People like myself, who study financial behavior, often marvel at how accurate a picture a person’s financial choices paint of their personality and attitudes. The purpose of this type of analysis is not to judge. A heavy debt load, for example, can just as easily mean that a person was willing to make a big life change or take a risk in their career choice, instead of the negative conclusions about character and spending habits that ‘critics’ tend to draw about debt.
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The Obama’s – who have between $2 million and $7 million in assets – have most of their investment dollars in U.S. Treasury Notes. According to the report, their Treasury Note holdings are between $1 million and $5 million. In addition, they have between $250,000 and $500,000 in low risk treasury bills.
As most financial planners will tell you, a diversified portfolio is a smart portfolio. The Obama’s holdings also include stock. They have between $300,000 and $750,000 of their retirement money invested in different Vanguard 500 Index Funds, which invests in 500 of the largest companies in the United States. In addition, they have four different 529 college savings plans, each worth between $50,000 and $100,000.
“If they were the normal American millionaire couple, their investment choices are most likely woefully low risk if these amounts comprise the bulk of their net worth. It’s possible they could run out of money before they run out of life,” says Certified Financial Planner Rick Kahler, also president of Kahler Financial Group.
“However, given his government pension, and the earning capacity they have after retiring from the Presidency. Their largely T-Bill investment portfolio can be framed more as an emergency reserve for their lifestyle, and is therefore completely acceptable,” he adds.
President Obama currently earns $400,000 for his role as commander-in chief. He and his wife also made combined royalties ranging between $45,000 and $150,000 for their books. Like many Americans, they also have a mortgage. They are paying off a 30-year rate mortgage that ranges between $500,000 million at a rate of 5.625% for their home in Chicago.
If the Clinton’s are any indication, that mortgage will soon be a thing of the past. The couple has earned at least $30 million since the beginning of 2014, largely from speaking engagements. A far cry from being “dead broke” and in debt when they left the White House, as presidential candidate Hillary Clinton told ABC’s Diane Sawyer, a financial position that appears to be in no small part the result of President Bill Clinton’s legal bills.
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