Palin's and Biden's Finances

Here's more perspective to add to our conversation about the candidates finances we started the other day.

This article details the personal finances of VP candidates Sarah Palin and Joe Biden. Here are a few of the highlights from the piece as well as my thoughts on them:

Palin, the Alaska governor whose selection by John McCain for the Republican ticket has riveted both sides of the political aisle, would be the poorest vice president in recent memory. Biden, Barack Obama's almost-taken-for-granted running mate, would be as well.

In a political world usually divided between the rich and superrich, the Palins and Bidens are decidedly middle class. And their investments are on the same scale as yours and mine.

Interesting. It's not a bad thing to have someone closer to the "masses" in net worth in the White House, huh? But are they really on the same scale as the rest of us? Read on.

Not counting their homes, which are exempt from reporting requirements, the VP candidates would struggle to find $1 million between them. Their retirement nest eggs -- which for both candidates are almost their entire net worth -- are modest in the extreme, amounting to somewhere between $300,000 and $400,000 for each family.

They are also, on the liberal-conservative scale, upside down. Democrat Biden has most of his money in a tax-sheltered annuity, that most timid of investment vehicles. The Republican Palins (husband Todd is the investor) are much bolder, venturing into individual stocks and exotic exchange-traded funds, or ETFs.

Isn't there something missing here -- like their ages? Palin is waaaaaaay younger than Biden, so her net worth is actually pretty good (compare it to what most 40-year-olds have.) Biden on the other hand is much later in life, so his net worth is comparably lower given this.

And as for how they invest, this seems also to be dictated by their ages -- one younger and more aggressive and the other older and more conservative.

Seems like the writer of this piece should have considered the ages of the candidates -- seems like a pretty meaningful (and obvious) issue impacting their finances.

[Palin] earns $125,000 a year as governor, and Todd Palin earns almost exactly as much from seasonal jobs, including salmon fishing, oil-rig maintenance and his championship snowmobiling in Alaska's annual Iron Dog race.

In addition to owning their home, the Palins are co-owners, along with friends, of two vacation properties identified not by street number or town name but by tract number from the state's land survey. They have a mortgage on their home but no other debt.

Hardly middle class -- at least from an income standpoint. They make $250k per year combined. But what do they do with their money -- they only have $300k-$400k in assets? My guess is that they give much of it away. [Update: See my comment below. After a reader comment and re-reading this sentence, it sounds as if I think the Palins are giving away a large percentage of their incomes. I do not think this. I do think that they are likely to give an amount much larger than average -- in the 10%+ range of their annual incomes. Sorry for the confusion -- sometimes I write faster than I think. ;-) ] After all, Palin comes from a Christian denomination known for its giving. Also interesting is that they have no debt other than their mortgage. Good for them.

In 2007, the period covered by the latest financial disclosures, Biden earned a little less than $300,000 from the Senate ($165,200), part-time teaching jobs and a book advance. His income and portfolio reflect his ranking as one of the poorest senators.

He is encumbered by several loans, including one dating to 1989 that was used for a son's college expenses. It was valued between $15,001 and $50,000 at the end of 2007. Unlike Palin's filing, which under Alaska rules can be detailed down to the penny, Biden's is on a federal form that organizes finances into broad ranges, such as $100,001 to $250,000.

Again, hardly middle class on the income side. He makes the big bucks but has little net worth to show for it relatively speaking (his annual income is the same as his net worth -- a sign of a poor saver.) And he's got a bunch of debt. Yikes!

It's hard to tell where these two would rank historically in terms of vice-presidential wealth, but they're certainly in the same rut as Walter Mondale. While running with Jimmy Carter in 1976, he revealed a net worth of $77,000 and joked he wanted the job "because I need the money."

Yikes! I never knew this.

From a class point of view, virtually all of the families in my neighborhood are very much like the Palins and Bidens, living modestly but well on incomes in the low six figures.

