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Hey everybody, an unusual episode today, it s a bonus episode, this is not The Art of Charm, this is not an episode of The Art of Charm, it s an episode of my new show called The Forbes List, where essentially I ll be interviewing people on The Forbes List, people who curate The Forbes List, about The Forbes List, you know, like, top...
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20 billionaires, top 5 fastest growing companies in tech, best places to retire, things like that.
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So, if you re new to The Art of Charm and this is your first episode, skip to something else or enjoy this one, but this is not representative of what The Art of Charm is about.
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I think this show on Forbes is going to be kind of fun, so check it out.
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If you haven t checked it out and you re a fan of The Art of Charm, you might like the Forbes list.
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Here we go, a little bonus episode about Forbes billionaires.
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This is The Forbes List on Podcast One.
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And I m Jordan Harbinger, host of The Forbes List.
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On this show, we dig in with the Forbes editors, getting a behind-the-scenes understanding of how they curate the famous Forbes lists and learning more about who and what actually makes those lists.
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Today, I m speaking with Keri Dolan.
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She s the assistant managing editor of Wealth at Forbes.
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Keri, thanks for joining us.
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Thanks for having me.
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Now, this is an interesting position you ve got here because you cover both wealth and philanthropy, which I didn t necessarily connect immediately.
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But now that we look at guys like Bill Gates, a standby on the list, you see that rich people seldom get away without giving away a bunch of their money, especially on his watch.
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Exactly.
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I mean, Bill Gates and his good friend Warren Buffett are on a mission to try and encourage as many billionaires as they can to give away half of their net worth in their lifetime.
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And that must affect the list.
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And we ll get into that in a little bit as well, because I would imagine cutting a check for a billion dollars here and there can chip away at one s net worth.
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Yes, it definitely can make a difference in the rankings.
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So over the past decade or so, who would you say are the top 10 billionaires typically year to year?
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Bill Gates has been number one on the Forbes list of the world s billionaires for most of the past 20 years.
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There were a couple of years in there, in the mid-2000s, where his friend Warren Buffett was number one for a year, and then Carlos Slim of Mexico was number one for a couple of years.
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But Bill is pretty much
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won the title of most years at number one as the richest man in the world.
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And the amazing thing, to your point about philanthropy, is we don t include the $28 billion worth of Microsoft stock that Bill gave to his foundation.
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part of his net worth.
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So when we look at people s net worth we are excluding any irrevocable terrible gifts that they have made.
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So that s when Warren Buffett gives stock of Berkshire Hathaway to the Gates Foundation as he does every summer.
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We take that, that s gone, that comes off his net worth.
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So that s about 20 billion dollars that is out of Warren s net worth that s in the Gates Foundation that s no longer part of
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Wow, so he d be well over 100 at this point if he was just a more stingy guy.
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Yeah, Gates and Buffett.
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Yeah, I mean, Gates has given away, each of them have given away about $28 billion.
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That s just an insane amount of money.
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I mean, the fact is there are cities that probably operate on a lot less than that.
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Maybe not major cities, but certainly.
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Yeah, and most of the people on the list are worth far less than $28 billion, right?
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Sure.
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So you get kind of an elite of the elite up there in the,
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you know, above $30 billion net worth.
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Right.
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It s like somebody who owns a private jet just had their entire net worth donated in the form of a check on Christmas because Bill Gates was feeling generous.
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Yeah.
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Right.
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That s it.
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That s impressive.
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Yeah.
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But that s interesting.
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One of the things Warren Buffett is pretty interesting about this idea of giving money away.
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He talks about the fact that, you know, even though he s given away $28 billion,
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It s not like it s changed his lifestyle.
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For somebody who s worth so much money, it s not like he has to skip lunch because he gave the money away.
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He talks about how the money he s given away has no utility to him.
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And I think that s the case for a large number of these folks.
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Sure, I mean, he can still take Christmas in Hawaii and stay at the Four Seasons.
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And fly private.
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And fly, yeah, in his own jet with his own, yeah, exactly.
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So how does Forbes determine a person s worth?
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Because this has to be a complicated calculation at some level, because you ve got stock, you ve got properties, a lot of these guys, and I m not mentioning any names because I can t, but I m sure there s a fair amount of people on the list that are putting money in places where they don t want anybody to find it.
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Yeah and you know we from the get-go will say that we are not omniscient.
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We do not have filings from the IRS.
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We work with publicly available information and we work with good old-fashioned shoe leather reporting.
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Calling people up on the phone, finding old bond prospectuses, reading clips in the paper about what s going on with people s companies if they re buying or selling.
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artwork or properties or all that.
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So to your point, how do we determine someone s net worth?
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For most of the people on this list, it has to do with the value of a stake that they have in a company.
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Usually it s a company that they ve founded or co-founded.
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So in Bill Gates  case, he co-founded Microsoft.
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In Warren Buffett s case, he essentially bought an old textile company, Berkshire Hathaway, and turned it into this investment vehicle that he owns a big chunk of.
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which is publicly traded.
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So what we do is we pick a day, a couple of weeks before we go to press with our list, and we use stock prices and exchange rates for everybody from the same day.
