Forbes launched its definitive ranking of the nation’s superrich in 1982. Back then the price of admission into this most exclusive of clubs was a mere $75 million of net worth. Even after adjusting for inflation, this year’s entry fee ($1.1 billion) is roughly ten times what it was thirty years ago. There were just 13 billionaires at the time and the total worth of the 400 club was a mere $93 billion. Today the combined net worth of the 400 richest Americans is $1.7 trillion, up from $1.5 trillion a year ago. The average net worth of a Forbes 400 member is a staggering $4.2 billion, up from $3.8 billion, and the highest in at least a decade, as two-thirds of the individuals added to their fortunes in the past year.
There has been much discussion of late about the widening gap between rich and poor and what role the wealthiest Americans should play in fixing society’s ills, and how much taxes they should pay. This list on the surface will perhaps exacerbate these concerns, but a deeper analysis instills confidence that the American dream is still very much alive. Seventy percent of the Forbes 400 members made their fortunes entirely from scratch; of the 20 newcomers who climbed into the ranks, only four inherited (including Steve Jobs’ widow, Laurene Powell Jobs, who is the richest newcomer with a net worth of $11 billion). Each of these people’s success has a ripple effect. Consider Andrew and Peggy Cherng, the founders of restaurant chain Panda Express, who debut with a combined net worth of $2 billion. Their restaurants employ approximately 21,000 people. The gas and convenience stores owned by Tom and Judy Love, also new entrants, employ another 10,000. Other notable newcomers showing there is no shortage of ingenious ideas are Under Armour’s Kevin Plank, 5-Hour Energy’s Manoj Bhargava and Twitter’s Jack Dorsey, who gets the bulk of his fortune not from social media but from his mobile bill payment company Square.
The country’s three richest entrepreneurs continue to add billions to their net worth, even as they give money away. Bill Gates, Warren Buffett and Larry Ellison, who hold onto their respective spots at numbers 1, 2 and 3, were up $7 billion, $7 billion and $8 billion, respectively. Ellison’s $8 billion jump was the biggest dollar gain of anyone on the list this year.
While winners outnumbered losers by nearly four to one, there were some stunning drops. No one fell more dramatically than Facebook’s Mark Zuckerberg, whose fortune stumbled $8.1 billion, making him the year’s biggest loser. He is still $2.5 billion richer than he was two years ago and he’s handily entrenched in the ranks. Not true for some of his other social media brethren who marched onto The Forbes 400 a year ago and have since retreated. Among this year’s 25 drop-offs (another 7 passed away) are Groupon’s Eric Lefkofsky, Zynga’s Mark Pincus and Facebook’s venture capitalist Jim Breyer (who missed the cut by $50 million. )
Our estimates are a snapshot of each list member’s wealth on August 24, the day we locked in net worth numbers and rankings.
1. Bill Gates
$66 billion (UP)
Residence: Medina, Washington
The planet’s most generous person --he’s given away $28 billion so far -- has a new obsession: building a better toilet for those without water or sewage systems. Every year 1.5 million children die from food and water tainted with fecal matter, more than the annual deaths from AIDS and malaria combined. The Bill & Melinda Gates Foundation is also spearheading a malaria vaccine that is showing promise in clinical trials. Gates’ net worth climbed $7 billion since last year on the strength of Microsoft shares, which rose 20%, and on gains from investments in private equity, bonds and stocks such as hygiene tech firm Ecolab and Mexican TV broadcaster Televisa. He continues to sell shares of Microsoft--he shed 80 million in the past year, about 15% of his stake--so that now just one-fifth of his net worth stems from the software company he cofounded 37 years ago. Gates and his good friend Warren Buffett continue to recruit new members to their Giving Pledge—so far 91 people, including 10 new signatories, have taken the pledge to donate at least half of their fortune to charity, in life or death.
2. Warren Buffett
$46 billion (UP)
Source: Berkshire Hathaway
Residence: Omaha, Nebraska
Buffett recently completed radiation treatment for prostate cancer, five months after he notified Berkshire Hathaway shareholders of his condition, assuring them that it was “not remotely life-threatening.” Still, he has gotten his house in order. In December, he chose his farmer son, Howard, as the future non-executive chairman and “guardian of the firm’s values.” In February, he said he’d picked his CEO replacement but has declined to give a name. He’s also stepping up philanthropically. He gave $1.5 billion to the Gates Foundation in July, bringing his total giving to $17.25 billion. On his birthday in August, he pledged $3 billion of stock to his children’s foundations. His fortune is up $7 billion as class A shares jumped more than 20% since last year. After studying under Benjamin Graham at Columbia Business School, Buffett offered to work for his former professor’s investment partnership, Graham-Newman Corporation, for free. According to Buffett, “he turned me down as overvalued.” It was only after several years of “pestering” that the father of value investing agreed to take on the younger man in 1954. When Graham retired two years later, Buffett returned to Nebraska to launch his own partnership. In 1962, Buffett began buying up shares of a struggling textile company called Berkshire Hathaway. Though Buffett has called Berkshire “the dumbest stock” he ever bought, the firm has long since shed its textile assets and today serves as Buffett’s famed investment vehicle. In May, Berkshire snapped up dozens of local newspapers from Media General after announcing a deal for the Omaha World-Herald in November 2011.
3. Larry Ellison
$41 billion (UP)
Residence: Woodside, California
Despite ongoing legal battles with such rivals as SAP, HP and Google, shares of Oracle, the software firm Ellison has run for 35 years, were up 20% in the past 12 months. He was the year’s biggest dollar gainer, adding $8 billion to his net worth. He spent a reported $500 million to buy 98% of Hawaiian island of Lanai from David Murdock in June. His other passion, yachting, is making its mark on San Francisco as anticipation builds for the 2013 America’s Cup. Ellison, who signed on to the Gates-Buffett Giving Pledge in 2010, has thus far donated $445 million, mostly via Oracle stock, to his Ellison Medical Foundation, which supports research on aging and age-related diseases. His latest gift to the foundation was 1.6 million shares of Oracle--worth $45 million--in April.
BHP Billiton has been hit with a $522 million tax bill that could rise well beyond that over the use of its Singapore …