I wouldn't call them "average" (as the writer implies). They may live modestly compared to how they could live, but let's face it, they're still well up there on the income scale. I guess he's trying to make the story that their finances are just like those for most of us commoners. I don't think most people make $250k-$300k and I'm not buying the "same as us" thinking.

Comments

[AmandaD]

"My guess is that they give much of it away. After all, Palin comes from a Christian denomination known for its giving."

That's a mighty big assumption. She will be releasing her tax records next week, as is required for all candidates. However, she is missing the deadline to do so, which is this week.

http://www.adn.com/palin/story/536988.html

[Paul]

I think it is telling that the Palin's have so little debt in comparison to the Biden's. That shows wisdom and good stewardship. But at least Biden isn't showing any signs of taking money under the table for their personal bank account, like so many others in congress.

[Emily]

What is the deal with your personal commentary. I get that you are a "christian". Does this mean that you will vote for McCain/Palin because you don't want those baby killing Democrats in the white house? Of course, God has for ordained Pailin to be here, through her he will put the country in the direction it needs to go. I bet you believe that crap dont you.

What happened to real christianity? I mean true christ-like behavior. Behavior that encourages love and accpetance, not hate and fear-mongering. Why does the consertive christian right feel the need to push their adgenda on the rest of the country. What ever happened to seperation of church and state. I get that you are a republican, and I have no issue with that, but stop trying tp puff up Palin!

[FMF]

Amanda --

Yes, it is a big assumption, we'll see what the true results are when they come in.

BTW, when I say "much" I mean "a good portion" (like in the 10%+ of income range.) Upon re-reading the piece I think I over-stated my feeling when writing it -- I'll adjust it accordingly.

[rwh]

Palin may have given away much of her net worth, or it may be tied up in the two properties they own other than their home, the value of which the article doesn't list.

Biden may be less of a money manager than Palin, or it may be much more expensive to live on the east coast than Alaska. The Palins have 5 kids, but how many have they tried to put through college?

[Emily]

Oh, lets not forget to add all the perdiam she got paid while staying in her home. Scamming the government for money, I love it!

[FMF]

Post is now updated -- should be showing up soon depending on Typepad updates.

[MonkeyMonk]

It should also be noted that Biden has helped significantly in putting all of his kids through college -- that can take a huge chuck out of one's savings, I don't believe any of Palin's children are college age yet.

I'm glad you updates the post becase you were showing a huge bias that called into question you entire analysis. Why would you assume she gives it away over assuming they blow their incomes on fancy non-essentials?

[Matt]

I understand the interest in the finances of the presidential and vice-presidential candidates given the election season and the fact that this is a personal finance blog written by a Christian author. While I do not share your religious beliefs, I respect them. I take umbrage, however, with your inability to separate obvious political leanings with objectivity.

This is the second blog post in as many days that has you assuming Palin's contributions to charity are great without any evidence whatsoever. Perhaps it is true. Perhaps it isn't. Until her financial information is released and you have cold hard facts, however, don't make assumptions.

Frankly, I think it is more worthwhile to examine the personal finances of the person who is going to actually be president. I'm not sure if you have or not, so forgive me if this was a topic of discussion before. I find it interesting that the McCains have recently had at least $225,000 in credit card debt, including one card with a $10,000 to $15,000 balance and a 25.99% interest rate. Meanwhile, the Obamas have no debt and recently put $200-250,000 into college savings accounts for their daughters. To me, that inspires much more confidence than McCain's "dependent child" credit card racking up $50,000 in debt and the purchase of a $700,000 condo for the eldest daughter as a college graduation gift. What are they teaching their children about personal financial responsibility?

I can't wait until this election is over.

[Matt]

Link didn't appear, here it is:

http://www.nytimes.com/2008/06/14/us/politics/14disclosure.html?_r=1&oref=slogin

[NickFadz]

@RWH
"Biden may be less of a money manager than Palin, or it may be much more expensive to live on the east coast than Alaska."

It is definitely more expensive to live in Alaska than it is in Delaware. It costs almost $9 for a gallon of milk in Alaska.

