Edited by Luisa Kroll and Matthew Miller, 03.10.10, 06:00 PM EST
For the third time in three years, the world has a new richest man.
Riding surging prices of his various telecom holdings, including giant mobile outfit America Movil, Mexican tycoon Carlos Slim Helu has beaten out Americans Bill Gates and Warren Buffett to become the wealthiest person on earth and nab the top spot on the 2010 Forbes list of the World's Billionaires. More ...
Warren Buffett and Bill Gates speaking at Columbia University's Business School in New York last year.
The pronouncement by Messrs. Buffett and Gates stems from a series of dinners the two men held over the past year to discuss the effects of the recession on philanthropy with some of the nation's richest people, including New York Mayor Michael Bloomberg, investor Ronald O. Perelman and David Rockefeller, his family's patriarch.
The result of the dinners is an invitation, called the Giving Pledge, which asks the nation's billionaires to publicly commit to give at least half of their wealth to philanthropic and charitable groups within their lifetimes or after their deaths.
The effort casts a spotlight on a highly private decision, and inserts Messrs. Buffett and Gates into the process. While several attendees of the dinners have made the pledge, many of the nation's wealthiest already had decided to disburse the bulk of their wealth to charitable causes.
The goal is to help create an expectation in society that the rich should give away their wealth and to create a peer group of wealthy people that can offer advice on philanthropy, said Melinda Gates, Mr. Gates's wife and co-chair of the Bill & Melinda Gates Foundation.
"It's really to help people to get started on their own in whatever it is they want to do," she said. "One of the most important things about philanthropy is that people do what they are passionate about. They won't do it otherwise."
The effort comes during the second year in a row in which philanthropy experienced its deepest decline ever recorded by the Giving USA Foundation, which has tracked annual giving since 1956. Donations fell 3.6% to $303.75 billion last year, down from $315 billion in 2008, according to Giving USA. In 2008, they were down 2%.
This week, Marc Benioff, founder of Salesforce.com Inc., said he planned to give $100 million to a children's hospital being built by the University of California, San Francisco, part of the software entrepreneur's plan to donate the majority of his wealth in his lifetime.
"This is in many ways like a religion—you either believe or you don't," said Mr. Benioff, who hasn't received the Buffett-Gates invitation. "People are not easily swayed in one direction or the other."
Mr. Rockefeller, George Soros and Gerry Lenfest are among those who already had decided to give away half or more than half their wealth. Mr. Rockefeller has given or pledged to give at his death more than $1 billion to charitable causes, including more than $100 million gifts to Museum of Modern Art, Rockefeller University, Harvard University and the Rockefeller Brothers Fund.
Mr. Lenfest, who in 2000 sold his communications company to Comcast for more than $6 billion and started a foundation, has already given away more than 70% of his wealth, said Joy Tartar, his foundation's CFO.
"Pledging to give away 50% of his wealth is like closing the barn door after the horse has gone out," Ms. Tartar said.
Still, when he received a phone call from Mr. Buffett to get involved he said he gladly obliged and planned to sign the pledge.
Ms. Gates said she, her husband and Mr. Buffett are now calling other billionaires to sign the pledge, which asks them to commit to an additional $600 billion—a benchmark calculated by dividing the amount of wealth represented in Forbes Magazine's billionaires list in half, said Melissa Berman, president of Rockefeller Philanthropy Advisors, an adviser to the Bill & Melinda Gates Foundation.
Mr. Perelman, the billionaire chairman and CEO of MacAndrews & Forbes who spends more than $60 million a year on philanthropy, said he supported the idea of a pledge but declined to say whether he would sign it. "I embrace the spirit of the pledge," Mr. Perelman said.
In 2009, Mr. Bloomberg said he gave $254 million to nearly 1,400 nonprofit organizations.
"I am a big believer in giving it all away and have always said that the best financial planning ends with bouncing the check to the undertaker," the mayor said.
—Robert Frank and Michael Howard Saul contributed to this article.
