Wednesday, December 03, 2008

Origins of Family Money

How would you feel if your family had some money from somewhat dishonest origins?
I was talking to a friend about her family background-- it's a fascinating story. One of her ancestors invented some sort of patent medicine and made a fairly large amount of money selling it before such things became frowned upon. Later generations of the family made a living in more legitimate ways, but certainly with the help of that ancestor's money.
Another branch of the family also had some money, but in this case, they were immigrants to the US who started a business that is still run by family members today, though not a branch that my friend is directly related to. There was a bit of a power struggle in the family, and my friend's branch was forced out, and possibly not paid their fair share of the company's value.
We got to talking about this because of a shared interest in genealogy. My friend's mother was very interested in learning more about her family background, but seemed a bit ashamed that there may have been some scandal in her family's past having to do with her ancestor selling fake medicine. But they dug up a lot of information about how active he was in his church and social and charitable activities, which made her feel a bit better about it. Nonetheless, she'd lived most of her life kind of turning away from a background of privilege, doing a lot of volunteer work and living very frugally. Her own children were brought up knowing they had a very small trust fund left by their grandparents, but other than that, they lived a normal, comfortable but not luxurious, upper middle class life. Their college educations were paid for, but other than that they had no handouts.
Money passed down in families can have all sorts of strange effects-- people can feel burdened by it, especially if they have qualms about its origins. Have you ever found yourself in that situation, or known someone else who has?


fivewood0 said...

I'm not sure how I would feel about free hand me dwon money. I'll never know the answer. That's for sure. For most people, meeting thier financial needs means taking out a Cheap Personal Loans from time to time to make ends meet.

Miss M said...

I often wonder what it would be like to have family money, if my grandfather wasn't a compulsive gambler it could have happened. He once owned a fabulous art collection, Monets and Matisses amongst others. He gambled it all away.

If I had money from dubious sources I would probably keep the source secret and not want to dig too deeply either. If you found out the money came at someone elses expense, would you give it all away?

Kate@LivingTheFrugalLife said...

There *was* a boatload of money in my mother's family, about four generations back. The family was American blueblood, New England gentility and all that. Not exactly the Rockefellers or the Morgans, but something on the fringes of that sphere.

My great-grandfather married into it and gambled my great-grandmother's share of the fortune away. Then he ditched her with three young girls. My grandmother was raised in near-poverty, which would have been particularly squalid for my great-grandmother. The cultural heritage that has come down to me from those ancestors consists of impeccable table manners and social poise. Honestly. I know it's really weird. Even for my generation it was like being reared in a rich family with no money. Not that the family is arrogant or anything, but there's a sense of belonging to a social class that we don't live in.

I never knew that the family had had money until I was a teenager. I still think it's a weird family history.

Strange Bird said...

If my ancestors had come by money dishonestly, I don't know think it would really bother me much. (If they had a history of homicidal rampages or something of that nature, I might be more ashamed!) I feel that, as long as I acquire and use any money I have ethically, I don't feel particularly burdened. Then again, I'm saying this as someone who grew up without much money and will probably inherit nothing. :)

I can't say that I understand or sympathize much with guilt for things done generations ago. Maybe if your ancestors were war criminals (and even if they were, if you weren't born yet, what could you do about it?)... but sellers of fake medicine? Meh.

Middle Class Hick said...

It depends on how close you are to that money. If your parents got that money, from selling drugs or something like that, then you might feel differently about getting money from them and how you use it.

My family had money, lost it, and now has it again. My great grand mother was an illegitimate child of a from a turn of the 1900's billionaire. He paid it off and gave her mother $100k (in 1900 that was a boat load) to keep things quiet and she married a guy who drank and gambled that money away over the next 10 years. My Grand mother (her daughter) grew up thinking drinking and gambling are bad and has never had alcohol (even in church).

Family histories are so much fun. My parents now have a few million stashed away for retirement. My father as a VP at a large company. If they both pass prior to spending it all, my siblings and I look to get something large. I am not counting on it (my parents love their retirement, 90 day around the world cruises anyone).

We shall see what happens going on with the family. Lots of people are comfortable in the middle class. Mostly it is my cousins that are struggling :)

Stray Cat said...

I imagine that growing up close to dirthy money make them tolerable. If there's no feeling of guilt within the family, than you will not feel either.
It happens in the south of Italy with organized crime. Many are born close to unlawful behaviours, absorbed it and do not really think that selling cocaine is ethically horrible.

Maybe, along the years, one can start feeling uncomfortable, but it will be likely a skinny sensation.

mOOm said...

Our fairly modest inherited family money came from art/antique dealing.

Gord said...

My inheritance will be from my Dad's hard earned labor in the newspaper business. But how would I feel if he had been an executive in the tobacco industry? I'd probably have to do something good (cancer research) with it to make things right. Something good from something bad. As it is; 10% will go to World Vision anyway.

Fit Wallet said...

What about how people make their money today in the stock market? All those mutual funds likely include oil, sex, drugs, rock n roll, you name it. I think people may be making "dirty money" without even being aware.

Anonymous said...

Similar to your "Rule #3: If you find money on the street, don't be ashamed to pick it up!", if you find money handed down from your ancestors, don't be ashemed to use them up!

But while I think it's totally fine to use your ancestors' money even if it originated from devious sources because they are they and you are you, I don't think keeping money found on the street is okay unless you go through the whole going to the police and wait until no one claims it in however long time.

CreditShout said...

Believe it or not I've never played the lottery because if for some unknown reason I won - I don't know if I could take the money. I would feel like I didn't "earn it legitimately" as crazy as it sounds..

Elizabeth said...

My family's background is similar to Kate's. Both parents came from wealth, status, and education. In both cases, though, the bucks stopped after one generation -- my parents. My mom blew through her inheritance. My dad's still sitting on his money -- guarding that nest egg with his life. He was so determined to not share any that he left his wife and children (including me) and never looked back. But they did give me an appreciations for the arts, table manners, and high-quality goods.

If you ask me, any of these high-society families with money coming out of their noses has more than one skeleton in the closet. Ford and Rockefeller were robber barons. Trump is a slum lord. Probloggers earn "passive income" by setting up shell website link farms. People become wealthy either through luck or some degree of questionable ethics, or both.

Cindy said...

My grandfather left some money to his grandchildren. However, most of these go to funds and some investments. All of his money's earned through his company and investments. However, all of us grandchildren but one 're rather careful about that. I have a cousin who never work for a day despite the fact that he's 31 years old. He's the only one who relies entirely on the will. Luckily, his parents're still here and keep track of investments and his spendings. Nonetheless, you must wonder how he survives when his parents are gone.

Anonymous said...

As an almost struggling almost 30 something single female, sometimes I wish I had an inheritance, regardless of where the money came from!

BUT, I know I would feel guilty and my conscious would not be clear because I'd always wonder who got the short end of the stick so I can live fabulously. But as I live and observe the ruthless world we live in where the wealth inequality can blow one away, it makes me depressed sometimes that my effort to make an honest living have not been fully rewarded.

May be if I was to become a call girl I might land me a fortune. May be if I was to marry a millionare all my financial worries would be over. May be if I was to stop watching too much TV and count my blessings I wouldn't know what I am missing.