How do we figure this? Forbes delved into the president’s latest financial disclosure report released on Tuesday and analyzed that report as well as prior ones filed each May the past four years to answer that question. Based on our research, the Obamas are actually worth less than they were last May, when Barack Obamapreviously filed.
As to be expected for the nation’s top politico and his wife, the vast majority of the Obamas’ fortune these days is held in plain vanilla U.S. treasurys, worth about $3.4 million. We figure he has $2.4 million in notes and $1 million in T-bills, lower than the $5.2 million in treasurys estimated off the May 16, 2011 disclosures, due to a drop in the value of their T-bills (T-bills were previously estimated in higher range on the disclosure form and have dropped). The Obamas also have nearly three quarters of a million in cash (this position moved up a bracket), $625,000 in mutual funds and ETFs, including about $300,000 in college funds for their girls, as well as a $90,000 in a State of Illinois pension fund.
The President's hefty book royalties from “The Audacity of Hope” and “Dreams From My Father,” a big source of his wealth, are decreasing at a faster rate than we had estimated. In 2009, Obama’s book sales peaked and he grossed nearly $5.7 million, according to his income tax statement; by 2010, gross book revenues had dropped to $1.6 million. This year the amount he’s taking home in book sales is even lower: between $150,000 and $1.1 million, according to Tuesday’s disclosure report. This figure is lower in part because Obama is giving away much of his new book money (after taxes), including a $133,000 advance and earnings of between $100,000 and $1 million (just disclosed on his latest financial form) for his third book, “Of Thee I Sing: A Letter To My Daughters,” published November 2010. Proceeds from that project are going to the Fisher House Foundation for scholarships for children of fallen and disabled soldiers.
One of the couple's most valuable assets is their 6,200-square-foot, 6-bathroom, 3-fireplace home in Hyde Park, on the South Side of Chicago. The property was recently listed in public documents with a value at $1.65 million, same as what the Obamas paid for it back in 2005. The financial disclosure released Tuesday reveals a mortgage against the house of between $500,000 and $1,000,000.
All in all, that brings the Obamas up to nearly $6 million, not too bad for a pair of Harvard Law School grads who skipped the corporate track to become a community activist and a hospital communications director.
Here's an approximated summary of where the Obamas hold their wealth:
Cash: $660,000 Mutual funds/ETFs: $625,000 Pension: $90,000 Treasuries: $3.4 million Real estate: $900,000 TOTAL: $5.7 million
A NOTE ON METHODOLOGY We embarked on this exercise at the same time we began looking into Mitt Romney's finances. To figure out Obama's albeit much smaller net worth, we applied the same methodology that we used for Romney's net worth valuation. Specifically, we analyzed four years worth of Obama's financial statements filed with the U.S. Office of Government Ethics, including the one most recently filed on Tuesday. We also looked at his income tax statements, starting with the 2006 filing. While the disclosures appear purposefully vague, providing wide asset ranges stretching from $1 million to $5 million, we were able to add some logic to the estimates.
Assets that jumped to a higher bracket from one disclosure to the next were valued at the 25th percentile of the current range, while those that fell were valued at the 75th percentile of the current range. Assets that stayed within their bracket were appreciated at the market rate from their initial median value through May 14; benchmark indexes were used as proxies for nonmarketable assets. Real estate was valued based on current property values.
**Note: the current issue of Forbes magazine values the Obamas at a shared net worth of nearly $9 million, based on the May 16, 2011 financial disclosure, the most up-to-date as of press time. The day after our issue went to press, Obama released his new financial disclosure form, showing that: 1) the Obamas have taken money out of treasurys; 2) book money is decreasing; and 3) the family still owes on its mortgage, disclosed for the first time on Tuesday. The latest disclosure also gave new information on the family's college savings plans, which allowed us to refine our valuation and bring the sum down. The above valuation takes all this into account.
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