A million dollars may sound like a fortune to most people, and folks with that much cash can’t complain — they’re richer than 94% of U.S. households and earn $350,000 a year, on average, putting them in the top 1% of taxpayers. But the club is a little less exclusive. About 6.7 million households have a net worth above $1 million excluding home equity – more than there were in 2002 but lower than the record high of 9.2 million in 2007, according to a 2009 report by Spectrem Group.
Moreover, a recent survey by Fidelity found just 46% of millionaires “do not feel” wealthy. “They’re worried about health care, retirement and how they’ll sustain their lifestyle,” says Gail Graham, executive vice president of Fidelity Investments.
Indeed, many millionaires still don’t have enough for exclusive luxuries, like membership at an elite golf club, which can top $300,000 a year. While $1 million was a tidy sum three decades ago, you’d need $2.9 million for the same purchasing power today. And two-thirds of all millionaires have a net worth of $2.5 million or less, according to research firm TNS. So what does it take to feel truly rich? The magic number is $7.5 million, according to Fidelity.
2. “I shop at Wal-Mart . . .”
Most millionaires come from middle-class households, and roughly 65% have been wealthy for less than 15 years, according to a 2009 survey of high-networth individuals, published by American Express Publishing and Harrison Group.
They may not buy the 99-cent paper towels, but millionaires know what it is to be frugal. About 84% say they spend with a middle-class mindset, according to the AmEx/Harrison survey. That means buying luxury items on sale, hunting for bargains – and even clipping coupons. In fact, affluent households, including those with income above $100,000, tend to be heavier coupon users than those with lower incomes, according to a 2009 study by Nielsen and market research firm Inmar.
The recent financial crisis has only worked to exaggerate this phenomenon. People making six figures are shopping at Costco. They’re realizing that “they really do need to be more aware of how they spend their money,” says Jon Gallo, principal of Gallo Consulting, which works with financial planners on issues of family wealth.
3. “. . . but I didn’t get rich by skimping on lattes.”
So how do you join the millionaires’ club? One way is to run your own business. That’s how more than a third of all millionaires made their money, according to the AmEx/Harrison survey. Over a third had a professional practice or worked in the corporate world; only 5% inherited their wealth.
Regardless of how they build their nest egg, virtually all millionaires “make judicious use of debt,” says Russ Alan Prince, coauthor of "The Middle-Class Millionaire." They’ll take out loans to build their business, avoid high-interest credit card debt, and leverage their home equity to finance purchases if their cash flow doesn’t cut it. Nor is their wealth tied up in their homes. Home equity represents just 10% of millionaires’ total assets, according to TNS. “People who are serious about building wealth always want to have a mortgage,” says Jim Bell, president of Bell Investment Advisors. His home is probably worth $1.5 million, he adds, but he owes $900,000 on it. “I’m in no hurry to pay it off,” he says. “It’s one of the few tax deductions I get.”
By Colin Barr, senior writerApril 30, 2010: 12:56 PM ET
(Fortune) -- Value investors are descending on Omaha this weekend for "Woodstock for Capitalists" -- also known as Berkshire Hathaway's annual meeting.
CEO Warren Buffett and his longtime investing partner, vice chairman Charlie Munger, will take questions from shareholders Saturday morning. More than 35,000 visitors are expected at the meeting, and a few dozen will get a chance to ask questions through a panel of journalists including Fortune's Carol Loomis.
Warren Buffett will address his fans Saturday in Omaha.
Here are some of the topics they may broach with the world's most acclaimed investor.
Buffett praised Goldman Sachs (GS, Fortune 500) as "an exceptional institution" when making a $5 billion investment two years ago. Does the SEC's civil fraud suit change that assessment at all?
Despite Goldman's recent run of bad press, it seems unlikely Buffett would distance himself from the firm. Goldman's results continue to be strong, and the investment bank has insisted it will prevail in the SEC case.
At the same time, Buffett surely enjoys getting $500 million in annual dividends on Berkshire's (BRKA, Fortune 500) preferred stock. In March, he called Goldman a "very, very strong, well-run business," and said of chief Lloyd Blankfein, "you cannot find a better manager.''
