Wales was born in Huntsville, Alabama, United States. He attended The Randolph School and a university-preparatory school, and then earned bachelor's and master's degrees in finance. While in graduate school, he taught at two universities. Wales later took a job in finance, and worked as the research director of a Chicago futures and options firm for several years. In 1996, he and two partners founded Bomis, a web portal that targeted males, and which hosted, and provided the initial funding for, the peer-reviewed encyclopedia Nupedia (2000–2003) and its successor, Wikipedia.