$1,000,000,000; All about the world's billionaires

Recently, Forbes magazine released their list of the richest billionaires in the world. Since there’s never been a trillionaire yet (although billionaire Mark Cuban predicts there will be one soon), this list also encompasses the wealthiest people on the globe. 

Here are some interesting facts, figures, and anecdotes about billionaires:

First off, we want to clear up how much a billion dollars is. A billion dollars is a thousand million, or one followed by nine zeros (1,000,000,000).

However, that wasn’t always the case. Interestingly, the old English definition of a billion was actually a million million (not a thousand million). So their version of a billion was 1,000,000,000,000!

Forbes released a record 1,826 names on their most recent Billionaires List.

Together, they have an aggregate net worth of $7.05 trillion.

Remarkably, that aggregate net worth is up from $6.4 trillion last year – a huge leap in wealth.

 The newest list of the world’s billionaires includes 290 newcomers.

A record 46 members are under the age of 40.

That’s contrary to the usual demographic of billionaires, with an average age of 60.4 years for the top 100 richest people in the world.

But thanks to this influx of new, younger members to the list, the average age has dropped by five years in the last year alone.

The youngest billionaire in the world is 24-year old Evan Spiegel, who is the co-founder of Snapchat and is worth an astounding $19 billion.

Many people assumed that Facebook founder Mark Zuckerberg was the youngest billionaire. However, he never held that title even before Spiegel, as his college roommate, and Facebook co-contributor, Dustin Moskovitz, made more than a billion dollars but is eight days younger than Zuckerberg.

Women are also represented in the billionaire club like never before. In fact, we’ve seen a 50% increase in the number of female billionaires over the last 20 years.

Still, women only represent 12 out of the 100 top billionaires on the Forbes list.

Elizabeth Holmes, at only 31 years old, made the list as the youngest self-made billionaire woman.

One woman that is guaranteed to make the billionaire’s list is actress Julia Louis-Dreyfus (Elaine from Seinfeld). Dreyfus’ father is a billionaire, and she will automatically become one of the wealthiest people in American once she inherits his fortune.

Another interesting statistic is that 88% of billionaires are married, compared to only 49% for the U.S. average.

Sure enough, billionaires seem to be family men and women, with an average of 4 children among the world’s richest billionaires.

So are billionaires all graduates of Yale, Harvard, and MIT? Not at all, as 25% of all billionaires are college dropouts!

The United States is represented by 515 billionaires on the Forbes list.

While the U.S. led the world in people with ten-figure net worths as recently as last year, China became the top billionaire nation in the world this year.

In fact, China added 242 new billionaires in one year alone, bringing the total to 596.

Inheritance and family wealth doesn’t seem to play a huge role in creating billionaires, as only 230 inherited all of their wealth to make the list. (Although many inherited some funds and worked to increase their net worth exponentially.)

In fact, 1,191 members of the Forbes billionaire list self-made their fortunes.

A professor at Stanford University gets credit as being a self-made billionaire…sort of. In fact, he amassed all of his wealth by investing in the ideas and inventions of his genius students.

The top countries for billionaires including China, the United States, Russia, Germany, and Brazil.

Moscow has more billionaires than any other city in the world, with New York City and London next.

But 740 Park Avenue in Manhattan is home to the highest number of billionaires of any one address in the world.

The first billionaire in the world was John D Rockefeller, who was worth an estimated $1.4 billion when he died in 1937. In today’s dollars, that’s almost $70 billion!

Henry Ford wasn’t far behind, becoming a billionaire in 1920. Ford’s fortune would be worth an estimated $194 billion today, making him the 7th richest person in the history of the world!

J. K. Rowling, the author of the Harry Potter series of books, became the first person in history to amass her billion-dollar fortune by writing. At one point, Rowling was actually wealthier than the Queen of England! But when she started giving away most of her money to charity, she dropped her off the Forbes list as is now "merely" worth a few hundred million dollars.

Philanthropy and giving away vast sums of money characterize many billionaires. In fact, almost one hundred billionaires have signed “The Giving Pledge,” an agreement to voluntarily give at least half of their wealth to charitable causes within their lifetime.

Likewise, former billionaire Chuck Feeney (co-founder of Duty Free Shoppers Group) has given away 99% his $6.3 billion fortune anonymously, helping underprivileged kids go to college. He’s now not only fallen from the billionaire’s list, but has a net worth of “only” $2 million.

Not all billionaires are so generous, even with their own families. Notoriously frugal billionaire J. Paul Getty even refused to pay a $17 million ransom when his 16-year-old grandson was kidnapped by Italian gangsters. Only when the boy’s ear showed up in the mail three months later did Getty negotiate, agreeing to pay $3 million, but only if his son paid back $800,000 of that with 4% interest!

One Kuwait billionaire owns a portfolio of valuable URLs and domain names worth an estimated $3 billion, such as party.com, research.com, and jackass.com, but he refuses to sell or do anything with them.

Perhaps the wealthiest person in modern history was Pablo Escobar, a Colombian drug lord that made so much money in the cocaine trade that it’s hard to even quantify (or count, as he certainly never kept it all in banks).

Reportedly, Escobar lost about 10% of his profits every year – about $2.1 billion wasted - due to rats chewing up his hidden stores of cash, moisture decomposing it, or just burying it for safe keeping but then losing it.