[FMF]

Monkey --

Why did I assume they give a good amount? Didn't I say why?

[FMF]

Emily --

I'm not trying to puff up anyone -- I'm trying to use facts (her religion) to make a guess at her finances. If I knew something about Biden (or anyone else for that matter) that I thought could give insight into the piece, I'd use that as well.

As far as my personal commentary, isn't that what a blog is about?

[FMF]

Matt --

I can't wait either. Though then it will be some other issue we'll all have to wrestle with -- like bailout plan #2 or economic stimulus part 2.

[Mr. ToughMoneyLove]

In evaluating Biden's situation, do not overlook the value of the enormous pension and medical care benefits he will received from the government after his years of being a politician. That pension probably has a present value of $2-$3 million. On top of that, he can make enormous sums as a lobbyist if he so chooses.

[Giff]

Reading the vicious comments reminds me why I loathe politics!

Nothing makes me want to stay at home on election day more then reading/seeing all kinds of nastiness on both sides.

The fact that Palin is religious does not makes her a better or worse politician.

It makes her a religious person. Period.

We should concentrate on the facts and on the plans of future leaders. We should strive to change the way things are going so we don't find ourselves with another "Bailout" while government acts as it never saw it coming.

Please consider both sides and vote for the greater good of the country. Think economy, foreign relationships and the American people rights and well being.

Personally, I do not select future politicians based on race, sex or religious beliefs. Do you?

[Matt]

Giff: don't stay at home! Voting is the most important obligation of being a citizen. Let your voice be heard. Politics is passion, is it not? Now more so than ever, I think. :-)

TML: you're right, I'm sure the Bidens don't have to worry about their retirement.

[LotharBot]

Emily:

There are plenty of good reasons to disagree with Palin. "She billed the state per diem when she was home" is not one of them. As with most governors, her official "home" is the governors mansion in the capital, and when she's at her real house she's "traveling". The per-diem regulations are intended to allow billing for this -- any time you're not in the official residence, where your food and utilities are all paid for by the state, you're expected to use per diem to be able to pay for your food and utilities. This is true in several states.

FMF needs to stop trying to puff up Palin, and you need to stop trying to tear her down. There's far too much Palin worship on the right, and far too many bogus Palin rumors and lame criticisms on the left. Instead of praising her for what we imagine are her giving practices, or attacking her for what we imagine her state's per diem practices are, can we stick to actual facts and legitimate analysis?

[Emily]

She is a right winged conservitiave nut job who needs to go back to Alaska and stay there. If she had it her way, we would all ve living in a pre 1960s world. It makes me sick and people should be scared. If she is so against government waste, why did she ask for 27 million in ear marks for her town of Wasilla Alaska? Come on, this woman is a fraud.

[Emily]

Gosh, politics has turned me into a bitter angry person...

[FMF]

Lothar --

Fact: Palin has been associated with the Assemblies of God church.

Source: http://en.wikipedia.org/wiki/Sarah_Palin

Fact: A key tenet of this church group is tithing and offerings -- the practice of giving 10%+ of your income:

Source: http://www.ag.org/TOP/BELIEFS/gendoct_06_tithing.cfm

As such, one plausible explanation for a high net income and (relatively) low net worth is the fact that a good portion of the funds have been given away. Of course, they could simply have been blown too. We'll find out for sure when she files. But to suggest that I'm painting her in a positive light without any basis in fact are simply not true.

[FMF]

Emily --

"Gosh, politics has turned me into a bitter angry person..."

Yes, it has. In fact, your rants are taking away from your arguments IMO.

Matt,
Thank you for link !

[Anonymous]

$250k in income = HARDLY middle class? You must be joking.

Please look into the income distribution in this country.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

Only 15-16% of Americans make more than $100k. These folks are not the middle class, they are the top of the socioeconomic pyramid.

I understand that Net Worth is of course, a different story, but there's nothing "middle" about making six figures, period.

