How Michael Bloomberg Went From Bond Trader To Billionaire Media Mogul
Bloomberg grew up in a middle class Boston suburb.
He majored in electrical engineering at Johns Hopkins and received his MBA from Harvard.
Bloomberg graduated from Johns Hopkins University in 1964 with a degree in electrical engineering.
After graduating from Johns Hopkins, he received his MBA from Harvard Business School.
Two years later in 1966, during the height of the Vietnam war, he applied to the Officer Candidate School of the US Armed Forces, but was rejected for having flat feet.
Source: encyclopedia.com
He went to work at Salomon Brothers in 1966.
In 1966, Bloomberg was hired by Salomon Brothers in New York.
His starting salary at Salomon was $9,000/year.
Source: nyc.gov, nytimes.com
Bloomberg started out by working in the bank's vault.
From the book Bloomberg on Bloomberg:
"We slaved in our underwear, in an un-air-conditioned bank vault, with an occasional six pack of beer to make it more bearable. Every afternoon, we counted out billions of dollars of actual bond and stock certificates to be messengered to banks as collateral for overnight loans. By the 1980s such practices would be as quaint as the horse-drawn carriage."
Source: encyclopedia.com
He worked his way up and was made a partner at Salomon Brothers in 1972.
After starting at the bottom, Bloomberg worked his way up, and eventually became a bond trader and was made partner by 1972.
He worked 12 hour days, six days per week.
By 1976, Bloomberg was a general partner at Salomon Brothers and held the glamorous position, head of equity trading and sales.
Source: encyclopedia.com, nymag.com
In 1976, he married his first wife, Susan Brown.
Together, they had two children, Emma and Georgina. The couple divorced in 1993.
Source: encyclopedia.com, nytimes.com
In 1979, Salomon Brothers CEO John Gutfreund asked Bloomberg to transfer to the computer systems area.
In 1979, the CEO of Salomon Brothers, John Gutfreund, and Billy Salomon, asked Bloomberg to leave his powerful position in sales and trading and to head the young and emerging computer systems area.
This was seen as a demotion. But, Bloomberg would later be thankful for the experience.
Source: nytimes.com
On Friday July 31, 1981, it was announced that Salomon Brothers would go public.
On Friday July 31, 1981, things changed at Salomon Brothers.
That night, the partners were called to a meeting, and it was announced that the private Salomon Brothers would be merging with the publicly traded, commodity trading firm, Phibro Corporation.
Many of the partners became very wealthy from the merger, and on that night, they ate steaks and partied like fraternity brothers.
Source: encyclopedia.com, nytimes.com
But, Bloomberg was given a $10 million dollar package and was asked to leave the firm.
The next day, Saturday August 1, 1981, the partners met with management.
Bloomberg met with CEO John Gutfreund and Henry Kaufman. He, along with a handful of the other partners, were asked to leave the firm.
For leaving the firm, 39 year old Bloomberg received $10 million in cash and convertible bonds.
Source: nytimes.com
After leaving Salomon Brothers, he decided to launch an information technology company.
Bloomberg's final day at Salomon was September 30, 1981.
The next day, he was self employed, and went to work on his own information technology company.
Bloomberg wanted to bring transparency and efficiency to the sellers and buyers of financial instruments.
Source: nytimes.com, nyc.gov
He invested $4 million of his own money into the development of a computer system that could provide information about the bond markets.
In a 10 foot by 10 foot rented room, Bloomberg put his Johns Hopkins University electrical engineering degree to work.
He invested $4 million of his $10 million Salomon Brothers severance package into his start-up.
His company was originally called Innovative Market Solutions, and consisted of four others, who collaborated to create and program a computer terminal that let traders stay informed about the Treasury bond market.
Source: nytimes.com, encyclopedia.com
In 1982, Merrill Lynch purchased 22 terminals and invested $30 million in Bloomberg's company.
In 1982, Bloomberg's first customer, Merrill Lynch ordered and installed 22 of Bloomberg's MarketMaster terminals.
Also, Merrill Lynch gave Bloomberg $30 million in exchange for a 30% position in his company.
Bloomberg's current offices in New York, feature 22 fish tanks, symbolizing the firm's initial sale of 22 terminals.
Source: Bloomberg.com, Forbes
Bloomberg's company became wildly successful during the 1980s.
In 1986, the company's name changed from Innovative Market Systems to Bloomberg L.P.
Bloomberg's company also moved to 499 Park Ave in New York.
In 1987, Bloomberg sold its 5,000th terminal and launched its trading systems platform.
In 1989, Bloomberg bought back 1/3 of Merrill Lynch's 30% stake for $200 million. With that valuation, Bloomberg's company was worth $2 billion only eight years after its launch.
Source: Bloomberg
Several other forms of media were launched in the early 1990s.
Bloomberg launched Bloomberg Business News, Bloomberg Radio, Bloomberg TV and Bloomberg Markets Magazine during the early 1990s.
