Forbes is out with its latest list of American billionaires.
It's always a strange group, because many of the wealthiest billionaires were essentially born into the list.
So we wanted to dig in and figure out who actually came furthest to be counted among the country's richest.
We call it the Horatio Alger Index, after the early-20th century author whose fictional tales of rags-to-riches success stories helped give rise to the notion of "the American dream."
We think it provides a rough estimate of who has made it the furthest based on where they started.
Click here to see the list »
We start out by calculating something we're calling family income proxy value. This is designed to approximate both the wealth (or lack thereof) into which an individual was born, and how developed his neighborhood would have been growing up (and so what resources he or she may have had access to that helped advance their wealth).
But we gave the most weight to whether one was a first-generation American or a minority.
Our list is not exhaustive. We worked mostly from the top 50.
For some, there was inadequate information, or they declined to provide it, so some deserving of our list may have been left out.
Here's how our formula breaks down.
Family income proxy value: We assigned or deducted five points based on their home area's income positive or negative order of magnitude differential from the national average in the Census year closest to their 16th birthday. For anyone born after 1940, the differential order of magnitude unit is approximately $2,300. So for instance, Jeff Bezos received zero points because Dade, Fla., his home county, had a median family income of $31,238 in 1979; while the national average was $33,374. Meanwhile Howard Schultz' home county of Kings, NY had a median family income of $27,881 in 1969; while the national average was $30,169. County median family income is not available prior to 1959; so for those born prior to 1940 we used state-level per capita personal income data from the BEA.
Minority: 3 points
First generation American: 5 points
Did not attend college: 3 points
Attended school on scholarship: 2 points
Enrolled in college in their home state: 1 point
Dropped out of college: 1 point
Second generation American: 0.5 points per parent
Not raised by biological parents: 0.5 points per parent
Sheldon Adelson — Alger Score: 1.50
Occupation: Founder and CEO, Las Vegas Sands
Net worth: $28.5 billion
DOB: August 4, 1933
Family income proxy value: 0.51 (Massachusetts 1946 per capita personal income: $1,393: USA: $1,254)
Comment: Adelson's was born to Ukrainian-Jewish immigrants. He enrolled at City College of New York but dropped out.
Alger Score refers to our tabulation of various factors in the subject's upbringing, including implied family income, level of education, and minority and citizenship status. Net worth data supplied by Forbes.
Jeff Bezos — Alger Score: 1.93
Occupation: Founder and CEO, Amazon.com
Net worth: $27.2 billion
DOB: January 12, 1964
Family income proxy value: 0.93 (Dade County, Fla. 1979 median income $31,238; USA: $33,374)
Comment: Bezos was born to a teenage mother; his stepfather was a Cuban immigrant.
Alger Score refers to our tabulation of various factors in the subject's upbringing, including implied family income, level of education, and minority and citizenship status. Net worth data supplied by Forbes.
Harold Simmons — Alger Score: 2.00
Occupation: Buyout investor
Net worth: $10 billion
DOB: May 13, 1931
Family income value proxy: 1.00 (Texas 1947 per capita personal income: $1,136; USA: $1,317)
Comment: Simmons grew up in a plumbing-and-electricity-less "shack" in rural Texas. He graduated Phi Beta Kappa from UT.
Alger Score refers to our tabulation of various factors in the subject's upbringing, including implied family income, level of education, and minority and citizenship status. Net worth data supplied by Forbes.
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