What I Learned About Old vs. New Wealth

I lived in NYC for 18 years, then in Madrid, Spain for 17 years and as of three weeks ago I have been back in New York City.  While I started my life as the middle class son of a university professor, I was lucky enough to become a serial entrepreneur in the telco, internet and alternative energy sectors, and enjoy a life that I would not have dreamed of when I was a student at Columbia University.

This has put me in a privileged position to observe the life of my successful peers on both sides of the ocean, people who are well off, otherwise known as “the rich.”  And while the rich are frequently disliked in the USA they are many times simply hated in Europe.  In the beginning of my life in Europe, I thought this was because equality is highly valued in Europe, not only equality of opportunity as in the USA, but also equality of results.  But upon my return to the USA, I have come to realize that this is only part of the reason why rich people in Europe face disdain from the public. That when you look into how the rich behave in Europe vis-a-vis their peers and society in general, you realize that there are more reasons to dislike the rich in Europe. Especially in continental Europe, where rich people rarely lead public lives, are reclusive and only occasionally generous when it comes to sharing their wealth to improve the world.

Old wealth

Many wealthy people in Europe come from old money, so they’ve never had to face the difficulties that the average person on the street faces. These people often don’t realize how privileged they are. They frequently have no living relatives who can recall tough times. They can only remember wealth.  And this old wealth, the wealthy German, Italian, French and Spanish families for example, families that I have come to know in my business dealings and social life, behave differently from their American counterparts who are more commonly self-made and greatly aware of the precariousness of their condition as wealthy.

New wealth

In contrast, the rich in the US, the majority who are many times self-made, are much more sensitive to the realities faced by the rest of society. For a lot of them, life was tough just a few years ago. Or because they are more commonly risk takers, they also identify with loss in the sense that they see that they too could be broke in the future should business prospects go seriously wrong.

This awareness of risk, and recent memory of adversity, makes the wealthy in the US more sensitive, and more willing to share – from making more charitable donations to sharing wealth with friends and acquaintances. Since we moved from Madrid to New York, we have experienced this largesse first-hand. My wife and I have received invitations to wonderful vacations, as well as offers to share planes, homes and yachts. This is something that I rarely experienced in Europe where splitting bills is very common even among the very rich.

The result is that in America the rich are more often admired and emulated than in Europe.  Take Warren Buffet and Bill Gates, for example, and their pledge to donate half of their wealth in a program known as The Giving Pledge and see all the American billionaires who have gone along with this pledge. These men are very wealthy but at the same time sensitive to the serendipitous nature of their economic success. I’m not sure I could name their European counterparts. Amancio Ortega for example, the fifth wealthiest person in the world with a net worth of $37 billion, is unknown around the world in part because he has avoided philanthropy.

Is the hatred of the European rich justified?

Oftentimes, yes. In Europe, people are used to dealing with rich people who are self-absorbed, insensitive and out of touch with reality. They see rich people who bask in their wealth, but do little to improve the world – philanthropy is rare in Europe, especially when compared to the USA. And as I mentioned before, Europe has huge egalitarian aspirations, so having wealth and not sharing it in any way does create animosity. What people in Europe want to see is a new crop of wealthy people who care about the world, and are willing to share their wealth beyond their immediate families.

This article was also published in LinkedIn. You can follow Martin by clicking below:

• new rich
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