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So if you re a Chinese billionaire and the Chinese yuan has weakened against the dollar, then your net worth is going to be lower in dollar terms this year than it was last year because of that currency shift.
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So there are a whole bunch of people on the list who have private companies.
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And those ones are a little bit harder to nail down.
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Although more and more of the biggest companies, companies like Cargill, which is a big agribusiness company, they actually disclose their revenues, their profits.
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And over time, we figured out which members of the Cargill family own how much of the company.
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And what we do is we try and figure out, if Cargill was a public company, what would it be worth?
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So we try and kind of evaluate all of the companies as if they were public, which is hard to do with private, but we re working on that.
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Right, yeah, especially when people in some of these are probably trying to hide things for whatever reason.
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Yeah, I mean, so we don t actually know what people s secret Swiss bank accounts have in them and that sort of stuff.
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So we tend to be conservative.
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Our net worths are probably
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lower than the real number in many cases because we don t want to make wild guesses about what people have done with all the years of dividends they ve gotten from the stocks that they own.
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They may have blown it on some trips somewhere or they may have invested it wisely and tripled their money or more.
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So we tend to take the low end of our estimates.
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Up towards the top, it s got to be a little bit tricky to calculate because there s a lot of sovereign wealth, if that s the right term, where you have maybe a prince who maybe has this much in cash and owns this much in a company.
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But in theory, everything natural resources related in the entire country of wherever kind of belongs to this person.
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They have dominion.
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That s a good question.
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years ago used to do a separate list that we called kings, queens, and dictators.
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It s much harder to actually figure out the net worth of the king of Saudi Arabia.
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Or at one point, I had to try and figure out what Fidel Castro s worth.
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And yeah, because in some ways they have the ability to tap the resources of the
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country if they have supreme power.
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So we actually don t, so the king of Saudi Arabia for example is not on our list.
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So we we try and include people whose net worth we can trace and prove and defend right and if we re and so we don t really know on some of these.
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So there s not a lot of, there s a couple, there s two princes from Saudi Arabia who are on the list but it s because of their holdings in publicly traded companies where we know how many shares they own and then you know that you use the share price from the stock exchange and so that s how they re on there.
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I can imagine this team of interns spread out throughout the office looking at these different numbers and Googling their pants off with LexisNexis as well and things like that.
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When I worked in private equity on Wall Street a million years ago, approximately,
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There were a lot of clients that we had that when I would ask the managing partner in the firm, how much money does this guy have?
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He just invested $180 million or something like that in some fund that we re working with.
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He would say, these guys don t even know how much money they have.
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Even their own wealth managers would not be able to rattle off over dinner or drinks the amount of money under their control because they ve got property, they own things that are in partnership with 7,000 different little sub-corporations and a bunch of other investors and things like that.
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It s so complex at a certain point that they re not even sure.
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And these are the guys whose job it is to know these things.
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So if it s your money and you ve got a family office, you would have no clue how much you re actually worth.
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And so that s why we re probably low, right, because we re going with, okay, well, we know that Warren Buffett owns X number of shares in Berkshire Hathaway, or we know Jeff Bezos owns X number of shares in Amazon.com.
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And we know when Jeff Bezos has sold shares of Amazon, so we count that cash after taking taxes out.
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But we don t know, yeah, how much land has Jeff Bezos bought with the cash that he s taken out of Amazon.
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Did he buy it in partnership with 10 other people?
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Yeah, that part we don t know.
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So that s where, yeah, that s where we do the best we can with the information we have.
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We definitely do not claim to be catching every dollar.
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And there s, I mean, there s some people, there s some people who actually want to tell us everything.
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I mean, there s this one guy who sends us, his finance guy sends us a PDF.
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listing how much the value of his furniture and his fixtures are in his homes and estates.
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And I frankly, I don t count it because we don t have that information for everyone else on the list.
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So we re trying to be level in our, I mean, we have more detail for some people than others, but we re not gonna get down to that level of nitty gritty for what your furniture is.
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Why do you think he does that?
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Is he just dying for some coverage?
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He s dying to get a higher net worth.
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I mean, the amount of ego that some of the members of these lists have, the billionaires lists in particular, is kind of astounding.
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For people who are incredibly successful, there are some people for whom that success
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isn t enough, where they really want to have a higher rank on our list.
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This is an elite club of people.
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We had 1810 billionaires in the world for when we did this list in 2016.
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So that s a pretty small percentage of the world s population.
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And yet for some people, I mean, I spend an inordinate amount of time on the phone for a very small number of people fielding calls from their chief financial officer who s lobbying to get their boss a higher net worth on our list.
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I wonder if they have their bonus attached to, hey, if I make the top half, buddy, you re going to Barbados.
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I wouldn t be surprised.
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I wouldn t be surprised.
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It seems like that makes sense to me, right, at some sort of perverse level.
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Because when I look at our iTunes rank or something like that, we might be in the top 50 or the top 100, but the rest of the entire world no longer exists.
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I m only looking at the 49 people in front of me.
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And I totally understand that competitive mindset.
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And I don t even have a billion dollars to show for it.
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How did the top five, let s say, make their money?
