How the Rich Hide Their Wealth

There are hundreds of people in the world whose names you might never know but who own millions -- if not billions of dollars.

These wealthy individuals often go out of their way to hide their assets from scrutiny -- sometimes from the public and sometimes from their own government.

Russians, for instance, are reportedly pouring record amounts of cash into London monetary markets to hedge against any future political retribution.

Figuring out how much money someone has is not an easy task.

Even Forbes magazine, which just came out with its annual list of the richest 400 Americans, acknowledges that its figures are just estimates and are "deliberately conservative."

"Most things like this are very private," says Daniel S. Hamermesh, an economics professor at the University of Texas at Austin. "People aren't running around telling people about their sex lives or marijuana consumption. They're considered private things in this and other countries. Income is something that is mine."

There are other reasons too.

Somebody -- maybe not a billionaire or even a millionaire -- might work at two jobs and doesn't want one employer to know how much the other pays. If the employer had that information, it might be less likely to dole out a raise.

Others might not want to be hassled by charities and others seeking donations.

Then, Hamermesh says, there are those that want to "beat the taxman."

"Look at Italy and Russia where this is a national pastime," he says.

This Forbes list only looks at the American wealthy -- everyone on it is worth at least $1 billion -- many own or have owned significant chunks of publicly traded companies. In that case, their ownership of such stocks is publicly disclosed.

Calculating the net worth of a Russian oil czar or a Saudi prince is a lot more difficult.

Stashing Cash Overseas

The influx of Russian cash is flowing into London, says John Coffee, a professor at Columbia University Law School, because of uncertainty.

"Putin some day will be out of power," Coffee says. "You don't know … on which side you'll be of his successor. And if you can have $100 million in London, you can live quite happily out of the country."

When England returned Hong Kong to Chinese control, Coffee says, a tremendous amount of cash flowed from Hong Kong to Singapore and Canada.

So why England?

"London is one of the deepest financial markets in the world -- quite possibly the deepest -- and it has almost no regulation," Coffee says. "You can invest in all different sorts of investments. You don't have to go through the same kind money laundering restrictions that the United States has."

Americans looking to hide assets from taxation or for other reasons have always looked abroad. Switzerland used to offer a high level of secrecy in its banks, but that has changed. Other countries, like Lichtenstein, have taken on that role. For Americans, the Cayman Islands and Bermuda are popular places to shift assets.

Generally, assessing somebody's wealth abroad is much more difficult than in America.

"What the Saudis or what some of the Russian oil plutocrats own," Coffee says, "is all a matter of very, very approximate calculation at best."

The Trouble Calculating Worth

But even in the United States there is very little information about how much the super-rich in general earn.

Hamermesh says the federal government's income surveys stop at $150,000 a year.

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