Multi-Generational Wealth Management: Vanderbilts vs. Rockefellers
Names like Vanderbilt and Rockefeller cause many people to think of the vast fortunes both patriarchs amassed during their lifetimes. To the average American family, that wealth represents freedom for future generations. The value of your children and their children having access to capital to pursue virtuous endeavors like going to college, starting a family, and starting a business is immeasurable. This article will explore how you can plan a legacy that does just that.
Cornelius Vanderbilt amassed a fortune worth more than the U.S. Treasury held in reserve at the time, topping over $100 Million, the modern day equivalent would be around $200 Billion. When Cornelius died in 1877 he left around 95% of his wealth to his son William, leaving the rest to be split between his wife and children. William managed the family money well, but he would pass away just 9 years after his father. This is where the family wealth began to dwindle with much more going out than coming in, eventually leading to a direct descendant of Cornelius dying broke just 48 years after the passing of the patriarch of the Vanderbilt family.
John D. Rockefeller would surpass Cornelius Vanderbilt in wealth accumulation as he would eventually leave $1.5 Billion to his family in 1937 upon his passing, worth somewhere north of $250 Billion in today’s dollars. Unlike Vanderbilt, Rockefeller positioned his wealth proactively by setting up trusts for each of his children during his lifetime ensuring that he wold be able to direct how the family wealth could be used. He also entrusted his family wealth to financial advisors that made up their family office. Six generations later, the Rockefeller family office is still managing the families’ wealth. It is estimated that the Rockefellers donate $50 Million per year to charity, something John D. would be proud of.
Your Family Legacy
You’ve worked hard to get where you are and you want to protect what you’ve accumulated, but you also want to bless your children and their children with opportunity and freedom. Hard work and inheritance don’t need to be mutually exclusive, but in order to ensure that your wealth is used in the way you intend, you need to do three things.
A plan is the first step in ensuring a successful future for your legacy and working with an advisor that is legacy focused can help you do that. Once you have a plan in place of what you would like to happen, you need to utilize risk management strategies that can help protect your legacy from market risk, creditors, systemic risk, and more. Lastly, you need to structure your wealth in a way that allows you to direct how it can/will be used while you’re here with your family and when you’re gone. If you can do these three things, you will have taken a major step towards securing your family legacy like John D. Rockefeller did many years ago.