Cornelius Vanderbilt, also known as “The Commodore,” has about 100 million dollars of fortune throughout his life. In today’s value, that will be around 2.5 billion dollars.
When he passed away in January 1977, he left 95% of his money to his eldest son William Henry Vanderbilt. Ninety-five million dollars equates to an estimated amount of 2.1 billion dollars.
This eldest son doubled the money he received for the next ten years of his life. He managed to be the wealthiest during that time.
As for the other children of Cornelius Vanderbilt, he left a smaller fortune for them to inherit.
And for the following years, William Henry Vanderbilt’s children spent almost all of the fortune he made from The Commodore’s inheritance.
Let’s discuss the stories from the book “Fortune’s Children: The Fall of the House of Vanderbilt” to know what happened to the Vanderbilt Family and their fortune.
According to the book, Vanderbilt’s luxurious and privileged lifestyle became a short-term golden for them. After 30 years since Cornelius Vanderbilt died in 1877, the following generations of the family hit rock bottom.
It didn’t matter that The Commodore has left an enormous fortune for his family. None of the descendants maintain the wealth in the end. Nobody from the Vanderbilt family made it into the wealthiest people in the United States.
When 120 members of the Vanderbilt household gathered at Vanderbilt University for their first family reunion in 1973, none of them even had a million fortune left.
It is surprising to know that the world’s most enormous fortune came to the Vanderbilt family, yet they did not end up as millionaires in the end.
The fortune that The Commodore made during his life and passed down to his children went down the drain.
What Happened To The Vanderbilt Fortune?
At the time of their peak, they had the world’s greatest fortune. If we equate that to today’s value, it’s still significant as it amounts up to billions of dollars.
But what happened? How did the family manage to lose it?
As discussed in the book:
During the Gilded Age, where materialism and corruption were rampant in the U.S, Vanderbilt gained popularity due to its wealth. The extreme desire for greatness and irrationality ruled the family that led to the establishment of various properties.
The Vanderbilts once dream houses are still standing as a masterpiece. These houses are Biltmore, Idlehour, Florham, The Breakers, and Marble House.
Not only were these masterpieces more significant than other millionaire’s houses, but they also competed to be as big and beautiful as the famous country houses in England and castles in France.
The properties were good enough to rival against mansions built since the Middle Ages. They were the U.S. equivalent of some of the grand old palaces around the world.
It aims to withstand through time to carry the prominence that the Vanderbilts had during their golden era. However, that was not the case today.
Even with the family’s spacious, expensive and elegant ancestral homes, none of them hardly used the mansions, not even the next generations.
The next generations of the Vanderbilt family, The Commodore’s grandchildren and great-grandchildren, started building large estates using their riches. They were colossal country properties, in particular, that cost about millions of dollars each.
The Vanderbilts rarely used any of these properties, just for a few weeks each year as their summer home. At present, some of these large houses are available for the public to tour.
If you’ve been to the Biltmore estate, you may agree that it is timelessly beautiful. The house is on private land that was 10 square miles big. The house itself is around 170,000 square feet big that costs a whopping $5 million to construct.
Biltmore estate costs $138 million in today’s value of money. Imagine how big and beautiful this house is when you are visiting it.
Remember, these houses cost a lot of fortune to construct, and they were the most expensive estates in their country back in the days. But, the Vanderbilts hardly ever used them.
Why Did The Vanderbilt Family Fall?
Cornelius Vanderbilt worked his way up to have the immense fortune in his time. He can even set a plan for the Vanderbilt family’s future generations but ruined the chance to do so.
The Commodore As A Father
We can directly blame the grandchildren for wasting their fortune on vacated estates they built, but it all comes down to The Commodore. As a father, he was not precisely hands-on in disciplining his children.
He did not have the best reputation as a father and did not train his children to manage their family’s wealth. They could’ve saved their fortune if they knew not to spend everything they have and use the interest in their original wealth.
Another probable reason is that he left a large part of his wealth to only one of his children. Presumably, this caused a legal battle between the other children that lasted for almost two years.
