Young, self-made, middle class: How tech is changing the super rich

It’s no news that tech has made a lot of people really, really rich. Bill Gates, of course, has long led the list of the richest people in America (in fact, he’s the richest guy in the world this year), Google spins off billionaires like an out-of-control carousel, and there’s a reason why I’ve been referring to Facebook founder Mark Zuckerberg as “Boy Billionaire” for a couple of years.

A look at the just-released list of the Forbes 400 illustrates just how much wealth has been created by the boom in information technology and the Internet. Three of the 10 richest people in the country — Gates, Oracle’s Larry Ellison, and Michael Bloomberg — made their megafortunes in tech, as did 13 of the top 50 and 48 of the top 400. The hugely disportionate share of tech leaders in the ranks of the super rich speaks volumes about changes in economic mobility: Thanks to the tech industry, there are more young people who are super rich, there are more from middle-class backgrounds, and there are fewer who inherited their money.

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Sure, at a time when economic inequality in modern America has never been as stark, it’s easy to resent people like Napster founder Sean Parker (No. 273 with a net worth of $2 billion) who took over a redwood grove for a multi-million-dollar wedding. But antics of bozos like Parker aside, there’s a larger point here that speaks to a seismic shift in the upper ranks of the economy.

Despite the perception that the super rich generally come from super-rich families, the truth is quite different. Inherited wealth has become far less important in the last few decades — and tech is a major driver of that trend.

In 1982, 60 percent of the people on the Forbes 400 list of wealthiest Americans came from wealthy families, compared with 32 percent in 2011, according to a study out of Stanford’s Graduate School of Business and the University of Chicago. This year, 31 percent of the richest inherited most of their wealth.

The young, the white, the wealthy When we think of the super rich, a picture of an old white guy probably comes to mind. To be sure, the list is still overwhelmingly white: The only African American to make it is Oprah Winfrey. And just 48 members of this exclusive club are women, including Hewlett-Packard’s Meg Whitman (worth $1.9 billion) and Laurene Jobs (worth $11.7 billion), the widow of Apple’s Steve Jobs. The tech industry hasn’t done much to change the dominance of white men.

However, there has been a shift in the age demographics. Yes, most of the 400 are well into middle age and beyond, but 20 of the billionaires on the list are under 45, including 11 who struck it rich in technology. As a writer for Forbes put it, they’re luckier than the rest: They have the money and many years to spend it.

The youngest person on the list is Dustin Moskovitz, the 29-year-old co-founder of Facebook, who’s worth a cool $5.3 billion. Mark Zuckerberg, only a few days older, has a much larger fortune: $19 billion, up from a mere $9.4 billion last year when the company’s stock was in the tank.

Meanwhile, you can’t forget about Sergey Brin and Larry Page. The 40-year-old co-founders of Google have a combined net worth just shy of $50 billion, which if owned by just one of them would be the third-largest fortune on the list — behind Gates ($72 billion) and Warren Buffet ($58.5 billion).

Other incredibly wealthy tech wunderkinds include Square’s Jack Dorsey ($1.3 billion), GoPro’s Nick Woodman ($1.3 billion), and Ubiquiti Networks’ Robert Pera ($2 billion).

Education and scalability are key to getting rich Inherited wealth may no longer be the key to hitting the top of the pile, but that doesn’t at all mean that class doesn’t count. Bill Gates, for example, grew up in an upper-middle-class household, his father a successful lawyer. About half of the Forbes 400 in 2011 grew up in middle-class comfort, compared with about 30 percent in 1982, according to the study by Stanford’s Joshua Rauh and Steven Kaplan of the University of Chicago.

“Being super rich no longer requires being born wealthy, but wealth does confer advantages, particularly in access to education,” says Rauh. Not only were they well educated, but technology has allowed them to apply their skills “to the most scalable industries: technology, finance, and mass retail,” Rauh and Kaplan write.

Consider Amazon.com. The rise of the Internet and the spread of high-speed connectivity made it possible to start a relatively small online store and scale it beyond the scope of even the most well-established brick-and-mortar retailers. Investment banking and financial services aren’t part of the technology sector as such, but without high-speed trading, analytics, and global information systems, they never could have become so huge and so dominant.

As Rauh and Kaplan point out, the Forbes List actually understates the impact of information technology on the creation of wealth. It’s even more important than you thought.

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