President Obama talks about his personal finances

Thursday, November 20th, 2014 By

President Obama strides

President Obama takes a straightforward approach to personal finances. Image: Muhammed/Ficker/CC BY

President Obama dropped in on the White House Personal Finance Summit Wednesday to give his opinion on a variety of budget related issues. He seemed a bit blind-sided when asked by Meg Marco, of the Consumerist, how he handles his own finances. After a brief pause, he answered, “don’t spend all your money.”

Saving some of what you earn

“My grandmother worked her way up from being a secretary to a vice president of a regional bank,” Obama told the small group of writers. “She was from Kansas, and she had a very straightforward view, which was save a little bit of what you’re earning and the magic of compound interest applies.”

College debts

“That is something Michelle and I have tried to apply, not always successfully,” the president said. “I’m very sympathetic to what young people are going through today, because Michelle and I graduated from law school with combined debt of $120,000, and it took us 10 years to pay off.”

Spending discipline

Obama said in the current economy, young people often are forced to deal with the “quadruple whammy” of unemployment, school debt, housing expenses and, often, the need to care for elderly parents. He said developing a “spending discipline is important.”

Spend on things that increase wealth

“Our first starter home was a $180,000 condo,” Obama said. “That was still a good investment. … It remains smart to spend on things that will increase productivity and income in the long term.”

The President finished by applying his theme to the national economy. “That’s an important distinction that we as a country have to make. … The economy has to get back to producing more and not just spending more.”

Practicing what he preaches

Last month, the White House made financial disclosure reports for President Obama available to the public. Those reports reflect that Obama practices what he preaches. In 2010 he earned $1.57 million, nearly quadruple the $400,000 he earns annually as President of the United States. Most of Obama’s investments are in Treasury Bills and Treasury Notes, opting for long-term security over risky high return investments.

Sources

Daily Finance
The Consumerist
Wealthinformantics

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