Buffett famously called derivatives "financial weapons of mass destruction." Why is he now trying to fight regulations that would make them safer?
Buffett's well known for his criticism of derivatives. Yet Berkshire in recent years has become a big player, with some $60 billion in derivatives contracts.
Under any new derivatives regulation, Berkshire would be likely to have to produce collateral for new derivatives contracts it writes. This would limit the attractiveness of new derivatives deals for Buffett, who has boasted that Berkshire rarely does a deal that calls for it to produce collateral.
But that's not why Buffett has been pushing back against the financial reform bill in the Senate. Instead, Buffett says he's concerned that the legislation would impose collateral requirements on existing contracts -- which he says would be illegal. Sen. Ben Nelson, D-Neb., made the same case this week as he defected from the Democrats backing the financial reform bill.
Whatever his logic, pushing back on derivatives reform has the interesting side effect of aligning Buffett, with his sterling reputation, with the widely derided Wall Street banks.
Buffett warned at last year's meeting about the dangers of inflation. Is he still concerned about an inflationary outbreak?
The threat of inflation, driven by federal government deficit spending, has long been one of Buffett's worries. In his 1984 letter to shareholders, he noted that "we believe substantial inflation lies ahead" and that "there is a small, but not insignificant, chance of runaway inflation."
Runaway inflation didn't develop in that instance, but there's always tomorrow. Buffett returned to the inflation theme last year, in a review of the government's efforts to restart the economy following the financial meltdown of 2008 and 2009. He warned that inflation may rise sharply in coming years, as policymakers resort to printing money to pay off huge debts.
LOS ANGELES (MarketWatch) -- America Movil SAB, Latin America's dominant wireless carrier, is moving closer to wrapping up a deal to buy Carso Global Telecom, which it sees as crucial to strengthening its hand in a coming battle for customers in the region's burgeoning market for sophisticated Internet data services.
America Movil /quotes/comstock/13*!amx/quotes/nls/amx (AMX51.57, +0.51, +1.00%) , the heart of multibillionaire Carlos Slim's communications empire, is in the process of buying Carso in a deal valued at more than $24 billion that would give America Movil access to fixed-line operations run by Carso Global's Telmex Internacional SAB/quotes/comstock/13*!tii/quotes/nls/tii (TII19.41, +0.01, +0.05%) unit. The deal would also give America Movil a controlling stake in Telefonos de Mexico SAB, known as Telmex/quotes/comstock/13*!tmx/quotes/nls/tmx (TMX16.53, +0.21, +1.29%) , Mexico's largest fixed-line operator.
The transaction would position America Movil at the center of the market for fixed-line and mobile Internet communications, which is expected to grow rapidly in the years to come. It would also allow America Movil to profit from technological advances, an expanding middle class with more money to spend on smartphones and computers and a growing appetite among cell phone users for movies, games and other data heavy communications.
"The most important thing about this merger is that it's a far-sighted move," as it "puts in place the assets that, over time, can exploit a trend toward integrating both fixed lines and mobile services," said HSBC analyst Richard Dineen.
But the deal also sets the stage for a sharpening of the already tough battle between America Movil and its competitors in the region, chiefly Spain's Telefonica SA/quotes/comstock/13*!tef/quotes/nls/tef (TEF69.82, +1.42, +2.08%) , analysts say. A looming auction of space on a cable fiber network in Mexico could complicate matters for America Movil by adding new competitors to the mix.
America Movil's offer for Carso was announced in January, and has already received clearances from America Movil's shareholders and Mexican regulators. The company has also raised roughly $5 billion in debt sales to help pay for the merger.
Regulators in all of the countries in which Telmex International, or Telint, operates must also approve the deal, which America Movil wants to complete in May.
Spokespeople for America Movil and Carlos Slim declined to comment for this report.
'Winning bet'
America Movil's planned purchase of Carso marks the next big swing by Carlos Slim in the telecommunications business. Twenty years ago, Slim led a consortium that bought Telmex from the Mexican government for $1.7 billion.
Reuters
Mexican tycoon Carlos Slim.
