The Vanderbilts

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Locked
User avatar
CABob
Posts: 4617
Joined: Sun Feb 25, 2007 8:55 pm
Location: Southern California

The Vanderbilts

Post by CABob » Tue Jan 30, 2018 12:02 pm

An interesting article on how the Vanderbilt family did not keep their family fortune.
https://ofdollarsanddata.com/the-best-w ... 79b4085217
Bob

More Please
Posts: 151
Joined: Mon Jan 31, 2011 10:13 am

Re: The Vanderbilts

Post by More Please » Tue Jan 30, 2018 2:06 pm

Very interesting article, thanks for posting. Keeping money in a family after the third generation is a classic problem, it doesn’t seem to matter how much they have in the beginning. The Rothschild family has managed to maintain and greatly increase their wealth by having a large pool of talented people and picking the their successors from within the family. It’s a very interesting topic.

Captain kangaroo
Posts: 70
Joined: Mon Nov 27, 2017 12:45 am

Re: The Vanderbilts

Post by Captain kangaroo » Tue Jan 30, 2018 3:11 pm

Very interesting read. Realistically, I don't think it's worthwhile to plan past two generations if you have a lot of money.

If I was one of the super rich, I'd plan for my kids and grandkids to be ok. After that, they're all on their own.

Stormbringer
Posts: 637
Joined: Sun Jun 14, 2015 7:07 am

Re: The Vanderbilts

Post by Stormbringer » Tue Jan 30, 2018 3:17 pm

Leave your kids enough money so that they can do anything, but not so much that they can do nothing.
"Compound interest is the most powerful force in the universe." - Albert Einstein

bgf
Posts: 652
Joined: Fri Nov 10, 2017 9:35 am

Re: The Vanderbilts

Post by bgf » Tue Jan 30, 2018 3:20 pm

"After adjusting for inflation, the $200 million Vanderbilt fortune would be worth roughly $5 billion in 2017 dollars."

I hate simple calculations like that. The Vanderbilts were far far far wealthier in comparison to their contemporaries than someone with $5 billion would be today...

That kind of inflation calculation doesn't really work.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

User avatar
nativenewenglander
Posts: 90
Joined: Sun Jul 30, 2017 6:05 am

Re: The Vanderbilts

Post by nativenewenglander » Tue Jan 30, 2018 3:46 pm

We bought a summer house from a Vanderbilt relative, it was our year round house, a pretty simple place actually. The wife told me how her family had to sell the big house of 50 rooms on 800 acres as no one had money to keep it up.That place was a couple towns away from me at the time. They lived year round on O Street in Washington DC. I never met their kids, but know they live in CA, one is a lawyer the other a therapist of some kind, so had real jobs. Interesting people for sure though, very proper.

deltaneutral83
Posts: 901
Joined: Tue Mar 07, 2017 4:25 pm

Re: The Vanderbilts

Post by deltaneutral83 » Tue Jan 30, 2018 3:52 pm

bgf wrote:
Tue Jan 30, 2018 3:20 pm
"After adjusting for inflation, the $200 million Vanderbilt fortune would be worth roughly $5 billion in 2017 dollars."

I hate simple calculations like that. The Vanderbilts were far far far wealthier in comparison to their contemporaries than someone with $5 billion would be today...

That kind of inflation calculation doesn't really work.
Yea I didn't understand that either. Even $100M mil in the equities in 1885 would be.....A lot more than $5 Billion.

Sockpuppet
Posts: 113
Joined: Mon Oct 23, 2017 9:06 pm

Re: The Vanderbilts

Post by Sockpuppet » Tue Jan 30, 2018 5:24 pm

Also, estate taxes.

randomguy
Posts: 6604
Joined: Wed Sep 17, 2014 9:00 am

Re: The Vanderbilts

Post by randomguy » Tue Jan 30, 2018 6:19 pm

More Please wrote:
Tue Jan 30, 2018 2:06 pm
Very interesting article, thanks for posting. Keeping money in a family after the third generation is a classic problem, it doesn’t seem to matter how much they have in the beginning. The Rothschild family has managed to maintain and greatly increase their wealth by having a large pool of talented people and picking the their successors from within the family. It’s a very interesting topic.
It is also a bit deceptive. For example 120 million of the relatives gathered and not one was a millionaire. Lets assume that was true. That just means the millionaire relatives (i.e. see Gloria Vanderbilt) didn't show up:) After 5 or 6 generations, we could easily be talking about 1000+ (The guy had 10 kids:)) descendants at this time.

As far as the value of the fortune: http://money.cnn.com/gallery/luxury/201 ... ory/2.html puts him more like 200 billion by using an economic impact measurement. That is probably a better measurement of how wealthy they were.

What will be interesting is seeing if going forward if families do better. Easy access to the capital markets, financial advice, and much smaller families should help. But human nature sure hasn't changed. It is easy to have spending increase to match just about any income.

Stonebr
Posts: 1468
Joined: Wed Jan 21, 2009 11:19 am
Location: Maine

Re: The Vanderbilts

Post by Stonebr » Tue Jan 30, 2018 6:33 pm

As I understand it Biltmore Estate in Asheville, NC is still in the Vanderbilt family.

