousand. That's over $300 billion in today'south dollars.

Only from these precipitous heights the family unit fortunes fell just as speedily.

The first of the Vanberbilts' Fifth Artery mansions in Manhattan was finished in 1883. Still by 1947 all x of these opulent homes had been torn downward after their contents had been auctioned off.

Within merely 30 years of the death of the Commodore, no member of the Vanderbilt family was among the richest in the U.S. And 48 years afterwards his death, one of his grandchildren is said to have died penniless.

In less than a single generation, the surviving Vanderbilts had spent the majority of their family wealth! And the wealth was virtually gone inside four generations. How was this possible?

Simply put, they went from producers of bang-up wealth to great consumers of it.

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The Commodore'due south children and grandchildren tried to outdo each other in building increasingly large and lavish homes. They became what my dad calls "insiders." They prepare and followed the trends of New York's loftier society. They gave money away to fashionable charities. They held over-the-top fairytale parties. They raced yachts, sports cars, and horses. They indulged their fantasies. Some were said to have developed substance abuse problems.

No doubt, the Great Depression and the introduction of income and estate taxes in the early 1900s took a cost. But families such as the Rothschilds, the Rockefellers, the Fords, and the Duponts were able to navigate these obstacles and preserve their wealth.

Members of these families still occupy the billionaire lists today.

The Vanderbilts held a family reunion at Vanderbilt University in 1973 attended by 120 family members. Not 1 of them was even a millionaire.

Living descendants of the family have authored books with titles such equally Fortune'southward Children: The Autumn of the Business firm of Vanderbilt and Dead Stop Gene Puddle about the family'southward lost wealth. According to these accounts, there was well-nigh no structure or organisation in how the family transferred wealth from one generation to the next.

SUGGESTED: x Life Lessons From My Dad

CNN reporter Anderson Cooper is the great-slap-up-great-grandson of Cornelius Vanderbilt. He reportedly inherited nothing from the Vanderbilt line. He started his career from scratch. He couldn't get his pes in the door anywhere. So he got his commencement in journalism by forging a press pass to enter Myanmar and selling his reports from there to a pocket-sized news agency.

The Vanderbilts but spent their coin. It shows that there's no fortune that can't be spent through.

That'south why you lot've got to set up upwardly the right structures – both "soft" and "hard" – within your family to ensure the proper transition of wealth between generations. It's besides why you desire to keep your family exterior the social circles of the "patsy" rich.

Will Bonner is the eldest son of New York Times bestselling author Pecker Bonner and Executive Director of the Bonner & Partners Family Part If you lot would like to read more essays like Will's, we recommend you lot sign-upwardly for his Dad's free daily e-alphabetic character at "Bill Bonner'due south Diary of a Rogue Economist."

Source: https://www.earlytorise.com/how-the-worlds-richest-family-went-broke/

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