E2 - Rockefeller vs. Vanderbilt: Why Structure Outlasts Fortune

Two of America’s wealthiest men died with fortunes worth billions in today’s dollars. Yet within just a few generations, one family’s money was gone—while the other’s wealth still supports over 200 heirs a century later.

In this episode of Before the Returns, Jaden Zubal unpacks the stories of Cornelius Vanderbilt and John D. Rockefeller to reveal why structure matters more than returns. You’ll learn:

• How the Vanderbilt fortune evaporated in less than 100 years
• The systems Rockefeller created that still impact families and philanthropy today
• Simple steps you can take to ensure your own wealth lasts beyond you

Wealth without structure fails. Wealth with structure lasts.

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⚖️ Disclaimer: This podcast is for educational purposes only. It is not financial, tax, or legal advice. Always consult with a qualified professional before making financial decisions.

Transcript

SPEAKER_00: 0:00

One of America's richest men died with billions in today's dollars, yet within just a few generations his family fortune was gone. Another man, just as wealthy, left behind a structure that still supports over two hundred heirs a century later. The names Vanderbilt and Rockefeller. The lesson structure matters more than returns. Hi everyone, and welcome to episode two of Before the Returns. I'm your host, Jaden Zuball. Uh thanks for joining us today, and I look forward to a great conversation here on the stories of two of America's wealthiest men. These two stories, the reason I wanted to discuss this today is I think it ties in really well with our conversation from last week. Last week being our initial episode, I really wanted to tie that into the name of the show before the returns. And as we learned in that episode, the name implies that it's not always about just chasing a high return. Sometimes we need to focus on making sure we have the right roots and the right systems in place in order to actually keep our money and keep it doing something productive for us. Oftentimes we're told that more money equals more freedom. But sometimes more just means more problems. How does that tie into the stories of Rockefeller and Vanderbilt? Well, let's go back to the beginning. Cornelius Vanderbilt, he died in 1877. But during his lifetime, he amassed roughly a hundred million dollar wealth, which is equivalent to more like two and a half billion dollars today. He had significant wealth. Many of us have heard of him, heard of that family, and even might even know that Anderson Cooper happens to be an heir of the Vanderbilt family. However, in that story, Vanderbilt's family in today's world, none of them have any of the family money left. Anderson Cooper has done well, but on his own merit, has nothing to do with Vanderbilt's money or the resources that were created for that family. Again, that just means that more money is not always the solution. It just created for that family more problems. They ended up spending all of it very, very quickly. And if you I won't get into too much depth on the family story today, but if you want to know more about it, I can put some links in the show notes here to a couple different resources to learn about how each generation progressively got worse, let's say, in the sense that they spent more money and just consumed the family trust and the family resources. Now, that just really tells us at its core that more is never enough without alignment. Freedom comes from clarity, not from quantity. How do we create clarity? Well, clarity can be created in a lot of different ways depending on what it is that we're trying to do. In this example, clarity can be looked at if we look at the comparison to Vanderbilt, which is the Rockefeller family. Now, if you happen to be watching this on YouTube, you can see just up to my right here, there is a photograph on the wall with an autograph on it. And this autograph is actually a signed stock certificate from John D. Rockefeller. I got this from some good friends of mine who have a shop in Manhattan, and I hung it on my wall, and right above him is a JP Morgan, and right next to JP Morgan is a Cornelius Vanderbilt. Today I want to talk about the Rockefeller image and the Vanderbilt image, the comparison between those two. And this story is so impactful for what I have personally set up for my family and what I'm doing that I decided to buy these photographs and ledgers and hang them on the wall so that my clients can see them when we talk, so that it's something that is kind of a standout as uh foundational to what I do. Rockefeller, let's talk that family for a moment. When Rockefeller passed away, he had also amassed a very significant wealth. And that's why these two are so comparable, because they both at the time were the wealthiest families in the world by far. Now, if you follow the trajectory of the Rockefeller family, there is roughly 200 people that are currently utilizing the family trust in some way, shape, or form. The difference between Vanderbilt and Rockefeller is Vanderbilt is completely out of wealth. There's nothing left for the family really to utilize at this point. On the Rockefeller side of the story, though, we're talking about multiple billions of dollars that are still accessible, still usable for the family trust. And again, the difference was clarity. Before Rockefeller passed away, he set up some very specific guidelines. Just a few quick facts on Rockefeller here. He lived from 1839 to 1937 and was the founder of a company called Standard Oil. And that's where he created most of his fortune, which is another really important aspect here, actually. And that's something we're going to discuss in later episodes of this podcast. But when we talk about wealth and we talk about chasing returns and things like that, I'm a firm believer that creating a business and using what you know and the knowledge you have and the things that you're passionate about to create wealth is the