Why should one invest in mutual funds?

Wealthy people have their wealth in form which offers them returns. The forms in which wealthy people park their money is real estate, bonds, debentures, mutual fund units, shares and stock along with others.

Take the example of shares which are in fact part ownership of corporations. If you invest in shares of a corporation you in fact own part of it thus taking part in its future profits and losses.

If you invest shares of Cement Company, you expose yourself to risks affecting the cement industry negatively. Moreover, there are some factors that can affect your company specifically like bad management, technological obsolescence and others.

In order to reduce company specific risk exposure, you need to invest in a number of companies. Likewise, if you want to reduce risk exposure to a certain industry you need to invest in different industries.

The more variety of shares you purchase the less risk exposure you will have. Reducing your exposure to risk by way of investing in multiple securities is called diversification.

Diversification when rightly implemented can reduce your risk exposure. But there are costs associated with buying number of different securities e.g. cost of ordering, accounting, etc. In order to get full benefit of diversification you need to invest a large amount in different securities. An individual has limited amount of capital and cannot diversify, which keeps him away from investing.

The problem of small capital can only be overcome by pooling of funds by different interested individuals. But how to pool funds and also the issue who would manage the funds on behalf of investors arises.

The answer to all these questions can be overcome by utilizing a vehicle called mutual fund.

Mutual funds are pool of funds managed by fund manager for the benefit of isolated investors, who don’t have expertise in the investment field.

When you invest through mutual funds, you benefit from the expert management. The analysts working for the mutual fund industry generates financial models which grows your capital as well as provides protection to your capital.

With Mutual fund investing you also get benefit from diversification, and economies of scale.

The one thing anyone interested in investing through mutual funds should keep in mind that the return from mutual fund is dependent not only on the financial markets performance but also the overall economic performance.

So start investing with good mutual fund manager and select the mutual fund after due diligence.

Disclosure: any thing/ content isn’t substitute of professional advice and the blogging team isn’t responsible for any loss/ damage resulting from acting on information from this blog.

Investing strategies: used by billionaires to amass their fortunes

There are many investing strategies, which investors use. Value investing, contrarian investing and growth investing are mostly used investing strategies. Let’s briefly study them.

Value investing is the most successful investing strategy. It was founded by Benjamin Graham, mentor of Warren Buffet. In this strategy investors see for underpriced securities based on some formula other than market price. This formula for ascertaining the value of the security is generally some multiple of income of the corporation. Value investors usually have to wait for longer in order to realize the full value of their assets.

Along with Warren Buffet many other successful investors follow the value investing strategy of investing. According to researches value investing proved to be the most successful way of investing.  Many billionaire investors favor value investing over other forms of investing. Warren Buffet, Howard Marks, Seth Andrew Klarman, Charles Brandes, Walter J. Schloss, Irving Kahn, Mario Joseph Gabelli, Michael F. Price   are some of most successful value investors.     

Another strategy is contrarian investing. Contrarian investing is buying when other people are selling and selling when other people are buying. Every up and down in the overall stock market or some specific share price offers opportunity of selling and buying to these contrarians respectively.  Warren Buffet is also sometimes referred to as contrarian investor, owing to the obvious reason of many similarities between contrarian and value investing strategy. Other famous proponents of contrarian investing are Michael F. Price, James Beeland Rogers, Marc Faber, David Dreman, Mark E. Ripple, and William Albert Ackman.

Growth investing is another strategy which many successful investors use.  Those who follow growth investing strategy invest in companies that show above average growth even when their shares seem to be highly priced. Unlike value investors, growth investors buy stock in companies that are trading higher than their intrinsic value-assuming that the intrinsic value would grow eventually exceeding current valuations. These investors focus on capital appreciation. Venture capital funds can be classified as growth investors.   

One more Asian billionaire every other day: UBS study finds

According to a study by UBS and PwC a billionaire in Asia is created every other day. Total billionaires in Asia are 637 as compared to 563 in U.S. The study further says that a 17% surge in billionaire wealth is supported by new billionaires born in Asia as well as an uptick in growth in materials, industrial, financial and technology sectors.

