Who was the richest man in history? - May 29, 2019
John D. Rockefeller is considered to be the first billionaire in history. Not only that, according to a new study, he might have been the richest man ever. If we adjust his wealth to today’s GDP, we can see that he had three times more money than Jeff Bezos. It’s an unusual method to calculate wealth but shows us some very interesting things.
We all know about the race for being the wealthiest man on Earth. Now it’s mostly between Amazon CEO Jeff Bezos and Microsoft founder Bill Gates. According to the Forbes, they have $149.4 billion and $100.1 billion respectively. Their wealth is already breath-taking, but historically there were several people who had much more money than they did.
Rockefeller leads by far
We have historical data about the richest people of the world and it’s interesting to look at it. John D. Rockefeller is for example considered to be the first billionaire with a wealth of $1.5 billion. It’s a lot of money, however, without adjusting it to today’s dollars, these numbers are not telling us the whole picture. If we do the Math (Bloomberg luckily did it already) we can see that the figures changes a great deal.
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According to the calculations, oil and industry magnate Rockefeller would have a $331 billion wealth today. Almost triple the worth of Jeff Bezos. (Bloomberg used a different method to calculate Bezos’ wealth than the Forbes, therefore their figures differ slightly.) But not only him, former steel company owner Andrew Carnegie, and railroad and water transportation magnate Cornelius Vanderbilt also had bigger wealth than Bezos.
Tricky calculations, based on GDP
What’s really interesting about Bloomberg’s and measuringworth.com’s method is that they use a measurement of “relative output”. This means that they not only adjust these figures to inflation. They believe that doesn’t show us the whole picture, so instead, they compare these wealths to the GDP of the time.
Why is this a good method? Because it puts everything in context. For example, it really shows us how rich Rockefeller was: in 1937 his wealth alone was 1.6% of the US economy. Just to put Rockefeller’s richness in context, Jeff Bezos’ wealth is “only” 0.6% of the American GDP.
Change in industries
It’s also interesting to see how the source of wealth changed through history. In the last century the richest made money mostly of industries like oil, transportation and building real estate. Before that, merchants and explorers had a great chance of making a fortune.
If we look at the richest people of today, we see that most money comes from technology. It’s not only true for Bezos and Gates but many others as well (see: Wealthiest people: tech is taking over).
Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.