Forbes has settled a libel suit with Saudi billionaire Prince Alwaleed bin Talal, who says the magazine underestimated his wealth.
Forbes has carved out a niche with its ranking of the world’s billionaires. But how does Forbes get the information for these lists? What's the secret sauce?
The first thing you have to do if you’re going to make a billionaires' list is forget how you’d calculate your own worth. Think like a billionaire. Once you’re in this altered state, a billionaire’s bottom line makes sense. For example…
“Frankly, the salary’s kind of a rounding error,” says Kerry Dolan, an assistant managing editor at Forbes. “The real value for a lot of these people’s net worth is the value of the stake in the company that they founded or inherited.”
Dolan wrote the article about Prince Alwaleed. She can’t comment about that story or the settlement.
But she does say it can be hard to calculate someone’s net worth if that company is private. Dolan says Forbes will contact the person and ask for an audited financial statement.
Forbes will also talk to analysts and former employees to see if there’s an art collection. Why does Forbes go to all that trouble?
“People love that kind of a list,” says John Carroll, a professor of mass communication at Boston University. “There’s a total fascination with wealth and celebrity and the intersection of the two. All of those things boost circulation.”
But there are some people who don’t like the list – people who are on it and don’t want to be.
"I think most people are probably trying to guard their privacy and their secrecy," says Steve Goldberg, a partner in Tweddell Goldberg Investment Management. "I know – in my business you’re not allowed to tell people who your clients are, much less how much money they have.”
But Forbes’ Dolan says other billionaires love being on the list and will even exaggerate their wealth to get on it.