11 highlights
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Cornelius Vanderbilt left his heirs the inflation-adjusted equivalent of something like $300 billion. Within 50 years it was gone.
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In 1875 an op-ed said socialites “devote themselves to pleasure regardless of expense.” A Vanderbilt responded that actually they “devote themselves to expense regardless of pleasure.”
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Reggie’s grandson – Anderson Cooper – was one of the first Vanderbilts who was never promised dynastic wealth. It may have been a blessing.
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I’m always interested in the difference between getting rich and staying rich. They are completely different things, and many of those skilled at the former fail at the latter.
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These definitions are my own, but here’s the distinction: Rich means you have cash to buy stuff. Wealth means you have unspent savings and investments that provide some level of intangible and lasting pleasure – independence, autonomy, controlling your time, and doing what you want to do, when you want to do it, with whom you want to do it with, for as long as you want to do it for.
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What I find fascinating are stories like the Vanderbilts, who were the richest people on earth but, by my definition, some of the least wealthy.
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Rather than using money to build a life, their life was built around money; rather than an asset, their inheritance was an insurmountable lifestyle debt, passed to the next generation until there was mercifully nothing left.
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Nassim Taleb echoes a similar point when he says, “The record shows that, for society, the richer we become, the harder it is to live within our means. Abundance is harder for us to handle than scarcity.”
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Part of the reason home affordability is lower today than in previous generations is because the average new home is a third larger than it used to be; millions of Americans haven’t saved enough to retire, but just a few generations ago the entire concept of retirement was a dream.
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Average household incomes adjusted for inflation have more than doubled in the last 70 years, but it doesn’t feel that way because expectations have more than doubled.
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The goalpost has to stop moving; the expectations have to remain in check. Otherwise money has a tendency to be a liability masquerading as an asset, controlling you more than you use it to live a better life.