The Forbes List: What It Shows (And What It Doesn’t)#

Now, Forbes puts in the work. They have more than 50 employees in 16 countries just to compile their list. According to their own description of how they do it, they use all sorts of sources:

• Public financial records
• Interviews with employees
• Interviews with rivals
• Interviews with attorneys
• They even try to check the numbers by contacting the billionaires directly.

Some of these super-rich folks do work with Forbes and give them access to their private finances so they can report a more spot-on number. But Forbes itself admits that most don’t cooperate.

On the flip side, these billionaires often don’t want people snooping around their finances. They’re always figuring out clever and different ways to move their money, try to hide it, or come up with new strategies, especially for taxes.

So, a lot of the list is really just an educated guess, an estimate.

But here’s another big point: there are many billionaires out there who absolutely should be on the list but will never show up.

The Forbes list is mainly focused on individual billionaires, not big, widespread family fortunes where the money is all tied together. And it’s the same problem when people ask about figures like Vladimir Putin – it’s just incredibly difficult to separate where their personal money ends and government money begins when it’s all mixed up. One obvious group of billionaires that are hard to track are the crony government leaders who essentially use their country’s central bank like their own personal credit card.

But I think there’s another type of billionaire that’s even more interesting and harder to find.

Magazines like Forbes and Bloomberg, who get a ton of attention online for their billionaire lists, have actually admitted privately that they have no way to keep track of the most common type of American billionaire.

The “Invisible” Billionaire Profile#

In an interview with the New York Times, Kyrie Dolan, the editor who’s in charge of the Forbes team that puts together the annual list, gave a perfect description of a billionaire they’d never find.

She told the Times it’s someone who:

“quietly sold a stake in a business for say 250 million in the 90s and then invested it well.”

…and that’s it. That’s the whole story.

Now, $250 million is a massive amount of money, especially for selling a part of a business back in the 1990s. But that kind of sale wouldn’t have made the news unless the company was a really well-known name, a household brand.

Most good businesses of that size are actually pretty boring and just sell their stuff to other businesses (that’s called B2B - business to business).

As someone who used to be an investment banker and personally worked on many of these kinds of deals, I can tell you that $250 million-plus exits happen every single day.

And sometimes, it’s not even the founders who walk away with all the cash. Silent early investors in a private company might only appear on the paperwork showing the buyer where to send the money.

Let’s run a quick example: If a person took all their money from a sale like that in 1999, right at the peak of the .com bubble, and put all of it into the market, and then only spent a relatively small amount – say, $1.2 million a year**, or **$100,000 a month – on themselves… guess what? They would now be worth an estimated $3.3 billion dollars.

And here’s the key part: nobody would know, unless they wanted them to know.

You have some folks with lots of money who want to show it off. And there are billionaires who can’t avoid being noticed because the companies they started are just too famous. But most billionaires? They are completely invisible to everyone except:

• Their close family
• Their accountant
• The IRS

There are three very important reasons why these billionaires choose to stay out of the spotlight. And they also use two fascinating strategies to make sure they remain under the radar.

Reason 1: Avoiding the Problems of Public Notoriety#

The first major reason most billionaires try very hard to stay off lists like Forbes is simply because of all the hassle that comes with being publicly known.

Think about lottery winners. They are constantly bugged by people begging for money, hit with frivolous lawsuits, and pitched business ideas by family members over Thanksgiving dinner. The stats are pretty wild: the average lottery winner is seven times more likely to declare bankruptcy than the average American, and getting all that public attention is a huge reason why.

Beyond just being annoying and expensive, getting chased for your money can also be downright dangerous. People known to be wealthy are obvious targets for things like:

• Kidnappings
• Burglaries
• Blackmail

High-profile business leaders and celebrities hire personal security teams, but even those teams have a tough time covering everyone in the family all the time.

Personal security is also really expensive and, honestly, pretty inconvenient. These agents need to travel with you, work with you, and essentially live with you to be effective. A nice, relaxing life enjoying your riches can quickly turn into another job just managing a security detail. Executive protection agents for major Bollywood stars, for example, can earn more than $300,000 a year.

But if nobody knows who you are or how much money you have stashed away in your investment accounts, all these problems can just be avoided. And that’s just the first reason!

Reason 2: Not Wanting to Be Associated with Paid Publicity#

The second big reason most billionaires work hard to avoid being included on lists like Forbes is because they don’t want to be seen in the same place as the people who do typically appear in the magazine.

Truth is, a lot of people who get articles written about them in Forbes actually paid for that privilege.

Magazine subscriptions are down these days, and selling online ads doesn’t bring in anywhere near as much money as selling physical copies did back in the day when magazines were the main way people read this kind of stuff. Magazines like Forbes have had to find new ways to make money, and doing paid articles is a very profitable option for them.

You’ll see people with big career goals in the corporate world have their PR manager pay the magazine a few thousand dollars to run a nice, flattering story about how they changed things at their last company. For a few thousand dollars more, they can even get put on a list, like the Forbes 30 Under 30.

Let’s be blunt: most of these lists are filled with people who paid to be there. They might throw in a few really big names, like Sam Bankman-Fried or Martin Shkreli (yeah, those guys), just to make the list look more legit. It used to be considered a real honor to be picked for Forbes’ annual list of 30 innovative business people under 30, but in recent years, more and more people who appeared on that list have actually ended up behind bars.

Forbes tends to report on people who want attention because, frankly, they’re the easiest ones to report on. Business people usually only want attention if it helps them out somehow. Having a Forbes article link on your resume or LinkedIn profile can be a smart career move, maybe worth the few thousand dollars it cost.

But for someone who’s already incredibly rich and successful? It looks like they’re desperate for attention.

