Carey was born May 11, 1930 in Baltimore, Maryland. He is a direct descendant of the 11th US President, James K. Polk. Carey's family has long ties in Baltimore. His great-great-great-grandfather James Carey was an 18th- and 19th-century Baltimore shipper, the chairman of the Bank of Maryland, a member of Baltimore's first City council, and a relative of Johns Hopkins. His grandmother, Anne Galbraith Carey, started the Gilman School for boys in the Baltimore suburb of Roland Park in 1897. As a young man, Carey left the Gilman School to go to the Pomfret School in Connecticut. After this, he studied at Princeton University and the University of Pennsylvania. He served in the Air Force for two years. He then worked at his stepfather's car dealership to repay his college expenses. He learned about leaseback financing while he worked there. He then moved to New York City. Carey lived in New York City and Rensselaerville, New York. In 1988, Carey started the W.P. Carey Foundation. In 1999, he served as the Executive in Residence at the Harvard Business School.