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All the Money
in the World
Contributors

Paul Berger

Anna Isgro

Gwen Kinkead

Alex Ulam
All the Money
in the World
How the Forbes 400
Make– and Spend–
Their Fortunes

E D I T E D BY

Peter W. Bernstein
A N D

Annalyn Swan

Alfred A. Knopf New York 2007


this is a borzoi book
published by alfred a. knopf

Copyright © 2007 by ASAP Media, LLC

All rights reserved. Published in the United States by Alfred A. Knopf,


a division of Random House, Inc., New York, and in Canada by
Random House of Canada Limited, Toronto.
www.aaknopf.com

Knopf, Borzoi Books, and the colophon are registered trademarks


of Random House, Inc.

Forbes 400 is a trademark of Forbes LLC.

Image of Sam Walton (p. 17): AP Photo/Danny Johnston;


image of Warren Buffett (p. 17): AP Photo/Seth Wenig, File.

Library of Congress Cataloging-in-Publication Data


All the money in the world : how the Forbes 400 make—and spend—
their fortunes / edited by Peter W. Bernstein and Annalyn Swan.
p. cm.—(A Borzoi book)
Includes bibliographical references and index.
eISBN: 978-0-307-26770-2
1. Rich people—United States. 2. Millionaires—United States.
3. Wealth—United States. I. Bernstein, Peter W.
II. Swan, Annalyn. III. Forbes Inc.
HC110.W4A436 2007
305.5′2340973—dc22 2007015676
v1.0
Contents

Acknowledgments vii
Introduction 3

Part One: What It Takes

1. Education, Intelligence, Drive 23


2. Risk 46
3. Luck—and Timing 68
4. Winning Is Everything 87

Part Two: Making It

5. Blue-collar Billionaires 109


6. West Coast Money 131
7. Entertainment and Media 156
8. Beyond Wall Street 176

Part Three: Spending It

9. Conspicuous Consumption 205


10. Heirs 230
11. Family Feuds 252
12. Giving It Away 276
13. Power and Politics 306
Afterword: Money and Happiness 327
Appendix: The Forbes 400, 1982–2006 331
Notes 361
Index 397
Acknowledgments

For the past twenty-five years, Forbes magazine has compiled its now leg-
endary list of the four hundred wealthiest Americans and considered the state
of the nation’s vast fortunes. Its issues on the subject have been rich in facts
and figures, on who’s up and who’s down, on whether Bill Gates (or Donald
Trump) has a billion more or less. But the list is perforce numbers-driven; the
issues focus less on the character of the people and the peculiar world they
inhabit. What makes the Forbes 400 members tick? Who gets to the top—and
why? How different are they from more average Americans? Are they happy?
What lessons about money and life can we glean from them?
In All the Money in the World: How the Forbes 400 Make—and Spend—
Their Fortunes, we set out to answer these questions and to create a collective
profile of America’s superrich over twenty-five years. While this book was
created in collaboration with Forbes, much of the information comes from
our own interviews, original research, and never-before-compiled data.
When we first approached Tim Forbes, the company’s chief operating
officer, with the idea for the book, he enthusiastically endorsed it. Through-
out the research and writing, many at the magazine eased our way, sharing
insights, opening archives and files, providing phone numbers and e-mail
addresses, and helping in every way possible. Pete Newcomb, the longtime
editor of the Forbes 400 list, was an inexhaustible source of information
about members of the 400, as was his successor, Matthew Miller. James
Michaels, the first editor of the Forbes 400, shared with us information, anec-
dotes, and insights from the early years. Additionally, Mitchell Rand, direc-
tor of information technology, provided original and insightful analysis of
Forbes 400 data over the last twenty-five years, while Barbara Strauch, direc-
tor of Forbes’s book division, reviewed the data and manuscript and compiled
the definitive list of all Forbes 400 members. Their efforts are immediately
evident in the many charts, graphs, and tables throughout the book, to which
designer Nigel Holmes has brought his distinctive flair.
At the heart of All the Money in the World are the voices of the Forbes 400
members themselves, as well as those of their families. Many gave us extensive
viii Acknowledgments

