Who's on top in 2010?
It has been a year of reclamation for America's richest. The total net worth of the Forbes 400 is up 8%, to $1.37 trillion, well outgaining the 1% rise in the S&P 500 Index ($INX) over the past 12 months. More than half (217) are richer than they were a year ago.
The headline numbers tell only part of the story. About 45% of the 400 failed to add to their fortunes or lost ground. And the record of $1.57 trillion in total net worth, set in 2008, still stands.
The very top of the list gained, with good friends Bill Gates and Warren Buffett up $4 billion and $5 billion, respectively. They are short of their personal highs, though.
No 1: Bill Gates, $54 billion
Residence: Medina, Wash.
Age: 54
2009 rank: No. 1
In March, Bill Gates lost his title of world's richest person to Mexico's Carlos Slim Helú. But that's because the software king is the most generous person on the planet. To date, he has cut checks totaling $28 billion. Even so, Gates is still America's richest person, topping the Forbes 400 for the 17th straight year.
Most of his donations have passed through the Bill & Melinda Gates Foundation, which now has a $33 billion endowment, including contributions from his buddy and bridge partner Warren Buffett. The foundation has given money to help prevent millions of deaths from AIDS, malaria and tuberculosis; now it's undertaking the eradication of polio. It is also fighting hunger by helping 400,000 farmers in Asia and Africa with rice varieties that resist cold, flooding and drought, and by giving 100,000 farmers on those two continents access to small, inexpensive irrigation systems.
As the foundation's work accelerates, Microsoft (MSFT) is stuck in neutral. Gates' stake in the company he co-founded is now worth $16 billion; its stock has been flat over the past year despite the release of a new Windows operating system and heavy investments in online advertising and games. (Microsoft owns MSN Money.)
Gates regularly sells shares in the software giant, pouring proceeds into investment outfit Cascade, which accounts for 70% of his wealth. Other investments include trash collector Republic Services (RSG), investment firm Gamco Investors (GBL), vehicle seller AutoNation (AN) and an inflation-hedging fund.
No. 2: Warren Buffett, $45 billion
Source of wealth: Berkshire Hathaway
Residence: Omaha, Neb.
Age: 80
2009 rank: No. 2
Along with bridge partner Bill Gates, Warren Buffett is coaxing America's richest to pledge half of their fortunes to charity. "You keep making the list; I'll keep milking it," he says.
The Oracle of Omaha plans to give 99% of his wealth to charity, primarily to the Bill & Melinda Gates Foundation, and it all has to be spent 10 years after he's gone. "Too often a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse and long-standing friends."
Buffett's Berkshire Hathaway (BRK.A) continues its capital stewardship excellence, beating the S&P 500 Index by 15 percentage points over the past 12 months. His secret to success: emotional stability. "When you come to a conclusion, you have to really not care what other people say," he says.
Buffett faked breathing problems when he was 12 so he could move back to Omaha from Washington, D.C., where his father was a freshman congressman. He had read every book about investing in stocks in the Omaha Public Library by the time he was 12.
He later met value investor Benjamin Graham, one of the key influences on his investing style, at Columbia University. In 1965, he bought textile firm Berkshire Hathaway and eventually transformed it into massive company with holdings including food, insurance, utilities and industrials. Buffett acquired railroad giant BNSF Railway for $26 billion in 2009.
No. 3: Larry Ellison, $27 billion
Source of wealth: Oracle
Residence: Woodside, Calif.
Age: 66
2009 rank: No. 3
The Oracle (ORCL) chief made headlines recently when he brazenly chastised Hewlett-Packard (HPQ) for ousting chief Mark Hurd over his relationship with a marketing contractor. Then he hired Hurd to replace Oracle's co-president, Charles Phillips, who had resigned at the same time. HP sued Hurd, prompting Ellison to say that HP was making it "virtually impossible" for the two companies to do business together. (The two parties recently settled.)
Oracle, which has acquired 66 companies over the years, figured out a way to turn a profit on its latest big buy, Sun Microsystems, in 2010. One of the highest-paid executives in the country, Ellison has gotten $960 million in compensation in the past five fiscal years, mostly from the exercise of stock options; he recently cut his salary to $1.
Ellison's fortune is almost entirely tied up in Oracle; he also owns a $580 million stake in Web business-software outfit Netsuite (N) and is one of the largest private landowners in the celebrity haven Malibu, Calif. Ellison also has two houses in the Bay Area: a Japanese-style compound in Silicon Valley and a water-view mansion in San Francisco.
An avid yachtsman, Ellison spent a decade and more than $100 million on his quest for the America's Cup, which he finally won in February. He beat rival Ernesto Bertarelli, thanks in part to a trimaran with a rigid mainsail longer than a Boeing 747's wingspan. Now he's deciding where to hold the next Cup regatta and is said to favor the seas near his own backyard, San Francisco. He intends to give 95% of wealth to charity.
No.4: Christy Walton and family, $24 billion
Source of wealth: Wal-Mart Stores
Residence: Jackson, Wyo.
