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  1. #1
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    Default Is Barack Obama good at managing his money?

    January 19, 2009

    Is Barack Obama good at managing his money?

    All eyes will be on Barack Obama, tomorrow, when he steps into George Bush's size 10 shoes and is sworn in as the 44th President of the United States of America.
    The 47-year old senator from Illinois will take on the responsibility of steering the world's largest economy through the dangers of the global recession.
    Will he be any good at managing the nation's finances? Perhaps we can get some idea by examining how successful he is at managing his own.

    Unlike Britain, where MPs do everything they can to hide the truth about their earnings and expenses, freedom of information actually means something in America.
    Politicians have to declare their interests, including their assets, investments and debts every year. The system is not perfect - the rules allow senators to report assets in broad categories - but it's better than anything we see on this side of the Atlantic.
    And a look at Mr Obama's personal finances gives a fascinating insight into the mind of the man who will soon be the most powerful person on the planet.
    Income
    On the campaign trail, Mr Obama, 47, often talked about how financially tough his early life was.
    He has left all that behind.
    In 2007, (the 2008 disclosures will not be published until May) Mr Obama earned a tidy $4,094,690 (2.8m). This mainly came from advances against book royalties - nice work if you can get it - including more than $3m from Random House in New York, publisher of the New York Times bestsellers Dreams from My Father and The Audacity of Hope: Thoughts on Reclaiming the American Dream.
    Intriguingly it also included $200,000 for a children's book, which he planed to work on with his wife, Michelle, and their two daughters. I guess that might be put on hold until after his stint in the Oval office.
    Spendthrift or savvy?
    A $4m paycheck suggests a fair degree of financial shrewdness - Mr Obama was a lawyer so presumably knows how to negotiate a good deal - but he wasn't the top earner among his politician colleagues.
    That accolade went to his bitter rival in the race for the Democratic presidential candidacy, Hilary Clinton, with a declared income of $10m. Most of this, admittedly, was made by hubby and ex-president Bill. He has made a packet, like our own ex-leader Tony Blair, from conference and after dinner speaking. In 2007, Mr Clinton was charging up to $425,000 a speech.
    Debts
    Too much debt got the world into the financial mess we face today. So it would be nice to think that the person in charge of the world's biggest economy is not up to his neck in the stuff.
    The good news is that Mr Obama had no loans or credit card debts worth more than $10,000 (about 6,000) in 2007. Anything above that and it would have to be declared. Nor had he dabbled in buy-to-let or property speculation.
    Not everyone in the presidential race was so debt-free. Mrs Clinton racked up "between 15,001 and $50,000" on a Citigroup credit card charging 15 per cent.
    Republican rival John McCain also appears prone to slap it on the plastic, or, more accurately, his wife does. Most of the senator's debts, of between $3m and $5m, are attributed to his spouse Cindy.
    That included at least $225,000 in debt on an American Express (Amex) credit card. A credit card held jointly by the couple, and carrying $10,000 to $15,000 in debt, charged a hefty 25.99 per cent interest.
    Spendthrift or savvy?
    Once again, Mr Obama appears to be the embodiment of financial prudence, but it may not be that simple.
    A loophole in the disclosure rules means that US politicians don't have to reveal the size of their mortgage on their personal residence, which is most people's biggest item of borrowing.
    However, we do know that in 2005 he bought a Georgian style mansion near the University of Chicago for $1.65m. The Obamas took a $1.32 million mortgage from Northern Trust to help to pay for the house, so they're not afraid of going into the black if necessary.

    Investments
    Mr Obama has a multi-million dollar investment portfolio spread across a number of funds some of which have held up well as stock markets have crashed around the world, while others have been duds.
    In the dud camp stands his investment of at least $150,000 into the Vanguard FTSE Social index fund, down 42 per cent last year. Another investment of between $1,001 and $15,000, the Goldman Sachs Large Cap Value fund, fell an eye-watering 37 per cent in 2008.
    However, some of his funds did much better during last year's stock market blood bath. Mr Obama's $1,001 to $15,000 in the PIMCO Total Return fund, was up 4 per cent in 2008. Not a sparkling performance but at least it didn't lose money.
    Spendthrift or savvy?
    The performance of Mr Obama's investments during the credit crunch has not been pretty. But many City or Wall Street professionals would regard him as a model investor. He doesn't have all his eggs in one basket, spreading his assets to lower risk. Also he has avoided flashy hot investments, some of which have plunged by more than 90 per cent and are now worth just pennies - or cents in his case.
    He has also made ample provision for his children: investing more than $200,000 into college savings accounts for his two daughters. Seems like a safe pair of hands.
    How much is Mr Obama worth?
    Estimated at between $2,022,016 and $7,356,000 Mr Obama is in better shape that most Americans to make it through the recession.
    Although it is a huge sum it makes him only the 31st wealthiest senator.
    Presidential rival John McCain is richer ranking 12th, with a net worth of $20,411,154 to $36,493,006. Mrs Clinton is one place higher, at 11, with between $10,359,018 to $51,216,999 of net assets.
    Their wealth pales into insignificance next to that of the richest senator in Washington DC, Jane Harman, a Democrat who is estimated to be worth a cool $236,280,153, and possibly up to $558,544,002. Most of her money is invested in Harman International Industries, an electronic company founded by her husband.



    http://timesbusiness.typepad.com/mon...-presiden.html
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  2. #2
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    Default

    that last bit about the wealthy reminds me of a kerry packer story i heard once

    apparently at a casino in los vegas he once cut in on a texan? millionaire during a game

    the man wasn't impressed and you told kerry he couldn't join the game as it had already started and the stakes were probably too high for him anyway

    kerry: "too high for me, how much do you think you are worth all up?"

    man: "upwards of 15?million"

    kerry: pulls coin from pocket "tell you what, we're both gamblers, double or nothing, i'll flip you for it, or you can let me join the game"
    have you defeated them?
    your demons

  3. #3
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    probably more accurate to depend on the wiki entry

    Packer is famously quoted for an exchange in a poker tournament at the Stratosphere Casino, where a Texan oil investor was attempting to engage him in a game of poker. Upon the Texan saying "I'm worth $60,000,000!" Packer apparently pulled out a coin and asked nonchalantly, "heads or tails?",referring to a $100,000,000 wager (according to Bob Stupak's biography). Some variations of the story put the sum at $60-100,000,000 and claim the line was "I'll toss you for it".
    have you defeated them?
    your demons

  4. #4

    Default

    A better question:

    Will he be good at managing OUR money?

  5. #5
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    Sarah Palin said her lack of wealth has been a major disadvantage in Washington and that Caroline Kennedy was the front runner for the NY Senate due to her wealth.

    Cheers,

    Donna
    PropertyTalk Blog - property articles

    BusinessBlogs - the best business articles are found here



  6. #6
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    Quote Originally Posted by donna View Post
    Sarah Palin said her lack of knowledge has been a major disadvantage in Washington and that Caroline Kennedy was the front runner for the NY Senate due to her name recognition

    Cheers,

    Donna
    there, fixed it for you
    have you defeated them?
    your demons


 

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