interviews. (A few requested anonymity; we honored their wishes.) Others


responded—sometimes at length—to a questionnaire we sent. Still others
maintained an e-mail correspondence with us. We are most grateful to them
for their time and insights into every aspect of Forbes 400 careers, philan-
thropic causes, and much more: Sheldon Adelson, John E. Anderson, Leon
Black, Timothy Blixseth, Michael Bloomberg, Eli Broad, Peter Buffett, Susie
Buffett, S. Truett Cathy, Jim Clark, Mark Cuban, David Duffield, Red Emmer-
son, Ken Fisher, Ted Forstmann, Daniel Gilbert, David Gold, Stanley S. Hub-
bard, J. B. Hunt, Jon Huntsman Jr., Michael Huffington, Wayne Huizenga,
David Kaplan, Vinod Khosla, Charles Koch, David Koch, Jerome Kohlberg,
Herbert Kohler Jr., Bruce Kovner, Ronald Lauder, John Malone, Ross Perot,
Ross Perot Jr., T. Boone Pickens, Marc Rich, Julian Robertson, Arthur Rock,
Wilbur L. Ross, Richard Mellon Scaife, Charles Schwab, Steve Schwarzman,
Charles Simonyi, Ram Shriram, Robert F. X. Sillerman, John Sobrato, James
Tisch, Donald Trump, Ivanka Trump, Mortimer Zuckerman.
This book has also benefited greatly from the wisdom of many writers,
professors, and analysts who have thought and written about wealth. Each is
credited in the Notes section, at the top of the chapters in which they are
quoted. We owe a number of them special thanks: the writers Nelson W.
Aldrich Jr., Ken Auletta of The New Yorker, Dr. Paul Babiak (industrial psy-
chologist and author), Ron Chernow, Richard Conniff, Edward Jay Epstein,
David A. Kaplan of Newsweek, Dr. Michael Maccoby (psychoanalyst and
author), Washington Post business columnist Steven Pearlstein, Matthew
Symonds of The Economist, and Thayer Cheatham Willis. A number of pro-
fessors gave generously of their time and insights: Raphael Amit (Wharton
School, University of Pennsylvania), Joseph Astrachan (Kennesaw State Uni-
versity), John C. Coffee (Columbia University Law School), Pablo Eisenberg
(Public Policy Institute, Georgetown University), K. Anders Ericsson (Florida
State University), Charles Geisst (Manhattan College), Alexander Horni-
man (Darden School of Business, University of Virginia), Christopher Jencks
(Harvard University), Steven Kaplan (University of Chicago Business School),
Andrew Keyt (Chicago Family Business Center, Loyola University), Josh
Lerner (Harvard Business School), Anthony Mayo (director, Leadership Insti-
tute, Harvard Business School), Eli Noam (Columbia University Business
School), Peter Singer (Princeton University), David A. Skeel Jr. (University of
Pennsylvania), George Smith (Stern School of Business, New York Univer-
sity), James Allen Smith (Georgetown University), Roy C. Smith (New York
University), Robert J. Sternberg (dean of the School of Arts and Sciences,
Acknowledgments ix

Tufts University), Jonathan Taplin (Annenberg School for Communication,


University of Southern California), David Waterman (Indiana University),
and Jerry White (Caruth Institute of Entrepreneurship, Cox School of Busi-
ness, Southern Methodist University). In many cases, they are also the
authors of well-known books, which are listed in the Notes section.
A major theme of All the Money in the World is how the Forbes 400 spend
their money. Many are philanthropists and have created foundations of their
own. Others try to influence politics. Several people were particularly help-
ful in describing the universe of charitable giving and the ways in which
money can buy power. William Luers, former president of the Metropolitan
Museum of Art in New York and now head of the United Nations Association
of the USA, was a valuable guide, as was Vartan Gregorian, president of
the Carnegie Corporation. Others whose insights enrich the book included
Rich Avanzino, president, Maddie’s Fund; Joe Breiteneicher, president, The
Philanthropy Initiative; Kathy Bushkin, chief operating officer, United
Nations Foundation; Chuck Collins, cofounder of Responsible Wealth; Wil-
liam Dietel, president, F. B. Heron and Pierson/Lovelace Foundation; Joan
DiFuria and Stephen Goldbart, codirectors, Money, Meaning & Choices
Institute; Sara Hamilton, of Family Office Exchange; Dr. Lee Hausner, of the
family-wealth consulting firm IFF Advisors; John Healy, former president,
Atlantic Philanthropies; Todd Millay, executive director, Wharton Global
Family Alliance; Aryeh Neier, president of the Open Society Institute; Judith
Stern Peck, director of the Money, Values and Family Life Project, Ackerman
Institute for the Family; Tim Stone, president, and Ryan Nguyen, research
manager, NewTithing Group; Celia Wexler, vice president for advocacy,
Common Cause; and Rod Wood, Wilmington Trust.
The “Beyond Wall Street” chapter benefited, in particular, from the advice
of experts who helped us navigate the often arcane world of high finance.
We are grateful to John K. Castle, former president of famed Wall Street
investment-banking firm Donaldson Lufkin & Jenrette and now chairman of
Castle Harlan, for giving us the benefit of his encyclopedic knowledge of the
history of Wall Street and of the various financial developments of the past
twenty-five years. Also providing insight were Zachary Bagdon, executive
director, International Center for Finance, Yale School of Management; Steve
Drobny, cofounder and partner of Drobny Global Advisors and author of
Inside the House of Money; Steve Greenberg of Allen & Company; Erik
Hirsch, chief investment officer, Hamilton Lane; Michael Karagosian, MKPE
Consulting; Alan Kosan, managing director, RogersCasey; Dick Kramlich,
x Acknowledgments