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Because I know we ve got Bill Gates.
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I know we ve got some telecom tycoons in there.
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What are we looking at for the amount of money that you have to get to hit the top five and be above the fold, so to speak?
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So I think Bill Gates  story is pretty well known.
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He co-founded Microsoft 41 years ago.
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He was worth $75 billion on our 2016 list.
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He s now worth $85 billion here at the end of January 2017.
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Not bad for a one-year jump.
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But he actually doesn t have as much Microsoft stock as he used to.
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His fortune is about 15% comes from Microsoft stock.
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So he s essentially sold off a bunch of stock over time.
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He s got a group of people who are managing his money and he s got a whole range of public stocks in the US and in places like Mexico and other countries.
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And he s got private equity, which we don t know the details of, frankly.
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And he s got real estate, which we don t know the details of.
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So we re making estimations on what he s got outside of Microsoft.
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But we know from what he s sold off, we have a starting point and then we can apply appreciation how
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kind of take how the indexes have done over time and apply that to his network.
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I mean, not bad, Bill.
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That s about a billion dollars per month over the last year, if you want to break it down.
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In terms of a jump in his network, yeah.
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I mean, we ve had even bigger jumps for some of the other folks on the list.
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Mark Zuckerberg, who s currently number five richest in the world,
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of course, the founder and CEO of Facebook.
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His net worth went up more than $10 billion between 2015 and 2016, just because Facebook s stock s gone up.
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And then it s gone up another $10 billion between March 2016 and now.
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So Mark Zuckerberg was worth $44.6 billion in March of 2016.
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Now he s worth $55 billion.
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He s promised to essentially give away
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99% of his Facebook stock, which is essentially, it s not 99% of his net worth because he has sold some Facebook stock over time, but it s about 98% of his net worth he s going to give away over his lifetime.
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And he s started with this very ambitious goal to try and eliminate, cure, or manage all disease by the end of the century, which is
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a really tall order, but hey, if he can do it, great.
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And he s going to spend $3 billion to do that.
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I love that.
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I mean, I totally understand at some level, once you, even over a hundred million or whatever, I m throwing out a ballpark here because I m nowhere near that amount myself.
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And I can t really speak from experience.
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There s just no marginal return other than a larger number on a spreadsheet that s managed by somebody else.
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Yeah, I think that certainly return on joy, like are you happier at $50 billion than you are at $40 billion?
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I can t imagine that you feel any different.
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Of course, our friend Donald Trump, president, we interviewed him in September of 2015 when he was still a candidate.
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A mere civilian.
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And he, we, Forbes estimated that at the time he was worth around $4 billion, but Trump
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was claiming he was worth more than 10 billion.
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And we said to him, well, why are you saying 10?
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And he said to us, well, 10 sounds better.
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Sounds about right.
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Yeah.
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So, I mean, there s some of that going on, right, where there is some ego gratification for having a higher number.
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But you re right.
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For most people like me, what s the difference between higher and fake?
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Right.
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And now it becomes maybe, in a way, and this sounds a little crass, so pardon me, Zuckerberg, but purchasing your place in history.
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Because no one is going to necessarily remember Facebook in 100 years because it s going to be something else.
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It s not going to be called that.
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It won t even make sense.
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the Model T of social networks and things like that.
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However, if somebody eliminated 1,000 or 1,500 different deadly diseases, that person s going in every textbook forever.
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And maybe winning a Nobel Peace Prize, right?
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Hopefully, right.
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Yeah, exactly.
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Exactly.
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No, and I think that makes sense because really, why does he and his wife need all that money?
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Sure, yeah.
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Yeah.
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What about these telecom tycoons that we see?
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A lot of them from Mexico or say Brazil.
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Telecom clearly ridiculously lucrative as lucrative slash more lucrative than info security computers and social networking.
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So Carlos Slim, the richest man in Mexico, was in the top 10 on our billionaires list in 2016.
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He s still one of the richest men in the world, but the value of his stock in this company, America Mobile, which has mobile phone concessions in Mexico and something like 16 other countries in Latin America, that stock s been falling a little bit since then.
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So he s dropped a little bit in his rankings on the list.
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super-duper rich.
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He s been beleaguered by some of the changes in regulation in Mexico.
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He essentially has a monopoly on telephone concession in Mexico and the president there passed legislation to try and essentially create a level playing field for the other telecom players in Mexico.
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So his stock s gone down as a result of that.
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SPEAKER_01
Yikes.
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SPEAKER_01
Yeah.
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When you have to give up your monopoly.
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Yeah.
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So he s had to sell off some assets and things like that.
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Sure.
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Yeah.
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To competitors, no less.
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That s got to sting.
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But at least he s not sending you PDFs of his furniture.
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SPEAKER_01
He s not at that point yet.
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You re right.
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So how do these top five billionaires spend their money?
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I mean, we ve talked about philanthropy.
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We ve talked about curing all diseases.
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What are some of the other uses that we see for this stuff?
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Is it research or do you see just excess that borders into the...
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Yeah, some of them have huge homes, right?
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SPEAKER_00
Yeah, I would imagine.
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Buy huge property.
