Biden makes millions of dollars: why he can't get rich anyway
Even before Joe Biden became president of the United States, he managed to earn $ 17 million. However, it is estimated that his fortune is less than half that amount. Where did the rest of the money go, and why, earning millions, Biden could not get rich, the newspaper found out Forbes.
Back in January 2017, when Donald Trump assumed the presidency, Biden had a capital of $ 2,5 million, and the main component of this amount is a pension fund and real estate. It was a modest condition, quite characteristic of a person who had worked in elective positions throughout his adult life.
But he hoped to soon increase his income. And so it happened - by the end of 2017, Biden and his wife Jill earned $ 11,1 million.The next year they received another $ 4,6 million, then $ 1 million in 2019 and $ 630 in 000.
The story of how Biden got rich after leaving his vice president's position and using his fame to sell books and give speeches has been told many times.
But if you take a closer look at the numbers, there is a question that no one else has asked: why hasn't Biden become richer? If someone starts with $ 2,5 million and makes $ 17,3 million during the boom in the markets, one would expect his personal fortune to be over $ 8 million. So what happened to Biden's money?
So, Biden donated $ 7 million for taxes, another $ 1,3 million for charity, $ 180 for servants and about $ 000 for mortgage interest payments. But even with these expenses, Biden's fortune should be greater than it is.
An analysis of Biden's financial statements, real estate registries, and his salary records indicate that it is $ 8 million.
There is a possibility that Biden, who shares his fortune with his wife Jill, gave some of the money to other family members. Or maybe he just wasted everything. To bring his fortune down to $ 8 million, the current president of the United States had to spend an average of about $ 2000 a day over the four years that he retired.
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Much can be understood about how the president will manage public money by looking at how he manages his own. Donald Trump may be part of a party that prides itself on fiscal conservatism, but anyone with a superficial knowledge of his financial history with huge debts due to extravagant but failed projects would immediately say that this guy is unlikely to carefully monitor the national budget. Trump did not follow: even before the pandemic, the budget deficit jumped 68%, in large part due to the significant tax cuts that have benefited rich people and corporations.
Biden acts differently. He is determined to give money to the middle class and to raise taxes for the rich.
However, close analysis of his personal finances suggests that Biden and Trump have something in common. Both of them are not afraid to borrow and love to spend money.
Where is the money
Biden's grandfather was one of the leaders of American Oil. His father opened several businesses, but they all failed, and the family was going through difficult times. Later, the politician's father was able to get a job as a car salesman. Joe himself was not interested in a stable career. While studying at the University of Delaware in the early 1960s, he asked friends a question: “Guys, after graduation, you are guaranteed a job at DuPont with a decent starting salary and lifetime guarantees, but you will never earn more than $ 40 a year (approximately $ 000 for today). Or you can agree to a job with a salary that is half as much, without guarantees, but your possible income is not limited. What will you choose? " For him, the answer was obvious. He told his friends that he was ready to take the risk.
After training, Biden took out a bank loan and opened his own law firm in downtown Wilmington, Delaware. He didn't really know how to save. When the firm won its first major case, Biden received a check for $ 5000. He and his first wife, Neilia, spent all of the money on a four-poster bed, dining set, and writing desk.
“The bill was significant, maybe even more than the check. But the furniture wasn't bad either, ”Biden wrote in his 2007 memoir Promise Me, Dad. "It was our adventure and Neilia believed so much in our future."
After a short period of time, the Naydens acquired real estate. In about six months, Biden purchased three houses. One of them was on a 32-hectare site in Maryland, where he dreamed of one day building an estate for his parents and siblings.
To begin with, he borrowed more money from his father-in-law and from banks while he and Neilia were looking for tenants and renting out their property. Biden and his wife and sons lived in a small house for free in exchange for managing the pool of a country club nearby.
And even at that time, the family of the future president was barely making ends meet. Biden himself admits this in his memoirs: "I was constantly on the verge of going into negative territory."
But this did not stop Biden from thinking much larger. In 1972, after a tragic car accident that killed Neilia and their little daughter, Biden bought a new home for himself and his sons - the 930 sq. m in Wilmington, which cost $ 185 (equivalent to $ 000 today).
