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The one thing that most people love about President Barack Obama is his ability to relate to a meager lifestyle. Prior to acquiring a successful career in politics, he grew up under very quaint living conditions that “the 99%” population of the U.S. is all too familiar with. It’s quite obvious that once President Obama attained a respectable salary, he had no intentions of reverting back to a lifestyle on the brink of poverty. He initially invested his money in stocks and bonds and continued to invest after striking lucrative publishing deals for his books.
Here’s a glimpse into President Barack and First Lady Michelle Obama’s finances in 2004: In his 2004 financial statements, President Obama indicated that he had three sources of income. One was an $80,287 salary from the Illinois Senate, where he was a state senator. The other was a $32,144 salary from the University of Chicago Law School, where he taught as a lecturer while he was in the statehouse. The third was Michelle Obama’s salary from the University of Chicago Hospitals, where she was an administrator. The Obamas had investments in three different assets in 2004: First was the Illinois State Senate Pension Fund, which Obama listed as worth something between $50,000 and $100,000, and the other two were investments in funds with Vanguard, the investment management company. President Obama evaluated his investments in Vanguard Wellington Fund to be worth between $100,000 and $200,000. The Wellington Fund consists of around 60 to 70 percent stocks and 30 percent to 40 percent bonds and is essentially a fundamental mutual fund. The Obamas also had $50,000 to $100,000 invested in the Vanguard Wellesley Fund. The Vanguard Wellesley Fund is more bond-heavy than most balanced funds, with exposure to around two-thirds bonds to one-third stocks.
After the 2004 Democratic National Convention, President Obama landed a lucrative publishing deal from Random House after delivering his speech, “The Audacity of Hope.” He signed a deal for 2 nonfiction books and one children’s book. One nonfiction would be The Audacity of Hope, an extended version of his 2004 speech. The children’s book — sources believe — became Of Thee I Sing, with proceeds going to charity. The terms for the book deals are as follows; After January of 2005, Obama received a $1.9 million advance on The Audacity of Hope. For that book, the deal says that he gets 15% of the list price for Hardcover copies, 7% of the list price for the trade paperback version, then 8% of list price for the first 150,000 issues sold of the mass market paperback, then 10% of the list price thereafter. He also gets 10% of audio book sales. Random House also republished his 1995 book, Dreams From My Father, generating more sales.
Once President Obama got the money from Random House, he didn’t just let it sit in a bank account. He invested.
He got a JPMorgan Chase Private Client Asset Management account, worth at least $100,000. His checking account with Northern Trust was worth between $250,000 and $500,000, and he also banked with UBS. He got $378,237 in royalties from Dystel & Goderich, his literary agent for Dreams From My Father, and another advance from Random House, $847,167. At this point, he was worth between $1.1 million and $2.5 million. From 2006-2007, he used his royalty checks from his books to buy a lump sum of Treasury notes. In 2006 he got $147,490 for Dreams From My Father and $425,000 from Random House for The Audacity of Hope. In 2007, as his presidential run made him a household name, book sales skyrocketed. He got $815,971 for Dreams and $3.28 million for Audacity.
He bought somewhere between $500,000 and $1 million worth of U.S. Treasury Notes. He moved the money from the two Vanguard Wellington Mutual Funds to the Vanguard FTSE Social Index Fund, which invests based on “certain social, human rights, and environmental criteria.” In 2007, he invested in his two daughters’ futures by purchasing two Bright Directions Age-Based Growth Plans for each of them. The plans will pay for his daughters’ college educations. Each portfolio was worth between $50,000 and $100,000. By 2010, the portfolios were worth $100,000 to $200,000 each.
The year he ran for President, he bought millions of dollars worth of U.S. Treasury Bills. By the time President Obama was sworn in, he owned somewhere between $1.1 million and $5.1 million worth of U.S. Treasury Bills, comprising most of his net worth. His other assets were worth between $411,000 and $915,000. He did not collect any income from his books. In 2009, he donated approximately $1.4 million Nobel Prize money to charities. When President Obama received the Nobel Peace Prize in 2009, he told the prize committee to wire the money directly to the following charities:
The salary compensation the President salary has received for his first term is $1.6 million. As a United States Senator, he was making $174,000 per year. Since he spent four years there, he acquired around $696,000 over the course of his term. In his time in federal government, President Obama made (pre-tax) $1.1 million. His estimated net worth is between $2.8 million and $11.8 million in 2010.