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So Bill Gates is known for this amazing home that he has overlooking Lake Washington in this suburb of Seattle.
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Jeff Bezos, who s, as of today, was briefly number three in the world richest, the founder of Amazon.com.
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He recently spent $23 million on what used to be a textile museum in Washington, DC, and he s going to turn it into a house.
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SPEAKER_01
This is a guy who already, of course, already has a house in Seattle where Amazon is based.
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SPEAKER_00
Yeah, he s not homeless.
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And he s got properties elsewhere, too.
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SPEAKER_01
And then the other thing is Jeff Bezos and his fascination with rockets and space exploration.
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SPEAKER_01
So he s put money into this company Blue Origin, which was successful in getting a rocket to go up and come back down and land in the water and they could use it again.
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SPEAKER_01
Right.
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SPEAKER_01
So the first reusable rocket.
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And he s talking about
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commercial space travel as early as 2018, which is only a year from now.
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SPEAKER_01
I don t know if it ll really happen.
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SPEAKER_01
Sometimes these things are a little overambitious, but this is something.
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And then also Jeff Bezos owns the Washington Post newspaper, which he spent $250 million on in 2013.
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So he s a guy with some interesting toys, if you want to call him that.
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A lot of the other folks at the very top of the list
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are not among the big yacht owners.
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There s a lot of the very wealthy billionaires who have big, fancy yachts.
2
SPEAKER_01
Some of the Russian billionaires love these big, long, fancy yachts.
2
SPEAKER_01
Number two on the list last year, Amancio Ortega, who s Spanish.
2
SPEAKER_01
He s probably most well-known to Americans for this clothing chain, Zara.
2
SPEAKER_01
The parent company of Zara, Inditex, is the public company in Spain.
2
SPEAKER_01
And he s put a bunch of the profits that he s made from his company into real estate.
2
SPEAKER_01
So he s got something like $8 billion worth of real estate, like office buildings in Miami, Chicago, Madrid, Barcelona, places like that.
2
SPEAKER_01
So some people just invest and then they re very private about what they do with the money for fun.
2
SPEAKER_00
Do you see any correlation between people who are high on the, which I noticed you had the self-made scale on the Forbes list, which I find super useful because it s hard to look at this and go, all right, well, how much is this his and how much is because his dad started an oil company in 1939, right?
2
SPEAKER_00
And how many of the people do you see that are highly self-made that also invest
2
SPEAKER_00
in things like real estate, property, things that are going to have a return versus maybe low self-made, even oligarch type guys who maybe invest in things that are just showy.
2
SPEAKER_00
Do you see a correlation there?
2
SPEAKER_01
I don t know.
2
SPEAKER_01
I mean, it s just interesting just to look at the very top of the list there.
2
SPEAKER_01
They don t seem to be the showiest of the people.
2
SPEAKER_01
As far as I know, Bill Gates, Warren Buffett, Amancio Teja do not have the largest yacht in the world.
2
SPEAKER_01
None of them do.
2
SPEAKER_01
Do they fly private?
2
SPEAKER_01
Sure.
2
SPEAKER_01
Who wants to deal with TSA?
2
SPEAKER_01
Do they have multiple homes?
2
SPEAKER_00
Yeah.
2
SPEAKER_01
So it s all a matter of scale.
2
SPEAKER_00
I know people that don t even have anywhere near a billion dollars, and they still don t want to deal with the TSA, and they still got the lake house.
2
SPEAKER_00
That s no big deal.
2
SPEAKER_00
I do wonder, there s a list I want to see.
2
SPEAKER_00
The top 100 money wasters, according to Forbes, right?
2
SPEAKER_01
Yeah, that s the part we don t have a lot of.
2
SPEAKER_01
I mean, I guess it s a matter of do you think they re wasting their money by spending it on another new Gulfstream jet?
2
SPEAKER_00
Right, yeah, sure.
2
SPEAKER_00
Maybe assets that, depreciating assets, right?
2
SPEAKER_00
Boats, planes.
2
SPEAKER_00
And that s pretty much the two big ones.
2
SPEAKER_00
Those are the two big ones.
2
SPEAKER_00
Exactly.
2
SPEAKER_00
Exactly.
2
SPEAKER_00
Who are some of these guys as people?
2
SPEAKER_00
I mean, it s it s hard to imagine.
2
SPEAKER_00
We see guys like Bill Gates and we think, wow, look, he s such this nerdy guy in the 80s who just, you know, his tie and his suit look like they re wearing him.
2
SPEAKER_00
And now he s really big glasses and big glasses.
2
SPEAKER_01
Look at the old pictures.
2
SPEAKER_00
Yeah, and he s giving away all his money, and you see Zuckerberg, and he s like this guy who every nerd s superhero invents this cool thing.
2
SPEAKER_00
He s learning Chinese.
2
SPEAKER_00
He seems like a happy, well-adjusted guy for the most part.
2
SPEAKER_00
But some of these other guys, well, I would love to hear about them, of course, but some of these other guys are more mysterious.
2
SPEAKER_00
These sort of old, dignified, distinguished,
2
SPEAKER_00
billionaires that live in South America and every headshot is of them not smiling in a suit, right?
