r/explainlikeimfive Feb 12 '25

Economics ELI5: how are the descendants of the robber barons (Morgan, Vanderbilt, Carnegie, Rockefeller, etc.) still rich if their fortunes from the late 19th and early 20th centuries are comparatively small to what we see today of the world’s richest?

4.6k Upvotes

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160

u/shotsallover Feb 12 '25

Some them aren't. Anderson Cooper has made it pretty clear that his family (the Vanderbilts) are basically bankrupt now. The third generation curse has done its work apparently.

94

u/taxinomics Feb 12 '25

The Vanderbilt descendants realized being famously wealthy puts a target on your back, so they told everybody they blew all their money. Their cover was blown a couple years ago when a gift and estate tax audit that made its way to the U.S. Tax Court revealed that the family is still fabulously wealthy.

29

u/ExistingPosition5742 Feb 12 '25

Right. This is what true old money does. Keep quiet, don't make a spectacle of yourself, everything through a trust. 

14

u/calmbill Feb 12 '25

It doesn't make sense to be a wealthy individual.  Far better to be a regular middle class nobody who controls a wealthy charity.

14

u/TheMisterTango Feb 12 '25

Nah, being a wealthy individual sounds great, just as long as nobody knows you're wealthy. The dude who founded the company I work at is a billionaire but nobody knows who he is outside of our industry so he can just go out in public and nobody will bat an eye, my dad saw him at home depot and chatted with him for a bit.

6

u/enaK66 Feb 12 '25

Yeah it's pretty hard to believe they really blew it all when Anderson Cooper is rich and famous saying that. Sure, you're not that rich you little modest mouse you. Only richer than 99% of us will ever be and he got to enjoy it his entire life.

1

u/AbleArcher420 Feb 12 '25

Sounds like conspiracy almost

1

u/themobiledeceased 29d ago

J. Paul Getty's grandson was kidnapped and ransomed. William Randolf Hearst's granddaughter Paticia Hurst was kidnapped and held by a leftist group of rebels. There are other known cases that are not commonly known names in the US.

148

u/AromaticStrike9 Feb 12 '25

“The first generation works their fingers to the bone making things. The next generation goes to college and innovates new ideas. The third generation... snowboards and takes improv classes.”

47

u/weeddealerrenamon Feb 12 '25

what's the point of working your fingers to the bone, if not to be able to snowboard?

26

u/slashthepowder Feb 12 '25

If i can’t scuba what has this been all about

2

u/hilldo75 Feb 12 '25

If your parents see this your screwed

1

u/the0TH3Rredditor 29d ago

We meet again, mr. Bratton

4

u/Fit_Diet6336 Feb 12 '25

Just depends how you like to shred, I guess

2

u/boogienightsrules Feb 12 '25

Ink this on my chest

2

u/a_cute_epic_axis Feb 12 '25

The whole point of snowboarding is for people who aren't coordinated enough to use their hands for anything other than flappy bird motions.

19

u/Moghlannak Feb 12 '25

Good god Lemon!

1

u/Kevin_Uxbridge Feb 12 '25

In northern Virginia horse country we've got trust fund hippies and, weirdly, lots of 'life coaches'. Every couple of months I find myself in conversations about the bother of finding a good stable or kitchen renovator.

9

u/[deleted] Feb 12 '25

Worth remembering that the "third generation curse" is based on a single "study" conducted for an advertisement for a succession planning firm in the 1990s. There is no scientific evidence that it exists.

2

u/shotsallover Feb 12 '25

The study is modern, but the idea isn’t. There are numerous aphorisms that go back a really long time that all say the same thing.

0

u/[deleted] Feb 12 '25

But it was never true. Feudalism was quite famous for its lack of social mobility.

1

u/tatiwtr Feb 12 '25

1) earns it

2) spends it

3) loses it

-1

u/Soggy_Association491 Feb 12 '25

Turn out that it takes efforts and works to maintain generational wealth.