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The Rothschild family was possibly the richest banking family in human history. Given the power of compounding over time and the large principal sum that they start with, they should easily be the world's richest family today. Besides, bankers should be pretty good money managers themselves and they should be quite competent in managing their own money. Yet today, nobody on Forbes' list of 500 richest persons in the world bears the surname Rothschild.

What happened to the wealth of the Rothschild banking family over the years?

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Anstalts and Stiftungs 73700 "nominee" companies,false trusts Thats how –  secrets and lies Jun 28 at 21:47

2 Answers 2

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They are still wealthy, here is an up-to-date business insider article on Rothschild's descendents.

The reason they are not on the Forbe's list is because their wealth is diluted amongst many people; Forbes makes an effort to focus on individual wealth. Here's is a comment by Forbes employee Luisa Kroll:

Thanks for your note. The Rothschilds are a large, wealthy family, and as you say, have accumulated their fortunes since the 1800s (FIXES TYPO: I originally wrote 1980s. The family has been involved in business for more than a century). Years ago when the number of billionaires start to soar, we made the decision to focus on individual wealth. We list brothers together, only if they are worth an estimated $1 billion apiece or $2 billion-plus total. We list a man, with his wife and children, if he’s the founder who built the fortune, even if he’s passed on some shares. But otherwise we really try to keep it focused on individuals. (Those fortunes with some nuclear family sharing are denoted with & family). That is why the family is not on, but Nat Rothschild, who has a personal fortune we can trace, is among the 1,226 billionaires.

She makes another comment here:

Hi Luis, Thanks for your question. We used to have the Rothschild family among the ranks but about a decade ago when we started to list all billionaires in the world together (we used to list usa separately), we decided to focus on individual wealth as best we could. we thought it was a more apples to apples comparison, ranking one entrepreneur versus 20 member family seemed not right, and also to keep the list exclusive. We have not been able to pin down one individual yet though the family are billionaires. We had Nat on our list but he fell off after debacle in Indonesia. We’re looking closely at Jacob and got him about half way there. If there are particular individuals on whom you have info, please send. Otherwise, we’ll continue to look for individual fortunes within large familes – they are there but not always as easy to prove or break down.

As a side note, dilution of wealth amongst many progeny was a major concern of the original Rothschild who barred female descendents from receiving inheritance in an effort to ensure that the family's wealth remains concentrated.

But why are they not richer given that they had many years to accumulate their wealth? I think that there are a few possible reasons:

1) High inheritance taxes and capital gains taxes

2) Earning a higher return with a large amount of money is difficult. In his early days, Warren Buffett was able to return in excess of 25%. But as of 2013, his company has only returned 5.3% p.a..

3) Lower returns combined with yearly inflation may drastically reduce the rate of wealth accumulation

4) The Nazis confiscated a lot of their wealth, including their bank (and also forced them to flee Europe).

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Forbes is a private company. That means it can only access publically available information to compile their list. They don't know how much money a person has in their Swiss bank accounts. They don't even have the information that people file on their tax returns.

Bankers generally don't have an interest about newspaper journalists knowing about their fortunes. Governments can confiscate assets. Rich people can get kidnapped and hold for ransom. When it comes to buying a company and making a hostile takeover, it not useful that it's publically known how much money you have.

Most of the people on top places on the Forbes list have made their money running a successful company. There no way for Bill Gates to hide the money he made with Microsoft. Warren Buffet profits good investor. It makes people invest into his company.

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