Copyright ©2009 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

STEVE INSKEEP, host:

The financial crisis has taken a toll on the world's billionaires. Forbes just came out with its annual list and it shows Bill Gates reclaiming the top spot, though even his net worth dipped by $18 billion. NPR's Robert Smith scanned the list and has some lessons for the rest of us.

ROBERT SMITH: Oh, billionaires - they're just like us. They lost money last year - just like us. Accept their losses added up to $2 trillion. In fact many of them are now non-billionaires. Hey, just like us.

Mr. STEVE FORBES (Forbes): Last year there were 1,125 billionaires; this year it's down to 793. A typical billionaire is down at least one third in their net worth.

SMITH: But wipe away those golden tears, Steve Forbes, because this isn't just gloomy news. It's an opportunity. All those empty spots on the list mean more room for the rest of us to move up. In fact, 38 new billionaires made the rankings this year. And here is how they did it.

Secret number one: Pick you location wisely. During boom times, the big money was in emerging markets. You couldn't toss an over-inflated commodity without hitting a new billionaire in India or Russia. Most of those guys dropped off the list this year. If you want to be a billionaire, Forbes says, the best place to live is…

Mr. FORBES: Still the United States. Even though we took a real hit, we suffered proportionately less than the rest of the world.

SMITH: And you certainly didn't want to be billionaire in, say, Iceland.

Mr. FORBES: In Iceland you would not want to have been a banker, because you would be trying to figure out will McDonalds hire me today.

SMITH: Secret number two: Make your money in something tangible. Hedge funds, private capital billionaires were hit hard. But producing something the world wants can still make you super-rich. Matthew Miller is an editor with Forbes.

Mr. MATTHEW MILLER (Forbes): People like John Paul DeJoria, who owns Paul Mitchell Shampoos, and Patron Tequila - Patron Tequila is a high-end tequila -not as many people are buying it at nightclubs as they used to, but liquor is something that people like in a recession, so he is new to the list this year.

SMITH: The owners of sports teams did well, and so did another newcomer with a recession-proof product. Joaquin Guzman Loera, a.k.a. El Chapo; Mexican drug kingpin, now billionaire, and the only man on list wanted by the U.S. government.

Which brings us two secret number three: Don't go along with the crowd. Billionaire John Paulson has increased his net worth by $3 billion last year. His profession: betting against the stock market as a short seller.

And if you're going to bet like that, it doesn't hurt to have secret four on your side: luck. Take Guy Laliberte, the owner of Cirque du Soleil and one of the rare billionaires to get richer last year. He is a poker player, but his best hand was selling 20 percent of his company in August before the economy tanked. Steve Forbes says sometimes you need more than skill.

Mr. FORBES: A lot of people who are on the list this year sold proportions of their business at the height of the economy, a year or little over a year ago, and they didn't know there was a collapse coming. They just did it. So yes, you need luck. But don't always think you can create your luck; that is called hubris.

SMITH: Forbes then tells me the final secret, secret number five, which is: Don't try and replicate what happened last year; take advantage of it. Forbes predicts the billionaires that will climb up future lists would be the people who will jump into the wreckage of the financial sector and build something new.

Robert Smith NPR News, New York.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.