Time for some “riches to rags” stories.

[Anonymous]

Anonymous wrote:I once dated a Vanderbilt. It turns out there were so many heirs to that fortune that most of them had little more than the name.

Yep. The first two generations of Vanderbilts did fabulously. The heirs squandered all their money. I’ve always wondered where it all went wrong with the subsequent generations. Bad parenting? The biographies of the family are fascinating.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I once dated a Vanderbilt. It turns out there were so many heirs to that fortune that most of them had little more than the name.

Yep. The first two generations of Vanderbilts did fabulously. The heirs squandered all their money. I’ve always wondered where it all went wrong with the subsequent generations. Bad parenting? The biographies of the family are fascinating.

Anderson Cooper is a Vanderbilt I believe.

[Anonymous]

Anonymous wrote:Just a few more years and will be able to add a former president to the list. Amazing how much of his father's money he has burned through already.

Son-in-law might be the same eventually. Already cut his family's holdings in half the few years he managed them, before his criminal father got out of prison (for extorting his brother-in-law) and took back over.

Which son-in-law? Jared or Tiff's husband?

[Anonymous]

My high school best friend’s mom - her ex made a ton of money in the early tech days inventing key technology that was very widely used. When they got divorced, her mom got the largest divorce settlement in the history of the state. Her mom lived lavishly, threw great parties, and always bought luxury items. She lost a lot of money in bad investments. She previously lived in a house that’s now worth 4-5M (not what she paid or sold it for though) and now rents a townhouse and is working (actually doing very important political work for an organization she founded and funded generously decades ago - she came back on as the paid ED). Frankly, though she’s not as wealthy as she once was, she lives a good life. She’s sober now and I’m willing to bet would say she’s happier now than she had been before. Although the money was never my friend’s money, she married a preacher and had four kids and always hosts foster kids and lives in a small home in a more rural community, so very poor compared to her childhood. But she’s super happy and well adjusted and perhaps has the highest quality of life of our cohort (embedded in a wonderful, supportive community, an ease of living , great relationships, etc).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Just a few more years and will be able to add a former president to the list. Amazing how much of his father's money he has burned through already.

Son-in-law might be the same eventually. Already cut his family's holdings in half the few years he managed them, before his criminal father got out of prison (for extorting his brother-in-law) and took back over.

Which son-in-law? Jared or Tiff's husband?

Jared.

https://www.vanityfair.com/news/2017/08/is-jared-kushner-the-worlds-worst-real-estate-investor

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just a few more years and will be able to add a former president to the list. Amazing how much of his father's money he has burned through already.

Son-in-law might be the same eventually. Already cut his family's holdings in half the few years he managed them, before his criminal father got out of prison (for extorting his brother-in-law) and took back over.

Which son-in-law? Jared or Tiff's husband?

Jared.

https://www.vanityfair.com/news/2017/08/is-jared-kushner-the-worlds-worst-real-estate-investor

And this was Jared's dad (the actual good businessman, this is why he went to prison and Jared had to take over for a few years).

https://www.justice.gov/archive/tax/usaopress/2004/txdv04kush0818_r.htm

When Jared's dad got out he took back over and started righting the ship.

[Anonymous]

ok so why were posts removed from this thread?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just a few more years and will be able to add a former president to the list. Amazing how much of his father's money he has burned through already.

Son-in-law might be the same eventually. Already cut his family's holdings in half the few years he managed them, before his criminal father got out of prison (for extorting his brother-in-law) and took back over.

Which son-in-law? Jared or Tiff's husband?

Jared.

https://www.vanityfair.com/news/2017/08/is-jared-kushner-the-worlds-worst-real-estate-investor

And this was Jared's dad (the actual good businessman, this is why he went to prison and Jared had to take over for a few years).

https://www.justice.gov/archive/tax/usaopress/2004/txdv04kush0818_r.htm

When Jared's dad got out he took back over and started righting the ship.

Ironically it's the brother who never joined the family business who has done super well, on his own. Although of course I am sure the family money/connections/etc helped him a ton in getting going.

https://www.forbes.com/profile/josh-kushner/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I once dated a Vanderbilt. It turns out there were so many heirs to that fortune that most of them had little more than the name.

Yep. The first two generations of Vanderbilts did fabulously. The heirs squandered all their money. I’ve always wondered where it all went wrong with the subsequent generations. Bad parenting? The biographies of the family are fascinating.

Anderson Cooper is a Vanderbilt I believe.

Yes, and he inherited basically nothing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s not that common

Neither are rags to riches stories, yet I read about those all the time. On average, when controlling for inflation, people achieve the same level of success as their parents. For every overachiever, there's an underachiever.

I think most of those stories are less “rags to riches” and more “lower middle class to upper middle class.”

[Anonymous]

My dad grew up in the British aristocracy. Literal castle, fancy boarding schools. Money so old there isn't any left. He never really learned how to be good with money or how to make any. Went into a poorly paid but culturally pretentious profession. I grew up LMC due to my mom's stable government job with benefits. I think he's still confused another everything.

[Anonymous]

^^wow I meant to write "prestigious" Freudian slip

[Anonymous]

Anonymous wrote:

Anonymous wrote:My grandma inherited a few hilariously bad investments called ground rents somewhere in the vicinity of Baltimore from her old Marylander relatives. These were an old-fashioned form of land ownership under other people's wholly-owned houses. The house owners were supposed to pay the fixed cost of the ground rent annually. Due to inflation, these ancient leases became largely valueless by the 1960s (e.g. $50/yr was real money in the early 1900s and not very much in the 1960s). To add insult to injury, the land in question ended up becoming a rough neighborhood and after a few more years nobody responded to payment inquiries.

This wasn't any meaningful part of my grandma's assets but it's an interesting DMV tale. Cousins who inherited the family farmland in Anne Arundel county did a lot better financially. That land soared in value over 100 years while the other land-backed asset crashed.

that is interesting! the taxes on that land must have been more than the ground rent she got. I’ve only ever heard of that kind of thing with mobile homes. do you know what happened to it?

PP. I only know about Baltimore ground rents from one conversation I had with my grandma 30+ years ago. And it stuck in my mind because it was so weird. And a good example of the power of inflation.

Before I posted, I Googled and confirmed that ground rents were indeed a real thing in Baltimore and Maryland. Because most of them were antique and relatively valueless, the Maryland State govt. passed laws to make it easier for house owners to buy out the ground rent. Especially if the ground rent had not been billed in a long time. There's a lot of info on the web if you want details.

My grandma didn't mention having to pay tax on the land. As I mentioned, the area had become blighted and this was in the late 1980s before massive computerization/online records when we talked about it. I assume the land was essentially abandoned or the homeowner was paying property tax on the house they owned and nobody cared about separate value for the land underneath. Her connection ended when people stopped paying her willingly. I guess when it became such insignificant money, they didn't care anymore. Or maybe they should have paid her to close out the ground rent and give them clear title...and just didn't.

As I'm remembering now, I think a few of her ground rents were eminent domained for road building and so were cashed out earlier than she stopped collecting rent.

My only interest is understanding what connection my relatives had to that area in historical times.

[Anonymous]

Anonymous wrote:^^wow I meant to write "prestigious" Freudian slip

I enjoyed that.

[Anonymous]

You have to widen your timespan for these stories. Riches to rags in a single generation is bad luck, bad planning, or bad decisions. But far more common is the three-generation arc:

First generation grows up poor and makes the money.
Second generation appreciates the money and makes more of it.
Third generation takes it for granted and blows it all.

Repeat.