The Vanderbilt Family…

Cornelius Vanderbilt created one of the greatest fortunes in world history, valued at his death at $100million. He left 95% of his estate to one son and divided the rest among his eight daughters and his wife, leaving a tiny portion to charity. Four of his children contested the will and one ultimately killed himself over the escalating feud about the financial inheritance.

Economist John Kenneth Galbraith said that the Vanderbilts showed “both the talent for acquiring money and the dispersing of it in unmatched volume,” adding that “they dispensed their wealth for frequent and unparalleled self-gratification and very often did it with downright stupidity.”

Confirmation of that view came only forty-eight hours after Cornelius’ death when one of his direct descendants died penniless and within seventy years of his passing, the last of the ten great Vanderbilt Fifth Avenue mansions in New York City was torn down.

So great was the destruction of the Vanderbilt family and its wealth that for decades and through the mid 1900’s the press referred to it as “The Fall of the House of Vanderbilt.’ William K Vanderbilt, grandson of Cornelius, said of his inheritance, “It has left me with nothing to hope for, with nothing definite to seek or strive for. Inherited wealth is a real handicap to happiness. It is as certain death to ambition as cocaine is to morality.”

Cornelius employed a legion of attorneys and accountants. In fact, his planning was based entirely upon financial planning and estate planning. He did not consciously prepare his children to receive their inheritances, create a pattern of communication amongst the family, or organise them for on-going success. Consequently, when the Vanderbilt family held a reunion in 1973 there were no millionaires left among them.

The Rothschild Family…

The story of the rise of Europe’s Rothschild family in the 19^th and 20^th Centuries is far more than a tale of banking or politics. It is also the story of how one family has intentionally prepared and organised its children to be strong, independent and successful on their own, apart from the family and its vast fortune.

The family first rose to prominence in the late 18^th century under Mayer Amschel Rothschild, and, by the time Sir Nathan Rothschild came to lead the family’s enterprises at the turn of the 20^th century the name Rothschild was synonymous with banking and finance. So great was their power that on several occasions the House of Rothschild, as it came to be known, actually bailed Germany and England out of economic catastrophes that could have led to their collapse.

The Rothschild family philosophy on passing inheritances from one generation to the next is very different from Vanderbilt’s. They actively mentor the children. For example, they establish ‘family banks’ to lend money to those children who want to start businesses or pursue other careers and they monitor and advise the ventures in which the children participate. At the annual family gatherings (which have been held for over 200 years), the values which have sustained the family for generations are affirmed even as their vision for the future is sharpened and clarified. As part of that vision, the family supports a programme of philanthropy in the Arts, Medicine, Science and Education.

The Rothschilds not only utilised Financial Planning and Estate Planning, they incorporated Legacy Planning, which prepares the heirs to receive their inheritance. Building on that very stable platform has been the key to keeping individual family members and the family as a whole, unified, strong and prosperous for generations, no matter what is happening in the world around them.

When you have got it, it requires 10 times more wit to keep it.” (Nathan Rothschild)

Source: The Heritage Institute, LLC • 5 Centerpointe Drive, Suite 400 • Lake Oswego, OR 97035