Self-Made Billionaires Thrive In Silicon Valley And Wall Street, As Manufacturing Suffers

Distribution of self-made scores among members of the Forbes 400 by select industries: tech billionaires are increasingly self-made, while manufacturing fortunes are largely inherited
The wealthiest people in the country are increasingly self-made, leaving behind an era when dynasties inherited and concentrated wealth.
Today, more than two-third of the Forbes 400 is made of individuals who made their way to the top by themselves, with an even heavier skew when it comes to billionaires in the fields of technology, finance, and real estate. While Silicon Valley and Wall Street pat themselves on the back for having made it, a troubling fact is that more than half of the billionaires on the Forbes 400 that derive their wealth from manufacturing inherited their fortunes.
It should come as no surprise that tech is the field where we see the highest concentration of self-made billionaires. We crunched the data from our most recent Forbes 400 and discovered that more than 94% of the tech billionaires created their fortunes themselves. A vast majority of these, or 61.54% of them to be exact, did have a little help: they were born and raised in middle- to upper-middle class households, meaning they really didn’t have to battle fate to earn themselves a place in the Forbes 400. That honor goes to our real estate billionaires, of whom nearly half were born in poor or lower middle-class homes.
The graphic accompanying this post is derived from our self-made scores, which we developed for the Forbes 400. In a nutshell, it’s a progressive scale, where a score of 1 indicates a billionaire that fully inherited their fortune and hasn’t worked to expand it, while a 10 represents a fighter who was not only born poor, but also faced extreme adversity on his or her way to the top. Scores 1 through 5 are considered inherited fortunes, while 6 through 10 denote self-made members of the Forbes 400.

More than 94% of tech billionaires in the Forbes 400 are self-made

The story for many of these tech billionaires is similar: raised in a middle-class home, went to university, many times at a top tier school, and then moving on to the role of founder, ultimately taking a disruptive technology into the mainstream through an IPO. The likes of Mark Zuckerberg, Jeff Bezos, and Larry Page, just to name a few, qualify as 8s in our scoring system, and they are most highly concentrated in the tech sector. Another industry with a similar demographic: finance. Just over 40% of our finance and investment billionaires fell into the 8 category, with names like Warren Buffett, Steve Cohen, and Stephen Schwarzman.
What’s missing among the tech and finance crowd, to a certain extent, are those go-doers that came up from nothing. Our 9s and 10s are most heavily concentrated among the builders and the sellers. Real estate, where 81.48% of the billionaires on the 400 are self-made, boasts the highest number of these boostrappers, with 25.9% in the 9 category, and 18.5% as 10s (so they not only grew up poor, but they also faced major adversity). While Donald Trump, who inherited a medium-sized business from his father and grew it to a 10-figure fortune, is a 5, other real estate magnates like David Walentas and Igor Olenicoff started all the way in the bottom of the social ladder, and qualified as 10s.
The second industry with the most 10s, or the highest level of our ranking of self-made fortunes, is fashion and retail. John Paul DeJoria, for example, was homeless and even worked as a janitor, before becoming the billionaire co-founder of hair products empire Paul Mitchell. Forever 21 ’s founders, Jin Sook and Do Won Chang, didn’t have it easy either: having left South Korea for the U.S. in 1981, Do Won worked as a janitor, gas station attendant, and at a coffee shop to make ends meet before opening his first store.

Manufacturing shows by far the highest concentration of 1s, or billionaires who inherited their fortunes and haven’t worked to expand them

Turning the table on its head, our self-made scores also shine a light on inherited wealth, and the bastion where it remains is the manufacturing sector. A whole 28.6% of the members of the 400 that derive their wealth from manufacturing fully inherited everything, and haven’t worked to grow those fortunes. A dangerous consequence of this concentration of 1s, as we scored them, is the stifling of innovation, which can exacerbate the well-documented fall of American manufacturing.
We find names like the secretive Catherine Lozick, the heiress to a massive Cleveland-based valve maker Swagelok. Also, the list of heirs from S.C. Johnson, the massive cleaning products manufacturer, which include S. Curtis Johnson, Karen Johnson Boyd, Josephine Louis, Herbert Louis, and matriarch Imogene Powers Johnson. Many food and beverage billionaires are also ranked as 1s, 16.7% of them to be exact, including the Cargill heirs.
As we’ve previously explained, our self-made scores aren’t perfect, but they are extremely helpful in illuminating the trends among the wealthiest Americans. Troubling, for example, is the demise of manufacturing, and the limited amount of mega-fortunes in the sector that is still in the hands of the founder. At the same time, social mobility is definitely possible, as our ranks show, in fields in the tech sector, finance, and real estate. Through hard work, it’s possible for anyone, even those in the worst possible conditions, to make their way into the Forbes 400.