From the Astors to the Vanderbilts, rags to riches stories are part of American mythology, and there are many tales of how people who started with nothing but a few dollars and a dream were able to transform their efforts into massive empires. But what happens when later generations squander that success and a dynasty's fortunes evaporate?
Overly bold business decisions, lavish spending, bad investments or pure bad luck can all lead to a fortune's downfall. Building an empire might require vision and sacrifice, but losing one seems to be easier than you'd think.
From glorious Gilded Age icons to 20th-century beer kings, these five famous American figures and families prove that building an empire takes decades, or centuries — but losing one can happen in a single generation.
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© Getty ImagesCornelius "The Commodore" Vanderbilt's shipping and railroad fortune eroded within generations. Above, Vanderbilt descendants Consuelo Vanderbilt (left) and Anderson Cooper
The Vanderbilts: How a $200m Gilded Age fortune faded to almost zero
The Vanderbilt fortune grew larger than the US Treasury after Cornelius "The Commodore" Vanderbilt transformed his shipping business into an empire worth $105 million. It was a growth that continued with the next generation as son William nearly doubled the estate to $200 million in less than nine years, cementing the family as the richest on Earth.
But this skyrocketing net worth wasn't meant to last. While families like the Astors invested in revenue-generating real estate, Gilded Age excess saw the Vanderbilts splashing their money on massive, unprofitable estates, like The Breakers summer palace and the 250-room Biltmore Estate in North Carolina. This heavy spending, as well as the dilution of wealth across multiple heirs over the generations, eventually led to the dwindling of the fortune. At a 1973 family reunion, with a gathering of around 120 descendants at Vanderbilt University, not a single member was reportedly a millionaire.
But is the legacy coming full circle? Vanderbilt heir Anderson Cooper of CNN inherited a fraction of the family's initial value from his mother, Gloria Vanderbilt, whose own fortune was earned mostly through her successful fashion career. The CNN anchor now has an estimated net worth of around $60 million, and while he says there will be no trust funds for his two children, who knows what the financial future holds.
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© Bettmann ArchiveHutton inherited an empire worth $1 billion in today’s dollars by age 21
Woolworth's heiress Barbara Hutton: The 'Poor Little Rich Girl' who died with just $3,500
Barbara Hutton, the granddaughter of Frank W. Woolworth, founder of the Woolworth five-and-dime store chain, inherited a fortune that would be worth about $1 billion in today's dollars by the time she was 21.
Even during the depths of the Great Depression, she spent money without a second thought — splurging on rare jewels, luxury estates, a massive entourage, and legendary parties, including her infamous $60,000 debutante ball. Then there were her seven husbands, who ranged from European princes and aristocrats to Hollywood icon Cary Grant. With the exception of the movie star, her exes famously helped burn through her fortune both during their marriages and in eye-watering divorce settlements.
After a tragic life marked by losing her mother at age four and her only son when she was in her 50s, she died in a Beverly Hills hotel room in 1979 at age 66 with just $3,500 left in her bank account.
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© Corbis via Getty ImagesJohn Jacob Astor built America’s first multi-million-dollar real estate portfolio. Above: heiress Brooke Astor
The Astors: The draining of a $100 billion empire
Gilded Age icon John Jacob Astor built a massive fur trade fortune and Manhattan real estate empire, making him the United States' first multi-millionaire. He died in 1848 as the richest man in America, with an estimated net worth of around $20 to $30 million, equivalent to over $100 billion today. Subsequent generations continued to build the family's riches, both figuratively and literally — John Jacob Astor IV built the iconic Astoria Hotel and the St. Regis in New York City, and another great-grandson, William Waldorf Astor, built the original Waldorf Hotel.
Family feuds helped split the fortune between the US and the UK and William Waldorf Astor moved permanently to England in 1891, taking his fortune with him. Additionally, estate taxes and dispersion across new generations helped dilute the estate. The family's massive property portfolio, which included a wealth of tenement real estate, was diminished, too, as heirs eventually sold off key New York properties like the Waldorf-Astoria Hotel site, sold and demolished in 1929. (Developers tore it down to construct the Empire State Building.)
In 1959, scion Vincent Astor left half of his $120 million estate to an eponymous charitable foundation he'd created, which would be led by wife Brooke Astor. Through giving, Mrs. Astor spent down the fortune, but not before her later years were marred by scandal.
Her son Anthony Marshall was convicted of fleecing her fortune after she became stricken with Alzheimer's. Millions went to legal fees and Marshall's inheritance was cut in half. She died at age 105 in 2007; most of her money, amounting to millions, were distributed to charitable organizations and cultural institutions according to her will.
