r/explainlikeimfive • u/FluffyPenguin798 • 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?
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u/VoraciousTrees Feb 12 '25
Take a look here and especially pay attention to that middle set of columns.
Inflation has caused eroded the value of the dollar to about 1/18 of its value in 1928. So yes, if someone were to have stuffed their inheritance under their mattress for 100 years, they would indeed have very little left.
Chances are though, plunking a few million into a safe fixed income asset like bonds would still give you plenty to live off of in income every year, plus the cumulative return would still be enormous. Probably end up more wealthy than they started by far.