Monday, January 23, 2012

Is Barack Obama A One Percenter?

Over the past number of weeks, there has been a great deal of mainstream media coverage regarding the net worth of the Republican Presidential candidates.  In the interest of at least some balance on the subject, I thought that it was time to take a look at the value of another soon-to-be Presidential candidate; Barack Obama.  Rather than looking at his net worth on his last Public Financial Disclosure, I thought I'd take a look at what he was worth when he was running for office in 2008 and compare it to his net worth now just to see if his portfolio has shaken off the effects of the Great Recession, unlike so many Americans that find themselves out of work and underwater.

Let's look back at history first.  According to Open Secrets, in 2004, Barack Obama was worth between $200,004 and $400,000.  This rose to between $1,100,008 to $2,500,000 in 2005, fell back to between $456,012 to $1,142,000 in 2006 and the rose to between $2,022,016 to $7,356,000 in 2007.  Let's not forget that his book, Dreams from My Father was republished in August 2004 after his successful United States Senate primary race in Illinois and that the Audacity of Hope was published in October 2006, just months prior to Obama's announcement that he was running as a Presidential candidate.  That, in large part, explains the jump in his assets during the 2004 to 2007 time period.

For the President's net worth while he was running for the biggest office of them all, I am using the filing that he made on March 17th, 2009 when he closed out his personal financial reporting to the United States Senate.

Let's start by looking at his earned income for 2008.  As shown on this screen capture, the income from his two books, Dreams from My Father and The Audacity of Hope were rather substantial:

That's a total of $2,462,843 in book royalties in just one year or roughly 50 times the average household income of an American family.  Note that as part of the disclosure, no member is required to include any income derived from the federal government (i.e. his salary and benefits as a Senator).

The remainder of President Obama's assets in 2008 were relatively wide ranging, including between $116,000 and $265,000 in Vanguard Social and Mid-Cap Indices as part of his retirement plan for both him and his spouse.  Each of his daughters had between $100,000 and $250,000 in Bright Directions College Savings Plans.  His largest single asset in 2008 was his investment in United States Treasury Bills where he had assets of between $1,000,000 and $5,000,000 outside of his IRA and an additional $50,000 and $100,000 in Treasuries in his IRA as shown here, revealing that he appears to be a rather conservative investor:

Other relatively small items include a total of between $16,000 and $65,000 in two checking accounts.

Let's look at the range of Senator Obama's total assets in 2008.  On the low side, his net worth in 2008 was $1,486,000 and on the high side, his net worth was $6,190,000 with a midpoint of $3,838,000.

Here is a screen capture showing an addendum to the Disclosure:

That's a one half million dollar advance that was negotiated just days before he took possession of the Oval Office plus whatever royalties he receives on the abridged version of Dreams from My Father.  Reportedly, he received a $1.9 million advance for the delivery of three books back in January 2005.

Now, let's take a look at the President's net worth in 2010.  The first thing that sticks out is the difference in the balance of his joint checking account.  Rather than a maximum of $65,000 in two checking accounts, his balance was between $252,000 and $530,000 as shown here:

Living life large in D.C.!

In this Disclosure, the specific amount of royalties gleaned from his book sales is not given, rather, a range of income values is provided.  Royalties from Dreams from My Father ranged between $1,000,000 and $5,000,000 along with a $225,000 advance.  Royalties from Audacity of Hope came in at between $100,000 and $1,000,000 and the advance for his book Of Thee I Sing: A Letter to my Daughters, a book which was published in November 2010, came in at $133,334.  After tax proceeds from sales of the book, including the advance, will be donated to the Fisher House Foundation for a scholarship fund for the children of fallen and disabled soldiers.

The biggest difference is the President's investment in Treasuries.  In 2010, there were  Treasury Bills worth between $1,000,000 and $5,000,000 and Treasury Notes worth between $1,000,000 and $5,000,000.  With the type of data provided, it is impossible to tell whether the funds from the 2008 Treasury Bill were split into two smaller fractions or whether the family's savings have grown by that much as shown here:

Let's now look at the range of President Obama's assets in 2010.  On the low side, his net worth in 2010 was $2,802,000, up $1,316,000 or 89 percent from 2008.  On the high side, his net worth in 2010 was $11,830,000, up $5,640,000 or 91 percent from 2008.  The midpoint is now $7,316,000, up $3,478,000 or 91 percent from two years earlier.   Apparently any impact on the President's portfolio that could be attributed to the Great Recession seems to have evaporated by 2010.

In a quick look through President Obama's Disclosure for 2009, the royalty income from each of his two books ranged from $1,000,000 to $5,000,000, the same as in 2008 and slightly more than in 2010. We have no way of knowing the exact amounts, however, it is interesting to see that the royalties remained in the same range in the first year of the Great Recession when consumers were cutting back as they did in the prior year.

While President Obama's net worth is not in the same league as Mitt Romney, he is definitely well entrenched in the one percent, although, surprisingly, compared to the Bush Presidents, he certainly is not flush with cash.  Certainly, he worked his way up from "the other side of the tracks", however, had he not become Senator and then President, it is unlikely that his book sales, which are providing the vast majority of his income, would have become the gold mine that they are now.  The biggest difference between the current President and his recent predecessors is that he wrote his books prior to taking office and is now gleaning the rewards while still in office; most previous Presidents earn or earned relatively vast sums of money from writing books and giving speeches after they leave office.  Should that precedent continue, after he leaves office, Barak Obama could become an extremely wealthy man.