He once burned $2 million in crisp new bills just to keep his family warm when they were on the run.

In his prime earning days, Escobar spent $2,500 a month just on rubber bands used bundle all of his endless stacks of cash!

The Million Dollar Club; A look at millionaire status in the U.S.

For many of us growing up in the 1970s and 80s, it was held as the ultimate measure of material success: millionaire status. In our minds, to accrue one million dollars meant we would live in a gigantic 2,400 square foot mansion, drive a Porsche 911 with our salmon colored collars turned up, and probably get interviewed by Robin Leach on the sun deck of our yacht for “Lifestyles of the Rich and Famous.”

Decades later, we’ve had plenty of television shows, songs, books, and yes, even real estate seminars that celebrate membership into the vaunted millionaire club. And while a million dollars isn’t what it used to be (adjusted for inflation, $2,848,567 is equal to $1,000,000 in 1980,) it’s still an enviable chunk of change. So let’s take a look at who exactly these millionaires are, how they got there, and if our perceptions still stand true.

Although estimates vary, the most recent assessment is that there are about 6.15 million millionaire households now in the U.S. It’s important to note that those figures include retirement plans and insurance with cash value, but don’t count the value of real estate because the volatile nature of equity.

There are 114,235,996 households in the United States, so 1 in every 20 households in the U.S. has more than $1 million in assets. While that may seem like a lot, remember that we’re talking about households, which most likely contain more than one person, not individuals.

1 out of every 39,015 households has $100 million or more, while

1 out of every 314,700 households has $1 billion or more. 

There are approximately 12.6 million households in the world that have a net worth exceeding $1,000,000, so almost half of them are in the United States.

Of the 6.15 million millionaires in this country, only 304,118 actually earn one million dollars per year or more.

California, Texas, and New York hold 25% of the nation’s millionaires.

The states with the most millionaire households per capita are:

1)        Maryland (7.7% of households there!)

2)        New Jersey

3)        Connecticut

4)        Hawaii

California is 6^th on that list, with 777,624 households with at least $1 million in assets in 2013.

Statistically, the average millionaire is a fifty-seven-year-old male who is married and has three children.

Almost all millionaires are married, the vast majority of them to their first and only spouse.

Millionaires in the U.S. have an average household net worth of $3.7 million.

The median annual household income for millionaires is $131,000. Of course that is just the median, or the exact 50th percentile. The average household income is $247,000.

8% of millionaires make between $500,000 to $999,999 in income every year, while only 5% earn more than $1 million.

On average, their total annual realized income is less than 7 percent of their wealth. That means they aren’t getting rich on their income for the most part.

The median net worth in millionaire households is $1.6 million but the average is higher, with nearly 6 percent enjoying a net worth of over $10 million.

About 95 percent of millionaires in America have a net worth of between $1 million and $10 million.

97 percent of all millionaires are homeowners.

Their average home is currently valued at $320,000 and they’ve lived in the same house for more than twenty years. (That speaks to the fact that most millionaires don’t live as lavishly as we might expect.)

Approximately 70 percent of millionaires earn 80 percent or more of their household’s income, making one person (the vast majority are men) the primary bread earner.

About half of their wives do not work outside the home. When they do work, the most frequent occupation is teaching.

Two-thirds of millionaires who are still working are self-employed. In contrast, self-employed people make up less than 20 percent of American workers.

Three out of four of millionaires who are self-employed call themselves entrepreneurs, while the rest are usually professionals like doctors, lawyers, and accountants, etc.

Most millionaires do not work in glamorous industries like pro sports, music, and entertainment, etc. They aren’t the CEOs of companies or tech wizards. In fact, the vast majority of millionaires made their wealth in professions they describe as “dull-normal”: running service, blue collar businesses or manufacturing companies that fill an under-served and very specific niche.

They are hard workers but not necessarily workaholics, as about two-thirds of millionaires put in between forty-five and fifty-five hours per week.

80 percent of millionaires have first-generation wealthy, having self-made their fortunes, going against the common perception.

 Only 19 percent of millionaires receive any income or wealth of any kind from a trust fund or an estate.

Fewer than 20 percent of them inherited 10 percent or more of their wealth, a tiny proportion. More than half of all millionaires received no inheritance at all!

About fifty percent of them never even received a dollar of college tuition from their parents or other family.

But millionaires are well educated: only about one in five are not college graduates. Eighteen percent have master's degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s.

They are mostly a product of public schools, as only 17 percent of millionaires or their spouses ever attended a private elementary or private high school. But their children are in private schools, to the tune of 55 percent of them.

A majority of millionaires did not attend Ivy League schools (though they did attend those institutions at a rate much higher than the general public).

Millionaires actually live well below their means and are frugal. Only a small minority live in big newer houses or drive new or leased cars. Instead, they live in older homes they’ve had for a very long time, older cars, and wear modest or inexpensive clothing.

They live in nice family neighborhoods but are usually the wealthiest, with more than six and one-half times the level of wealth of our non-millionaire neighbors, but. But their non-millionaire neighbors outnumber them more than three to one.

They are meticulous budgeters, planners, savers, and investors, on average investing at least 20 percent of their earned income every year.

They enlist the professional help and opinions of plenty of investment professionals, but in the end, most of them end up managing their own investments to some degree.

Most millionaires have accumulated enough assets so they wouldn’t have to work for 10 years at least, and usually much longer.