Monday, May 27, 2013

Omaha's surprising wealth

Downtown Omaha from the north. Photo: Patrick Hawks, via Wikipedia.
Anyone who lives here can tell you that Omaha has an unusual amount of money for a city of its size — although the largesse may not be particularly well distributed.
     The revelation of how much money elicits anything from raised eyebrows to gaping disbelief.
     Unlike Texans, Midwesterners aren't notorious for flaunting their loot (Willy Theisen notwithstanding) and flyover money isn't visible from planes.
     But the dough is here, and in 2005, Del Jones of USA Today confirmed the perception.
Omaha has tremendous wealth, industry and influence for being in the middle of nowhere. It ranks eighth among the nation's 50 largest cities in both per-capita billionaires and Fortune 500 companies.
     The article was accompanied by two charts which reveal that Nebraska's largest city had 9.9 Fortune 500 companies per million people, vs. 5.3 for New York City. It had 7.4 billionaires per million people vs. 4.5 for Los Angeles (!), 3.8 for Chicago, 3 for New York and 2.7 for Miami.
     Omaha is said to have at least 100 families worth in excess of $100,000,000 each, many of them early Berkshire-Hathaway investors who rode the Warren Buffett train to Fat City.
     (In 2009, Berkshire-Hathaway actually bought the Burlington Northern Santa Fe (BNSF) railroad outright for $34 billion. The only U.S. railroad bigger than BNSF, the Union Pacific, is headquartered in... Omaha.)
     Below: Ralph Nader promoting a book at Borsheim's Fine Jewelry, in Omaha's Regency neighborhood. At 62,000+ sq. ft. with 100,000 items in inventory, Borsheims is said to be the largest single-location jewelry store in the world and is where Bill Gates bought Melinda her engagement ring. During his shopping expedition at Borsheim's (by then a Berkshire property), Gates was squired by pal Buffett who, ever the salesman, gave him the following advice about buying a ring:
"Look, Bill, this is none of your business, but when I got married, I spent 6 percent of my net worth on the ring. I don't know how much you love Melinda."
The 300-year-old Indian "Princie" pink diamond, sold
April 16, 2013 by Christie's in New York City.
     In 1994, when Gates bought his engagement ring from Borsheim's, he had just edged out Buffett as the wealthiest American, reckoned by Forbes to be worth $9.35 billion. A ring worth 6% of that would have cost $561 million, a sum more than ten times the cost of any diamond ever sold, before or since.

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