As I was perusing the latest copy of Kiplinger’s last night, I came across something rather shocking: Joe Biden and wife has a total net worth of only $215,000. Wow. At $300k myself it means we’re beating them out by almost 50%! Wild!
They break it down in the article, which I’ll get to in a bit, but the whole purpose of it all was to show that even people of high stature could benefit from paying closer attention to their money. I liked this quote a lot from it:
“They may be the most powerful couples in the world and rub shoulders with the likes of George Clooney and the Queen of England, but the Obamas and Bidens face many of the same financial challenges as the rest of us – neglect, inertia, poor diversification and spotty investments.”
Now of course they’re in a better position to IMPROVE their situations a lot faster than any of us common folk are – and really they’re not that horrible anyways – but still. Kinda makes you feel better about not being on top of it 100%, eh? ;) Here are some problems Kiplinger sees with their setups:
- Both the Obamas and Bidens have high-cost loans out right now and should be refinancing (ya know, with all the time they have, haha…). Obama has a mortgage on his old Chicago place at 5.625% interest, and Biden – while doing better in the mortgage department – has other loans out for over $65,000 in the 7.5% and 9.9% range! OUCH.
- The bidens also have NINE total checking and/or savings accounts in their names too – ranging from anywhere between $1,000 to $15,000 in deposit. Perhaps it’s time for some combining a bit?
- As for investments, the Obamas and Bidens are on the opposite scale of things: The Obamas are far too conservative and poorly diversified, while the Bidens are too spread out (kinda like their 9 accounts too – guess it’s a trademark?)
- The Obamas have 92% of their money in pure cash – at around $4.7 Million (WOO!) – but only $325,000 in stocks. And in fact, just in ONE fund: The Vanguard Index 500. If I were Vanguard I’d be using that knowledge to market the $hit out of my products! Haha.. “The president ONLY believes in OUR funds!” (And randomly enough I, too, am invested in that same Vanguard fund)
- The Bidens have 6 small cash-value life insurance policies, of which they’ve taken loans out against between 5%-8%, and also have what appears to be a tax-sheltered annuity that’s invested in 11 sub-accounts. Something Kiplinger says is the opposite of what diversification is about.
The article goes on to say a lot of this could also be stagnant due to it being an election year and what not, but at the end of the day they should still reconfigure their game plans soon. On the plus side, both parties have some great stuff going on too! (Besides ruling the country, of course):
- The Obamas have between $100,000 and $200,000 in each of the girls’ college savings accounts. And you’d be interested to know that they’re 529 accounts! So I guess they believe in them too :)
- And the Bidens will both have pensions when it’s time too: Joe with around $90,000 annually Kiplinger estimates, and his lovely wife at $32,000 which she’s actually getting already.
Of course neither party really has anything to worry about for the rest of their lives anyways, at least financial-wise, but it’s still rather interesting to see how they each personally do things. The real winner among them all? Mitt Romney ;) Love him or hate him, he’s damn good with his money. It would be interesting to see what his net worth is now that his latest tax filings have been released. Or, I guess I can just Google it and find out haha… $250 million. That’s some serious dough!
Actually, that last link reminds me – a killer site on net worths of celebrities is CelebNetWorth.com. Been checking it out the past few weeks and it’s really addicting. I like to play a game called “Which celebrity am I worth more than?” Haha… I usually lose 99% of the time, but every now and then I get to feel special and beat my fists across my chest a la King Kong. (Like when I click on Gary Busey (-$500k) or Kate Gosselin (+$200k))
The point of all this today? We all need help with our money. Whether you’re a famous politician or just famous to all your friends, we all need to pay attention and continually make sure we’re heading in the right direction. And anyone reading these words right now as I type them are already ahead of the game – congrats ;) Not everyone cares about finance blogs! So keep it up my friends, it means you’re ready to learn and take some killer action.
Now we’ll see if the personal finances of these politicians will matter in the election! What do you think? Should the net worths of presidential candidates sway your political vote?
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PS: Do your best not to turn the comments into a political bloodbath, okay? :)
(Photo credit: MCS@flickr)
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Empower account instead (formerly Personal Capital)
Empower is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Empower - check it out here: Why I Use Empower Almost Every Single Day.
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I don’t really care about a candidate’s personal finances. Obama will be making plenty of money giving speeches and writing books after he gets out of office. My guess is he is invested in treasuries for political reasons.
I also heard somewhere (not sure if it is true or not) that once you’re president you don’t really touch your investments and someone else manages them for you. Would make sense because I doubt they have time to think about that stuff.
