Are billionaires self-made?
|March 13, 2008||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
Are billionaires self-made?
We meld two 2008 articles and examine how one grabs a fortune: Buffett ‘becomes world’s richest’ on BBC March 6 and ’Forbes’: Facebook CEO is youngest self-made billionaire in USA Today March 5. Warren Buffett has ousted his friend and occasional bridge partner Bill Gates as the world’s richest man.
Buffett, 77, has stakes in a range of companies, including Coca-Cola, Proctor & Gamble, and Tesco. After studying economics at New York’s Columbia Business School under investment guru Benjamin Graham, he began purchasing shares in textile firm Berkshire Hathaway in 1962 before buying a controlling stake in 1965. In December, the company’s stock price surged to a record $150,000 a share, just before Forbes formulated its 2008 ultra-rich list.
Two years ago, Buffett pledged most of his Berkshire shares to the Bill & Melinda Gates Foundation.
The Microsoft co-founder had topped the Forbes business magazine’s rich-list for the past 13 years. In 1995, he replaced Yoshiaki Tsutsumi, a Japanese real estate investor who slid with Japans falling land prices and was removed from the Forbes list in 2007.
Gates might have stayed at the top of the wealth-pile had Microsoft not made an unsolicited bid for rival Yahoo! last month: Microsoft shares plunged 15% in the two weeks following the bid.
Gates’s fortune climbed only $2bn to $58bn, enough for third place. Buffett’s Berkshire Hathaway stock climbed $10bn last year to $62bn. Mexican communications magnate Carlos Slim Helu’s fortune rose $11 billion to $60bn, putting him in second place; it has doubled in the past two years.
The biggest gainer over the last year is 48-year-old Indian Anil Ambani. His wealth jumped $24 billion, or nearly $3 million an hour.
Mark Zuckerberg, 23, the founder of the social networking site Facebook, joins the list as the world’s youngest billionaire.
Two made the Forbes list at a younger age than Zuckerberg. One was Albert II, prince of Thurn and Taxis, who is a German heir of postmasters dating to the Holy Roman Empire. He inherited his wealth at age 7, when his father died in 1990, although he did not gain access to his fortune until he turned 18.
The other was Hind Hariri, youngest of the Lebanese heirs of a banking, real estate, oil and telecommunications fortune that she inherited at 22.
Mainland China’s richest person is 26-year-old real estate heiress Yang Huiyan (No. 125), worth $7.4 billion. 50 billionaires are younger than 40. The average age of all billionaires has dropped to 61 from 64 in 2004.
The world’s richest woman is the French L’Oreal chief, Liliane Bettencourt, 17th on the Forbes list with a net wealth of $22.9bn.
Some are well known: US chat-show host Oprah Winfrey, ($2.5bn), property mogul Donald Trump ($3bn), and Harry Potter author JK Rowling ($1bn).
Billionaires sometimes slip beneath Forbes radar, but a record 1,125 individuals made it on the 2008 list. That’s an increase of 179 billionaires from a year ago.
Close to half — 469 (42%) — are from the USA. The average US billionaire is worth $3.4 billion vs. $4.3 billion for the average foreign billionaire.
All of their combined net worth is $4.4 trillion. Never before in human history have so many people in so many parts of the world advanced so quickly economically.
JJS: Forbes refers to the rich who did not inherit their wealth as self-made. Even Russian and Chinese billionaires who took title of former state assets, for such brazen thievery, the fawning press dubs them self-made. But can any human being work that hard or invest that smart to actually earn so much money? Not if we were to run government like a business. Have government quit paying out corporate welfare. Have government start charging full market value for the permits it grants. Want a land title, a resource lease, a broadcast license, an emission permit, a patent or copyright, a utility franchise, a corporate charter, or a banking charter? Have we a deal for you! From now on, the publics agent — the government — is going to charge full market value. Have government live off those recovered rents, then from the surplus public revenue, pay citizens a dividend. And have government quit taxing effort. Enjoying their cushion, people could negotiate higher wages, earning money now collecting at the top. There wouldnt be multi-billionaires, just millionaires, but at least then they would be inventors and entertainers who would have truly earned it.
Jeffery J. Smith runs the Forum on Geonomics.
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