The Forbes 400

For the third consecutive year the rich got richer. In this, the 24th annual edition of The Forbes 400, the collective net worth of the nation's wealthiest climbed $125 billion, to $1.13 trillion. All but 26 people on our roster are billionaires. Surging real estate and oil prices drove up several fortunes and helped pave the way for 33 new members (and 9 retreads). Gulf Coast oilman Tracy Krohn landed on the list after taking his W&T Offshore drilling operation public in January. Developers Jorge Perez and Steven Roth are two of the six real estate tycoons added to the list. Another newcomer: James Leprino, who built a $1.3 billion fortune supplying cheese to pizza joints Little Caesars and Papa John's.

The year's biggest gainer was casino mogul Sheldon Adelson, whose net worth jumped $8.5 billion on a big bet he's making on the peninsula of Macau, China. Gambling is also the source of wealth for Ruth Parasol and Russell DeLeon, a husband-and-wife team who run their online casino, PartyGaming, from Gibraltar.

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The Very Richest The Newly Rich Near Misses In Memoriam

For every arrival, there is an exit. Eight members of last year's list died, including Wal-Mart heir John Walton, in a plane crash in June.He is replaced by his wife, Christy. Thirty-three fortunes simply couldn't keep pace with the rising minimum needed to get on the list, which this year was $900 million, a $150 million jump from 2004. Among the notables on whom the curtain descended: DreamWorks cofounder Jeffrey Katzenberg.

#1 William Gates

Net Worth: $51.0 billion
Source: Software, Microsoft
Self made

Age: 49
Marital Status: married, 3 children
Hometown: Medina, WA
Education: Harvard University, Drop Out

Microsoft's chief visionary moving further away from day-to-day corporate work. For the first time did not offer a strategy outlook at this year's financial analyst meeting. Instead, prefers to dive into innovative projects, foster collaboration among Microsoft's many divisions. Microsoft aims to be omnipotent, selling software for PCs, servers, cell phones, television set-top boxes, gaming consoles, the Web. Fifteen product launches slated for the next year and a half, including new version of Windows, called Vista, and gaming console Xbox 360. At the ripe (tech sector) age of 30, Gates' company impressively beats rivals in profit margins, market capitalization and R&D budget, but its sales growth is slowing to a (recently) single-digit percentage pace. Like elder statesman of computing, IBM, has been investing heavily in its own stock ($8 billion worth so far). Diversifies methodically, selling 20 million shares every quarter, reinvesting through Cascade Investment. Big stakes in Canadian National Railway, Republic Services, Berkshire Hathaway. Philanthropy, via $29 billion Bill & Melinda Gates Foundation, aimed at fighting infectious disease (hepatitis B, AIDS, malaria) and improving high schools.

#2 Warren Buffett

Net Worth: $40.0 billion
Source: Investments, Berkshire Hathaway
Self made

Age: 75 Marital Status: widowed, 3 children
Hometown: Omaha, NE
Education: University of Nebraska Lincoln, Bachelor of Arts / Science Columbia University, Master of Science

Revered investor taking it on the chin over Berkshire Hathaway's General Re insurance unit; SEC threatening civil fraud suit against General Re Chief Joseph Brandon over questionable transaction with American International Group. Also getting it for his board seat at Coca-Cola, where his "independence" might be compromised by Berkshire's ownership of Dairy Queen, which buys lots of Coke products. Buffett: "Do they want us to favor Pepsi?" At Berkshire set in place two governance reforms: regular meetings of directors without Buffett present; whistleblower line for employees. Sitting on $43 billion in cash, hoped to make some big acquisitions last year, "but I struck out." Instead, invested in foreign currencies: $21 billion bet against the dollar and in favor of various other currencies. "In no way does our thinking about currencies rest on doubts about America." Newspaper delivery boy filed first 1040 at age 13; claimed $35 deduction for bicycle. Studied under Benjamin Graham at Columbia. Applied value-investing principles to build Berkshire Hathaway. Portfolio includes utilities (MidAmerican Energy Holdings), insurance (Geico, General Re), apparel (Fruit of the Loom), flight services (FlightSafety, NetJets). Also chunks of American Express, Coca-Cola, Gillette, Wells Fargo. Instructs managers to run a business as if it's the only asset the manager's family will own over the next 100 years. Prefers his investors to buy equities only after careful analysis. "If they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful." Says he underestimated the severity of certain stocks' overvaluation during the tech bubble. "I talked when I should have walked." No matter. Since taking control of Berkshire 40 years ago, has delivered compound annual return of 22%. "No wonder we tap-dance to work."