With public figures like that, they actually have huge untraditional assets that aren’t really counted. Joe Biden can probably make many public appearances after he leaves public office and get paid lots of money for them for the rest of his life. Just because of what he once was. That’s kindof like a huge annuity that he can tap at any time after his term of office is over.
Can the rest of us say that? I know I can’t. So even though my numeric net worth is over 50% more than Biden’s, I think he’s still got a lot of “unvalued” assets that aren’t going into that equation.
If he is really only in VFINX than he is costing himself money. He should be in VFIAX (admiral shares of the same fund) since the expense ratio is only .05 versus .17 for VFINX. He is well above the minimum to switch.
@Lance, much like Romney, I’m sure Obama has a blind trust managing his investments, since he actually does have enough pull to swing the market.
As far as their worth swinging votes? I don’t think it should, but it probably does to a few people. I prefer to look at their stances on issues I can about and then make my decision on the candidate (who might be a third party) I will support.
This is interesting information. Biden must have a massive mortgage on that huge house of his. It doesn’t really make me feel good to know that I have a much higher net worth than someone twice my age who is a heartbeat away from running our country. And $4.7 million in cash? Really? There’s gotta be some specific reason for that. Either way, both these men have incredible earning potential ahead of them, obviously. New car? I think I’ll make a speech. I don’t even have to write it, just show up and read it. Vacation to Europe? I’ll get someone to ghost write a book for me.
What interests me far more is their levels of charitable giving. Biden’s is piss poor. Totally pathetic if you ask me. I think it says a lot about a person how much they give. At least Obama does better there. And Romney does very well in that area.
@Lance @ Money Life and More – Yeah, probably true. Plus you don’t want to give the impression you’re favoring one area over another, or that you have inside knowledge etc/etc. I bet there’s all kinds of crazy rules you have to follow once in there… Maybe I could interview him about it one day? ;)
@Mrs. Pop @ Planting Our Pennies – Oh yeah, no doubt about that. He’s just chillin’ right now enjoying the ride and can tap his assets (both phsyical and non) anytime he wants. Being in office is the gift that keeps on giving forever! Haha… though that’s not taking away from how hard I’m sure it is too. I know I wouldn’t last a day in office.
@Brian – That’s a good way of doing it too. It’s pretty wild how many outside variables really contribute to poeple casting their votes one way or the other. And I put myself into one who factors them in too, just not regarding their personal finances. I could never vote for someone I feel like I couldn’t trust, or who is downright nasty, even IF they’d be better for America in the long term. And I’m guessing others are the same way as neither candidates ever try and come off as anything other than super nice and genuine, haha… Always gotta look good!
@MainlineMom – Yeah, Biden has a lot of mortgage debt it seems like from the article. And I really don’t get why he has so many outstanding loans out there? So strange to me… but ofcourse he’ll be fine anyways as you mentioned. I don’t know how much either of them give to charity, but I def. know Romney is a BEAST in that area. Which I think is awesome. Even though people will say he SHOULD give more cuz he makes more, yada yada yada. I find a lot of people complain about certain things, when they don’t match up whatsoever to their own beliefs ;) But that’s a whole other topic for another day… Thanks for stopping by today!
Wow that’s interesting! No, I already had in mind who I was voting for and what that make or have made doesn’t make much of a difference. One thing you mention was things being stagnant because of the election. My producer is blaming our slow work on it being an election year. I don’t know how that would affect things, but who knows, maybe he is right?
No wonder I like Obama, we have similar investment strategies, CASH!
Wow, 100-200k in the 529? That’s pretty awesome considering how young their kids are. Great job prez Obama. Yeap, Obama and Biden will both make a ton of money after their terms are up. I think that’s good for them.
“The Obamas have 92% of their money in pure cash – at around $4.7 Million (WOO!) – but only $325,000 in stocks.” >>>> The Obamas know something you don’t !! :D
Google “Joe Biden’s Net Worth”. Let me know what you find as the top result. :)
I am very surprised by Biden’s net worth (still way more than ours!), but then again with those awesome pensions upcoming savings are not as crucial. I’d be interested to know why he has taken out loans instead of saving up/cash flowing. Does it have to do with his role as a politician (campaigning)?
Very interesting. I won’t be influenced one way or another with how much personal money the candidates have or how they invest. Personal finances and political finances are two completely different animals. Even so, I’m a little surprised at Biden’s net worth!
The 200K cannot include the present value of his pension. If you are including your retirement accounts in the 300K, then Biden should get to count the PV of his pension which would put him in a much higher bracket.
