Cornelius Vanderbilt, also called “The Commodore,” has made about $100 million.
At today’s prices, that would be worth about $2.5 billion.
When he died in January 1877, he gave his oldest son William Henry Vanderbilt 95% of his money.
The amount of 95 million dollars are worth is about $2.1 billion.
This oldest son doubled the amount of money he got for the next ten years.
He was the wealthiest person during that time.
Cornelius Vanderbilt also had other children, and he left them a minor fortune.
In the following years, William Henry Vanderbilt’s children spent almost all the money he made from The Commodore’s inheritance.
Let’s discuss what happened to the Vanderbilt family and their money in “Fortune’s Children: The Fall of the House of Vanderbilt.”
The book says that Vanderbilt’s life of luxury and privilege became a short-term gold mine for them.
Cornelius Vanderbilt died in 1877, and 30 years later, the next generations of the family hit rock bottom.
It didn’t make a difference that The Commodore left his family a considerable fortune.
In the end, none of the children or grandchildren keep the money.
No one in the Vanderbilt family became one of the wealthiest people in the U.S.
When 120 Vanderbilt family members got together for the first time at Vanderbilt University in 1973, none had even a million dollars left.
Surprisingly, the Vanderbilt family got the world’s most considerable fortune but did not become millionaires.
The Commodore made a lot of money and gave it to his children.
Now, that money is gone down the drain.
Where Did The Vanderbilt Money Go?
They had the most money in the world when they were at their best.
Trying to figure out what that would be worth today, it would be worth billions of dollars, which is still a lot.
But what went wrong?
How did the family lose everything?
During the Gilded Age, when greed and materialism were common in the United States, Vanderbilt became well-known because of its wealth.
The family had a strong desire for greatness and acted irrationally, which caused them to build many properties.
The dream houses that the Vanderbilts once had still stand as works of art.
The Biltmore, Idlehour, Florham, The Breakers, and Marble House are the names of these homes.
These works of art were more critical than other millionaires’ homes and tried to be as big and beautiful as famous English country houses and French castles.
The homes were as lovely as mansions built during the Middle Ages.
They were like some of the world’s grand old palaces but in the United States.
It’s meant to last long and keep the Vanderbilts’ fame in their golden Age.
Today, though, that wasn’t the case.
Even though the family had extensive, expensive, and elegant ancestral homes, no one, not even the next generation, used them much.
The Commodore’s grandchildren and great-grandchildren used their money to start building large estates.
They were humongous country properties that each cost about a million dollars.
What’s worse, the Vanderbilts rarely set foot in any of their many mansions.
They only used them as summer homes for a few weeks each year.
Some of these big houses are now open to the public for tours.
If you’ve been to the Biltmore estate, you may agree that it’s a beautiful place that will never go out of style.
The house is on 10 square miles of private land.
The house is about 170,000 square feet and costs $5 million.
At the price of money right now, the Biltmore estate costs $138 million.
Think about how big and pretty this house will be when you go there.
Remember that building these houses cost a lot of money; back then, they were the most expensive homes in their country.
But the Vanderbilts didn’t use them very often.
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The Commodore as a Father
You can blame the grandchildren directly for wasting their money on estates they built but never lived in, but it all comes down to The Commodore.
He wasn’t very hands-on as a parent when disciplining his kids.
He didn’t have a good reputation as a parent and didn’t teach his kids how to take care of the family’s money.
They could have kept their money if they had known not to spend everything they had and instead use the interest on their money.
Distribution of Inheritance
He also probably did it because he gave most of his money to only one of his children.
This probably led to a court case between the other kids that lasted almost two years.
But somehow, the oldest son was able to take care of it.
He added to the money that was left to him.
No Conditions for an Inheritance
The Commodore didn’t tell the kids how they could spend the money.
John Jacob Astor, already quite wealthy, became immensely rich through the real estate industry.
He made a lot of money years before Vanderbilt did.
He put a 50/50 rule on his money and gave the same amount to his children and grandchildren.
The same term would still be used in the future.
If The Commodore had tried the same thing, the Vanderbilt family could still be wealthy today.
Alva Vanderbilt’s Marriage
The fact that Alva Vanderbilt married The Commodore’s grandson is another reason why they lost their money.
Most of New York’s elites didn’t accept Vanderbilt’s wealth at the time because it was new.
So, they didn’t invite the Vanderbilts to parties or other social events.
Alva Vanderbilt did not like the situation because she wanted to be part of the elites.
She used the Vanderbilts’ money to build the most prominent house in New York so that everyone would like her.
The architect understood what Alva wanted to do with the new mansion.
He knew why Alva wanted to build a big house on many lands.
Alva wanted to use the house to get into the rich people’s group.
She didn’t want another place to live.
All she wanted was a place to show off to the rich in an attempt to be one of them.
The estate was finished after three years and ultimately cost $3 million to build.
That would be worth about $70 million now.
But Alva didn’t get what she wanted because of the beautiful mansion.
The Astors still didn’t invite the Vanderbilts to their big parties.
So, Alva had her party at the new mansion with more than 1,000 wealthy families in New York, except for the Astors.
Mrs. Astor didn’t want the chance to pass her by, so she called Alva.
The party cost about $5.8 million in today’s money.
Alva was finally part of the elite because of the mansion and the party.
Social Acceptance
Since other wealthy families liked the Vanderbilts, other Vanderbilts wanted to be like them.
The Commodore’s son built a house on Fifth Avenue with other family members.
These homes cost a lot of money but didn’t work out.
When the auctioneer tore down the mansions on Fifth Avenue that the family had built, they fell one by one.
In 1882, they built the first house on Fifth Avenue, but it burned down in 1914.
By 1947, the rest of Vanderbilt’s property had also gone down.
Even so, Alva was impossible to stop.
She was about to spend all of the Vanderbilts’ money.
William thought the only way to make his angry, bossy wife happy was to give her his money.
The Commodore didn’t mind that Alva wanted to live in luxury.
They gave her all the money she could consume to make her happy.
From here on out, things got worse for the Vanderbilt family.
Until Alva and William got a divorce, family members competed to have the most extensive estates.
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Final Thoughts
Social acceptance was what turned the family’s fortune into rubble.
It wasn’t about the homes anymore; it was their craving for belongingness in the prestige class.
Arranged marriages also made them unhappy.
Greed led to the loss of the family fortune and the fortunes of the family’s children and grandchildren.
The Commodore said that anyone could make much money, even a fool.
But it would be best to have wisdom and intelligence to maintain your fortune over the years.
