Kerry Dolan, assistant managing editor of wealth at Forbes, talked about how its editors and reporters calculate wealth in a new podcast about how the business magazine compiles its lists.
Forbes is known for calculating the wealth of the 1,810 billionaires in the world. Microsoft co-founder Bill Gates has been No. 1 on the list for most of the past 20 years. Dolan noted that Forbes does not include the $28 billion worth of Microsoft stock that Gates has given to his charitable foundation in his net worth.
“More than half the people on the list are worth far less than $28 billion,” said Dolan.
“From the get go, we’ll say we are not on a mission, We do not have filings from the IRS,” explained Dolan. “We work with publicly available information and we work with good old-fashioned shoe leather reporting.”
Some of the tactics, said Dolan, is looking to see if someone is in the news buying an expensive piece of art or real estate. “We do the best with the information we have,” said Dolan.
For most of the people on the list, their value is determined by the value of the stake in a company, said Dolan. The magazine picks a day, a couple of weeks before it goes to press, and use the stock prices and exchange rates from the same day.
“We tend to be conservative,” said Dolan. “We tend to take the low end of the estimates.”
One billionaire, however, has his financial person send the magazine a list of the worth of his furniture in his homes, but Forbes doesn’t include that data in its list because it’s not available for the others.
“The amount of ego that some of the members of these lists have, the billionaires list in particular, is kind of astounding. For people who are incredibly successful, there are some people for whom that success isn’t enough, where they really want to have a higher rank,” says Dolan. “This is an elite club of people.”
Added Dolan: “I spend an inordinate amount of time for a very small amount of people fielding calls from their chief financial officer who’s lobbying to get their boss a higher net worth on the list.”