The total billionaire wealth has increased from USD 5.1 trillion to USD 6 trillion in 2016.

Billionaires from United States owns 2.8 trillion USD, an increase of .4 trillion dollars. Combined wealth of Asian billionaires grew from 1.5 trillion dollars to 2 trillion USD. Combined total wealth of 342 European billionaires was 1.3 trillion USD.

The study also mentioned that if the current trend continued, it is likely that Asian billionaires would overtake U.S. billionaires in wealth in four years. The surge in billionaires’ population in Asia can be attributed to growth in China and India, which have 318 and 100 billionaires respectively.

The report further points to increasing role of networks in raising capital outside financial markets which is no surprise, given the increasing role of Asian businesses which feels comfortable going to family rather than capital markets for funds.

Europe, the report says, in 2016 was the story of multigenerational wealth preservation. The number of billionaires in Europe was 342, by the end of the year.

The business controlled by these billionaire employees 27.7 million people, which is roughly the size of U.K. workforce.

Baby shark method: the secret of many successful retailing giants

Albert Gubay, the late billionaire, from humble beginning established United Kingdom’s most successful supermarket chain Kwik Save.

It started, in 1959, when he founded value foods. His aggressive price cuttings lead many distributors and suppliers to refuse him.

In 1964, he visited United States learning from there a technique which helped him built his retailing chain. Sooner his Value Foods changed to Kwik Save, a discount retailer chain boosting more than 1000 stores. The growth of his business was a direct result of his use of baby shark method.

In this method the retailer purchases goods on good payment terms, say for example, 60 or 90 days and then sell these items at or below costs. The interest on cash generated by the sale is then used to expand retailing business.

The interest on trade credit is received in form of discount. By selling these items he generated cash for expansion at the same time being able to pay suppliers when the payments became due. This method is a sort of OPM, other people’s money.

The use of baby shark method, along with other cost cutting methods learnt from West German retailing giant ALDI, he founded the empire consisting of hundreds of outlets. In 1973, he sold Kwik Save for £14 million, the first step to amass his £500 million fortune.

ALDI, the giant German retailer was using this method much before Gubay copied it. In fact, ALDI was where this method of retailing was perfected. Today ALDI owns more than 10000 stores in 18 countries, with total turnover of 50 billion €.

Who owns PSL cricket teams

Pakistan is a cricket loving nation. The cricket matches between Pakistan and India are biggest sports event and therefore good business opportunity for sponsors.

Pakistanis use to spend a lot of time on watching the game as it is long game unlike football.

Pakistan Cricket Board in its effort to reintroduce international cricket in Pakistan, established Pakistan Super League (PSL). PSL is a single entity and has five cricket teams as its franchises. The commercial rights to the initial franchises were sold for PKR 9.85 billion ( 91.4 million $) for a span of 10 years in December 2015. The first session, held in 2016, yielded 2.6 million $ in profit.

Owners of these teams are:-

Karachi Kings is owned by ARY Media Group. ARY Media Group is owned by  Salman Iqbal, whose net income for year is 90 million$.¹ Karachi King was sold to ARY Media Group for a period of 10 years, from December 2015, for 26 million$, thus making it the most expensive PSL team.                                                                                                                                                                                                                                   

Lahore Qalandars are owned by Qatar Lubricants Company limited (QALCO). QALCO is the only state-of-the-art lubricants blending plant in Qatar. This company is headed by Rana Fawad. It is the second most expensive team after Karachi Kings and was priced at 24 million $ in December 2015.

Peshawar Zalmi was sold to Haier Paksitan for 10 year period against 16 million US dollars. Javed Afridi is the CEO of Haier Pakistan. Haier Pakistan is subsidiary of Haier Group Corporation based in China.

Quetta Gladiators is owned by Omar Associates, a Karachi based company. The company was founded in 1969. Nadeem Omar is presently the CEO of the company. The group was basically a construction company but now the group is planning to enter into mining sector. The group acquired the franchise for 11 million$.