cofounder and general partner of New Enterprise Associates; Bruce McGuire,


president of Connecticut Hedge Funds Association; Michael Peltz, executive
editor, Institutional Investor and Alpha; Charles Taylor, National Venture
Capital Association; and David B. Williams, managing partner, Williams
Trading LLC.
We are also grateful to the following for their help on an array of subjects,
ranging from how money works in Hollywood to how members of the
Forbes 400 enjoy themselves and invest their money: Banker Mark Buchman;
Diane Byrne, editor, Power & Motoryacht; George Cooke, entertainment
lawyer, Manatt, Phelps & Phillips, LLP; Janet Healy, former Walt Disney
Company studio executive and producer; Gregg Kilday, film editor at The
Hollywood Reporter; Tobias Meyer, worldwide head of contemporary sales,
Sotheby’s; Craig Moffett, Stanford C. Bernstein entertainment analyst; Tom
Pollock, ex-chairman of MCA/Universal Pictures and co-owner of Montecito
Picture Company; Farhad Vladi of Vladi Private Islands; William D. Zabel,
founding partner, Schulte Roth & Zabel, LLP. Additionally, Louise Grunwald
and Mary Sharp Cronson provided insights into the manners and mores of
the wealthy world. Family and friends not only shared stories and offered
support but in many cases helped with contacts and arranging interviews.
Throughout our work on the book we were aided by a number of talented
young researchers. Karl Moats, a student at Columbia University, proved
indefatigable in compiling vast lists of data about everything from which sec-
tors create the most wealth to the number of immigrants and women on the
list. He was ably assisted by Erin Gaetz, Courtney Myers, and Mary-Catherine
Lader, all members of the Forbes summer intern program for college stu-
dents. Whenever we encountered problems in running facts or people to
ground, we consulted Anne Mintz, director of knowledge management at
Forbes. In the final stages of editing we benefited from the fact-checking of
Cesar Suero and Jason Storbakken at Forbes. We are also grateful to Monie
Begley Feurey and Laurie Baker at Forbes for their interest in, and promotion
of, the book.
At Knopf we were fortunate to work with Erroll McDonald, a superb
editor in every sense of the word. His suggestions about how to use the fasci-
nating data compiled from twenty-five years of Forbes 400 issues proved
especially important to the collective portrait that emerges from these pages.
Against all odds Robin Reardon mastered the many moving pieces—
manuscript, charts, graphs, boxes—and kept us on course, as did Kathy
Hourigan, Ellen Feldman, Andy Hughes, and Tracy Cabanis. Virginia Tan’s
Acknowledgments xi

design elegantly weds the two parts of the book—the running text and the
graphic elements—and Peter Mendelsund’s cover design is both classy and
powerful. Knopf publicists Paul Bogaards and Erinn Hartman gave enthusi-
astic support to the project. And from the beginning, our lawyer, Robert Bar-
nett, was there behind us, supporting the idea in every way.
Above all we are deeply grateful to the wonderful team of writers and
reporters who spent months fleshing out the themes of the book in the vari-
ous chapters, and then helped us through the endless checking of every detail.
Their knowledge and command of their subjects illuminate every page: Paul
Berger, Anna Isgro, Gwen Kinkead, and Alex Ulam. A brief biographical
sketch of each writer is included below. To them all, our deepest thanks.