Pretty big asset to ignore. William Amherst Vanderbilt Cecil died last year at 89. He was the grandson of George V, who bilt :wink: the thing, and bought all the land that ended up as Pisgah National Forest.
"have more than thou showest, | speak less than thou knowest" -- The Fool in King Lear

User avatar
willthrill81
Posts: 6416
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: The Vanderbilts

Post by willthrill81 » Tue Jan 30, 2018 10:30 pm

Stormbringer wrote:
Tue Jan 30, 2018 3:17 pm
Leave your kids enough money so that they can do anything, but not so much that they can do nothing.
How much money is that? Are those two things inclusive of each other?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

nova1968
Posts: 227
Joined: Wed May 18, 2016 12:00 pm

Re: The Vanderbilts

Post by nova1968 » Wed Jan 31, 2018 10:19 am

I believe Anderson Cooper, the guy from CNN is a heir to the Vanderbilt fortune, Additionally, a lot of the assets went to fund Vanderbilt University, similar to the Getty Fortune which set up an art museum in Malibu.

BlackStrat
Posts: 265
Joined: Wed Apr 29, 2015 9:20 am

Re: The Vanderbilts

Post by BlackStrat » Wed Jan 31, 2018 11:53 am

willthrill81 wrote:
Tue Jan 30, 2018 10:30 pm
Stormbringer wrote:
Tue Jan 30, 2018 3:17 pm
Leave your kids enough money so that they can do anything, but not so much that they can do nothing.
How much money is that? Are those two things inclusive of each other?
I believe I read once that Bill Gates said the same thing about how much he'd leave his kids. When pressed further about an actual amount, he quoted $25M!

...same planet different world

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: The Vanderbilts

Post by Pajamas » Wed Jan 31, 2018 12:03 pm

nova1968 wrote:
Wed Jan 31, 2018 10:19 am
I believe Anderson Cooper, the guy from CNN is a heir to the Vanderbilt fortune, Additionally, a lot of the assets went to fund Vanderbilt University, similar to the Getty Fortune which set up an art museum in Malibu.
No, his mother already told him there are no trust funds or similar that he will inherit but he doesn't care because he makes more than $10 million a year as a journalist and author.

https://www.thewealthadvisor.com/articl ... ilt-estate

bhsince87
Posts: 1890
Joined: Thu Oct 03, 2013 1:08 pm

Re: The Vanderbilts

Post by bhsince87 » Wed Jan 31, 2018 12:17 pm

I once had an heir to the Reynolds tobacco family as a co worker. I think he was 4th or 5th generation.

He eventually got a trust fund around $20 million. But in order to "earn" that, he was required to get a college degree and hold down a "real" job until age 35. Which he did indeed do.

I thought that was an interesting approach.
Retirement: When you reach a point where you have enough. Or when you've had enough.

daveydoo
Posts: 1564
Joined: Sun May 15, 2016 1:53 am

Re: The Vanderbilts

Post by daveydoo » Wed Jan 31, 2018 12:23 pm

bgf wrote:
Tue Jan 30, 2018 3:20 pm
"After adjusting for inflation, the $200 million Vanderbilt fortune would be worth roughly $5 billion in 2017 dollars."

I hate simple calculations like that. The Vanderbilts were far far far wealthier in comparison to their contemporaries than someone with $5 billion would be today...
That's actually a lot of money for one family to own. I think we're jaded by the lists of billionaires and the daily updates on whether Gates or Bezos is in or out of the 12-figure club. But $5 billion in today's dollars? That's hardly disappointing. Well used, that could position a family to be a or even the leading philanthropist in any major city.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

nordsteve
Posts: 653
Joined: Sun Oct 05, 2008 9:23 am

Re: The Vanderbilts

Post by nordsteve » Wed Jan 31, 2018 12:26 pm

If you're curious about how they dissipated their fortune, the book Fortune's Children is an excellent read. Written by one of the heirs.

mhalley
Posts: 6290
Joined: Tue Nov 20, 2007 6:02 am

Re: The Vanderbilts

Post by mhalley » Wed Jan 31, 2018 12:34 pm

I believe the statistics go something like 70% of inherited wealth is lost by the second generation, 90% by the third. How many generations has it been since the Vanderbilt’s? I guess they never hears about the SWR.

User avatar
alpine_boglehead
Posts: 240
Joined: Fri Feb 17, 2017 9:51 am
Location: Austria

Re: The Vanderbilts

Post by alpine_boglehead » Wed Jan 31, 2018 12:47 pm

Very interesting that some of the losses are attributable to the lack of liquidity in rough times. A good reason for having an emergency fund.