2
SPEAKER_00
You just think, who are these guys?
2
SPEAKER_01
I mean, so some of the people on the list did inherit their wealth, right?
2
SPEAKER_01
And so they are maybe lower profile or playboys or, you know, not as invested in, you know, because that s the challenge, right?
2
SPEAKER_01
If you re a real go-getter entrepreneurial spirit and you come on some great idea,
2
SPEAKER_01
Amazon.com, let s say.
2
SPEAKER_01
For a while, Nick Woodman of GoPro was on our list.
2
SPEAKER_01
He s fallen off the list because GoPro is not as popular as it was in the past.
2
SPEAKER_01
work really hard, right?
2
SPEAKER_01
They have to put in a lot of sweat to get the company up off the ground and get it running.
2
SPEAKER_01
And then the question is how do you instill that same work ethic in your kids if they re born into this?
2
SPEAKER_01
But it s interesting, we had a conversation a number of years ago with
2
SPEAKER_01
Peter Buffett, Warren Buffett s son.
2
SPEAKER_01
And he was talking about how he didn t even know that his family was rich until he read Forbes magazine and saw that his dad was on the list of one of the Forbes 400 richest people in America.
2
SPEAKER_01
Because they didn t change their lifestyle.
2
SPEAKER_01
They got rich, but they kept this.
2
SPEAKER_01
Warren Buffett s lived in the same house in Omaha, Nebraska since 1958.
2
SPEAKER_01
They spent $31,000 on it.
2
SPEAKER_01
He ll tell you the only thing he does now differently is he flies private, right?
2
SPEAKER_01
But he s just not about upgrading his lifestyle, where I think a lot of these other folks, you get that much money, and then you re like, oh, you buy the second home and all that kind of stuff.
2
SPEAKER_00
I would wonder what the inside of the house looks like, though.
2
SPEAKER_00
Maybe it s the same house, but does it have seven stories underneath it or something like that?
2
SPEAKER_00
I mean, come on.
2
SPEAKER_01
Well, so I can tell you, I ve spent a week a number of years ago in Saudi Arabia visiting
2
SPEAKER_01
one of the Saudis on our list, this guy Prince Al-Waleed, and he has a palace with 430 rooms.
2
SPEAKER_01
And the only art on the wall was really photos of him and his kids.
2
SPEAKER_00
That s interesting.
2
SPEAKER_00
Yeah.
2
SPEAKER_00
I didn t see that one coming.
2
SPEAKER_00
I thought you were going in a totally different direction with that.
2
SPEAKER_01
And as you walk into the lobby, there s pictures of the prince with every
2
SPEAKER_01
prime minister, president, king, dignitary that he s met over the course of his life framed and there s a frame this at his home and at his office.
2
SPEAKER_01
So this is this is kind of a sense of one billionaire s lifestyle.
2
SPEAKER_00
It s so, these guys are all seemingly so quirky, and yet when you compare them to the neighbor in the neighborhood you grew up with, they re basically the same person with 100 billion more, and change more dollars.
2
SPEAKER_01
Yeah, and probably pretty, maybe more driven for the people who started.
2
SPEAKER_00
For sure, yeah.
2
SPEAKER_01
So there s one of my favorite stories on the billionaire s list is this guy named Shahid Khan, who came here from Pakistan with $25 in his pocket, landed in Detroit, ended up going to go to school.
2
SPEAKER_01
And then ended up working for an auto parts company, and then founded his own company.
2
SPEAKER_01
He came up with this idea for this new kind of bumper that you could put on cars.
2
SPEAKER_01
His company is called Flexingate.
2
SPEAKER_01
And he s super successful, sells to all the big automakers, and made enough money from selling his auto parts to buy the Jacksonville Jaguars football team.
2
SPEAKER_01
So he s the first Muslim football NFL owner.
2
SPEAKER_01
And he s giving back to his community, his employees.
2
SPEAKER_01
One of my colleagues wrote a profile about him on Forbes.
2
SPEAKER_01
We got all these positive comments from his employees.
2
SPEAKER_01
Oh, we love Shahid.
2
SPEAKER_01
So people can really come from nothing, create a company, and turn around and give back to their employees and to the society.
2
SPEAKER_01
And another guy who s like that is the guy behind the Chobani yogurt.
2
SPEAKER_01
Hamdi Ulukaya, who came from Turkey, took an old craft factory up in upstate New York, turned it into the Chobani factory.
2
SPEAKER_01
And he s still a private company.
2
SPEAKER_01
He gave 10% of his ownership in the company to his longtime employees last year.
2
SPEAKER_01
And he hires all kinds of refugees to work at his company.
2
SPEAKER_01
So he s really trying to make a difference with the business he s built.
2
SPEAKER_00
Sure, restoring a little bit of our faith in humanity.
2
SPEAKER_00
Thanks, gentlemen.
2
SPEAKER_00
Actually, speaking of gentlemen, are these all guys?
2
SPEAKER_00
I only took a sampling of the list, but I was noticing it was a little testosterone heavy.
2
SPEAKER_01
Yeah, there are way more men on this list than women.