Sometimes, I think that we lose perspective when it comes to personal finances.  We hear so much about millions, billions and trillions of dollars that the numbers become meaningless.  If we want to gain a better understanding of our politicians' wealth, we need to remember that, according to the Census Bureau, in 2009, an average American family had a net worth of $96,000.  While some people feel that it is only the elite of America who have the necessary qualifications to become President or serve in Federal politics, I would strongly beg to differ.  Such has not been the case historically in the United States, particularly in the 1800s and early 1990s (think, in particular, peanut farmers who found themselves in debt to the tune of nearly $1 million when they left the White House and Harry S. Truman among others) and it most certainly is not the case in other similar democracies, most particularly Canada where the country’s current Prime Minister definitely not enter the Prime Minister's office as one of the country’s elite.  It definitely is worrisome that politics has increasingly become a game for a very, very small part of American society, leading to further division between the haves (who make the rules) and the have nots (who are supposed to blindly follow), between them and us.  


After reading a reader comment, I thought I'd add a bit more information.  According to Bloomberg, the number of what are considered ultra-high net worth households (more than $5 million in assets) was 1.1 million in 2010 (Federal Reserve data).  According to the United States Census Bureau, in 2011, there were 78,613,000 households in America.  So, with those figures in mind, Barak Obama's household is probably not in the top 1 percent, however, the distance between him and the one percent is extremely small if one uses the 2010 midpoint data of $7.316 million.  As well, while many American households have a lot of assets in a gross sense (i.e. including debt owed), the Census Bureau (as I noted above) states that an average American family had a net worth of only $96,000, a far cry from the Presidential family net worth.


  1. Having a net worth of a few million dollaars does not put one in the 1% class. Every doctor lawyer, insurance salesperson, real estate sales person and small business owner has a net worth in the low millions if they are at all successful. After all, a single family home can cost $250k and any kind of retirement account has to be close to $2million if a person is going to have any kind of middle class retirement. Many of these huge diesel RVs cost over $250k that you see thousands of in RV parks all over the country. Then consider the farmers who buy tractors that cost $250K and combines that cost close to $500K no the 1% are the uber wealthy who have tens if not hundreds of millions. They are the ones that have the millions they can contribute to politicans and their lobbyists in Washington. No, I doubt Obama will ever be in the 1% of the wealthy.

  2. However the real question is: "How much financial information has been sealed-up by President Barack Obama and hidden from public view through his general lack of transparency???"!!!

    1. Good point. Its after they have led country when the money rolls in.

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  4. @other-Anon

    Farmers who pay for tractors are making Expenses. Note that those are deducted from income. What counts is your income AFTER business expenses. It's not the farmer who sold for 1.1 million, it's the farmer who walked home with 1.1 million AFTER paying expenses.

    Also something to note: Obama tends to speak of himself as part of the 1%. Thus his "we (Obama and those like him) can pay a little more" comments.

  5. i see..... if you can't find anything wrong with the president's finances, accuse him of hiding something. that way you can always think of him as a no-gooder to support your side.

    1. If you are so supportive - why do you sign all your remarks Anonymous?

  6. $250K for a home where in the heck do you live slumville. In northern california for a nice area you are still in the $600-$700k level.

    1. Sorry Anonymous - but California is NOT representative of the majority of Americans. You CAlifornians came to WA and OR and drove our real estate prices right out of the market for most of us ... wish you'd stayed in CA where you were already living beyond your means. You didn't have to take the rest of down with your extravagant lifestyles!

  7. Nice hack job Junkie. If you used the word "However" one more time to try and justify spinning the truth, I would have puked on my keyboard.
    You answered your own question with such obfuscation that even YOU were confused at the end.
    Is Obama a 1%?? No. Spin it.Flip it. Twist it all you want.

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    According to this site, anyone with an adjusted gross income above $344K is a 1%

  11. Nice double speak: Seems a bit of a conflicting idea for Republicans to point out that Obama was successful before his presidency and to try to entrench him in Romneys lack of consideration of low earners. This article is plain and simple a double speak deflection of Romney's fortune.

  12. 5 years ago our house, which was a nice house, 1750 sq feet with full basement in Atlanta suburb was worth about $170,000. We just got the tax notice from the auditor and it is now worth $56,000 (and no - that is NOT a typo!) I can't say what's happening to the rest of the country but we have lost 2/3 of our 'portfolio" which was only about $300,000 including retirement savings. Tell me again how we come anywhere near the 1% or "elite"?

  13. After reading "Anonymous's" first post, I am devastated to learn that, as a former criminal trial attorney who is now an active member of the Judiciary - and who has a net worth well beneath (hundreds of thousands less in fact) the $1 Million dollar mark, I am not considered to be successful! Anonymous, I would suggest, has missed two very important points, the first of which that, financially, Obama is in essence the same boat financially as those he typically vilifies. Trust me, regardless the outcome of the next election, neither Obama nor any member of his family would ever "have to work" to survive. The concept of paycheck to paycheck living is now foreign to the Obama clan. The second point that Anonymous overlooks is that success is not always measured with dollar signs - although having several places to the left of the decimal point does indeed make day to day living an easier, less challenging prospect. (PS - as I do not have any of the required accounts to post this, looks like I too must adopt the moniker Anonymous, though my friends know me as "Ken")

  14. And I regret the one typo/misspelled word that I now see