Thursday, August 15, 2013

Riches to Rags

File under counterexamples to infinitely lived agents or very high discount rates.

From Andrew Ang's forthcoming textbook:
Cornelius Vanderbilt (1794-1877), known as the “Commodore,” was one of the richest men of his day. He was born rich, created even more wealth, and amassed a fortune of more than $100 billion in today’s dollars, enough to make him the richest person in the world by a comfortable margin. Even today “Vanderbilt” has the connotation of rolling-in-dough, filthy rich. His heirs lived the high life, squandering their inherited wealth on yachts, estates, grand parties and whatever took their fancy. In two generations, they had burned through all of it. According to a scion of the Vanderbilt family, several descendants died penniless, and “when 120 of the Commodore’s descendants gathered at Vanderbilt University in 1973 for their first family reunion, there was not a millionaire among them.”

I think this book by Jerry Patterson is the original source, but I'm not sure because the index does not appear to be finished.

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