Paul Berger is a British freelance writer based in New York. His work has
appeared in the New York Times, the Washington Post, U.S. News & World
Report, Online Journalism Review, and Denmark’s Weekendavisen. He is a
contributing editor to three books, including the New York Times best seller
Secrets of the Code. (Chapters 2, 3, 9, 10, 11, 13)

Anna Isgro, a freelance writer and editor based in the Washington, D.C., area,
was an associate editor at Fortune magazine and editor of US News Business
Report. She has contributed to a variety of book projects, including The New
York Times Practical Guide to Practically Everything and the TurboTax Income
Tax Handbook. (Chapters 1, 5, 11, 12)

Gwen Kinkead, a prizewinning journalist and author, was a senior editor at


Worth and Fortune magazines, and has contributed to The New Yorker and the
New York Times. (Chapters 4, 7, 8)

Alex Ulam is a New York City–based freelance writer who specializes in archi-
tecture and urban planning. His work has appeared in Architectural Record,
Landscape Architecture, Wired, Archaeology, and the National Post of Canada.
(Chapter 6)
All the Money
in the World
Introduction

T he Forbes 400 is the dominant symbol of wealth in America. It recalls


the earlier 400 list of Mrs. Astor but differs from hers in one telling
respect. Whereas the original 400 referred to the collection of socially promi-
nent New York families who filled the ballroom of Mrs. Astor in the late nine-
teenth century, the Forbes index spotlights individual wealth. It measures the
size of this or that personal fortune. It asks not where you came from or who
you work for, but who’s richer? It’s the big-banana index—simple, primal,
direct—and for those reasons irresistible.
Malcolm Forbes, a passionate believer in fortune-making, established the
list in 1982. There was nothing elitist in his ebullient approach to wealth.
Forbes was unashamed by his fortune; he relished the idiosyncratic (and he
knew the value of publicity in promoting his brand). His favorite form of
transportation was neither the everyman’s Chevy nor the aristocrat’s polo
pony, but a motorcycle and a hot-air balloon—both of which kept him and
his eponymous magazine, Forbes, in the news. Several years before the cre-
ation of the 400 list, Forbes developed a Cost of Living Extremely Well Index
(CLEWI), a cheeky riff on a traditional Cost of Living Index, which measures
the price of staples. The CLEWI (see page 207) charted the changing prices of
yachts, caviar, cigars, and private planes. Similarly, Forbes presented its 400 as
celebrities, treating them the way People treated actors or Sports Illustrated
home-run hitters. The reported numbers had a kind of celebrity flash: A for-
tune was a batting average.
It seems remarkable that the Forbes 400 list, today endlessly quoted
around the world, is only twenty-five years old. (B. C. Forbes, Malcolm’s father
4 All the Money in the World

and the magazine’s founder, published a brief precursor of the list in 1918,
naming the thirty richest Americans of the time, but it did not take hold.)
The Forbes 400 is a particular product of its era, a living reflection of recent
history. It captures a period of extraordinary individual and entrepreneurial
energy, a time unlike the extended postwar years, from 1945 to 1982, when
American society emphasized the power of corporations. The gross domestic
product (GDP) in the United States has more than doubled since 1982, and
may soon triple. The size of American personal fortunes has more than kept
pace. In 1982 only thirteen billionaires were on the Forbes list, and you
needed $75 million to make the cut. Today you must be a billionaire. In 1982
the combined net worth of the 400 represented 2.8 percent of the GDP. By
2006 that figure had risen to 9.5 percent. (The percentage actually reached
12.2 percent of the GDP in 2000, during the Internet boom.) More generally,
in 2005 the wealthiest 1 percent of Americans claimed a percentage of the
national income not equaled since 1928. Only the Gilded Age, the period
from the Civil War to the 1890s, and the 1920s can withstand comparison to
the last twenty-five years in terms of wealth accumulation.
For many people (not least, before his death, Malcolm Forbes himself) the
Forbes 400 represents a powerful argument—and sometimes a dream—
about the social value of wealth in contemporary America. In this view, great
wealth does not (at least in the United States) suggest an aristocratic or privi-
leged group of people who inherited their positions. It means enterprising
individuals, a marvelous meritocracy of money. Those who make fortunes
are an ever-changing, ever-churning group of remarkable people who flour-
ish in the land of opportunity. They bring jobs, energy, ideas, and even joy to
their society. They have been responsible, in the late twentieth century, for
extraordinary advances in technology, the invention of new financial instru-
ments, and the efficient restructuring of American industry. Money is fluid.
Money is restless. In 1982 twenty-four Du Pont heirs were among the four
hundred wealthiest Americans. By 1999 no Du Ponts remained on the list.
New money was supplanting old. It was wealth’s way.
To be sure, many take the other side of the argument. Why commemorate
greed, competition, and dollar one-upmanship? What does it say about
America that the wealth of four hundred individuals should, in 2006, equal
almost one-tenth of the annual output of a nation of 300 million people? To
skeptics, the Forbes 400 symbolizes a period of avarice, excess, and selfishness.
All the Money in the World does not join in these arguments. Instead it
recounts a more nuanced and personal story. At times anecdotal, at times
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