Inside the billionaire club
By Lucy Battersby and Emily Chasan, With Reuters | theage.com.au | 07 March
Easy money may be on the slide, but there's a growing corps of new faces among the ranks of the 10-figure tycoons and the world's billionaires have plenty of cash in hand.
This year's Forbes Billionaires list contains several rolled-gold surprises and plenty of eastern promise. If you trade in luxury goods or are looking for a very rich husband, now's the time to start learning Cyrillic or hone your internet skills. For not only has the world's most famous philanthropist nerd been knocked off his perch, but 87 of this year's billionaires come from a certain former communist country, that once fought for its right to eschew commerce.
And top of the billionaires blessed with unimaginable riches before their brows wrinkle is the man who turned his peers onto social networking in cyberspace like never before.
It will come as no surprise that several Australians have made it onto the list, but their rankings might be unexpected. There are 14 in Forbes' list of 1125 billionaires, topped by the 145-ranked mining magnate Andrew Forrest, with an estimated net worth of $US6.5 billion. He is followed by James Packer with $US5.7 billion.
Microsoft magnate Bill Gates is no longer the richest man on the planet.
His fall to third place after 13 years will be cushioned by a personal fortune of $US58 billion ($A65 billion). But while Gates' wealth grew by $US2 billion in the past year, the fortunes of the Sage of Omaha Warren Buffet and Mexico's Carlos Slim Helu grew even more.
Buffet now carries the title of the world's richest man with a personal fortune of $US62 billion. Shares in his stockbroking firm Berkshire Hathaway are worth $137,000, giving some indication of the confidence he inspires.
Carlos Slim Helu, a giant in the South American telecommunications industry, is a close second to Buffet with $US60 billion.
Ranked number 17 in the list with a net worth of $US22.9 billion, Liliane Bettencourt is the world's richest woman, thanks to her controlling stake in the cosmetics giant L'Oreal.
She became a widow last November when her husband, Andre Bettencourt, died aged 88.
Media queen Oprah Winfrey is the reigning celebrity top earner with an estimated annual $US260 million pay packet. But her earnings pale when compared with those of the world's mightiest Wall Street plutocrat.
Forbes said Buffett's rise to No. 1 overall was particularly noteworthy as it came at a time of great financial turmoil and as Buffett has begun to siphon off part of his fortune to charity."
Even though he is giving away a piece of his fortune each year, the stock of Berkshire Hathaway, the source of Warren Buffet's wealth, has been rising very rapidly," Forbes magazines chief executive Steve Forbes says, noting Buffett's fortune climbed $10 billion in the last calendar year.
Buffett in June 2006 announced plans to give 85% of his fortune away, granting it to the Bill & Melinda Gates Foundation and four family charities.
Bill Gates serves on the board of directors of Berkshire Hathaway and is a long-time bridge buddy of Buffett's.
Gates has also given a substantial amount of his fortune to the foundation.
Buffett has been lauded among investors for his preference for investing in larger companies with easy-to-understand businesses, large or dominant market shares, consistent earnings, and strong management.
In the early 1960s, Buffett started to invest in Berkshire, then a struggling textile maker, and took it over in 1965.
Since then, he has transformed it into a holding company for more than 50 companies, ranging from Benjamin Moore paint and Dairy Queen ice cream to Fruit of the Loom underwear and Ginsu knives.
Calculations for the 2008 list are based on each billionaire's net worth in US dollars as at February 11.
However, the weak US dollar means that foreign fortunes have been worth more over the past six months, leading to a surprising mix of citizenship at the top of the list.
There are four Indians, two Americans and one billionaire each from Mexico, Sweden, Russia and Germany in the top 10. All told there are 226 newcomers - 35 from Russia, 28 from China and 19 from India.
There are also 109 billionaires from countries once part of the communist Eastern Bloc. There are 87 Russians listed, giving Russia the second highest number of billionaires after the US, a position Germany had held since 2001.
