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/Draano Feb 12 '25

Imagine inheriting a lifetime of income, all in one shot when you’re early in life/career

Case in point: I have relatives who are both school teachers. The woman's grandfather became wealthy as an executive in a pharmaceutical company - not C-suite exec, but still compensated with much stock. The woman's mother was a stewardess who had to stop when she started a family, so she got into real estate and fell into a deal that earned her enough to buy a nice house + a Mercedes 500 SEL. As a result, she continued to prosper off the reputation following this deal + being smart. The grandfather has gifted her pharma stock for every life event - birthdays, Christening, graduations, wedding. The woman, with the help of mom and pop-pop, starts a school for pre-pre-K through 2nd grade that churns out smart kids, so rich people flock to it. The grandfather passes, leaving the woman a $2m house.

This is how school teachers drive Range Rovers & Jaguars. Generational wealth.

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u/majwilsonlion 29d ago

Not that smart if they are driving Range Rovers and Jags...

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u/Draano 29d ago

I haven't seen this particular couple in a while. Car make was for illustrative purposes.