The Richer You Were, The More You Had To Lose
I've written several times now about how adversely this recession has affected the rich. Apparently Forbes' famous list of the richest Americans shows just how badly their fortunes have been hit. This year's article reads like an obituary for the wealth that once was. It also provides some ugly statistics to dig into. It starts:
America's super rich are getting poorer. For only the fifth time since 1982, the collective net worth of The Forbes 400, our annual tally of the nation's richest people, has declined, falling $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion.
That's pretty bad. It amounts to a loss of $750 million per person. Their wealth has decreased by 19%. Interestingly, the Dow and S&P are both only down about 15% over the same period (as of Sept. 10, 2009 vs. 2008 -- the date Forbes says it used). But Forbes says the problem went far beyond just stocks. It blames:
Faltering capital markets and real estate prices, along with divorce and fraud . . .
The top 10 alone lost around $39 billion total, with their decline more closely resembling that of the stock market at 14%. It says the biggest loser was none other than value investing guru Warren Buffet, who took a whopping $10 billion dollar hit over the past year -- 20% of his wealth. He's still worth $40 billion though, so you probably won't find him in the soup line.
It was definitely a bad year for the rich on Forbes' list. Yet, I urge them to look on the bright side: they are still the 400 richest Americans. So despite their recent troubles, I suspect most of us still envy their wealth.