There’s no easy way to tell from reading Forbes who:

• Was written about purely because of their achievements.
• Was written about unwillingly (though this is rare, people usually cooperate or get estimated).
• Was written about because they paid for it.

Established billionaires don’t want anyone to assume they paid to be featured, so they just steer clear of media attention altogether.

Another group that pays magazines like Forbes for coverage are the scammers who make money selling online courses or shady cryptocurrency projects. If you watch some of their ads, they often brag about being featured in Forbes or Money Magazine. This gives them a lot of credibility and can convince skeptical customers. Most people think big magazines wouldn’t promote a scam, but they absolutely would.

Could it be that the Forbes 30 Under 30 list mainly attracts entrepreneurs who don’t really have a solid business but just want to land on the list for social proof?

The business people that real billionaires deal with every day are well aware of this paid publicity game. So, for them, seeing someone show up in Forbes can actually be a mark against that person’s business credibility.

Reason 3: Selection Bias and Long-Term Management#

The third reason most billionaires avoid publications like Forbes is pretty straightforward: it’s plain old selection bias.

The people who get featured prominently in Forbes Magazine are usually right at the peak of their careers or business success. After that, there’s often a long way down and not much room left to go up.

People who are the heads of major companies or part of incredibly famous wealthy families can’t really avoid the spotlight. But anyone who seeks out attention knows the risks and does it anyway, usually because they just like the attention.

People with these kinds of personality traits are, over the long term, less likely to manage their massive wealth and their businesses effectively. They’re more likely to take big risks and be overly confident in their own abilities. Someone like Kevin O’Leary, for example, would likely be a lot wealthier today if he had just invested the money he made early in his career and then just left it alone.

Also, when someone’s financial success becomes public knowledge, it can sometimes turn their customers off their brand. People often prefer to support small, family-owned businesses over what feel like faceless corporations. But if they find out the owners are already billionaires, that customer loyalty might not be as strong anymore.

On the expense side, a known billionaire is also going to get offered more expensive options everywhere they go. Contractors will charge them way more, and they’ll get judged if they try to negotiate discounts.

Frankly, there are very few benefits to having your wealth publicly known, and it causes a lot of problems. Smart billionaires understand this, and smart billionaires are more likely to stay billionaires.

Step 1: Structure Your Business Exit#

If your money is coming from selling a business, make sure it’s a private sale. These days, launching your company onto the public stock market through an IPO (Initial Public Offering) is only really necessary if you’re aiming to be the next Facebook or Amazon. And honestly, if your company is already that massive, sorry, it’s probably too late for you to stay hidden.

A sale to a private equity firm or an acquisition by a bigger company is generally quieter and easier to manage in most cases. Crucially, the details of the deal don’t have to be public record in the press release announcing the sale. So, there’s nothing for journalists at Forbes to dig up later.

Step 2: Invest Your Money Discreetly#

Once you’ve secured the cash, you should invest it widely in the market and avoid putting too much money into any one company.

Here’s a key detail: If you own 5% or more of any public company’s shares, you are required to file something called a Form 13D with the SEC (Securities and Exchange Commission). These 13D forms are public for anyone to see. Why? Because the SEC wants investors to know who the biggest shareholders are in a public company. If someone owning more than 5% suddenly needed to sell all their shares quickly, it would push the stock price down significantly. Investors pay attention to who the top shareholders are because if those people are in a tough personal financial spot, it could be bad news for the stock price, even if the company itself is doing well.

As a billionaire who values privacy, your best bet is to limit any individual investments in public companies to no more than 4.99% of the company’s shares. An added bonus? This strategy naturally encourages you to be more diversified, which is good for your portfolio anyway.

Step 3: Avoid Certain Corporate Roles#

Another way the SEC can inadvertently tip off Forbes is through a Form 3. This form must be filed if you own more than 10% of a public company, or if you are a company officer like a CEO, CFO, or Chief Legal Counsel. A Form 3 also needs to be filed if you are a company director (sitting on the board).

Form 3s are also public records. So, if you want to stay hidden, it’s best not to take on too many of these positions. You could have a billion-dollar portfolio invested across hundreds of companies, and only the holdings you have in the specific companies where you are a director would become public. So, if you really want to sit on a few boards, you can, but it will definitely put your name out there connected to those specific holdings.

Step 4: Minimize Your Public Footprint#

• Avoid Lawsuits: The other main way your wealth can become public knowledge is through lawsuit discovery. If you get sued, anything the lawyers dig up during the discovery process is entered into the public record, unless it’s a rare circumstance where evidence gets sealed. The best way to avoid lawsuits? Avoid attention in the first place. So, as a new billionaire trying to stay private, you’re already doing everything right by being discreet.
• Use Legal Structures: Billionaires will also use structures like holding companies and trusts. They often set these up in states that have strong asset protection and privacy laws, like Nevada and North Dakota. (If you live outside of America, you might want to check out my video on the Panama Papers to see how global billionaires manage this).
• Avoid Ostentatious Displays: Once you have your accounting set up discreetly, the next step is just to avoid showing off your wealth in obvious ways. You can still live in a beautiful home, just make sure it’s in a private area and maybe not the single most expensive house in the neighborhood. You can still drive a nice car, but don’t post pictures of it all over social media. You can still fly private, but don’t paint a huge logo or your name down the side of your plane.

Your absolute best defense is being too boring to write about and for your actual wealth to be too difficult for journalists to verify.

Step 5: Handle Media Inquiries#

If you ever get a call from one of these publications asking about your wealth, just laugh quietly. Tell them you wish you were worth a billion dollars and that you would prefer they didn’t imply that you were, because that would be “materially inaccurate.” If they have no way to definitely check your actual wealth, they won’t risk adding you to their list.