Source: Bloomberg, encyclopedia.com
The Bloomberg Terminal became a necessary tool for traders.
The 100,000th Bloomberg Terminal was installed in 1998. Charging around $1,500/month per terminal, Bloomberg's privately held company became hugely profitable.
Source: Bloomberg, encyclopedia.com
His company has offices throughout the world and monitors dozens of markets.
In 2001, Bloomberg decided to run for Mayor of New York City, but as a Republican.
In late 2000, Michael Bloomberg decided that he wanted to run for mayor of New York. He switched from the Democratic party to the Republican party, because he thought he had a better chance of standing out among the Republican candidates.
Few considered him to be a serious contender in the mayoral race.
At the time, New Yorkers registering for the Democratic party outnumbered the Republicans five to one.
Source: encyclopedia.com, nytimes.com
He took office in 2002, and helped to rebuild New York after the 9/11 attacks.
The primaries for the mayoral race took place on 9/11/2001, but were postponed after the attacks. He later beat the Republican challenger in the rescheduled primary.
Bloomberg set a new campaign spending record for the mayoral race in New York City, when he spent $74 million. He eventually won over the traumatized New York City population, and took the mayoral race in late 2001 by a margin of 2%.
Bloomberg stepped down as CEO of his company, and appointed Lex Stanwick as the new CEO.
He was inaugurated mayor in January of 2002, accepting just a salary of just $1/year.
Source: encyclopedia.com, nyc.gov, Bloomberg
The Mayor helped New York quickly get back on its feet after the terrorist attacks.
Following the 9/11 attacks, many thought that New York would fall apart, crime would rise, businesses would leave and it might take several years to revive. Since taking office in 2002, Mayor Bloomberg has done the following:
- Welfare roles are down nearly 25%
- High school graduation rates are up 40% since 2005
- Crime is down 35%
- Since October of 2009, there have been nearly two times as many private sector jobs added in New York, compared to the next ten largest US cities combined.
He finished his final term as Mayor of New York City.
During his first term as Mayor of New York, he saw his approval ratings fall as low as 24%. But, they rebounded and Bloomberg, with his $85 million campaign, was re-elected mayor in 2005.
In 2007, during his second term, Bloomberg decided to leave the Republican party and declared himself a political independent.
During the difficult economic times of 2008 and 2009, Bloomberg decided that he needed to run for a third term. He contributed $90 million to the race and was became only the fourth NYC Mayor to serve a fourth term in the last century.
Source: encyclopedia.com, nytimes.com
As Mayor, he only accepted a salary of $1, but his net-worth is $33.2 billion making him the 15th wealthiest person in the world.
As of March 2014, Michael Bloomberg was listed by Forbes as the 15th wealthiest person in the world, with a net worth of $33.2 billion.
Bloomberg is also believed to be the wealthiest New Yorker.
Source: nytimes.com, Forbes
He has given over $2.4 billion to philanthropy over the years too.
Michael Bloomberg has donated more than $2.4 billion to philanthropic causes in public health, environment, government innovation, arts and education. In 2011 alone, he donated a total of $330 million.
His philanthropic gifts have placed him in the top five of the Chronicle of Philanthropy's list of America's top 50 philanthropists.
He has also donated to Princeton University, where there is a dorm named Emma B. Bloomberg Hall, after his daughter who graduated from the university in 2001.
Source: mikebloomberg.com
Not to say he doesn't get billionaire perks. Bloomberg has awesome homes all over the world from Vail to London.
Mayor Bloomberg, who could've lived in the New York mayor's mansion, Gracie Mansion, opted instead to live in his own $17 million Upper East Side townhouse.
He also owns a $10.5 million estate in Bermuda, a $10 million Victorian in London, a $20 million Southampton, NY estate and a $1.5 million condo in Vail. He owns 11 properties in total.
Source: nymag.com, nytimes.com, 27east.com
He loves his toys too, especially his helicopters and jets.
Michael Bloomberg began training to become a pilot in 1976, at the age of 34.
He has a passion for flying helicopters and rarely gives up the controls to his professional pilot, who primarily takes Bloomberg's $4.5 million six seat Augusta SPA A109s helicopter to its home in New Jersey after dropping off Bloomberg in NYC. He also keeps his private planes at the Morristown Municipal Airport in New Jersey.
Bloomberg has even personally flown friends and businessmen from New York to Albany aboard his helicopter for meetings at the state capital.
He's currently scheduled to receive an AgustaWestland AW609 Tiltrotor in 2016. This aircraft is similar to the military's V-22 Osprey.
Source: nytimes.com
When Bloomberg isn't flying his helicopter somewhere, though, he usually taking the New York subway.
Mayor Bloomberg and his investment banking girlfriend Diana Taylor, are both frequent users of New York's subway system.
Diana Taylor says that she rides the bus to work everyday, and Mayor Bloomberg rides the subway from 59th Street to his office in City Hall.
Source: nydailymail.com, nytimes.com
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