OT RE:"It would not surprise me if there are not 20,000 to 50,000 millionaires maybe 100,000 in the whole area."
Kash, from SF Biz Times, the number of millionaires in the San Francisco metropolitan is 66,902; Oakland, 64,231; and San Jose, 55,378.
[San Francisco Business Times]
February 17, 1997
Bay Area strikes it rich
Boom time sparks explosion of millionaires
Mark Calvey and Sougata Mukherjee Business
Times Staff Writers
The Bay Area's robust economy, coupled with Wall
Street's roaring bull market, is creating many
more millionaires among us.
San Francisco was home to 38 percent more
millionaires last year than it was two years
earlier. Across the Bay in Oakland, the
millionaire ranks grew by 48 percent. In San
Jose, the number of millionaires rose 44
percent, according to Tampa, Fla.-based Payment
Systems Inc.
"The stock market has created a new set of
millionaires, and wealth is growing faster than
any time in recent history," said John DeMarco,
who heads the affluent research group for
Payment Systems, which acquired San Francisco's
Spectrem Group last year.
For the first time in this country's history,
people between the ages of 35 and 54 are the
fastest-growing segment of millionaires,
overtaking the 60-plus group.
According to Payment Systems, 51 percent of the
nation's millionaires fall with the 35-to-54
range. In the mid-1970s, research showed that
more than 60 percent of the millionaires were
older than 60.
Many of these new millionaires are benefiting
from the booming technology sector.
"We have clients who were on macaroni-and-cheese
diets not that long ago," said William Timoney,
executive vice president of private banking and
investment services at Bank of America. He also
said it's not uncommon for everyone involved in
a start-up operation to reap the rewards of a
successful initial public offering. Even the
receptionist answering the telephones was
probably getting partially paid in stock
options, he said.
In Silicon Valley, so many young workers have
their wealth tied to volatile tech stocks that
it's creating a phenomenon some are calling the
1 o'clock surge. Silicon Valley workers are
returning from lunch about the time the stock
market closes and surging onto the Internet to
check stock prices and see how much they're
worth before getting back to work.
The proliferation of the young wealthy is also
creating unique challenges for Bay Area bankers.
Union Bank of California, for instance, is
trying to design its new private banking offices
with the stately look that the older, more
traditional wealthy customers prefer while
having a hip appearance that will appeal to
younger clients. Younger clients are also more
apt to deal with their bankers on the Internet
rather than on the golf course.
The new millionaires include people like Irving
Weissman, a Stanford immunologist, and his
colleagues at Palo Alto-based biotech company
SyStemix Inc.
Weissman co-founded the company in 1988 and
quickly patented technology that eventually
could externally produce oxygen-carrying red
blood cells.
So impressed was Sandoz Ltd., the giant Swiss
drug company, with the possible introduction of
new biological entities into the marketplace, it
paid Weissman and his partners $392 million two
years ago for a 60 percent stake in SyStemix,
making Weissman and his group instant
millionaires.
Since Weissman and other entrepreneurs and
executives of technology companies make up the
majority of the new millionaires, cities that
have recently fostered their own silicon valleys
witnessed the most dramatic growth in their
millionaire populations. The number of
millionaires in Austin soared 130 percent to
20,454 and Portland's millionaire ranks doubled
to 31,262. Back in the Bay Area, the number of
millionaires in the San Francisco metropolitan
statistical area last year rose 38 percent to
66,902; Oakland, 48 percent to 64,231; and San
Jose, 44 percent to 55,378.
The spawning of new millionaires is part of
national trend in which the millionaire
population is growing almost 20 times faster
than the general population. By the end of 1996,
there were more than 4.8 million households
whose net worth exceeded $1 million, not
including the value of their residences.
Household stock portfolios now outweigh home
equity for the first time in four decades. Stock
holdings were valued at $5.5 trillion in 1995,
compared with home equity of $4.2 trillion,
according to the Federal Reserve.
With much of the new wealth in stocks, a bad day
on Wall Street can be devastating. Just ask
those who have much of their wealth in Menlo
Park-based Sola International Inc., which lost
about a third of its value this month when it
announced earnings would not meet expectations.
Those riding the IPO boom also face serious
liquidity issues since they typically have sales
restrictions on their stocks as insiders.
"They suddenly get a champagne appetite, but
they don't have the liquidity," said C. William
Criss Jr., western regional manager for the
Chase Manhattan Private Bank in San Francisco.
"They've got the wealth, but not the liquidity." |
