Wednesday, September 30, 2009

Filthy Rich are Getting Poorer (But not by Much)

The Forbes 400 Richest Americans
Wednesday, September 30, 2009provided by
Almost all of America's wealthiest citizens are poorer this year.

America's super rich are getting poorer. For only the fifth time since 1982, the collective net worth of The Forbes 400 — our annual tally of the nation's richest people — has declined, falling $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion.

Faltering capital markets and real estate prices, along with divorce and fraud, pushed the fortunes of 314 members down and drove 32 plutocrats off the rankings.

Hurt the most: Warren Buffett, America's second-richest citizen. The Oracle of Omaha dropped $10 billion from his personal balance sheet as shares of Berkshire Hathaway fell 20% in 12 months. He is now worth (only) $40 billion.

Beating out Buffett for the 16th straight year as America's richest man is Microsoft co-founder Bill Gates. Sluggish Microsoft shares and declining outside investments pushed the software visionary's net worth down $7 billion in 12 months.

Rounding out the top 10 on The Forbes 400: Oracle founder Larry Ellison ($27 billion); Wal-Mart heirs Christy Walton ($21.5 billion), Jim C. Walton ($19.6 billion), Alice Walton ($19.3 billion), and S. Robson Walton ($19 billion); media maven Michael Bloomberg ($17.5 billion) and energy titans Charles and David Koch ($16 billion each).

The 10 richest Americans lost a combined $39.2 billion in the past 12 months, a 14% decline.

Other big losers include casino mogul Kirk Kerkorian, whose nest egg shed $8.2 billion in the past year. Shares of his gambling giant MGM Mirage have fallen 90% from their October 2007 high.

Also hitting the brakes: Enterprise Rent-A-Car founder Jack C. Taylor. The rental car titan's fortune is down $7 billion in a year as the travel industry slows and private-company valuations fall.

The biggest gainer is banker Andrew Beal, who tripled his net worth to $4.5 billion buying up cheap loans and assets as the markets crumbled last fall.

Membership on the list was made easier as the price of admission dropped $350 million, from $1.3 billion last year to $950 million this year, paving the way for 19 new members and 19 returnees.

Newcomers to the list include Marvel Entertainment chief Isaac Perlmutter, whose net worth soared to $1.55 billion after Disney agreed to buy the superhero outfit in August for $4 billion in cash and stock.

Other new members include Bloomberg LP co-founder Charles Zegar ($1 billion), mapping-software magnate Jack Dangermond ($2 billion) and trading titan Steven Schonfeld ($1 billion).

Former New York lawyer and accountant Jeffry Picower makes his debut on The Forbes 400 with a net worth of $1 billion. A longtime investor with Bernard Madoff, he is likely worth billions more (Picower is alleged to have extracted billions of dollars from Madoff's fund before it collapsed).

Picower and his foundation are named in a lawsuit by the liquidator for Madoff's investment business, who is seeking to recover funds allegedly obtained through "fraudulent activity." Picower claims if he knew Madoff was a fraud he would not have transferred money into Madoff accounts.

In December 2008, the Picower Foundation shut down after losing its $1 billion endowment in Madoff's Ponzi scheme. The charity had given millions to MIT, Human Rights First and the New York Public Library. Picower made his first fortune selling medical device maker Alaris in 2004.

Among those returning is venture capitalist Michael Moritz, who rode Amazon's purchase of online shoe retailer Zappos and surging Google stock back onto the list.

Divorce forced Google exec Omid Kordestani from the rankings, while R. Allen Stanford lost his billionaire status when the feds froze his assets after charging him with allegedly running an $8 billion Ponzi scheme.

Several Forbes 400 mainstays also fell off the list, including former Citigroup czar Sanford Weill, mall developer Matthew Bucksbaum and condo kingpin Jorge Perez.

Six members died, including glass giant William Davidson and newspaper maven Frank Batten Sr.

The Forbes 400 is a snapshot of wealth on Sept. 10, 2009. Gap co-founder Donald Fisher, who ranks No. 296 on our list, died Sept. 27 at his home in San Francisco at age 81.

Edited by Matthew Miller and Duncan Greenberg

The Top 21 Richest Americans

© Ryan Pierse/Getty Images 1. William H. Gates III

Net Worth: $50 billion

Source: Microsoft

Residence: Medina, Wash.

Age: 53

Despite losing $7 billion in 12 months, software man retains his title as America’s richest person for the 16th straight year.
Microsoft shares down 8% in past year but up 65% from March lows. He sells stock every quarter, redeploys proceeds via personal investment outfit Cascade.
More than 60% of fortune held outside Microsoft; investments include Four Seasons hotels, Televisa, AutoNation.
Stepped down from day-to-day duties at Microsoft last summer to focus on philanthropy.
Bill & Melinda Gates Foundation dedicated to fighting hunger, improving education in America’s high schools, developing vaccines against malaria, tuberculosis and AIDS. Endowment: $30 billion.
Penned first report on foundation’s projects in January. Touted progress made on preventing fatal childhood diseases; confessed frustration at challenge of creating an affordable, effective AIDS vaccine.
Ramping up personal contributions: donating $3.8 billion this year, $500 million more than in 2008.


© Michael Buckner/Getty Images 2. Warren Buffett

Net Worth: $40 billion

Source: Berkshire Hathaway

Residence: Omaha

Age: 79

America’s favorite investor lost $10 billion in past 12 months on his Berkshire Hathaway shares.
Provided calming guidance to panic-stricken investors during financial crisis last fall; avowed enduring faith in U.S. economy, advised bargain hunting: “Be fearful when others are greedy, and be greedy when others are fearful.”
Shrewdly invested $5 billion in Goldman Sachs and $3 billion in General Electric last fall.
Suffered a $1.5 billion loss in first-quarter 2009; Berkshire notched $3.3 billion profit in second quarter thanks in part to bet on Goldman.
Son of Nebraska politician filed first tax return at age 13, claiming $35 deduction for bicycle bought for paper route.
Met value investor Benjamin Graham while studying economics at Columbia.
Took over textile firm Berkshire Hathaway 1965, used as vehicle to invest in insurance (Geico), food (Dairy Queen), utilities (MidAmerican Energy) and recently green tech (electric-car maker BYD).
Believed to be grooming NetJets Chief David Sokol to eventually take over Berkshire.
Appearing in cartoon form on upcoming online-tutor series The Secret Millionaires Club.
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