Lessons from the Gilded Age, Part 1: Lifestyles of the Rich and Historical
I was heartened to read a recent New York Times article about how the rich weren’t spending enough to stir the economy in tough times. Retailers, car dealers and so forth were dismayed, but it could be worse. The rich could be spending too much. Not possible, you say? Au contraire, Baudelaire. There was a time when they did just that.
Let’s take a short trip back in time to see what the Gilded Age taught us about how not to spend money. Yes, that magical period in the late 19th and early 20th centuries when one of the wealthiest generations in history made Manhattan the apex of affluence, the pinnacle of posh, and the capitol of, well, capital.
Our informal tour guide? Greg King, author of A Season of Splendor: The Court of Mrs. Astor in Gilded Age New York (Wiley, 2009). I highly recommend this book if you are a fan of either U.S. history or unbridled extravagance sliding swiftly down into abject decadence.
What we want to learn from the observation deck of history is how not to spend beyond our means. In this case, beyond beyond. Seriously, how many times have you said to yourself, “Wow, I saved more than I expected this year, and I’m really disappointed that I couldn’t find a big enough boat to blow it all on?”
Well, the Gilded Age was a time when people like William Vanderbilt spent $23 million in today’s currency (all figures approximate current values) for a 331-foot, 20-luxurious-cabin yacht that required a 62-man crew with a $30,000 per month payroll. A time when Alva Vanderbilt spent $220,000 on flowers for one single party that all-together cost an astonishing $5 million. A time when Frederick Vanderbilt maintained a checking account with a $63 million balance for window shopping excursions along Fifth Avenue, “just in case I see something I want to buy,” he explained.
My man Mark Twain coined the term Gilded (basically, pretty on the outside, ugly from within) Age when he co-authored a book about what he believed to be the growing corruption in America after the Civil War. He may not have used the word “sustainable,” but I’m pretty sure that’s what he was thinking.
The major players of the Gilded Age routinely spent upwards of $50 million or more to erect resplendent residences along Fifth Avenue or the Hudson, in the Berkshires or Newport, few of which remain standing. But they also pushed the unchecked excess envelope so far that their “age” lasted only from the 1870s until the outbreak of WWI in 1914. More potent tax laws passed in 1913 were the last nail.
What can we take away from their financial foibles? Choose to spend your expendable income in ways that improve your quality of life and enable you to bank away fond memories of time with family and friends. If you find yourself standing in the corner of your next party wishing you’d bought that $500 jar of caviar instead of the $20 large pizza, you’re going gilded.
Credit.com has more information on managing your dough.
Christopher Johnston has written for American Theatre, Cleveland, Continental, Crain’s Cleveland Business, Editor & Publisher, The Plain Dealer, Progressive Architecture and Urban Design, and Scientific American, among other publications. He is currently writing a biography of Frederick C. Crawford, founding chairman of TRW Inc. As an avocation, he is a playwright and director, and this December, his play APORKALYPSE! will premier at convergence-continuum theatre in Cleveland.
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