[Emily]

FMF, I love your blog, but you are kind of an ass hole.

[FMF]

Emily --

I think you're making my point for me.

[Giff]

@ Emily

You are indeed making FMF points for him.

@ Matt

I live in Texas so my vote would either go to:
a. make a red state more red
b. make a red state less red

So what's the point?

As for "letting my voice be heard"... I don't think I care to associate my voice with most of the people on either side, especially self-proclaimed "bitter angry" people (sorry Emily). Although, in Emily's defense, from what I've seen, politics tends to polarize people so much that we all become bitter and angry about things at some point. So unless someone wants to try to convince me otherwise, I think I'm sitting this one out.

[Mike B.]

One should also consider when thinking why Palin's net worth doesn't match up with what some consider to be a high salary remember that she just recently became governor, and her salary as a mayor was probably significantly lower.

[Mary]

Giff, on both sides? I've been reading the comments and it only seems like one side is doing the bashing here and it's not the conservatives. I do understand your frustration however, the liberals are always accusing repubs of pushing fear and hate just as AManda and Emily seemed to be above. Who's pushing the fear and hate? You can tell by looking who's doing all of the hateful bashing in these comments. I think Emily's got enough hate built up to go around, unfortunately.

And to Matt who is so willing to assume that Obama has it all under control because he has no debt and has money saved for his kids college fund. THat's very interesting. You might want to do more digging to see why he has all of that money to invest.

And to everyone who is reading this, if you think the country's finances are messed up now well, just wait until you get Obama in the white house. With all of his tax hikes to increase government control you won't have to worry about investing anything because you won't have anything to invest.

And, It should scare you to death to see Pelosi, Frank, and Dodd (a.k.a. Dumb, Dumber, Dumbest) as the ones that are working on this so called bail out plan. It was their party who promised the loans for those who couldn't pay in the first place, now the tax payers are going to pay for it. McCain saw that this was happening and brought it to the attention of Washington, while at the same time Barney Frank said all was well and good with the Freddie's, it's all documented.

Back to the subject though, if you're talking about finances, isn't it fair to note that both VP candidates have done a pretty good job so far in their finances? As long as they're on the up and up let's move on. One thing that is a bit hypocritical about Joe Biden though is the fact that he cries that it's patriotic to pay taxes...since when? I believe he has an accountant who most likely looks for any and all tax breaks and let's look at the amount that Biden has given to charitable contributions. Very small.

[Sarah]

You might want to do more digging to see why he has all of that money to invest.

Ah, so you can avoid feeling guilty about being hateful if you merely make nasty insinuations instead of stating king a claim outright, Mary? Of course, if you actually said that Obama was corrupt, someone might actually ask you to back it up.

FMF, you should know better. Just because a church preaches something doesn't mean its members follow it. I don't know how much money Sarah Palin gives to charity--it could be a lot, could be a little--but, you know, I'm pretty sure her church is strongly against lying, too. Do you think she never lies? She'd be the first politician (either side) that didn't...

[FMF]

Sarah --

Yes, I'm well aware of that, and I could be wrong about Palin (we'll eventually see.) But my position isn't without reason and it's not made up out of thin air as some say/imply. It's speculation (note that I say it's my "guess") and I say why I'm guessing that way.

Now if someone disagrees, then fine, they can state their reasons and back it up with facts/rationale (i.e. you made an argument with a reason.) But to simply rant and rave simply because she belongs to one party or another -- that's a waste of cyber ink IMO.

[rwh]

NickFadz:

Okay, milk is more expensive in Alaska. How about property taxes?

I would need to see a comprehensive analysis before I would acknowledge it takes more money to live in Alaska than the east coast.

[Gavagirl]

OK, rwh, I wanted to know too, so here it is:

Alaska ranks 12th in tax burden, with a median tax of $2241. That's 1.14% of the median value of a home.

Delaware ranks 39th with a median tax of $806, or 0.40% the value of a home.