That land-line operator became the launchpad for his America Movil cell-phone venture, which Slim spun off from Telmex in 2001. The company now serves 201 million wireless customers in 18 countries, including the pre-paid TracFone business in the U.S.
If the Carso Telecom deal goes through, America Movil's total subscribership could swell to 250 million, including 72% of the mobile market in Mexico, where it operates under the name of Telcel.
Slim and his family members hold controlling stakes in the four companies involved in the pending merger. America Movil's shares in Mexico City jumped 51% last year, and U.S.-listed shares gained 60%, helping to boost Slim's estimated fortune to $53.5 billion and making him the world's richest man, according to Forbes.
Edited by Luisa Kroll and Matthew Miller, 03.10.10, 06:00 PM EST
For the third time in three years, the world has a new richest man.
Riding surging prices of his various telecom holdings, including giant mobile outfit America Movil, Mexican tycoon Carlos Slim Helu has beaten out Americans Bill Gates and Warren Buffett to become the wealthiest person on earth and nab the top spot on the 2010 Forbes list of the World's Billionaires.
Follow That Billionaire
William Baldwin, 03.11.10, 08:20 AM EST Forbes Magazine dated March 29, 2010
How hard is it to copy Warren Buffett's stock portfolio?
Rich investors like Warren Buffett (see "The World's Richest People") didn't get that way by making bad stock picks. They leave tracks in various Securities & Exchange Commission filings. Why not follow in those tracks?
A whole industry of Buffett groupies and hedge fund trackers exists to knock off investment ideas. One of these trackers, Mebane Faber, has quite a following on Forbes.com and his own portfolio-cloning site. The power of follow-the-leader trading was made starkly visible one day in 1997 when it appeared from an SEC filing that Berkshire Hathaway had exited its Wells Fargo position, taking the bank's stock down seven points. It turned out that the oracular stock picker had put Wells on a confidential disclosure form.
Maybe you could do well with a footstep-following strategy. But here are a few cautions.
One is that the spectacular results you are trying to imitate may not be due to stock picking. Hedge funds make money in currencies, commodities and derivatives that are not to be found on those public 13F filings. Buffett's wealth has a lot to do with using Berkshire's balance sheet to extract profit from insurance underwriting and credit spreads. You can't do that.
Next problem is that the smart guys hide their tracks. A fascinating paper published a few months ago by four academics (Vikas Agarwal et al.) looked at 55,185 standard 13F filings and 1,958 confidential ones (which get delayed disclosure). On average, big institutions can't beat the market, but positions shown in confidential filings did deliver excess returns over four months.
Even when a money manager doesn't get confidential treatment, the lag of weeks to months in the revelation of stock positions means that you can't use the copycat technique on a busy trader.I've never understood why people try to mimic Buffett. Own his stock and you pay him a peppercorn to manage that part of your portfolio exactly the way he manages his own. I know I am not smarter t.... Last problem is that you don't really know whom to follow. Buffett was just the right person to copy beginning in 1965. We didn't know it then. He may not do so well over the next ten years. Could be that some of his favorites, like Coca-Cola and Procter & Gamble, are overbought. A1986 creation called the Wealth Monitors Fund aimed to follow not just Buffett but also other apparent geniuses like Saul Steinberg and Irwin Jacobs. The fund flopped.
We may not all be billionaires, but we can buy the same stocks that they do. Some have made their billionaires rich, and some were bought after these ... www.forbes.com/2007/03/09/gates-buffett-helu-pf-ii-in_mr_0309soapbox_inl_slide.html - 10k - Cached - Similar pages
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Edited by Luisa Kroll, Matthew Miller and Tatiana Serafin, 03.11.09, 06:00 PM EDT
The richest people in the world have gotten poorer, just like the rest of us. This year the world's billionaires have an average net worth of $3 billion, down 23% in 12 months. The world now has 793 billionaires, down from 1,125 a year ago.
