America’s richest grow their fortunes

The net worth of the richest Americans grew by 13% in the past year to $1.7 trillion (€1.3tn), Forbes magazine said, and a familiar cast populated the top of the annual list, including Bill Gates, Warren Buffett, Larry Ellison and the Koch brothers.

The average net worth of the 400 wealthiest Americans rose to a record $4.2bn, up more than 10% from a year ago, while the lowest net worth came in at $1.1bn versus $1.05bn last year, the magazine said. Seven in 10 of the list’s members made their fortunes from scratch.

It was a bad year, however, for social media moguls, whose net worth fell by a combined $11bn. On the heels of Facebook Inc’s rocky IPO in May, the No 1 social network’s chief executive, Mark Zuckerberg, was the year’s biggest dollar loser: his net worth fell by nearly half to $9.4bn from $17.5bn. He also slid to the No 36 slot from No 14 a year ago, Forbes said.

Facebook shares have fallen 40% from their IPO price of $38 a share in May.

Dismal performances by other social media stocks dropped some executives from the list altogether, including Groupon Inc chairman Eric Lefkofsky, No 293 on last year’s list, and Zynga Inc chairman and CEO Mark Pincus, No 212 on the 2011 list.

“The gap between the very rich and merely rich increased and helped drive up the average net worth of The Forbes 400 members to an all-time record $4.2bn,” said Forbes senior wealth editor Luisa Kroll.

Collectively, this group’s net worth is the equivalent of one-eighth of the entire US economy, which stood at $13.56tn in real terms according to the latest government data. But the 13% growth in the wealth of the richest Americans far outpaced that of the economy overall, helping widen the chasm between rich and poor.

Forbes attributed the growth in net worth, in part, to the performance of the stock market and a recovering real estate market.

But while their wealth grew faster than the economy as a whole, which expanded at an anaemic 1.7% annual rate in the second quarter of 2012, the super rich generally failed to keep pace with the stock market.

The benchmark Standard & Poor’s 500 index rose nearly 20% over the 12 months to Aug 24, the last date of market performance measured for this year’s list.

Gates, the chairman of Microsoft Corp, topped the list for the 19th year in a row, with $66bn, up $7bn from a year earlier.

Buffett, chairman and chief executive of insurance conglomerate Berkshire Hathaway Inc, stood second with $46bn, followed by Larry Ellison, head of software maker Oracle Corp, with $41bn. Brothers Charles and David Koch, who run the energy and chemicals conglomerate Koch Industries Inc and who are active in conservative politics, were tied for fourth with $31bn, Forbes said.

The ranks of the top five were unchanged from a year earlier.

Two notable names dropped from the top 10, however. Casino magnate Sheldon Adelson, also active in conservative political causes, fell to the 12 spot from No 8 last year, and financier and liberal philanthropist George Soros dropped five spots to No 12.