best thing you can do. High control, you get the right influence and you get a better outcome that way. Rockefeller created his wealth with Standard Oil. And then in 1913, he created the Rockefeller Foundation, which is still active today. During all this, there were dynasty trusts set up. It's just a type of trust. It would be an irrevocable trust, one of the things that'll come up in these conversations, with an emphasis, though, on stewardship, family meetings, and shared values. Those things created that clarity that we need in order for wealth to have meaning. So today, there's somewhere between 170 to 200 heirs that still benefit from the family trust and from the family wealth. And we're talking about billions of dollars. A hundred years later, the Rockefeller money and name still fund universities, medicine, and philanthropy. Compare that to a couple of facts here on Vanderbilt. Cornelius Vanderbilt lived from 1794 to 1877. So there was a little bit of crossover in their lives, but Rockefeller was just a little bit after Vanderbilt. Vanderbilt made his wealth in shipping and railroads. Again, business. You look at some of the wealthiest people today, their wealth came from their businesses, not from investing in somebody else's thing. So Vanderbilt died in 1877. He left around$100 million, which is equivalent to$2.7 billion today. It was the largest U.S. fortune of the time. Now, his son, William Henry Vanderbilt, actually doubled the fortune by 1885. So he did very well with it. But two generations later, the fortune had evaporated. Heirs overspent on things like mansions, yachts, luxury, anything that they could come up with that they felt like buying because there was no clarity. There was no there were no guidelines. There was nothing telling the family what to do with the money. In 1973, there was a reunion at Vanderbilt University. There was about 120 descendants that came, and none of which were millionaires. They had gone from what was equivalent to a$2.7 billion fortune down to none of the descendants qualifying with the term millionaire anymore. They went from the richest family in America to no millionaires in under a hundred years. What's the lesson here? The lesson is in Vanderbilt's family, wealth without structure equals wealth that's going to fail. In the Rockefeller family, wealth with structure equals lasting impact. The core idea here is it's not how fast you grow the money, but it's how you structure it to last. If you talk with very many business owners, which I would certainly encourage you to do, I'd encourage you to go out and speak to local owners and founders and people who built their businesses from the ground up, talk to them about what it took to get where they're at. Most of them are going to say it took years and years and years and tons of work and time and energy, and it's an exhaustive process, but the reward for that is significant. The reward is they've created a structure that now supports them, their family, potentially future families, and it's something that you can there's almost a feeling that comes with the business ownership of just a sense of peace, but it's more of knowing that you really did something important with yourself to add value to the world. And owning a business can be anything. That is one practical takeaway from today. But one of the things I wanted to mention here is as you're considering your own financial picture and you think about the differences between these two families, like let's just bring this home for a minute and talk about this more on a local level. Some of the questions I would ask are: Do you have a basic structure? Do you have family goals and plans? Do you have even better, the next step would be do you have a will? Do you have a trust? Do you have these documents in place that help outline what it is that you actually want to happen with the money that you accumulate? So if something happened to you, would your wealth survive? And am I passing values alongside my money? So what does that mean? Well, it means that as a family, you probably have certain things, whether they're written down or even just in your head right now, you have things that you believe and that you do as a family. So one of the recommendations I would give is take those ideas and write them down. Put them in a place that you can talk to your kids about, that you can share and have conversations about, so that whatever you decide as your family are your values, the things that you guys are going to live by when it comes to your financial picture, you can pass those to your kids. You can give those ideas and those concepts to them so you can take the money and make it last, like the Rockefellers, and not let it disintegrate like the Vanderbilt family. So again, even just a simple will, simple trust, writing things down, teaching your kids the things that you do is a great start to getting there. Today, as in every episode that we do here, I want these to be short, sweet, simple, and leave with some sort of concept or idea that you could easily implement. So today it's really about how do we make sure that we not only have the values and the belief systems and the structure and the clarity, but we make sure that we pass that on, keep it going, keep it as something that our families can shift from generation to generation. So story today was two families, two different outcomes. Wealth without structure fails. Wealth with structure creates clarity and is a lasting system. Same as last time, and this will be in every episode, but money is the tool, purpose is the goal. Go out there and create purpose and create values and systems that can help solidify what you do as a family and help grow that family. So, with that, if you're enjoying this episode, if you enjoyed the last episode, please follow us on wherever you listen to your podcast. Check us out on YouTube if you want to see the visuals behind all of this. I'll link a few different things there. And if you enjoyed the episode, please leave us a review as well.