User avatar
alpine_boglehead
Posts: 240
Joined: Fri Feb 17, 2017 9:51 am
Location: Austria

Re: The Vanderbilts

Post by alpine_boglehead » Wed Jan 31, 2018 12:52 pm

mhalley wrote:
Wed Jan 31, 2018 12:34 pm
I believe the statistics go something like 70% of inherited wealth is lost by the second generation, 90% by the third. How many generations has it been since the Vanderbilt’s? I guess they never hears about the SWR.
Buffet and Gates might be thinking along the same lines when pledging most of their wealth to charitable causes. Give the kids a better world to live in than give them money :D

The Wizard
Posts: 12432
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: The Vanderbilts

Post by The Wizard » Wed Jan 31, 2018 12:54 pm

The Family Office concept of managing inherited wealth may be the best idea to avoid excessive spending, I'm thinking.
The Rockefellers have that and they're still pretty much solvent, right?
Not sure what the Waltons do...
Attempted new signature...

2015
Posts: 2152
Joined: Mon Feb 10, 2014 2:32 pm

Re: The Vanderbilts

Post by 2015 » Wed Jan 31, 2018 2:07 pm

Love the WCI quote at the end of the article. Once is all it takes to make it. Keeping it takes something else entirely.

bgf
Posts: 652
Joined: Fri Nov 10, 2017 9:35 am

Re: The Vanderbilts

Post by bgf » Wed Jan 31, 2018 5:35 pm

daveydoo wrote:
Wed Jan 31, 2018 12:23 pm
bgf wrote:
Tue Jan 30, 2018 3:20 pm
"After adjusting for inflation, the $200 million Vanderbilt fortune would be worth roughly $5 billion in 2017 dollars."

I hate simple calculations like that. The Vanderbilts were far far far wealthier in comparison to their contemporaries than someone with $5 billion would be today...
That's actually a lot of money for one family to own. I think we're jaded by the lists of billionaires and the daily updates on whether Gates or Bezos is in or out of the 12-figure club. But $5 billion in today's dollars? That's hardly disappointing. Well used, that could position a family to be a or even the leading philanthropist in any major city.
I'm pretty sure I'm right on this one. The size of his fortune in comparison the the entire American economy at the time is difficult for us to comprehend. If he liquidated all his assets upon his death, he would have taken 1 out of every 20 dollars in circulation at the time. His importance to the economy was staggering.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

cherijoh
Posts: 4989
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: The Vanderbilts

Post by cherijoh » Wed Jan 31, 2018 5:58 pm

I heard the author of this book on Biltmore Estate when she was on her book tour and a guest on a local Charlotte radio program. Very interesting stuff - here is a link to the podcast.

daveydoo
Posts: 1564
Joined: Sun May 15, 2016 1:53 am

Re: The Vanderbilts

Post by daveydoo » Wed Jan 31, 2018 6:00 pm

bgf wrote:
Wed Jan 31, 2018 5:35 pm
daveydoo wrote:
Wed Jan 31, 2018 12:23 pm
bgf wrote:
Tue Jan 30, 2018 3:20 pm
"After adjusting for inflation, the $200 million Vanderbilt fortune would be worth roughly $5 billion in 2017 dollars."

I hate simple calculations like that. The Vanderbilts were far far far wealthier in comparison to their contemporaries than someone with $5 billion would be today...
That's actually a lot of money for one family to own. I think we're jaded by the lists of billionaires and the daily updates on whether Gates or Bezos is in or out of the 12-figure club. But $5 billion in today's dollars? That's hardly disappointing. Well used, that could position a family to be a or even the leading philanthropist in any major city.
I'm pretty sure I'm right on this one. The size of his fortune in comparison the the entire American economy at the time is difficult for us to comprehend. If he liquidated all his assets upon his death, he would have taken 1 out of every 20 dollars in circulation at the time. His importance to the economy was staggering.
Not sure what this means, though. That article makes the point that his or his family's half-dozen properties were too expensive. Not sure how that relates to 5% of the money in circulation (or even how the money in circulation relates to the aggregate net worth of Americans). If you own 5% of the whole economy, it's hard to criticize you for owning a handful of expensive properties. You could probably own Manhattan and LA and I don't think he did. So what does your "1 out of every 20 dollars" mean?

And then there's this quote: "Of all the financial sins committed by House Vanderbilt, this one is probably the worst. During their entire fall from grace there is no account of a Vanderbilt purchasing an income producing asset. This is one of the biggest differences between those who grow wealthy and those who don’t — the wealthy buy income producing assets." Is the author familiar with those fools, Gates and Bezos...
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

GoldenFinch
Posts: 1666
Joined: Mon Nov 10, 2014 11:34 pm

Re: The Vanderbilts

Post by GoldenFinch » Wed Jan 31, 2018 6:03 pm

2015 wrote:
Wed Jan 31, 2018 2:07 pm
Love the WCI quote at the end of the article. Once is all it takes to make it. Keeping it takes something else entirely.
Me too. One of the best take-a-ways from the article. I’m forwarding this to my kids.

Thanks for the link CABob! :happy

User avatar
LadyGeek
Site Admin
Posts: 49128
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: The Vanderbilts

Post by LadyGeek » Wed Jan 31, 2018 8:03 pm

This thread has run its course and is locked (rich people). See: Non-actionable (Trolling) Topics
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
  • US or world economic, political, tax, health care and climate policies
  • conspiracy theories of any type
  • discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Locked