After slipping in recent years, the U.S. is regaining its dominance as a repository of wealth. Americans account for 44% of the money and 45% of the list's slots, up seven and three percentage points from last year, respectively. Bill Gates lost $18 billion but regained his title as the world's richest man. Warren Buffett, last year's No. 1, saw his fortune decline $25 billion as shares of Berkshire Hathaway fell nearly 50% in 12 months. Mexican telecom titan Carlos Slim Helú maintains his spot in the top three but lost $25 billion.
If the protests die down and the bureaucracy speeds up, India might just get a giant new university. Mining magnate Anil Agarwal is putting $1 billion into this dream.
Surveying the Damage Wealth has vanished all over the world. This map depicts the change in the number of billionaires in each country over the past 12 months.
Forbes latest newcomers to the Forbes 400 Billionaire list were 51% from this years stock market winners.40 came from Harvard,26 from Stanford University 17 form Yale and 8 from Princeton.
Entrepreneur Becomes World's First Trillionaire
10-15-2007 REDMON, WA - Savvy entrepreneur Richie Fellows has reached an agreement with a European conglomerate to sell his massive online enterprise for $1 trillion dollars. The sale, which has been rumored for months, will become final pending approval by the Securities and Exchange Commission. Pending the transaction, Mr. Fellows will become what is believed to be the world's first trillionaire. Mr. Fellows' on-line empire, Things.com, has skyrocketed in popularity in recent years, combining online shopping through every online retail outlet, instant access to every online media outlet, and personal web pages of every man, woman and child on the face of the Earth. "They say every person that goes online in a given day will visit Things.com at least once." said Fellows. "I don't know if that's true, but it's got to be close." Recent data has Things.com receiving one billion hits per day. Representatives of the European conglomerate would not speak with The Daily Redundancy directly, but did whisper behind a large plant in the lobby. When asked about the unimaginably huge price tag, the official whispered: "It's simple math, really. When you're reaching a billion people a day, it doesn't take that long to get to a trillion." Experts, though, point out that the title of 'World's First Trillionaire' shouldn't be bandied about so carelessly. "The riches of some ancient empires may dwarf a trillion in today's dollars." says Weston Stoneturner, professor of Macroeconomic Archeology at Howyflyl University. "The entire riches of the Incan and Egyptian empires were in the hands of one person. You apply all that gold at today's prices, and you're talking some serious simoleons." Mr. Fellows doesn't foresee much of a change in his lifestyle. "I might buy a new boat." he said with a wry smile. "And maybe a nice boat slip with a Caribbean island around it."
Blackstone Group (BX)8-10-07 Blackstone Can Still Raise Money But Where To Spend It? Blackstone may not have yet learned how to get people to buy into its stock but it sure does know how to get people to invest in its funds. And the private equity giant proved that again today by announcing that it has raised $21.7 billion to close in on the largest private equity fund ever, beating out the $20 billion that Goldman Sachs raised earlier this year. That's a significant war chest to add to what it already a pretty formidable arsenal....
Income-Inequality Gap Widens The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
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World's Richest Man Faces Scrutiny,Oct.9,2007 Carlos Helu $67.8 billion.
Mexican businessman Carlos Slim is now said to be the world's richest man. He is Latin America's leading business mogul, acquiring telecommunication assets and banking and retail businesses throughout the region and beyond. His massive increase in wealth in recent years should further increase public scrutiny of Slim and his business empire, particularly within Mexico.Bill Gates Ousted; Carlos Slim Now Holds World's Fattest Wallet. Mexican tycoon Carlos Slim is the world's richest man, worth an estimated $67.8 billion, after overtaking Microsoft Corp. founder Bill Gates, according to a respected tracker of Mexican financial wealth.Bill Gates $59 billion and Warren Buffett $52 billion according to the latest Forbes 400 are old news. Every day it seems they're making headlines, either for their efforts to make money or their efforts to give it away. But while Gates and Buffett can't avoid the spotlight, other fantastically rich people do manage to slip under the general public's radar. Some avoid scrutiny because they built their wealth through privately held companies. Others are emerging-market billionaires who are well known in their home countries and will soon be making headlines abroad. And some made their billions in under-the-radar industries, like online gambling. Here are the three richest people below.
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