Age: 55
2009 rank: No. 4
The widow of John Walton, one of the Walton family heirs, gained her wealth after the former Green Beret and Vietnam War medic died in an airplane accident in 2005 near his home in Wyoming. Christy Walton got an extra bump in her fortune because of her late husband's early investment in First Solar (FSLR); shares are up more than 400% since the company's initial public offering in 2006. But the bulk still comes from her shares in Wal-Mart Stores (WMT). An active philanthropist, Christy Walton supports museums, education and organic gardening.
Her father-in-law, Sam Walton, who died in 1992, founded the company in Bentonville, Ark., with his brother James in 1962. Today, Wal-Mart has annual sales of about $400 billion and employs more than 2.1 million people.
No. 5 (tie): Charles Koch, $21.5 billion
Sources of wealth: manufacturing, energy
Residence: Wichita, Kan.
Age: 74
2009 rank: No. 9 (tie)
Since inheriting control of the refining business built by his dad, Fred Koch, in 1967, Charles Koch has expanded the Wichita conglomerate more than 100-fold, to $100 billion in annual revenue. Koch Industries is now the second-largest private company in the U.S. behind Cargill. Koch's biggest deal to date: a $21 billion purchase of building-products-maker Georgia Pacific right before the housing market crashed. Charles and his brother David bought out siblings Frederick and William for $790 million in 1983.
Each year, Charles and David Koch reinvest 90% of the profit in the business, with enough left over to pour hundreds of millions of dollars into their favorite charities and causes, a mix of libertarian think tanks and New York City arts institutions. Most recently, they angered California Gov. Arnold Schwarzenegger by giving $1 million to help efforts to overturn the state's climate change regulations.
No. 6 (tie): David Koch, $21.5 billion
Sources of wealth: manufacturing, energy
Residence: New York
Age: 70
2009 rank: No. 9 (tie)
More gregarious than his brother Charles, David Koch may have made his shrewdest decision in 1983, when he kept his stock in Koch Industries instead of selling out like his brothers William and Frederick, who got about $790 million for their stakes.
Since then, the company has expanded rapidly and now is worth more than $50 billion; it has interests in pipelines, refineries, Lycra and Dixie Cups.
David, who was the Libertarian Party's candidate for vice president in 1980, now restricts his political activities mostly to supporting conservative think tanks and activist organizations. From his home base in New York City, he runs Koch's chemical technology group. He and his wife, Julia, are also active on the charity circuit and have given or pledged $600 million, mostly to cancer research and the arts, since 2000. He sits on 26 nonprofit boards.
No. 7: Jim Walton, $20.1 billion
Source of wealth: Wal-Mart Stores
Residence: Bentonville, Ark.
Age: 62
2009 rank: No. 5
Jim Walton is the chairman and chief executive of family's Arvest Bank; he also chairs Community Publishers, a local-newspaper company. Sam Walton's youngest son has served on Wal-Mart's board of directors since his brother John's death in 2005.
Although Wal-Mart's shares have been nearly flat over the past year, the three surviving children of founder Sam Walton collected $1.2 billion in dividends.
No. 8: Alice Walton, $20 billion
Source of wealth: Wal-Mart Stores
Residence: Fort Worth, Texas
Age: 61
2009 rank: No. 6
Alice Walton is building the Crystal Bridges Museum of American Art in Bentonville, Ark. The daughter of Wal-Mart founder Sam Walton, she was an equity analyst after college and later formed investment bank Llama and led the creation of Northwest Arkansas Regional Airport. The horse lover also runs Rocking W Ranch in Texas.
No. 9: S. Robson Walton, $19.7 billion
Source of wealth: Wal-Mart Stores
Residence: Bentonville, Ark.
Age: 66
2009 rank: No. 7
S. Robson Walton has been the chairman of Wal-Mart since his father's death in 1992. The Columbia Law School grad joined the company in 1969. The positions he's held: senior vice president, secretary and general counsel, and vice chairman.
No. 10: Michael Bloomberg, $18 billion
Source of wealth: Bloomberg LP
Residence: New York
Age: 68
2009 rank: No. 8
America's richest politician, Michael Bloomberg only recently saw his campaign spending record of $109 million surpassed, by California gubernatorial candidate Meg Whitman. He is serving his third term, set to expire in 2013, after successfully campaigning for extended term limits in 2008.
The Boston-born son of a Russian immigrant accountant is registered as an independent, but he is a social liberal. In a recent address, he said: "I'm pro-choice. I'm pro-gay rights. I'm pro-immigration; I'm pro-gun control. I believe in Darwin."
Outside politics, the mayor owns an 88% stake in Bloomberg LP, a data analytics company he founded in 1982 after being fired from Salomon Brothers. ("Living well is the best revenge," he recently said of his multibillion-dollar turnaround.)
While other financial-media companies have been cutting jobs and selling titles, Bloomberg is on a growth spurt. The company, which operates about 290,000 data terminals, has increased its employee head count 25% over the past three years; it picked up BusinessWeek for less than $5 million. Overall revenue is up an estimated 10% this year to $6.9 billion, thanks in part to the company's expansion into the legal-data field.
Michael Bloomberg has given more than $1.4 billion to charities over the years; his causes include anti-smoking, public health and the arts.
In a letter accompanying his promise to donate the bulk of his net worth through the Giving Pledge, he explained why he chooses to give money now rather than bequeath his fortune: "Why wait? Why deny financial aid to this generation? Why deny a possible cure for a disease to this generation?"