Islalmabad United Leonine Global Sports won the bid for franchise rights of Islamabad United for a decade against 15 million$. Leonine Global Sports is owned by venture capital firm Leonine Global which is based in UAE. The sports entity Leonine Global Sports also owns a franchise team in Hong Kong T20 League. The venture capital firm is owned by Ali Naqvi.  Ali Naqvi is a renowned businessman having business interests in different countries.

Related links

1. Salman Iqbal

2.    Islamabad United 

3. Ali Naqvi

Top 10 richest presidents of U.S.A.

With the election of Donald Trump as next U.S. president, America is going to see the richest President all time.  Earlier the richest one was founding President George Washington with worth of 580 million U.S. dollars. Below is the list of richest presidents along with their wealth, in 2016 dollars. The figures represent peak wealth.

1.       John. F. Kennedy ( more than 1 billion $)

He along with his family owned more than 1 billion us dollars. His family fortune was created by his father John Kennedy, who made money from commodity trading and real estate investing.

2.       George Washington (580 million dollars)

He was an industrialist and entrepreneur. He sat up his own distillatory for making alcohol. Moreover he owned more than 8000 acres of land. President Washington estimated worth in today’s dollars is 580 million $.

3.       Thomas Jefferson (234 million dollars)

He was third president of United States. His net worth was 234 million $.  He inherited vast fortune but ended up in debts, in later part of his life.

4.       Theodore Roosevelt(138 million dollars)

He owned 138 million dollars. He was born to prominent and wealthy New York family and became 26^th U.S. president.

5.       Andrew Jackson(131 million dollars)

Andrew Jackson was 7^th president of United States. He owned 640-acare plantation called hermitage situated near Nashville. He was among first three investors who founded Memphis.

6.       James Madison (112 million dollars) 

112 million dollars president Madison after inheriting some land from his father, he eventually owned 5000-acres.  He became the largest land owner of Orange County, Virginia.

7.       Lyndon b. Johnson. (108 million dollars)

After inheriting small piece of land, in Texas, he eventually built it up into expensive 1500-acre ranch. His wife also owned radio and TV station in Austin, Texas.

8.       Herbert Hoover (82 million dollars)

A mining engineer by profession amassed huge stakes in different mining companies.

9.       Bill Clinton ( 75 million dollars)

He unlike other presidents, Clinton didn’t inherited family fortune. He made his fortune during his tenure as Arkansas Governor and later as President. He also received 15 million$ advance for his autobiography in 2005. President Clinton is one of the highest paid keynote speakers.

10.   Franklin D. Roosevelt (66 million dollars)

32^nd President of United States owned 66 million dollars. Like other wealthy U.S. presidents much of his fortune was inherited.

How leveraging works

Leveraging (Other People’s Money) is one of the techniques, most used by billionaires to amass fortune. Sam Walton, Donald Trump, Aristotle Onassis, W. Clement Stone, Daniel Ludwig and number of other tycoons applied this principal to set up their empires.

Financial leverage is using borrowed funds to invest in an industry. Say, for example, an investor borrows 1000$ and invest it along with his own 1000$. Now, if the industry generates 20% returns he would be able to produce 33% return on equity as compared to 20% returns he would have generated without leveraging.

The most famous example of application is Aristotle Onassis who borrowed funds from banks, using future cash flow from his already owned ships as collateral, to build more ships. Although Daniel Ludwig was the founder of this technique but Aristotle Onassis is more famous for its application.

W. Clement Stone also used other people’s money to buy other insurance companies. E.g. he bought the Pennsylvania Casualty Company using funds borrowed from the Commercial Credit Company of Baltimore, which owned the company he was buying.

Financial leverage is a double edged sword. Using it can generate super normal profits in good days but it can play against you, as well, by generating extra losses during recession.

