How Did Michael Bloomberg Make His Money?

Michael Bloomberg is one of the most well-known names in New York. He founded Bloomberg L.P. He was mayor of New York City from 2002 to 2013. And attempted a 2020 presidential run as a Democratic candidate.

His estimated net worth of $54.9 billion makes him one of the 10 richest people in the world. But exactly how did Michael Bloomberg make his money?

Bloomberg L.P. is a privately owned company he created in 1981. It’s a respected name on Wall Street; it focuses entirely on the stock market and related market data. It wasn’t long before the company fed information to firms like Merrill Lynch. It also went on an aggressive acquisition spree.

The path to success isn’t a straight line though. Bloomberg himself jumped in and out of his own business to become mayor and a philanthropist. He also pledged to give his company up if he ever became president, something he toyed with on several occasions.

Below, we place Bloomberg under the microscope to determine how he made it happen.

How Michael Bloomberg Got Started

Bloomberg was born in Boston in 1942 and eventually graduated with a Master of Business Administration (MBA) degree from Harvard Business School. By 1973, he became a general partner at a large Wall Street investment bank called Salomon Brothers.

He worked there until 1981 heading equity trading and systems development. At that time, Phibro Corporation bought the firm and paid him $10 million for his equity in the firm as severance.

Because he was already working on an in-house financial data system, Bloomberg used the money from his severance to create Innovative Market Systems (IMS).

The company delivered real-time market data and other analytics for Wall Street firms. He understood the premium these investors could afford, and they happily bought into his analytics.

As the financial intelligence business gained popularity, Bloomberg gained money.

The company was renamed to Bloomberg L.P. in 1986, which brings us to the next question.

Is Michael Bloomberg Related to Bloomberg News?

Bloomberg News and Bloomberg Radio are among the many subsidiaries of Bloomberg L.P. It also owns Bloomberg Professional Services, Bloomberg Television, Bloomberg Markets, Bloomberg Pursuits, Bloomberg Equity Exchange, Bloomberg Government, Bloomberg Law, Bloomberg Opinion, Bloomberg Tradebook, Bloomberg Beta, and more.

While successful, the company was known for a corporate culture of toxic masculinity in the 1980s and 1990s. This plunged him in controversy over sexist remarks and accusations that women were held down (one time even physically) in his businesses.

He’s also responsible for NYC’s controversial stop-and-frisk policy. This police tactic allowed police officers to stop and search whomever they pleased on the streets of New York City. The policy is criticized for increasing instances of racial profiling and police brutality.

Despite rampant discrimination, Bloomberg is largely heralded for his fiscal policies. As mayor, he turned the city around from a $6 billion budget deficit to a $3 billion surplus. His political career is largely viewed as a success, despite is flaws.

Some argue he’s more successful than fellow NYC tycoon Donald Trump. So, how did he make his fortune?

How Did Michael Bloomberg Make His Money?

Bloomberg L.P. is responsible for Bloomberg’s fortune. He transformed his $10 million Salomon Brothers severance into an 88 percent stake in the media and financial data business. He ranked ninth on Forbes’ 2019 list of wealthiest people in the world but fell to 16th by 2020.

The company generates most of its revenue from subscriptions and fees, and it reported $10 billion in revenue in each 2018 and 2019. Because it’s privately owned by Bloomberg and Merrill Lynch (which owns a 12 percent stake), exact financials aren’t known.

Still, professional services are estimated to generate 90 percent of revenues. The Bloomberg terminal is a computer system that analyzes real-time market and financial information. It also provides robust data analytics to apply to this data.

The average Bloomberg Law subscriber pays $500 per month. Bloomberg Professional Services costs $1,000-$2,000 per month. Bloomberg Government subscribers pay $5,700 per month. These massive fees are supported by the company’s venture capital business, a $75 million fund that includes brands like Codeacademy.

How Is Michael Bloomberg So Rich?

Bloomberg is rich by understanding both investments and technology. He was a successful equity trader and technologist for a large Wall Street brokerage before making this data available to anyone who wanted it. Basically, he’s a Wall Street insider who made tools to help other Wall Street investors.

This type of number crunching is what makes Bloomberg and others like him rich. He’s rich because he held full control over his company.

By comparison, Jeff Bezos owns 11.1 percent of Amazon (AMZN) and Mark Zuckerberg owns 29.3 percent of Facebook (FB).

Specializing in stocks and investments gave Bloomberg an inside track to that world, and he avoided all the common trappings of a public offering and angel investors.

Besides an early investment from Merrill Lynch, he used his own data to practice what he preaches and prove he’s a financial wizard. 

What Companies Does Bloomberg Own?

Michael Bloomberg owns a variety of companies that are mostly branded with the Bloomberg name.

His company also purchased WNEW radio, BusinessWeek, New Energy Finance, Bureau of National Affairs, PolarLake, and CityLab. Each of these companies expands its foundational focus of media and market data.

Thanks to this empire, Bloomberg propelled himself to billionaire status. He leveraged that to become mayor of New York City and turned that city into a thriving operation too.

All this success comes with a dark side though, as Bloomberg companies are known for a toxic masculine atmosphere echoed by controversial remarks from its head.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.