Photo: AP Images
Michael Bloomberg started his New York City story sweating in his underwear in Salomon Brothers’ vaults.And in a little over 20 years he turned a $10 million severance package from that now defunct bank into a multi-billion dollar company Wall Street can’t live without.
The inspiring journey, with plenty of highs and lows, is one of a man who enjoys both success and philanthropy.
His current gig is only paying him $1 per year, but it’s not like he needs the money. According to Forbes, he’s now the 11th richest man in the world.
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.
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.'
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.
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.
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.
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.
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.
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.
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.
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.
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 10 largest US cities combined.
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.
And though he only accepts a salary of $1 for that job, his net worth is $22 billion making him the 11th wealthiest person in the US.
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.
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.
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 Agusta 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.
When Bloomberg isn't flying his helicopter somewhere, though, he usually taking the New York subway.
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