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June 08, 2011

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Heh, I find a little funny you are so congratulatory to the President for his financial situation. I think he's doing all the right things but this would be an absurd portfolio for anyone but a major political figure. Assuming the most aggressive breakdown of the ranges above he's got 7.5% of his money in a checking account and 63% in treasuries. You get on him for only earning $1000 in interest on his checking account but don't mention the 1.1mm in Tbills. The longest bill is yielding .14% today, a pretty big mistake in portfolio management if he actually cared about efficient allocation.

It's important for a President to maintain both the reality and perception of no conflicts of interest in his investments. What's more plain vanilla than an S&P index fund and treasuries? That's why he's doing the right thing not because it makes any economic sense.

Being a current or former president of the United States is an interesting situation. Money really won't have much value for him for the rest of his life. His political influence will enable him access to a world that money could not. Any job he wants is his. After his term is over he will have whatever he wants cars, vacations, meals, clothes free for the taking. If he wants actual cash I'm sure he could sign up ten million dollars in speaking fees in an afternoon. It's got nothing to do with Democrat or Republican it's a perk all former presidents get. I don't begrudge him those benefits either. President is an absolutely horrible job, you completely sacrifice 4+ years of your life and in return half of the people in the country hate you. Former president's getting to live on easy street after their service is well deserved.

My take is that he has hired someone to manage his affairs and someone who is astute.

He does not have the time to research an plan this out himself.

I'm almost positive that I read in the early days of his campaign that they were still paying off their student loans when his first book was published, which is something that really resonated with me.

Not only that they chose to pursue education in such a way that they needed loans (because clearly, their families weren't able to foot the bills), but that they continued to work through those loans well into their careers, which is the reality that MOST people who pursue higher education are living in.

I noticed, too, that the Commander in Chief has a lot of his money locked up in Treasuries, anticipating higher interest rates. Not that he has any influence whatsoever on that ....

Debt free - very nice. If only it was the case for our nation ........ :-(

When you're running for national office, writing a book or two isn't a hobby, it's part of your job.

Seriously, this post is pretty strange all the way through.

I would have thought that the President would have somebody clever managing his money pretty actively, but geez, a checking account, treasuries and an index fund. I could have figured that out!

If only he managed our nation's finances the same way. This is unfortunate.

I'm with MattJ. This is a strange post. :/

The Obamas had a negative net worth before entering national politics. In the few years since, they are now millionaires. The portfolio is strange for a wealthy family but not for a family with a sudden and large influx of money, that portfolio is an expanded version of what they had before the windfall.

Interesting to learn about the US President salary.

Perhaps FMF can research about the Singapore President and Minister Salaries, which is under review.

www.salary.sg

Everything I've read indicates their situation not so good up until the books were published. With that being said it would be interesting to see how things looked 5 and 10 years ago... we probably would not be very impressed.

I thought the Obamas were poor at managing their money before he ran for president. The publicity of being president ensures the books will be bestsellers... Now as president all his and the family expenses are paid for so with royalties coming in and a $400k a year salary he should be on an easy path to save up.

After he finishes being president he will have nice perks and retirement pay for life- really he would have to be a real failure to screw up such a good deal.

He is a great speaker, no doubt, so will command huge speaking fees long after he is president. And given his relatively young age, that could account for alotta lettuce!

-Mike

Oh, one more thing.

Holders of treasuries would come out ahead if the interest rates go down, not if they rise. If held to maturity then you will get the interest rate of the treasury but if you wanted to resell before maturity these rules apply.

Last thing,

Owning US treasuries and keeping money in a savings account is the most publicly patriotic thing you can do. Can you imagine if he was in a fund that was short the USD or betting on foreign currencies? The fallout would be ugly!

I'd be doing really well financially too, if only I could convince a million or more folks to buy my memoirs. LOL.

Whatever wealth Obama has, and he seems suddenly to have become a multi-millionaire, you can bet that his boss George Soros had something to do with its accumulation.
T. Deecy MD

Wow, that is night and day compared to the VP. I was wondering about the lack of risk in their portfolio and then realized that they are nearing the age that my husband and I would want to retire, so it made more sense. We won't have many stocks in our portfolio after age 45 either. Thanks for the rundown!

The only reason this post is "strange" is that FMF was trying his hardest not to politicize it. No one wants another drag through the mud political debate the leaves everyone exactly where they started. Kudos to FMF for keeping this post unbiased (as hard as that was for him :-)) and focusing on the facts.

To sum it up, the President found himself unexpectedly wealthy in a short amount of time, but instead of blowing it all as most Americans would have, he continued to do what he had always done, only on a larger scale. Kudos to him for that.

LOL - I'm sure they're reading Free Money Finance! This post reminds me of a post I read on the Thousandaire blog about -- (on the other end of the spectrum) -- how badly Joe Biden has managed his personal finances. I'm not being political; it's simply the obvious conclusion that anyone would reach after seeing his financial disclosure.

I like that you wrote about politicians without being political -- kudos! We need more of that. I'm so sick of political bickering, and I'm excited to see a blog that can write about the President and just stick to the facts.

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