#3 Paul Allen

Net Worth: $22.5 billion
Source: Software, Microsoft, investments
Self made

Age: 52
Marital Status: single
Hometown: Seattle, WA
Education: Washington State University, Drop Out

Microsoft cofounder, "wired world" proponent lately finding more promise in pipes delivering oil instead of information. Bought energy outfit Plains Resources for $460 million, controlling stake in Plains All American Pipeline, operator of 15,000 miles of oil pipelines. Through Vulcan Energy unit, paid $250 million for natural gas storage business from Sempra Energy. Hasn't given up entirely on the future. Still maintains dozens of investments in media (Charter Communications), technology (set-top box manufacturer Digeo), biotech. Ten-year-old investment in wannabe Hollywood studio DreamWorks finally showing some returns after company took its animation unit public but planned secondary offering of mostly Allen shares postponed for now. Good times elsewhere in sports (owns pro football's Seattle Seahawks, basketball's Portland Trail Blazers), space (funded SpaceShipOne, first to launch private flight into suborbital space), the open seas (413-foot yacht Octopus armed with 2 helicopters and a 60-foot submarine). His Paul G. Allen Family Foundation has donated heavily to education, art and science causes. Joined buddy Bill Gates in 1975, left the company in 1983 to fight Hodgkin's disease. Has been slowly selling off Microsoft stake ever since.

#4 Michael Dell

Net Worth: $18.0 billion
Source: Technology, Dell
Self made

Age: 40
Marital Status: married, 4 children
Hometown: Austin, TX
Education: University of Texas Austin, Drop Out

Founder, former chief executive of world's largest PC maker feeling tremors at the top. Second-quarter revenue up 15% to $13.5 billion, still missed analyst expectations. Stock sank 13%, biggest dip in almost 4 years. Soft-spoken Texan started selling computers from University of Texas dorm room 1984; dropped out to start Dell Computer. Went public in 1988, grew fast with direct-sales model, kept R&D costs low. Ironfisted chief info officer Randall Mott led charge to trim spending; swiped by rival HP in July. Steady seller of Dell stock, pumps cash into private investment firm MSD Capital. Assets include 377-room Four Seasons Resort Maui in Wailea, Hawaii; stakes in IHOP, NorthWestern, Indiana restaurant chain Steak n Shake. Devoted Republican sits on U.S. President's Council of Advisors on Science & Technology. Wife, Susan, created fashion label Phi, sells through Neiman Marcus.

#5 Lawrence Ellison

Net Worth: $17.0 billion
Source: Software, Oracle
Self made

Age: 61
Marital Status: married, 2 children, 3 divorces
Hometown: Silicon Valley, CA
Education: University of Illinois, Drop Out

Brash software executive holds Darwinian view of his industry, believes that fewer companies peddling software will be better for business. In the past year made 9 acquisitions totaling some $17 billion, including a pending $5.9 billion for Siebel Systems, $10.6 billion for PeopleSoft. "I don't think you'll see another major acquisition anytime soon." Already strong in database management software, the newly combined companies will make Oracle the dominant player in customer relationship management applications. Addition of boutique software shops I-flex and ProfitLogic will move Oracle into retail and banking. For now expanded Oracle looking stronger: sales up 16% this year. But so-called project Fusion, blending Oracle's database technology with PeopleSoft's business wares, not expected until 2008. Chicago native cofounded database software firm in 1977, took public in 1986, a day before Microsoft. Maintained rabid rivalry ever since. Also competitive on the high seas: BMW Oracle Racing team aiming to win America's Cup in 2007. Recently purchased a dozen residential and commercial properties in Malibu, Calif. Might have to rethink furnishing plans in light of pending $100 million charitable gift on behalf of Oracle to settle insider trading suit.

Back to the Special Edition -- The Forbes 400: The Richest Americans.