Trump tumbled more than 100 spots to number 544 on the magazine’s 31st annual list, largely because of the impact of the slumping New York real estate market on his holdings.
“Midtown Manhattan real estate is down; therefore, so is Donald Trump’s fortune,” the business magazine said in a statement.
The developer-turned-politician, who ranked number 205 last year, fell further behind to Bill Gates, the list’s perennial leader.
Gates, the philanthropic co-founder of Microsoft, was followed this year by Berkshire Hathaway chairman Warren Buffett at number two and Amazon.com founder Jeff Bezos at number three.
While Trump’s net worth slipped, more people were qualifying for the list. This year, Forbes ranked a record 2043 billionaires.
“Booming stock markets, higher commodities prices and plain old-fashioned entrepreneurship helped to make this a record year in terms of wealth creation around the globe,” Forbes editors Luisa Kroll and Kerry Dolan said.
Trump’s current net worth of $3.5 billion compares with $3.7 billion in October, when Forbes published its list of the 400 wealthiest Americans, and a month before his Election Day upset against Democrat Hillary Clinton.
While campaigning for the Republican presidential nomination in May, Trump’s team filed a personal financial disclosure form that said his net worth was more than $10 billion.
Critics have said he has inflated the true value of his wealth, saying his tax returns would provide a more accurate snapshot of his financial status. But Trump has defied convention and refused to release his returns.
Neither the White House nor the Trump Organisation, which Trump’s sons have run since their father’s inauguration, immediately responded to a request for comment on the Forbes list.
Gates maintained his number-one spot for the fourth year in a row, with his fortune of $86 billion up from last year’s $75 billion.
Buffett, the legendary value investor known as the “Oracle of Omaha”, reclaimed the number-two berth after a two-year hiatus. His net worth surged to $75.6 billion from $60.8 billion.
Third place went to Bezos, who apparently was the biggest winner on the 2017 list. His wealth jumped to $72.8 billion, a gain of $27.6 billon from last year, Forbes said.