The Astors and the Vanderbilts are two famous American dynasties who saw their fortunes dwindle within generations
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© Bettmann ArchiveFour times-wed A&P grocery heir George Huntington Hartford II burned through an estimated $500 million inheritance on lavish pursuits
George Huntington Hartford II & A&P — Playboy pursuits & missed opportunity
George Huntington Hartford grew the Great Atlantic & Pacific Tea Company — the iconic A&P — into America's first giant retail grocery chain, taking full control of the company in 1901. When he died in 1917, management of A&P was placed in the hands of his three sons, George Ludlum Hartford, John Augustine Hartford and Edward Vassallo Hartford.
When Edward Vassallo died in 1922, his 11-year-old son George Huntington Hartford II inherited a massive fortune, adding to the annual income of $1.5 million (equivalent to roughly $25 million today) that he had from his grandfather.
Despite these incredible figures, Huntington Hartford II, who became known simply as Huntington Hartford, would become an example of squandered wealth for the history books. Unlike other members of the clan, Huntington II refused to work in the family business and instead opted to live off of dividends. But the cash flow eventually dwindled due to a wide range of unwise investments, from a magazine to a failed art museum in New York City.
In his most famous real-estate blunder, he spent over $30 million acquiring Hog Island in the Bahamas, renaming it Paradise Island and building the Ocean Club resort. He ended up selling the failed real estate project for just $1 million, a crippling loss, when he was unable to get a casino license.
Meanwhile A&P was falling in popularity, failing to adapt to the trend of suburban superstores like Walmart, which was creating massive wealth for the Walton family.
Having burned through an estimated $500 million inheritance, Huntington Hartford II finally filed for personal bankruptcy in 1992 and moved to the Bahamas in 2004. Married four times, he died on May 19, 2008 at Lyford Cay at the age of 97.
A&P filed for Chapter 11 bankruptcy for the second, and last, time in 2015; remaining stores were closed or sold off by the following year, a sad end to the company's 150-year history.
"If the younger generations in family businesses are encouraged to carve out their own identities and somehow grow up with an absence of this sense of entitlement... This would be a much healthier way for potential family leaders to develop themselves"
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© Bettmann ArchiveFounded in 1850 by Bernhard Stroh selling homemade beer door-to-door, Stroh's grew into a brewing titan in the 1980s
The Stroh Brewery dynasty — A $9 billion family beer business that went bust
Bernhard Stroh immigrated to Detroit from Germany with $150 in his pocket and founded the Stroh Brewery Company in 1850, selling a homemade beer door to door out of a wheelbarrow. Incredibly, 130 years later Stroh's had grown to be the third-largest beer empire and the largest private beer fortune in the U.S.
In fact, Forbes estimated the Stroh family wealth to be worth an incredible $9 billion at its peak during the 1980s. So how did the family get completely wiped out from the business?
In a 2017 interview with Bloomberg, Bernhard's descendant Frances Stroh, who had written a book, Beer Money: A Memoir of Privilege and Loss, about her famous family, explained exactly how it happened.
The trouble came, she said, in the 1980s, when her uncle Peter Stroh was running the business. "He didn't follow the light beer trend quite in time. He actually chased it [when] we should have been at the forefront… Unfortunately that really hit us hard in the 80s at the same time that we were purchasing Schlitz which was five times our market cap. Taking out a half a billion dollar loan and going national overnight with a family run, family-oriented culture was not really the mentality for a big national brewer."
In 1999, the family announced they would sell off their labels to rival breweries Pabst and Miller. As then-CEO John Stroh III said of the decision, "Emotionally, it was an extremely difficult one to make, knowing that it would impact our loyal employees, and recognizing that it would mean the end of our family's centuries-old brewing tradition that had become, in essence, an important part of our identity."
Stroh's is still brewed but it's no longer in the hands of the family descended from its creator.
What can we learn from defunct dynasties?
Lessons can be learned from the experiences of these defunct financial dynasties, with wealth split exponentially among new generations who don't build upon the past, lavish assets that don't generate wealth and heirs who don't steward their family legacy.
Fortunes built from almost nothing can evaporate seemingly into thin air — but are family dynasties fundamentally flawed?
In her Bloomberg interview, Frances Stroh addressed this question. "Not necessarily," she said. "One of the issues in family dynasties, especially in the later generations as the companies evolve, is this sense that there'll just be a job waiting for you when you get out of college — but this is not necessarily the path that everyone in the family should take."
"The Vanderbilts showed how even a massive fortune can disappear over generations without proper planning and discipline"
She went on to say that younger generations should be "encouraged to go out into the world, figure out who they are, carve out their own identities and somehow grow up with an absence of this sense of entitlement, which is really up to the parents."
From a financial standpoint, it's important to note that "building wealth and keeping it are two very different things," financial planner Greg Guenther, CEO & Managing Director of GRANTvest Financial Group previously told HELLO!.
"Howard Hughes died without a valid will, leaving a multibillion-dollar estate tied up in litigation for decades. The Vanderbilts showed how even a massive fortune can disappear over generations without proper planning and discipline…. Whether you have $1 million or $1 billion, you need a current estate plan, a clear succession strategy, and heirs who are prepared for what they will inherit."
