Who do you think made the Top Five on Forbes magazine's annual billionaires list for 2018? Well, here's a hint: two are Harvard dropouts, four are American, one is French, and one of them filed his first tax return at age 14.
1. Jeff Bezos
- Net Worth: $112 billion
- Founder: Amazon (AMZN)
In 1994, Bezos founded Amazon.com in a garage in Seattle, shortly after he resigned from the hedge fund giant D.E. Shaw. In fact, he had originally pitched the idea of an online bookstore to his former boss David E. Shaw (a rumor that Shaw himself has confirmed), who wasn't interested.
Though Amazon.com originally started out selling books, it has since morphed into a one-stop-shop for everything under the sun, and is arguably the world's most important retailer. At any rate, it is hard to dispute its self-description as the "earth's most customer-centric company." Its pattern of constant diversification is evident in some of its unexpected recent expansions, which include its acquisition of Whole Foods in 2017 and its launching of its own branded over-the-counter drugs in February 2018.
Bezos took Amazon public in 1997, and has since gone on to become the first man since Bill Gates in 1999 to achieve a net worth of over $100 billion. Bezos' other projects include aerospace company Blue Origin, The Washington Post (which he bought in 2013), and the 10,000-year clock, also known as the Long Now. (See also: Jeff Bezos: Introduction.)
2. Bill Gates
- Net Worth: $90 billion
- Co-Founder: Microsoft Corp. (MSFT)
One of the two Harvard dropouts in the Top Five, Bill Gates' knack for increasing wealth is staggering, even for a rich guy. The Microsoft co-founder's net worth has more than doubled since 2009.
Through the Bill & Melinda Gates Foundation, he has also spent billions to fight polio and malaria. Additionally, he pledged $50 million in 2014 to help fight Ebola. (For related reading, see: Where Does Bill Gates Keep His Money?)
Bill Gates is currently a board member for Microsoft and Berkshire Hathaway Inc. (BRK.A).
3. Warren Buffett
- Net Worth: $84 billion
- Best Investor of the 20th Century
He first bought shares in a textile company called Berkshire Hathaway in 1962, becoming the majority shareholder by 1965. He expanded the company to the insurance and other investments in 1967. Now, Berkshire Hathaway is a half-trillion-dollar company, with a single share of stock trading at over $300,000 per share in early 2019.
Warren Buffett is widely known as “The Oracle of Omaha” because of his knack for value investing, in other words, finding bargains in undervalued companies. While most investors have been piling into social media companies, Buffett has repeatedly stated that it’s too difficult to determine their value, and has instead stuck with investments that he thinks will pay off 10 years down the road. He is also a noted Bitcoin skeptic.
Buffet is also known for his frugality. At age 14, he itemized his bicycle as a $35 deduction on his first income tax return because he used it for his paper route. (For related reading, see: Warren Buffett's Frugal, So Why Aren't You?). He gives much of his wealth to charity, and has said that he doesn't intend to leave his riches to his children. Between 2006 and 2017, Buffet gave back nearly $28 billion and committed to eventually giving away his entire fortune.
4. Bernard Arnault Family
- Owner of LVMH
- Net Worth: $72 billion
The only non-American Top Five, French national Bernard Arnault is the chairman and CEO of LVMH, the world's biggest luxury goods company. The company owns some of the biggest brands on earth including Louis Vuitton, Hennessey, Bulgari, Marc Jacobs, Dior, Sephora, and many more.
An engineer by training, Arnault's business chops became apparent whilst working for his father's engineering company, Ferret-Savinel. He converted the company to a real estate company in 1976.
Arnault acquired luxury goods maker Financière Agache in 1984, eventually selling all of its holdings other than Christian Dior and Le Bon Marché department store. He became chairman of the board of LVMH in 1989. His own investments are broad, including technology concerns and yacht companies. He was considered Europe's richest man as recently as early 2019. (See also: A Look at the $13b LVMH-Christian Dior Deal.)
5. Mark Zuckerberg
- Co-founder of Facebook
- Net Worth: $71 billion
CEO of Facebook, Zuckerberg is the second Harvard dropout in the Top Five. He invented Facebook in his Harvard dorm room in 2004, along with Harvard classmate Eduardo Saverin, following his creation of an earlier successful program called Facemash. Fellow Harvardians Tyler and Cameron Winklevoss claimed that it was they who first approached Zuckerberg with the idea, leading to a notorious lawsuit that finally settled in 2008. In the settlement, the Winklevoss twins were awarded $20 million and what at the time was $45 million worth of stock.
Facebook, which had its IPO in 2012, was estimated to have more than two billion active users monthly in late 2018. Its market cap was approximately $462 billion in early 2019.
Zuckerberg has used his fortune and influence towards some charitable causes, such as a solar powered drone that can deliver internet to areas deprived of the web, and donating $100 million to public schools in Newark, New Jersey. (For more: Facebook: 7 Secrets You Don't Know.)
The Bottom Line
If you want to get a little closer to making Forbes' richest billionaires list, then you might need to become a technological innovator, a telecom mogul, or a retail king. Or you can keep it simple and focus on value investing. It also wouldn't hurt to inherit a large sum. (For related reading, see: Which Billionaire Could Be Your New Neighbor?)
Dan Moskowitz does not own any shares in MSFT, BRK.A, ORCL, CRM, or N.