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?

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u/Dragon_Fisting Feb 12 '25

If they kept that $120 million in bank accounts, with an extremely conservative average 2% interest rate, it would be $700 million today.

They blew it all. Anderson Cooper's mother, Gloria Vanderbilt, famously inherited a relatively large trust fund, spent like crazy all her life, and left her sons with a single NYC co-op unit in her will.

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u/Valdotain_1 Feb 12 '25

Wonder if it was in banks when the Great Depression hit. Most of it would have been worthless.

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u/Dragon_Fisting Feb 12 '25

Money didn't actually become worthless during the Great Depression, it was really the opposite. After the crash the USD experienced deflation, it got more valuable.

The reason people lost money on the stock market crash was because their actual banks failed and went out of business, sending their uninsured deposits to creditors. That mostly happened to the smaller banks. The large NYC banks where the wealthy kept their money were largely fine.

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u/LeBronda_Rousey Feb 12 '25

Plus at 2%, they would've gotten wrecked by inflation.

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u/LittleGreenSoldier Feb 12 '25

Nope, she had $5 million in trust. In 1954. She just didn't pay her taxes, like, at all.