At the time, Biden was a senator and was making $ 43 a year. Over the years, he frequently re-mortgaged the house and borrowed well beyond its original value. In 000, Biden sold the mansion for $ 1996 million and bought a plot of land nearby for $ 1,2. There he built a new house, and then began to regularly re-mortgage it.
Biden's three children graduated from private schools and colleges thanks to borrowed money. "Owning a home is how most middle-class families save money, how most middle-class families form assets, and in many cases this is how you pay for your child's college tuition: you take out loans against the home," Biden explained on Ministry of Housing and Urban Development event in 2015. "This is how I was able to send the kids to college." In 2001, when his daughter Ashley was at Tulane University, he paid back at least half a dozen loans worth over $ 700.
From a business perspective, all of these decisions are illogical. Biden spent too much and saved or invested very little. But when judged in terms of quality of life, they seem more reasonable: "Joe from the middle class" wanted to live like people from high society, buy big houses and educate children in expensive schools, so he borrowed a lot. And it paid off.
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“It often happens in the US today that people, even with large incomes, do not have free funds,” says Megan Gorman, attorney and managing partner of a financial planning firm for wealthy people. - If you look at the tax returns of the Biden family, you will see a couple who have accumulated some kind of property in their life like retirement savings, life insurance, some other savings. And this is not some kind of well-thought-out large-scale plan to turn into ultra-rich people. "
When Biden became vice president, he had additional income to pay for the house. He rented out a cottage on his site in Wilmington for $ 26 a year. The tenant was reportedly the United States Secret Service, which protects Biden.
What did Biden spend his money on?
If you have little free money and savings, this does not mean that you are bankrupt. When Biden stepped down as vice president in 2017, his fortune was estimated at $ 2,5 million. He had a life insurance policy and several accounts for accumulating retirement, but his capital was based on a house in Delaware and a federal pension that guaranteed him a lifetime income of about $ 160 per year.
The money got bigger when Joe and Jill Biden started publishing books and performing at events. The former vice president also received a professorship at the University of Pennsylvania. But the more the Biden earned, the more they spent.
In 2017 alone, they spent $ 8 on household help, and by 600, that amount had grown to $ 2020. They also donated $ 95 million to more than two dozen charities such as the United Federation of Chicago Jews and The Foundation Beau Biden Child Protection ”. In addition, they paid off one mortgage and closed two loans.
In June 2017, Biden fulfilled a long-standing promise to his wife and shelled out $ 2,7 million for a 450 sq. m in Rehoboth Beach (Delaware). It turned out to be a good investment: Thanks to the skyrocketing house prices during the pandemic, the house is now valued at $ 3,4 million - 25% more than the Biden paid four years ago.
But apart from this case, the Biden did not seem to have done much to increase their fortune through investment. The politician made a commitment not to invest in shares of individual companies in order to avoid ethical conflicts at work. However, he did not even use the diversified investment funds, which ethicists often recommend as a way to avoid conflicts of interest.
The 2019 declaration showed that the Biden held less than $ 200 in variable annuity funds (an annual premium that immediately turns into shares) owned by an insurance company, and the rest of their money was simply held in bank deposits, retirement accounts, in the form of policies. life insurance and holding companies set up to manage book and public speaking fees. By not actively investing in the stock market, the Bidens missed out on potential returns that could have increased their capital by millions.
In the last filing in May, Biden listed cash and retirement accounts between $ 1,2 million and $ 2,9 million.Just take his $ 17,3 million in revenues and subtract the $ 11,8 million in known expenses (taxes , charity, home maintenance costs, and so on), remains $ 5,5 million. This is significantly more than the amount "between $ 1,2 million and $ 2,9 million" specified in the declaration. It can be assumed that Biden spent at least $ 2,6 million on something. One of the possible options is gifts to relatives. Tax law allows spouses to transfer up to $ 30 to anyone without declaring it. If Joe and Jill Biden gave the maximum amount possible to their children, Hunter and Ashley, and their grandchildren, the total could exceed $ 000 a year.
In addition, Biden may have made additional donations to charities outside the United States, which are not reflected in tax returns. For example, in 2018, the Biden donated $ 25 to a UK charity associated with Prince Harry.
It is possible that Biden spent the money at his pleasure. But even if they continue to spend, they are unlikely to become poorer. They could spend $ 2000 a day for the next eight years and still have over $ 2 million after a possible second term of office ends. Then they will again have more time to give speeches, write books and earn good money.
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