Leveraging may help you to be extra vigilant regarding your business expenses. The liability you have under taken in form of funds and interest would pressurize you to be extra careful in your expenditure and you would move towards cost cutting. It may provide impetus for you to work hard. Fed chairman Ben Bernanke, has compared, adding debt to firm’s capital structure, to putting a dagger to steering wheel of your car.   Dagger- which points towards your stomach- would motivate you to drive carefully but at the same time the risk of damaging yourself is very serious when someone else hits you- even if you are driving carefully.

The enormous wealth of presidential contestants

Hillary Clinton and her husband have earned 30 million dollars during previous 16 months, according to ‘financial disclosure forms’ filed with federal elections officials on Friday.

Bill Clinton, husband of Hillary Clinton

In the 2016 presidential elections many of the possible contenders are much wealthier than average American citizen.

Jeb bush, for example, is a member of wealthy families that own Oceanside compound in Kennebunkport, Maine. Democrat’s possible contender Hillary Clinton, wife of former President Bill Clinton, has earned 200,000 dollars as speaking fees over the past year. The one hour speech can earn Mrs. Clinton what average American make in four years.

 In addition to speaking fees she was known to have received a $14 million advance for the book she released last year.

Other contestants include Ted Cruz having worth of $3.2 million, Rand Paul having $1.3 million.

Businesswoman Carly Fiorina is one of the wealthiest potential White house contenders. She is worth an estimated $ 71 million.

But these contestants are nowhere near to the former contestant, private equity mogul, Mitt Romney. At the time of contest he had had somewhere between $190 million to $250 million.

The tendency of power to concentrate in the hands of rich and those having strong family connection is seen in the World’s sole super power.

Past presidents did include millionaires. The richest president till now is J. F. Kennedy who is estimated to be a billionaire in 2010 dollar terms. Other rich presidents in 2010 dollars terms were George Washington 525 million dollars, Thomas Jefferson 212 million dollars, Theodore Roosevelt 125 million dollars, Andrew Jackson 119 million dollars, James Madison 101 million dollars, Lyndon Johnson 98 million dollars, Herbert Hoover 75 million dollars, Franklin Roosevelt 60 million dollars, bill Clinton 55 million dollars, George H W Bush 23 million dollars, George W Bush 20 million dollars.

Although J. F. Kennedy is considered to be billionaire but conservative estimates suggest much less figure hence George Washington can be considered to be the richest president of all. President Washington owned nearly 60,000 acres and more than 300 slaves.

George Washington was in the business of flour milling, fishing, horse breeding, spinning, weaving and (in the 1790s) whiskey production.

Wealth of congressman, senators and presidential contestants has brought severe criticism from general public. The criticism is not entirely unwarranted.

 The general trend of American society from meritocracy to aristocracy has been noticed.  

The nation of ship-owners

No nation has ever been so much successful in maritime industry as this nation. Today 95 % goods are carried through ships and shipping magnate from this nation owns 23% of the world bulk carriers.

95% of merchant goods are carried through ships

The fleet belonging to wealthy of this nation is valued at 105 billion dollars, according to vesselvalues.com. The combined value of global fleet of vessels is 680.4 billion dollars. Hence the maritime nation owns 15.43% worth of global fleet. 

The maritime nation is no other than Greek, who have been fighting severe debt crisis since 2009. Severe Government debt crisis has caused many Greeks to lose their jobs. The unemployment rate is as high as 25.40% for February 2015. But the families involved in shipping business are spending as if there were no crisis.

Ship owning business is part of Greek culture. Owing to mountainous landscape, limited availability of farming land and extended coastline, Greek, at an earlier stage, turned to maritime business. Furthermore Greece, being situated at crossroads of ancient sea lanes in eastern Mediterranean and proximity of other advanced civilizations helped Greek succeed in this business. New evidence suggest that since ancient times wine, oil and honey were traded, as well as fruit, fish, meat and resin by Greek ship owners.

The majority of these maritime companies are run by families with a long tradition in shipping.

There are 800-900 families involved in this business, leading among them are Onassis, Niarchos, Evgenidis, Latsis, Lemos, Laskaridis, Pateras, and Tsakos families.