But somehow, the eldest son managed to pull off the responsibility. He grew the fortune left with him.
No Inheritance Condition
The Commodore did not put conditions on how the children will use the money.
Another business magnate, John Jacob Astor, made a lot of fortune through real estate. He established his wealth years before Vanderbilt started.
He put a 50/50 condition under his wealth and split his money equally to his children and grandchildren. The same term applied even to future generations.
If only The Commodore tried the same approach, the Vanderbilt family could maintain their wealth even today.
Alva Vanderbilt’s Marriage
Alva Vanderbilt’s marriage to the grandson of The Commodore is another reason why they lost their fortune.
At that time, New York elites did not generally accept Vanderbilt’s fortune because it newly emerged. Therefore, they did not invite the Vanderbilts to social gatherings.
Alva Vanderbilt, who badly wants to join the elites, did not like the situation. She spent the Vanderbilts’ riches on building a mansion, the largest in New York, on being accepted by the crowd.
The architect in charge of the mansion grasped what Alva wanted to happen to the new mansion. He knew the reason why Alva desired to build a large estate.
Alva wanted to use the house as a key to enter the wealthy society. She didn’t want another home, but just a place to show off to the high community so she can be part of them.
The estate opened its doors three years later with a total cost of 3 million dollars to build. That would be around 70 million dollars by now.
However, the elegant mansion didn’t get Alva what she desired. The Vanderbilts were still not invited to big parties that the Astors held.
That’s why Alva hosted her party at the new mansion with over 1,000 noble families in New York except the Astors. Mrs. Astor didn’t want to let the chance slip away and called Alva.
The said party cost 5.8 million dollars in today’s value. The mansion and the party paid off as Alva was finally in the elite.
With the acceptance from the wealthy families, other Vanderbilts wanted the same status. The Commodore’s son started his mansion on Fifth Avenue, along with other family members. These homes cost millions of dollars but turned out useless.
One by one, the mansions on Fifth Avenue built by the family crumbled when the auctioneer demolished the homes. The first house on Fifth Avenue stood in 1882 but fell in 1914. By 1947, the remaining Vanderbilt properties followed the fall.
Despite this, Alva was unstoppable. She was starting to blow the fortune of the Vanderbilts.
William figured that the only way to please his eruptive and commanding wife was to let her spend his money. Even The Commodore tolerated the lavish lifestyle Alva wanted. To satisfy her, they provided her the fortune she could consume.
This point is where it all went downhill for the Vanderbilt family. The family members competed to have the largest estates until Alva and William divorced.
Final Thoughts On The Vanderbilt Family
It is unbelievable to think that the Vanderbilt family’s fortune turned into stones because of social acceptance. It wasn’t about the homes anymore but the craving for belongingness in the prestige class.
Arranged marriages turned them into unhappy couples. The greed destroyed the family and the fortune of the future generations of the family.
The eldest son complained about the burden of inheriting the majority of the fortune. He said there’s nothing good about being the richest compared to the moderately rich.
He came to realize that he had a house, horse, and pictures, but the moderately well-off people also have them. Even having a yacht, but it will not make him happy, and he wouldn’t care about it.
He talked about his neighbor, who isn’t half as rich as him, but that neighbor experienced the real pleasures of life more than he did. Their house was not as big as his, but both were comfortable.
His neighbor’s house didn’t cost as much as his. But the people who built it were as good as his. Willam also thought that his neighbor’s health was better than his and that he could grow older than William.
William cannot trust anyone, even his friends. The fortune that made him the wealthiest person in the world gave him nothing but anxiety.
William Vanderbilt said these words when he was still the richest man in the world. He was unhappy despite being wealthy because of his failing health and concern over the money.
He also wanted his eldest son to inherit his fortune but speaking from his experience, he didn’t want his son to experience the burden too. So, he gave his wealth to his two sons equally.
The Commodore said that anyone, even a fool, can make lots of money. However, it takes intelligence to maintain the fortune for the following years.
And to think, I travelled to Guatemala for six weeks on less money than it cost me to live at home in Alabama. Wild.