BUSINESS
How Does The Ultra Wealthy Build Their Fortune?
Becoming a billionaire ain’t easy. The Three Comma Club only has 2,153 members, but there are many ways the people who made the Forbes’ 2019 World’s Billionaires list built their wealth—from selling glass smartphone screens to Apple to growing a scaffolding empire.
Among this year’s 195 newcomers, fortunes were made in tried-and-true industries like food and beverage as well as manufacturing. But a handful of new billionaires also capitalized on current trends. Perhaps the most of-the-moment (and controversial) way to get rich is by selling nicotine vaporizers, which is how James Monsees and Adam Bowen, the co-founders of Juul Labs, amassed their billion-dollar-plus fortunes.
But the majority of the world’s billionaires did not vape their way to 10 digits. Most fortunes were made in the staid finance and investments industry. This year, 306 billionaires hail from this industry, which makes up 14% of the 2,153 total billionaires on the list. Notable finance and investing list members include Warren Buffett, the third richest person in the world and Robert Smith, the founder of private equity firm Vista Equity Partners. Despite the price of Bitcoin and other cryptocurrencies crashing over the past year, Brian Armstrong, the CEO and co-founder of cryptocurrency wallet Coin-base, became a billionaire this year. Last year finance and investments also ranked as the industry with the most billionaires, with 310 people. It turns out managing or investing other people’s money can make you rich.
Another way people got rich was by selling clothing, makeup and everything in between. The fashion and retail industry has the second-most billionaires with 230 people, or 11% of the total. Alice, Jim and Rob Walton—heirs to the Walmart fortune—rank among the top 20 richest people in the world, along with Bernard Arnault of luxury goods purveyor LVMH, Zara creator Amancio Ortega, and L’Oreal heiress Francoise Bettencourt Meyers, who is also the richest woman in the world. Newcomers in fashion and retail include Luciano Hang, who is worth $2.2 billion thanks to his Havan department store chain in Brazil; Chen Tei-Fu, who runs herbal-products supplier and retailer Sunrider with his wife; and Dani Reiss, whose $1.3 billion fortune is tied to his trendy winter coat company Canada Goose.
Selling people homes, or leasing office space to companies are also popular ways to make piles of money. Real estate comes in third with 223 billionaires, about 10% of the world’s richest people. China has the most real estate billionaires with 55, compared to 46 in the U.S. Hui Ka Yan, chairman of developer Evergrande Group, is the richest real estate mogul in the world with a $38.3 billion fortune. Donald Bren, owner of Southern California-based Irvine Co., is the richest real estate developer in the U.S. at $16.4 billion. But the most famous among the real estate set is President Donald Trump, whose net worth is unchanged from a year ago at $3.1 billion. Ironically, Trump’s most valuable holdings are interests in two office towers, one in San Francisco and one in New York City, that do not bear his name.
More and more people are becoming billionaires by making hit mobile apps, enterprise software and other popular tech products. Technology comes in fourth with 214 tech billionaires or 10%, up one percentage point from last year. Growth in tech fortunes has been quite a run: the number of technology billionaires on the Forbes list was just 42 in 2005. This year, 34% of all newcomers to the list made their fortunes in the sector—more than any other industry. New tech billionaires range from Spotify’s Daniel Ek to Pavel Baudis, the co-founder of cyber-security company Avast. Safra Catz, the co-CEO of software giant Oracle, also joined the ranks this year thanks to her stock options and 1% ownership in the software company founded by Larry Ellison.
Although Forbes doesn’t formally track it, divorce can also be a profitable endeavor. Earlier this year, Jeff Bezos, who is the richest person in the world with a $131 billion fortune, announced that he and his wife MacKenzie will break up. MacKenzie could walk away with $65 billion in Amazon stock, which would likely be the largest ever divorce settlements. Sue Gross, who was married to PIMCO co-founder Bill Gross until their 2017 divorce, joined the billionaires list after getting approximately $1.3 billion, a $36 million house in Laguna Beach, and half the couple’s art collection, including a Picasso painting.
See below for the full list of the top 10 industries in which billionaires made their fortunes.
Top 10 Industries for 2019:
- Finance & Investments
- 306 billionaires
- 14% of the list
- Fashion & Retail
- 230 billionaires
- 11% of the list
- Real Estate
- 223 billionaires
- 10% of the list
- Technology
- 214 billionaires
- 10% of the list
- Manufacturing
- 188 billionaires
- 9% of the list
- Diversified
- 188 billionaires
- 9% of the list
- Food & Beverage
- 171 billionaires
- 8% of the list
- Healthcare
- 135 billionaires
- 6% of the list
- Energy
- 85 billionaires
- 4% of the list
- Media & Entertainment
- 71 billionaires
- 3% of the list
source:Forbes