Today constitutional protection related to taxation provided to ship owners and geographical factors led the ship-owning families to live like landed aristocrats of medieval times. Like aristocratic families ship-owning families have their own family culture, and a thrust to protect their status in Greek society. These families often inter-marry thus multiplying power and wealth of these families.

These 800-900 families, involved in Ship-owning business, own slightly more than 4000 vessels.  Hence per family average ownership comes to 4.7 vessels. Families in Greece along with Spain and Italy are more cohesive than many other European counterparts. Hence the help and support from family is also an important factor in the success of Greece's maritime business.

These rich families, although are accused of not doing enough for Greece; especially during the time of crisis, are also involved in philanthropy. Foundations bearing the names of the rich maritime families like Onassis foundation are highly involved in charity.

Indian Silicon Valley

San Jose; California, is nick named silicon valley, owing to presence of large number of technology companies in this city.

Now the term Silicon Valley has become so popular that any area having sizeable number of technology firms is known as Silicon Valley.  Bangalore, India is one of these cities famously dubbed as Indian Silicon Valley. It is home to as many as 900 IT firms.

The Indian Silicon Valley Bangalore has increased in size to more or less the same size as that of San Jose, The American Silicon Valley. The estimated GDP of the city during 2007 was 83 billion us dollars.

The rise of Bangalore as IT city is attributed to various factors.

First of all its location helped it to be the hub for defense technology and supply companies. As it was situated away from Pakistan and China, Indian planners considered it to be suitable for locating strategic industries. Hence they located important defense equipment manufacturing factories in Bangalore.  For example The Hindustan Aeronautics Limited (HAL) headquarters is based in Bangalore, and is responsible for research and development activities needed to develop indigenous fighter aircraft for the Indian Air Force. Other such companies which were homed in Bangalore were HAL, DRDO, BHEL, and ISRO.

Owing to these strategic industries and defense manufacturers skilled engineers were in high demand in this city. Engineers from neighboring regions shifted to Bangalore. Later on these highly skilled engineers supported the growth of IT. In other words the growth in IT was a direct result of external economies of scale generated by the defense equipment manufacturers.

Another reason was boom in engineering colleges in Karnataka.

Boost came from the liberalization policies adopted by the Government is also one of these factors which established Bangalore as IT capital of India. In 1991, Government actively pursued the liberalization of the economy. This provided the best environment for start ups.

High speed internet was another reason as Bangalore was technology intensive city hence Bangalore was first city to be connected to internet. The Internet boom along with economic liberalization of 90’s provided double boom to IT industry of Bangalore.  

Special Economic Zone (SEZ)   Karnataka was among the first to setup tax free zones to support technology companies. This further encouraged ICT companies to set their businesses in Bangalore.

Low crime rate and great weather Compared to other metropolitan and bigger Indian cities, Bangalore has relatively low crime rate. Weather of the city is also pleasant almost throughout the year. This encouraged entrepreneurs to move to Bangalore.

The rise of Indian information technology has created many millionaires in this city. Now the city is the third largest hub for high-net-worth individuals. The city can boost over 10,000-dollar millionaires and about 60,000 super-rich people who have an investable surplus of US$714,299 and US$79,400 respectively.

These Information Technology firms located in the city contributed 33% of India’s 23 billion dollars IT exports in 2006-07.

The dark side of Bangalore growth

The growth of IT has presented the city with unique challenges. The encouragement of high-tech industry in Bangalore, for example, has not favored local employment development, rather it forced out small enterprise. The state Government has also resisted the massive investments, required by Cities’ IT moguls, to reverse the rapid decline in intra-city transport which has already begun to drive new and expanding businesses to other centers across India.

Investment in Dubai realty market

After 2008 Dubai property market learned a lot from the crisis. Laws and regulations were improved. Property transfer fee has been raised to sideline speculators. Escrow account added another layer of security for investors. The payment to developers is released when the developer presents certificate that certain stage in construction has been reached. This ensures safety of investors from delay and cancellation of project.

