How To Preserve Wealth Over Centuries?

Once while in Rome James Rickards was ensconced in a 900-year-old fortune still intact. Here was a family fortune that had survived the Black Death, the Thirty Years' War, the wars of Louis XIV, the Napoleonic Wars, both world wars, the Holocaust and the Cold War. He says the Colonna family weren't unique; there were other families like them throughout Europe who kept a low profile. These families are only too happy to be overlooked by the Forbes 400. That type of wealth and longevity could not be due merely to good luck. In 900 years, too many cards are turned from the deck for luck alone to be sufficient. There had to be a technique.

- James Rickards

I believe that we’re heading for another liquidity crisis or financial crisis. That doesn’t mean it’ll happen tomorrow, but there are disturbing signs that it might not be too far off.

It doesn’t mean the world’s going to end. But investors who aren’t prepared could see large portions of their portfolios wiped out. It could take years to rebuild them, and many investors just don’t have the time to recoup those losses.But how do you prepare? You might want to start by looking at how “old money” preserves its wealth. Today I want to explore that.

On a cool evening in the fall of 2012, I joined a private dinner in Rome with a small group of the world’s wealthiest investors.We dined at Palazzo Colonna, a private palace that’s been owned by one family for 31 generations or 900 years. My dinner companions were mainly Europeans, some Asians and relatively few from the United States.Amid marble, gold, paintings and palatial architecture, I mused on the meaning of old money compared with the new money crowd that congregated for cocktails near the Connecticut home in which I lived at the time.

Old Money vs. New Money

Old money has proved they know how to preserve wealth over centuries, while the jury is still out on new money busy buying yachts, jets and exotic vacations.

In the United States, the “old money” is generally about 150 years old with fortunes dating to the mid-19th century. Families in this category include the Vanderbilts, Rockefellers and Carnegies.Some U.S. family fortunes are almost 200 years old. But most of the great wealth today isn’t old at all. It comes from success in the past 30–50 years including Mark Zuckerberg, Jeff Bezos and Warren Buffett.