2
SPEAKER_01
There s something like 140 women on the list out of 1,800.
2
SPEAKER_01
And most of them inherited their wealth from their husbands or their fathers.
2
SPEAKER_01
There s a very small subset of self-made women billionaire.
2
SPEAKER_01
And the richest of those is a woman from China.
2
SPEAKER_01
And for all the Chinese speakers listening, forgive my pronunciation, I think it s called, her name is Ju Kunfei.
2
SPEAKER_01
I might have it wrong.
2
SPEAKER_01
It s Z-H-O-U-Q-U-N-F-E-I.
2
SPEAKER_01
And she has this amazing story.
2
SPEAKER_01
She grew up poor and worked in factories.
2
SPEAKER_01
And it turned out she worked in a factory that made covers for cell phones.
2
SPEAKER_01
And then she started her own factory.
2
SPEAKER_01
her own company and basically the glass screens that cover the iPhones and the Android phones come in part from her factory and she took her company public in China.
2
SPEAKER_01
I guess it s public on the Hong Kong Stock Exchange I should say and she s worth about seven billion dollars based on her value, her ownership of the stake in the company.
3
SPEAKER_01
I think she found it.
3
SPEAKER_00
Even more impressive given the fact that in Chinese society, it s not exactly, it s a little more patriarchal than we might be used to.
3
SPEAKER_00
I mean, things are hard enough here in America for a self-made billionaire female.
3
SPEAKER_00
I can imagine it being even a few degrees more difficult.
3
SPEAKER_01
I think you re probably, I think you re probably right.
3
SPEAKER_01
Yeah.
3
SPEAKER_01
In the United States, perhaps the best known, uh, self-made female billionaire is Oprah Winfrey.
3
SPEAKER_01
Of course.
3
SPEAKER_01
Yeah.
3
SPEAKER_01
Another one who listeners may know about through her product Spanx, which is a fancy girdle, is a woman named Sarah Blakely who came up with the idea for Spanx and she s on our bill.
3
SPEAKER_00
Right, yeah, I met her husband and I thought, I really hope you re a secure, level-headed guy because that could give you a complex, right?
3
SPEAKER_01
He seems like a good guy.
3
SPEAKER_00
Sure, honey, I ll support your underwear business.
3
SPEAKER_01
Right, and look where she s gone.
3
SPEAKER_00
Right, exactly.
3
SPEAKER_00
Yeah, I can imagine that there s maybe a little tension in the house sometimes when it comes to that.
3
SPEAKER_00
You have to be ready for that.
3
SPEAKER_01
She definitely gets way more attention than he does in the media.
3
SPEAKER_00
Yes.
3
SPEAKER_00
Do billionaires want to be, aside from the people that send you their list of their furnishings in their house, do people want to be on the Forbes list?
3
SPEAKER_00
I mean, are these billionaires itching for it or are they hiding from it?
3
SPEAKER_01
I would say it s a mix.
3
SPEAKER_01
There are some people who do not return our phone calls, do not cooperate with us, do not want to be on the list.
3
SPEAKER_01
Some people will actually say, how do I get off your list?
3
SPEAKER_01
And I had, back in 2000, when I was living in New York,
3
SPEAKER_01
A German billionaire flew to New York with his accountant and he brought his New York-based lawyer into the Forbes office and basically showed me documentation.
3
SPEAKER_01
that he had transferred his ownership in his private retailer in Germany to a charitable foundation in order to be taken off the Forbes list.
3
SPEAKER_01
And the back story to that was when his daughter was five years old, there had been an attempted kidnapping of her.
3
SPEAKER_01
And so he wanted to have nothing to do with any kind of publicity with wealth.
3
SPEAKER_01
And so we took him off the list.
3
SPEAKER_01
But that was the most extreme.
3
SPEAKER_01
I mean, the fact that the guy would fly from Germany just to have a meeting with me to show me this was kind of a shocker.
3
SPEAKER_00
That I completely understand.
3
SPEAKER_00
Yeah.
3
SPEAKER_00
One way to get off the list is to cut a big check.
3
SPEAKER_00
So let me know if you need my address or anything.
3
SPEAKER_00
How much change year to year do you see on the list?
3
SPEAKER_00
I mean, do people swing wildly from the top 10 or the bottom 25?
3
SPEAKER_01
We see change on a couple of levels.
3
SPEAKER_01
So we see change in terms of the total number of billionaires on the list.
3
SPEAKER_01
When we started this list in 1987, I wasn t at Forbes then,
3
SPEAKER_01
But they found 140 billionaires.
3
SPEAKER_01
And so now we re up to 1,810.
3
SPEAKER_01
And who knows, there may be even more for the 2017 list, depending on what happens with the stock market.
3
SPEAKER_01
So the numbers generally have been climbing, except for in 2009.
3
SPEAKER_01
which as you may remember was the financial crisis where the markets melted down, we went from having more than 1,000 billionaires in 2008, 1,125 billionaires I should say in 2008, down to 793 in 2009.
3
SPEAKER_01
So those big moves in stock markets globally can make a big change.
3
SPEAKER_01
in terms of the overall number of the world s billionaires.