Dubai night view

These new laws have brought stability to Dubai property market. Property market again bounced back.  According to Dubai land department Indian investors led the realty investors list by investing 18.123 billion dirham during 2014. The total transactions by Indians totaled 7353 during the period.

Pakistani investors were ranked second as they transacted 5079 times amounting to 7.588 billion dirham. These investors included entrepreneurs, professionals, civil and military officials, overseas Pakistanis and other high net worth individuals. Pakistan, according to wealth report 2013, had 415 ultra high net worth individuals. The average wealth of these ultra high net worth individuals was 120.5 million dollars. After economic recovery in 2014, number of super rich may have gone up.

British investment came third at 9.318 billion dirham. Iran and Canada came fourth and fifth respectively. Investment from Iranians stood at 4.5 billion dirham while from Canadians it was 3.157billion dirham.

The huge interest of Indo-Pak investors is due to following reasons. Investment outlets in home country like that offered by Dubai is lacking. Furthermore realty market in Dubai has been developed and matured since its opening in 2002 to foreign investors.  Secondly the proximity of Dubai to sub continent is another reason for Indo-Pak investors to invest in Dubai. Thirdly Dubai market offers unique opportunity of earning tax free rental income and capital gains.

The total non-Arab investment in Dubai during 2014 amounted to 64 billion dirham through 29,098 transactions. This constitutes more than half investment in the real estate. The balance is expected to remain in favor of non-Arab investors if oil prices remained dip.

Jordan topped the list of Arab realty investor in Dubai. 

Saudi merchant families

Saudi Arabia is rich in oil and is the largest oil exporting country. It has 19^th largest economy. It has many merchant families involved in commerce for many decades and their wealth can rival that of house of Saud. In the pre oil era, these families provided financing to the royal family for running the affairs of state. Later on when oil was discovered these families were rewarded for their loyalty to house of Saud. They were given important development contracts.

List of wealthy family along with short introduction is given as follow.

Alireza

The house of Alireza is the oldest family business in Saudi Arabia. The business history of the family spans more than 150 years. The business of Alireza family includes retailing, travel agency services, manufacturing and distribution of aviation fuel, operating of shipping and freight terminals and real estate.

Ba Khashab

Ba Khashab family is involved in providing logistic services. This family owns the largest transporting business in the kingdom. Besides transport the family has distributorship of ISUZU commercial and passenger vehicles.

Bin Laden 

Osama B. Laden famous terrorist belonging to Bin Laden family

Bin Laden family is renowned for its business connections across the globe. Saudi Bin Laden group is largest construction firm in the world. Recently the contract for the construction of Kingdom Tower in Jeddah has been signed. Kingdom tower is planned to be the world’s tallest building.

Al Gosaibi family

Al Gosaibi family is one of the leading merchant families of the Middle East. Its business is diversified and includes oilfield services for ARAMCO, interests in banking, insurance, shipping, trading, stevedoring and manufacturing.

Jamjoom family

Jamjoom family is a prominent Saudi trading family in GCC and African region. The industries in which the family has stakes includes pharmaceuticals, Medical equipment and supplies, vehicles, hotels, food, writing instruments and stationery, toys, perfumes, skin care, fashion and metal industries.

Juffali Family

Juffali Group is the largest business house in Saudi Arabia. Al Juffali family is currently worth 19.8 billion dollars according to list of Arabs by net worth. Today the family business is looked after by sons of Ahmed Juffali, Ebrahim and Ali.

            

Olayan family

Olayan group is founded by Sulaiman S. Olayan and now it is managed by his sons and daughters.  The group has activities in trading, food processing and restaurants, construction, cleaning products, paper, plastic and fiber and office equipment. The Olayan family invests across the globe and is thought to own more than 10 billion dollars.

AL Rajhi

Al Rajhi family owns the Al Rajhi bank, which is the largest Islamic bank in the world.  Al Rajhi family is now the richest non royal Saudi family.

Al Sulaiman family

Al Sulaiman family is involved in different areas of industry, real estate, and trade. Ghassan Ahmed Al Sulaiman is the sole owner of IKEA Saudi Arabia.