The Prez is all cash? Does he know something we don’t? Like the fiscal cliff which might crash the stock market?
Even if Social Security and Medicare crumble, an ex-VP’s pension will be set in stone. With benefits like an ex-VP, who needs net worth? :)
This explains it all! No wonder our country is in the toilet.
@Drop Dead Money – I’m guessing he’s all cash trying to show the country that he believes in the dollar….just a guess. At least he’s not all gold bars – then I think we should be worried….not that all cash is a bit strange
I am pretty sure they have more net worth than I do! Pretty sure! ;-)
@Budget & the Beach – I think a lot of industries are hit when elections come up – I’d totally believe it :)
@StackingCash – Haha… thought you’d like that one ;)
@Joe @ Retire By 40 – I know right? They def. believe in education!
@Pauline – Haha, you never know ;)
@Kevin @ Thousandaire.com – Woohoo! Hello there, friend! Though it looks like now you have a competitor by the name of Dave Manuel trying to beat you out – uh ohs!
@Emily @ evolvingPF – Huh. Hadn’t thought about that actually, perhaps? I guess it could be a lot of things considering they’re getting up their in age… They’ve had a lot of time to take loans out for stuff :)
@Christa – I was too!
@Lisa – Hmmm… you may have a point there. Maybe I should then add other stuff into my net worth too, like the value left on my years left to work and/or other properties that I could sell at any given point like this blog? :)
@William @ Drop Dead Money – I guess just to stop finance bloggers like us talking about them! Haha…
@David Hunter – I won’t comment on that ;)
@frugalredneck – Oh man if it were all gold bars that would be CRAZY!!! Haha… I think Romney has a TON in gold and silver actually, but probably the right amounts due to his massive worth.
@debtgirl – Maybe not for long though if you keep at it! :)
With a net worth of juuuuust about zero, they’re all doing better than I am…except Gary “Spaceship” Busey.
Aw crap. Well 2nd isn’t bad.
I heard somewhere that Biden was actually one of the only senators that didn’t have a net worth over $1 million. He was the poorest in his profession. I don’t know where I heard that though so don’t quote me…
I think that looking at the candidates’ personal finances is very insightful and relevant for the upcoming election. The economy and the national debt are core issue for many voters. While the finances of a country are far more complex than any individual’s finances, the principles are very similar. For example, in both cases spending more than you earn leads to debt.
If someone has mismanaged his own finances, what tells us that he will do a better job with the finances of the country?
I guess it’s a good thing the Bidens will get a massive pension, instead of retiring on Social Security, like us common folk.
First of all, the folks in the Kiplinger article assuming that the rule of thumb “a couple this young needs to have 40% in stocks” is applicable to the Obamas is just crazytalk. While the majority of couples around their ages have many earning years left and need the boost from compound interest working in their favor in their retirement accounts, the Obamas might well decide they don’t want to make much money in the future. If they stopped working come January and never made another dime, they could be perfectly comfortable (former presidents all make 150k/year in pension, so even if they had zero net worth today they’d be better off than 89% of American households).
Once you’ve made 4 million, you’ve earned the right to DECIDE what ‘mismanaging’ your money means to you. Didn’t it ever occur to some of you that there might be some MORAL (not just political) reason to not be a greedy sack of manure?
@Sandy – Haha… You’ll be up in the plus in no time, I’ve got faith in you :)
@Kevin @ Thousandaire.com – I bet it moves back up later though – your post was pretty dope.
@Chris – Huh. Well, after reading this article I guess it’s not that surprising then, eh?
@The Financial Planner – I’m sure a lot of people look at it that way too :) Although in some cases I don’t necessarily think it goes hand in hand. Take doctors for instance – would you trust one that chain smokes? They know how dumb it is more than anyone, but does that mean they’d influence YOU to smoke more or give you bad advice just beause he/she does it? Could relate to finances too. Some people are better managing other people’s money because they can take the emotion out of it, whereas whe it’s our own it gets trickier. All interesting things to think about either way though :)
@Bret @ Hope to Prosper – It’s just crazy how fast pensions have gone out of style in careers, ya know? just a couple of decades ago they were all the rage!
@becca – I totally agree – you’re allowed to do anything you want with your money, ESP if you’ve got millions in the bank! :) I don’t know how morality plays into it all (are you saying it’s bad to make tons of money?), but the Obamas are def. gonna be well off no matter what they do with their hard earned dollars for the rest of their lives. As they should be – they’ve been killing it!