3
SPEAKER_01
And then the other thing is the strength of a country s currency.
3
SPEAKER_01
So we lost last year, the number of Brazilian billionaires fell down to 31.
3
SPEAKER_01
We lost 23 Brazilian billionaires because the Brazilian currency
3
SPEAKER_01
had weakened so dramatically against the dollar.
3
SPEAKER_01
And then I think the stock market there also weakened as well.
3
SPEAKER_01
And then also, the Russian ruble was weaker last year.
3
SPEAKER_01
So we lost something like 10 or 11 Russian billionaires fell off the list.
3
SPEAKER_01
Because when you translate weaker rubles into dollars, you get fewer dollars.
3
SPEAKER_00
So that s what happened.
3
SPEAKER_00
Was that in large part because of sanctions against Russia and things like that?
3
SPEAKER_01
I think it also had to do with a lot of the Russians have natural resource-related fortunes, oil and gas.
3
SPEAKER_01
And so oil prices were down.
3
SPEAKER_01
So I think that had a fair amount to do with it as well.
3
SPEAKER_01
And so we may see going ahead this year, again, anything could happen between now and the time we use our date in February to figure out what people are worth.
3
SPEAKER_01
But we could have more Russians and more Brazilians on the list because those currencies have gotten stronger and oil prices have come back a little bit.
3
SPEAKER_00
Do you find that the list grows because of a growth in wealth or is it what percentage of it is a growth in, let s say, transparency and the ability to get at things you couldn t have gotten in 1990?
3
SPEAKER_01
Yeah, it s a it s a good question.
3
SPEAKER_01
We definitely have seen an increase in transparency.
3
SPEAKER_01
And I think it s kind of hard to measure how many more people we ve added.
3
SPEAKER_01
But but I remember when I ve been doing this a long time, I started at Forbes and in the mid 90s.
3
SPEAKER_01
and was looking at billionaires in Brazil then from New York.
3
SPEAKER_01
And I would have people in Brazil send me this book that was published annually by one of the big financial newspapers there, which listed the biggest companies.
3
SPEAKER_01
I mean, it s kind of crazy to think that you d had to get information from books as opposed to the internet, right?
3
SPEAKER_01
But this was, frankly, the early days of widespread internet usage.
3
SPEAKER_01
And now you go on to the Brazilian Stock Exchange website and you can look up people s ownership in the publicly traded companies and you can see when they ve sold and that kind of stuff.
3
SPEAKER_01
So that s one country where I d say the transparency has increased dramatically and we have seen a dramatic increase in the number of Brazilian billionaires in the time.
3
SPEAKER_01
Partly the economy has gotten bigger but partly the transparency is just a heck of a lot better.
3
SPEAKER_00
It s really interesting to see that kind of snapshot of world economies.
3
SPEAKER_00
You kind of only need look as far as the Forbes list to find out if somebody s currency has gone down the tubes, which commodities markets are in turmoil.
3
SPEAKER_00
Yeah, it s you see that big red on the daily indicator.
3
SPEAKER_00
You see that big red drop below the fold and you go, oh, man, poor guy.
3
SPEAKER_00
I mean, it s I just hope they don t wake up in the morning and look at that thing, because that would be depressing.
3
SPEAKER_01
Yeah, I would imagine that most billionaires are not checking
3
SPEAKER_01
like the Forbes website every day to see how much their fortune s gone up or down.
3
SPEAKER_01
I would hope that they have better things to do with their time than that, frankly.
3
SPEAKER_00
Except for the guy who s sending you the complete listing of his furniture.
3
SPEAKER_00
He s still figuring out how to get three rungs higher so he can take a screenshot and send it to his buddies.
3
SPEAKER_00
The majority of the top 10, aside from, say, like the Koch brothers, are largely self-made.
3
SPEAKER_00
I inspected that yesterday before the show just to see if this was a trend here.
3
SPEAKER_00
Why do you think that is?
3
SPEAKER_01
Why do I think that the richest people are self-made?
3
SPEAKER_00
Because it s theoretically easier to inherit a bunch of money, let it sit in private equity for two generations.
3
SPEAKER_01
I think that people who are willing to build companies are naturally more risk takers.
3
SPEAKER_01
Because if you think about chances that a company will fail, any kind of startup are really high.
3
SPEAKER_01
So if you are willing to drop out of Harvard, let s say, to start a software company or a social network, we ve got
3
SPEAKER_01
Bill Gates and Mark Zuckerberg covered there.
3
SPEAKER_01
You re willing to take risks on spending $19 billion when your company s buying WhatsApp, right?
3
SPEAKER_01
When Facebook bought WhatsApp, which seemed like a huge amount of money for a company with no revenues, but lots of users, right?
3
SPEAKER_01
Or even when Facebook bought Instagram, right, for a billion dollars, no revenue.
3
SPEAKER_01
You know, there was no... Turned out to be a pretty good deal.
3
SPEAKER_01
Instagram turned out to be a great moneymaker for Facebook now.
3
SPEAKER_01
So, or even like, maybe still a little bit out on Oculus Rift.
3
SPEAKER_01
Are these, you know, VR goggles going to make a lot of money for Facebook?