How tycoons acquire influence

Tycoon is an English word having roots in Japanese. In Japanese the word taikun means ‘great lord’. Today it refers to powerful businessman. Sociologist debates as to who is more powerful, whether it is wealthy people or people in top echelon of institutions.

Top business people acquire influence through various tools. First of all they have wealth which is form of power. They can use it to purchase loyalties of important people. They can use it in legitimate and illegitimate ways to acquire influence.

 Donation to political parties in order to acquire influence over them is an important way in which business people build and maintain their influence. It was considered legitimate for a long time. But now this has been severely criticized by general public. The movement against the influence of 1% has brought attention to the unfairness of the system. The rich generally donates to all major political parties. In this way they access power through elected representative.

Other options are hiring and employing retired military and civilian bureaucrats. By hiring important people retired after serving in upper echelon of institutions they can get a sway over their former institution.

Many military generals served different corporate giants. Defense contractors in USA are notorious for hiring retired people to further their own interest. This leads to rise in military industrial complex. Defense contractors make use of their influence to make sale of their weapons and equipment. It is not only defense contractors that make use of retired personnel’s influence. Leading private equity firms also hire retired people for example David Petraeus has been hired by a private equity firm.

Other tools are controlling stock market, manipulating currency market, and manipulating money market. The most powerful of this market is bond market which has power to affect interest rate in the economy.

 Wealthy business moguls also acquire stakes in media corporations. Many billionaires have stakes in media corporations. They also throw their influence by using the leverage of advertisement owing to their status as clients of the media house. In this way they alter the content broadcast on media.

When public oversight makes it difficult to acquire influence the top one percent starts investing outside the system. This includes investing in and financing outlawed groups.

Old money families

Old money is any person or family possessing inherited wealth. Generally it is said shirtsleeves to shirtsleeves in three generation. In other cultures it is said from clogs to clogs in three generations. Similar proverbs convey the same meaning across different cultures.

But there are some old money families who have inherited huge assets. The major portion of old money family comes from landed aristocracy in Europe and other parts of world. The political power of aristocracy doomed as prices of agricultural product fell.

Maintaining old money has become more and more difficult as inheritance taxes has been levied in many countries. Below is a list of some of the families who successfully managed to keep their fortunes in family over a large period of time.

Old Money in United States

Rockefeller family

Rockefeller family fortune was made during late 19th and early 20th century. They made their fortune from oil industry primarily through Standard Oil.

Du Pont family 

Du Pont family has been ranked as richest families of United States by Forbes magazine. Their wealth dates back to mid 1800s.

Forbes family

Forbes family acquired its riches from trading between North America and China. This is an influential family whose members are active in American politics. Well known name is John Kerry, who is United States secretary of state.

But old money in United States is not too old. Below is a list showing old money families from various parts of world.

Old money in other parts of world. 

Old money in other parts is too old. Some claim that their fortunes were made during 12th century.

Spinola family of Genoa

Spinola family is an Italian family. It remained powerful during thirteenth century. Castle Tassarolo is their residence. Their fortune successfully survived many centuries.

Goulaine family

 This is old money French family.

This family owns Château de Goulain for more than 1000 years.

Royal family of Udaipur. 

This family is world's oldest serving dynasty in India.

Scindia family of Gwalior 

This was ruling family of princely state Gwalior. Jyotiraditya Madhavrao Scindia is known to own more than 3 billion us dollars. This family is prominent for more than 270 years.

Rathor family of Jodhpur.

 This is another royal family from India having fabulous wealth for many generations.

House of Thurn and Taxis

This house is from Germany. The family is known for breweries and building castles. The head of the family has been listed as billionaire many times.

House of Hanover

Prince Ernst August is current head and is estimated to own 500 million pounds.

Nawab of Bahawalpur.

 The abbasi family of Bahawalpur governed princely state until their powers were abolished. This family owns many properties. The Punjab University building was gifted by this family. Sadiq Garh Palace in Dera Nawab Sahib was built by this family.