The stock market crash wiped out some of their wealth but, according to Forbes magazine, the 400 richest Americans still had a total worth of about $220 billion, enough to cover the federal budget deficit for a year.
Last year’s Oct. 19 financial market debacle reduced the fortunes of many of the ultra-affluent 400 and caused 22 former members to be dropped from the list because their fortunes slipped below Forbes’ $225-million cutoff.
Still, the average fortune on this year’s edition of the annual list comes to $551 million, up $1 million from last year. (The complete list appears on Page 3.)
Sam Walton, 70, easily held the No. 1 spot for the fourth year in a row, even though his net worth shrank by a whopping $2 billion following the crash.
Walton, head of the Arkansas-based Wal-Mart discount store empire, scoffs at his $6.7 billion in riches. He calls it “just paper--all I own is a pickup truck and a little Wal-Mart stock.”
By Forbes’ estimates of worldwide wealth, Walton rates fifth, behind Japan’s Yoshiaki Tsutsumi, $18.9 billion; Taikichiro Mori, $18 billion; Haruhiko Yoshimoto, $7.8 billion, and Canada’s Kenneth Cole Irving, $8 billion.
Runner-up to Walton on the billionaire list is John Werner Kluge, the head of Metromedia Co. with a net worth of $3.2 billion.
Next in line are H. Ross Perot, the founder of Electronic Data Systems who wants to overhaul the nation’s postal system, with $3 billion; publishers Samuel I. Newhouse Jr. and Donald Newhouse, $2.6 billion each, and Pittsburgh industrialist Henry Lea Hillman, $2.5 billion.
Underscoring the adage that the more you have, the more you can lose, billionaires were among those hit hard by the crash. Among the big losers were David Packard of Los Altos Hills, founder of Hewlett-Packard; media magnate Rupert Murdoch and retailer Leslie Wexner, chairman of the Limited, each of whom suffered losses of up to 50% of their fortunes.
Even so, Packard led the list of richest Californians. He ranks No. 13 with a $2-billion fortune. He is followed by developer Donald L. Bren of Newport Beach, who is chairman of the Irvine Co., Orange County’s largest landowner.
California had 62 residents on the Forbes list, a number exceeded only by New York state with 81. Rich people seem to like New York City, said Forbes, which counts 79 of its list’s members in the metropolitan area. After the Big Apple among metropolitan areas come Los Angeles, with 33, Dallas-Ft. Worth with 21, Chicago with 20 and the San Francisco Bay Area with 18.
Other Californians high on the list were oilman Marvin Davis of Beverly Hills; Packard’s co-founder William R. Hewlett of Portola Valley; financier Kirk Kerkorian of Los Angeles; real estate mogul David H. Murdock of Bel Air, chief executive of Castle & Cooke; Drexel Burnham Lambert “junk bond” king Michael Milken of Encino; Copley Newspapers Chief Executive Helen K. Copley of La Jolla; publisher Randolph A. Hearst of Hillsborough, and industrialist Norton Simon of Los Angeles.
7 Join Billionaire Club
Rupert Murdoch was on a record money-making pace in 1987, trebling his net worth to $2.1 billion before the crash. But his fortune dwindled to $1.2 billion following Black Monday, relegating him to 35th place on the Forbes list instead of eighth. Fox Broadcasting, which he is trying to build into a fourth national broadcasting network, is expected to lose $80 million this year.
Seven new names joined the elite billionaire club, including flamboyant New York real estate developer Donald J. Trump, who claims a net worth of $3.47 billion though Forbes’ estimate is in the $1 billion range.
Joining Trump are:
- Sumner M. Redstone, who boosted his balance sheet with the takeover of Viacom, $1.4 billion.
- Press-shy Charles Feeney, who runs Duty-Free Shoppers at airports, $1.3 billion.
- Charles Sammons, head of the privately held Sammons Enterprises, the nation’s 15th-largest cable TV operator, $1.3 billion.
- Charles de Ganahl Koch and David Hamilton Koch, brothers involved in oil services, $1.1 billion each.
- Ronald O. Perelman, takeover strategist and head of Revlon, $1 billion.
Four businessmen returned to the “lowly” ranks of multimillionaire when their fortunes sank below $1 billion: Laurence and Robert Tisch of Loews Corp., each estimated at $850 million; Milton Petrie, the philanthropist and head of Petrie Stores, $750 million, and Carl Lindner II, $950 million.
William Henry Gates III, who dropped out of Harvard and founded the Microsoft software company, remained the youngest self-made billionaire at age 32. His net worth is estimated at $1.1 billion.
The oldest person new to the list is Mansfield Freeman, who holds a stake in American International Group. With a fortune of $240 million, he made the list for the first time at age 93.
Among the 52 who disappeared from the list, 22 vanished because of Black Monday-associated losses; 26 were surpassed by greater fortunes, and four died.
On the list, as usual, was Forbes Publisher Malcolm Forbes, whose holdings include a 400-square-mile Colorado ranch and a French chateau. While not officially disclosing his net worth, the magazine put Forbes in the $500-million category but cited various published reports that pegged his wealth at $400 million to more than $1 billion.
The list appears in the Oct. 24 edition of Forbes and is based on holdings as of Aug. 30.