3
SPEAKER_01
So far I don t think so, but it s early days, right?
3
SPEAKER_01
So virtual reality may be a big money maker.
3
SPEAKER_01
So Mark Zuckerberg is still willing to take risks in how he leads Facebook and what sorts of acquisitions they make.
3
SPEAKER_01
Warren Buffett at Berkshire Hathaway, he s buying companies, usually it s one or two companies a year, sometimes more, where he s trying to figure out which companies are undervalued, which ones would add to his portfolio.
3
SPEAKER_00
Absolutely.
3
SPEAKER_00
I read a story a while ago, and I can t remember where it was now, but it was about newspapers and the Hearsts and things like that, and there was this young guy buying up newspapers all over the country, and I don t know, the 70s or something, turned out to be Warren Buffett.
3
SPEAKER_00
And you re just thinking, who s buying newspapers left and right?
3
SPEAKER_00
It doesn t even make sense.
3
SPEAKER_00
And then now you look at it and you go, wow, that s a lot of political power.
3
SPEAKER_00
Well, you can use it to publicize favorably other investments that you have.
3
SPEAKER_00
I mean, it s just such a genius kind of back channel move.
3
SPEAKER_00
And yeah, these guys are, but it could have flopped easily.
3
SPEAKER_00
I mean, newspapers.
3
SPEAKER_01
And I think it depends where you re buying them.
3
SPEAKER_01
Because I mean, newspapers, a lot of the big city newspapers are really struggling to hold on.
3
SPEAKER_01
So the smaller ones may be doing better because of advertising from local markets and stuff.
3
SPEAKER_00
Well, it is good news for those of us trying to live out the American dream to see that the richest people are ones that didn t necessarily just get dealt a nice trust fund on the day one.
3
SPEAKER_01
I would agree.
3
SPEAKER_01
No, I think it s great.
3
SPEAKER_01
I mean, I think one of the things about this list that makes it so interesting to work on is to learn these stories of people who, you know, come up with these great ideas for new products, new services.
3
SPEAKER_01
I mean, you know, and I remember when Airbnb was first founded, I thought Airbnb, like who would want to stay in somebody else s
3
SPEAKER_01
like a room in somebody else s house, or like a room in somebody else s house.
3
SPEAKER_01
And now, of course, it s worth more than Marriott, right?
3
SPEAKER_01
And it s all over the world, and it s super popular, and it s easy to use.
3
SPEAKER_01
And you kind of can t imagine the world without Airbnb.
3
SPEAKER_01
But when some of these companies are introduced, you ve got to scratch your head sometimes.
4
SPEAKER_01
They re so new that they don t really, or Uber.
4
SPEAKER_01
I remember when Uber first hit the streets here in San Francisco.
4
SPEAKER_01
It was like, really?
4
SPEAKER_01
Do you really need this?
4
SPEAKER_01
And now, you ve spawned competitors all over the world, and it s a huge company.
4
SPEAKER_00
Sure.
4
SPEAKER_00
Well, often we see the first iteration of these companies being far less useful in hindsight, right?
4
SPEAKER_00
Because Uber was originally
4
SPEAKER_00
Hey, let s have these really expensive black cars that only yuppies can afford, and it s only in San Francisco and San Jose or something like that.
4
SPEAKER_00
And then it just turns into, actually, I hate using taxis, and so does everyone else.
4
SPEAKER_00
Let s expand it.
4
SPEAKER_00
Now we have the Uber we re looking at.
4
SPEAKER_00
Now, Airbnb used to be food included, and the other person had to be there most of the time.
4
SPEAKER_00
And it was rare to get a whole property without an owner there.
4
SPEAKER_00
And then they ditched the food because
4
SPEAKER_00
Yuck.
4
SPEAKER_00
And also, most people don t want to be in the house when a random bunch of teenagers from Iceland comes over for a week, right?
4
SPEAKER_00
I don t want to be there.
4
SPEAKER_00
I just want the money.
4
SPEAKER_00
So it tends to be marketed.
4
SPEAKER_01
Yeah, it iterated.
4
SPEAKER_00
Yeah, right.
4
SPEAKER_00
It gets formed by the market, which is one of the reasons why it goes.
4
SPEAKER_00
But it s great to see these people who weren t handed anything put their foot on the gas and not let go until they ve cured diseases or changed the world in some other impactful way.
4
SPEAKER_00
Carrie, thank you so much.
4
SPEAKER_01
Jordan, thanks.
4
SPEAKER_01
It was great talking to you.
4
SPEAKER_00
That s it for this episode of The Forbes List.
4
SPEAKER_00
I m Jordan Harbinger.
4
SPEAKER_00
If you d like to share a comment, email us at thelist at podcastone.com.
4
SPEAKER_00
Thanks for listening to The Forbes List on Podcast One.
4
SPEAKER_00
Remember all, this is a little taste of what we ve got on The Forbes List, another show that I m hosting on Podcast One.
4
SPEAKER_00
You can find the show at podcastone.com or wherever you download your podcasts.
4
SPEAKER_00
It s called The Forbes List and it s hosted by yours truly, Jordan Harbinger.