Kind of an interesting article.
U.S. VPs would be among the poorest
For all the political differences between Sarah Palin and Joe Biden, their finances have a lot in common. The winner will be America's poorest VP in many years.
By Tim Middleton
September 16, 2008
Compared with the piles of financial disclosures from would-be U.S. presidents I've pored over in recent months, the filings of America's vice-presidential candidates Sarah Palin and Joe Biden are astonishing.
Palin, the Alaska governor whose selection by John McCain for the Republican ticket has riveted both sides of the U.S. 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.
Rather than multimillionaires with sprawling assets tucked into tax-free bonds (Obama) and lavish estates (McCain) or with gigantic incomes from speeches and books (Hillary Clinton), the Republican and Democrat VP hopefuls are the folks next door. Palin carpools to school basketball games. Biden struggles to pay off college loans for his sons.
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.
Maybe a million bucks -- combined
Not counting their homes, which are exempt from reporting requirements, the America's 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.
But both Palin and Biden are lucky they have U.S. government pensions to fall back on, because their savings won't support either one in the lifestyle to which they aspire -- and will win, if the electorate gives the nod.
Palin's public image as a down-to-earth, effusive hockey mom is reflected in her finances. Her state disclosure form is handwritten. It confesses she accepted a "gift" from an Alaska lobbyist in the form of carpooling with another mother of a sixth-grader. She also, as governor of the largest U.S. state, accepted an ivory puffin mask worth $2,200 from Calista, an economic-development group of Native peoples.
She 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.
The Palins also benefit from a source of income unique to Alaska residents: the state's Permanent Fund, which hands out a slice of the state's proceeds from North Slope oil. Sarah and Todd Palin each received $1,654 from the fund in 2007, and their children, together, received the same amount. The family total was $4,962.
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 U.S. 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 U.S. federal form that organizes finances into broad ranges, such as $100,001 to $250,000.
Both officeholders get perks. Palin reportedly was able to take per diem payments for nights she spent at home. Biden will get a lucrative pension after spending 36 years in the U.S. Senate. But as suspicious as people are of politicians, there's no sign these candidates are cashing in on their offices.
How they invest
Biden's investments, nearly all of them in retirement plans, are valued somewhere between $65,000 and $366,000. The breadth of that range is due to the fact that the three largest of them are reported to be worth between $15,001 and $50,000, and the smaller ones, also grouped around broad ranges, are more numerous.
They include a few mutual funds, including the target-retirement portfolio Fidelity Freedom 2020 (FFFDX), Janus Aspen Large Cap Growth (JAGRX) and a number of conservative annuity-related portfolios that don't have ticker symbols.
The Palin family's securities reside in two accounts in the name of Todd Palin: a retirement plan from employer BP Prudhoe Bay and a self-employment individual retirement account. Todd Palin's businesses include commercial salmon fishing and sponsored snowmobile racing.
The total value of these accounts at the end of 2007 was $381,405. The investments are much more aggressive than Biden's choices. The Palins' largest single investment was $80,112 in the T. Rowe Price Latin America Fund (PRLAX). Other individual holdings valued at more than $35,000 included Alger Small Cap Growth Fund (ALSAX) and American Funds Fundamental Investors R5 (RFNFX), a conservative large-cap fund.
The Palins report smaller holdings of such ETFs as KBW Capital Markets (KCE.N) and iShares MSCI Australia (EWA.N), and such common stocks as Intuit (INTU.O) and Roper Industries (ROP.N).
Politics being politics, the Palins' filing attracted considerable attention from liberal blogs. At one of them, the Petris Files, the postings were almost universally positive until a poster calling herself Alison appeared and railed, "They have 1.6 million shares of Alger Hiss Small Cap I, which is trading at $22.30 a share today -- that is in excess of $3.5 million -- and there are many others."
Alger Hiss, of course, is a deceased communist spy (whom many leftists still regard as the victim of a right-wing smear). Fred Alger is founder of the mutual fund. And this holding would be worth $35 million, not $3.5 million, except that it doesn't exist. The filing reports ownership of 1,668 shares of Alger Small Cap Growth.
Most of the postings, however, remarked with favour on the Palins' financial life, including their investment choices. Poster "jpr9954" wrote: "With regard to her and her husband's investments, I was impressed that Todd participated in both the 401(k) with BP and had a SAR-SEP IRA for his fishing work. Todd is showing great responsibility in planning and saving for his retirement.
"He uses a mix of mutual funds, exchange traded funds, and very little stock and holds a diversified portfolio," the blogger continued, identifying himself as a financial planner. "He's doing things right and has shown more financial responsibility than the majority of Americans."
In his BP 401(k), Todd Palin reports owning about 70 shares of BP PLC (BP.N), which finished 2007 trading at $73.17.
If he still owns stock in his employer, he's taken a hit this year like everybody else: The shares closed Sept. 11 at $53.42, down 27% so far this year. That's what happens when you take investment risks, but the Palins are in their 40s and have plenty of time to recoup their loss. I think energy remains in a long-term bull market, despite its cyclical plunge this year.
The poorest U.S. vice president in years
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."
Those who followed Mondale -- George H.W. Bush, Dan Quayle, Al Gore and Dick Cheney -- ranked much higher on the wealth meter.
From a class point of view, virtually all of the families in my neighbourhood are very much like the Palins and Bidens, living modestly but well on incomes in the low six figures.
Families like the Obamas and the McCains live on the other side of the tracks -- literally, in my New Jersey town, where the mansions are higher up the Short Hills for which the place is named.
Whether my neighbours tuck in their children at night cooing, "You could grow up to be vice president," I do not know. (More likely they say, "Please don't go into politics." That's what I always cooed.)
But it's refreshing to come across a pair of politicians who truly do understand our situation, because they share it. And it's too bad one of them could be the only such person in Washington come next January.