(I googled this and found it at MSN Money; for some reason I can't get a link to work here)

Also, don't forget that Alaska has only two or three industries of any real significance, and no agriculture, so everything has to be shipped in from elsewhere, and with such a tiny population they aren't exactly getting the bulk discounts when they buy things.

So yeah, it looks like Palin is doing pretty well, but I'm not too surprised either. Those churches don't just strongly encourage people to give; they also put a lot into teaching people how to take care of their wealth. Some of us heathens could learn a lot about community maintenance from their example (though probably not too much about foreign relations from Palin ;-P )

In reference to another comment, Palin ahs one child that is college age. He's the one that is going to Iraq. The daughter who is pregnant I suppose would be going this year or next. I do have serious misgivings about the fact that the Palins are encouraging their daughter to marry this 19-year-old boy, who presented himself as a drunken wanna-be thug on his MySpace page, rather than help her concentrate on finishing her education. That doesn't sit right me AT ALL. I have a feeling they are going to be putting a lot of money toward supporting a daughter and grandchild for some time to come.

[Rick]

Emily, you are partly wrong in your rant against Christianity. The Bible does not teach acceptance. It teaches love and forgiveness. Just look at how Jesus "accepted" the Pharisees.

The Bible does teach us to love others. It teaches how the fruits of the Spirit are love, joy, peace, patience, kindness, etc. I fully agree that many Christians do not exhibit these qualities. I also fully agree that the Republicans support certain activities that maybe we shouldn't -- like the war in Iraq and Afghanistan, for instance. And I also fully agree that maybe Palin wouldn't make the best VP.

But this blog is about personal finance, and the blog author is simply evaluating the personal finances of two of the more well-talked-about characters in the news today. And he's suggesting that maybe because one of them is a Christian, she gives some of her money away. But I see nowhere that the blog author is advocating voting for one candidate or another, especially based simply off of their personal finances.

[dogatemyfinances]

A fact that might matter is that Biden sent his kids to expensive, elite private schools. Palin's kids go to public school.

[LotharBot]

Emily said: "If she had it her way, we would all ve living in a pre 1960s world."

This is exactly the sort of bogus rumor/lame criticism I'm talking about -- totally overblown, and based on shoddy analysis and guessing. There are plenty of reasons to disagree with Palin's policies and ideas without going into the realm of speculation. There's no reason for people to become as unhinged as they sometimes become when talking about Palin, as you did above (nor is there reason to come unhinged when talking about Obama or Bush, as I've seen from others elsewhere.)

Spreading questionable-at-best rumors, calling people a**holes, and generally being bitter and angry doesn't strike me as "true Christ-like behavior". People would be more receptive to your point if your own behavior was more appropriate.

[Matt]

Mary, I know this is coming late and you'll probably never read it, but the bulk of the Obama's income has come from sales of his two books. Also, Michelle Obama was paid pretty well as a hospital administrator in Chicago. I'm not sure what kind of "digging" is required to know that.

[Jim]

Palin has only been Governor for a couple years. Before that she was making $68k as mayor of Wasilla. I think thats probably the key reason their net worth isn't what you'd expect with a $250k joint income. Its quite likely Palin gives to charity, but its anyones guess how much. We also don't know how much Palin's husband has made in previous years and his work sounds seasonal so it might have big fluctuations year to year. Alaska is generally expensive place to live. They have 5 children.

Jim

[MonkeyMonk]

Although I guess this thread is long buried I read this afternoon that the Palins released some tax statements and reported contributions of $8,205 to charity in 1997 and 1996. Assuming FMF's estimate of a $250,000 income that puts their charitable giving at only a little over 3%.

If accurate, I'd say this number is a little disappointing. I thought FMF's 10%+ assumption was way to generous but this is a lot lower than I expected.

[FMF]

Monkey --

Do you have a link to that info? I'd love to look it over.

[FMF]

Never mind, it's here:

http://www.reuters.com/article/politicsNews/idUSTRE4927WN20081003