And India might not have a seat at the UN security council, but it certainly has financial influence. There are four Indians in the top 10 spots and 49 overall. The richest is steel barron Lakshmi Mittal ($US45 billion), then Mukesh Ambani ($US43 billion), who owns the Mumbai cricket team in the Indian Premier League, then Anil Ambani ($US42 billion) and KP Singh ($US30 billion).
Mark Zuckerberg, the 23-year-old founder of social networking site Facebook, has become the youngest ever self-made billionaire.
The magazine put the former Harvard student's personal wealth at $US1.5 billion ($A1.61 billion), based on what it said was a conservative valuation of $US5 billion ($A5.36 billion) for Facebook and Zuckerberg's estimated 30% stake.
It played down speculation that the site could be worth as much as $US15 billion ($A16.1 billion), based on Microsoft paying $US240 million ($A257.5 million) for a 1.6% stake in the company last year."
Would it really fetch that much today? Some analysts - and a few Facebook investors - doubt it," the magazine says. It says it based its valuation on Facebook's estimated annual sales of $US150 million ($A161 million).
And Moscow has overtaken New York City as home to the most billionaires, with 74 of the super-rich elite now counting the Russian capital as their home. By contrast, 71 billionaires live in New York, according to the magazine's annual list, which placed London in third place with 36."
Russia is again the dominant story in (Europe) this year. Its billionaires are just fast and fearsome. What's fascinating is that every single one of them is self-made," says Forbes senior editor Luisa Kroll. "We're not going to get into exactly how they got it but none of them inherited it and their average age is 46."
Gates has held the No. 1 spot since 1995, when he unseated Yoshiaki Tsutsumi, a Japanese real estate tycoon.
Tsutsumi fell off the billionaires' list last year after receiving a suspended prison sentence for falsifying financial statements and insider trading in 2005.
Mexican Slim, a former stock market trader, is known for buying up struggling, cheap firms and turning them into profitable cash cows. He built his fortune by privatising former Mexican state telephone monopoly Telmex. America Movil, a Telmex spinoff, is is now Slim's flagship business and Latin America's biggest mobile phone company.
The collective net worth of the world's billionaires soared to $4.4 trillion, $US900 billion higher than last year, the magazine says.
The list of billionaires has almost doubled in the past four years, Forbes says. There were 469 US billionaires, worth a combined $1.6 trillion, while the 656 billionaires who live outside the US are worth $2.8 trillion.
James Cayne, chairman of investment bank Bear Stearns Cos; William Pulte, who founded US home builder Pulte Homes Inc; and Howard Schultz, founder of coffee chain Starbucks, all fell off the billionaires' list amid declines in their companies' stock prices.
The decline in the dollar, a trend that Buffett himself has been betting on since 2002, provided a boost to billionaires outside the US, particularly because the Forbes list is tabulated in US dollars. -- With REUTERS
The world's top 10
1. Warren Buffett (US): $US62b Berkshire Hathaway
2. Carlos Slim (Mexico): $60b Telecoms
3. Bill Gates (US): $58b Microsoft
4. Lakshmi Mittal (India): $45b Steel
5. Mukesh Ambani (India): $43b Petrochemicals
6. Anil Ambani (India): $42b Diversified
7. Ingvar Kamprad (Sweden): $31b Ikea
8. KP Singh (India): $30b Real estate
9. Oleg Deripaska (Russia) $28b Russian Aluminum Inc.
10. Karl Albrecht (Germany): $27b Aldi supermarkets
Australia's top 10
1. Andrew Forrest: 145th richest man in the world $US6.5b resources (iron ore)
2. James Packer: $5.7b media, entertainment (gaming), investment
3. Frank Lowy and family: $4.6b property (shopping centres)
4. Shi Zhengrong: $2.9b technology
5. Harry Triguboff: $2.7b property
6. Gina Rinehart: $2.4b resources (iron ore)
7. Richard Pratt: $2.1b manufacturing (paper, packaging), investment
8. John Gandel: $2b property (shopping centres)
9. Kerr Neilson: $2b services (finance)
10. Stan Perron: $1.8b property, retail (vehicles)
First published by TheAge.com.au on March 07 2008
Visit theage.com.au for the latest news updated throughout the day
