New Money vs Old Money. Should you care?

Money is an essential need in every human being's life. Without money, we can’t survive in this world. For fulfilling our basic requirements money is important.

It is the principal measure of wealth. It is also the medium of economic exchange. It is commonly known as Currency. People work hard to earn money. We can buy any items with the help of money.

Types of money:-

Money is classified into four different types by economists

1. Commercial Money
2. Fiduciary Money
3. Fiat Money
4. Commodity money

What is New money?

• The money which is recently earned by individuals is known as New money. New money is the wealth that is created and earned by individuals. This type of money is not inherited. It is the kind of money that is earned by people through the hard work they put in their work.

What is Old money?

• The money which passes from one generation to the other generation is known as the old money. Old money is a kind of wealth that is inherited rather than earned. It is generally the inherited wealth of all the upper-class families. Generally, people whose families are very wealthy for a long period of time have old money.

Differences between Old and New money are as follows:-

1. Source -The most important difference between old and new money is the source from which they are coming. Old money is inherited whereas New money is earned.
2. Social Standing – Social Standing is another difference between old and new money. Families who have old money are rich for many years and have a social status whereas families who have newly earned money get less social status and respect as compared to families which have old money.
3. Difference in spending habits – Old and new money are different from each other on the basis of their spending habits also. Families who have old money have different spending habits as compared to families who have newly earned money. Newly earned money families are more proud and they generally show – off their money to other people.
4. Families who have old money don’t have to buy expensive items for showing that they are rich while families who have new money generally show off by buying expensive things in their house.
5. Families who have old money belong to the elite upper class whereas the families who have new money belong to any class.
6.  Those who have new money like to post pictures of their vacations and expensive things on social media whereas families who have old money don’t do these things.
7. People who have newly earned money are very hardworking whereas Old money people work very little as compared to newly earned money people.
8.  Old money people tend to be more conservative towards their money whereas new money people spend more money.
9.  These two are also differentiated on the basis of social perception.

Should you really care?

The answer to this question depends on the perspectives of people. Some people don’t give importance to old and new money while others proudly present themselves expressing the kind of money they have.

Old money people take pride in telling about the wealth which they are having from many generations while new money people majority of the world’s current billionaires are self–made.

So the difference between these two forms of money depends upon how we look at it or what is our understanding and perspective towards these things.