Barack Obama's Net Worth Trumps Presidential Power
In the year 2022, Barack Obama’s net worth stood at $70 million. The wealth of the former US president doesn’t just come from his presidential salary. In fact, his presidential salary made the least contribution to his net worth. Obama made a significant amount of money even before he became the US president. Apart from his previous roles in public service, he received huge sums of royalties for his best-selling books. Most importantly, he consistently gives to charity, based on his belief that,
“There’s only so much you can eat. There’s only so big a house you can have.”
Obama leveraged his public role to secure his financial status and that of his family.
Presidential Salary
During his presidential term, Obama earned an annual salary of $400,000. That adds up to roughly $3 million for the eight years he was president. His income is evident from his 2015 tax returns. He released the tax returns showing he and his wife had an adjusted gross income of $436,065.
It’s also interesting that Donald Trump, the highest net worth US president, made a lot of money during Obama’s presidency. In fact, Trump made more money during Obama’s presidency compared to every other administration. Trump added $2.9 billion when the economy rebounded from the Great Recession.
Book Deals, Investments, And Combined Income With Wife
Books contributed the most to Barack Obama's net worth.
His books include:
"The Audacity of Hope"
"Of Thee I Sing: A Letter to My Daughters"
"Dreams From My Father"
Obama earned advances and royalties from those books amounting to $15.6 million. Note that income from such royalties wasn’t consistent. Instead, he earned less money each year during his presidential term. In 2009, he made $5.6 million from royalties. This amount slowly dropped to $450,000 in 2015.
From the time he joined the US Senate in 2005 to 2016, the Obama’s earned as much as $20.5 million. This income came from:
Obama’s government salary
investment income
book royalties
Michelle Obama’s income working at University of Chicago Hospitals before becoming the first lady
By 2004, Obama was already earning an $80,287 salary from the Illinois Senate. He was also a university lecturer, making a salary of $32,144. He made intelligent investments even at this early stage. He had investments in 3 different assets. One such asset was the Vanguard Wellington Fund worth between $100,000 and $200,000.
Book Deals
In 2005, he started getting the million-dollar royalties. Random House gave him a multi-book deal. They gave him a $1.9 million advance for “The Audacity of Hope,” besides royalties. This came after Obama’s appearance during the 2004 Democratic National Convention. In the same year, he earned about $847,000 from “Dreams From My Father.” Additional book royalties gave him another $378,237.
In 2006, he went on to get more royalties for “Dreams From My Father.” This time, it was a low sum of $150,000. On top of that, he got $425,000 in royalties for “The Audacity of Hope.” The following year, Obama’s royalty income rose. He earned nearly $3.3 million from Random House. Dystel & Goderich gave him almost $816,000 for “Dreams From My Father.”
In his characteristic investment style, he bought U.S. Treasury notes worth $500,000 to $1 million. By 2008, his U.S. treasury bills were worth $1.1 million to $5.1 million. That means he was a millionaire before he became president. Hence, he likely had a million-dollar net worth by age 58.
Post-Presidency
Bill Clinton and Hillary Clinton left the White House in debt but earned $240 million 15 years later. That wealth came from blockbuster book deals and high-paid speeches. Clearly, Barack Obama's net worth is on the same path. He’s already making book and Netflix deals. According to Analytics@American, he could make $242.5 million.
Besides, he has a guaranteed $200,000 yearly annual pension.
Movie Productions
The Obamas signed a production deal with Netflix. It’s worth $50 million.That’s one of the most valuable deals that will contribute to Barack Obama's net worth.
Michelle's Book Deals
Michelle Obama's memoir "Becoming" also boosted the Obamas’ net worth. Published on November 2018, the memoir became the No. 1 best-selling book that year. In its first 15 days, the book sold more than 2 million copies. It’s sure to pull in several millions. Both Obama and Michelle have signed book deals worth approximately $60 million. The profits they get from book deals also come from book tours.
The cover of a book by Michelle Obama, Becoming
Image source: cnn.com
Merchandise
Besides books, the Obamas make money from merchandise related to those books. For example, Michelle sells 25 different items related to her book. Such items include mugs retailing for $20 and candles retailing for $35.
Public Speaking
Public speaking events contribute significantly to Barack Obama's net worth. Since he left office, Obama has had public speaking events that pay as much as $400,000. He had two speeches to the Carlyle Group and Northern Trust Corp, earning $800,000. He also made at least $1.2 million from 3 talks to Wall Street. Michelle is also making $225,000 for each speaking appearance.
Barack Obama's Net Worth: How He Spends His Money
Expenses/liabilities are a key consideration in assessing net worth. As you may know, the net worth formula is:
total assets - total liabilities = net worth
Through careful spending and smart saving, Obama has maintained a good debt-to-income ratio. Just like everyone else, his first expense is taxes on his income. The Obamas also donate to more than 30 charities. Most of all, they have to cater to their children’s expenses.
Make Smart Financial Decisions.
College Fees
The Obamas have always had a long-term plan for their kid’s education. As far back as 2007, Obama purchased Bright Directions age-based growth plans. The plans were each worth $50,000 to $100,000. These were meant to pay for Malia's and Sasha's college education. Malia is a Harvard student, while Sasha goes to Univeristy of Michigen.
Real Estate Property
The Obamas possess an expansive real estate property. After leaving the White House, they purchased an 8,200-square-foot mansion in Washington, DC. They previously rented the property before buying it for $8.1 million. At that time, it was reportedly the second-most-expensive home in the neighborhood. The most expensive property was Jeff Bezos' former textile museum turned mansion. Way back in 2005, the Obamas bought a home in Chicago's Hyde Park. They bought it for $1.65 million. They took out a $1.3 million mortgage on the house. Its value rose to approximately $2.5 million.
Vacationing/ Leisure
The Obamas traveled to Southern California and Necker Island. Here, Obama kite-surfed with Richard Branson. Obama then visited Hawaii, his home state. He also went to the island of Tetiaroa in French Polynesia. There, he checked into The Brando, a luxury resort. A night in a one-bedroom villa in the resort costs between $3,034 and $4,318.
The Obamas spent time on David Geffen's yacht with Tom Hanks, Oprah, and Bruce Springsteen. They experienced a wine tasting in Tuscany; as well as river rafting in Indonesia. However, the General Services Administration pays for travel and business expenses of former presidents. So, the Obamas likely didn’t pay for all the travel expenses from their own money.
Living Expenses
When she was the first lady, Michelle Obama wore a Versace gown valued at $12,000. She wore other expensive designer clothes such as pieces from Naeem Khan. But she also wore casual, relatable styles. This includes affordable brands like Target, Converse, and J. Crew. The family isn’t lavish in their spending, despite the expensive vacations. Michelle prefers bag lunches such as turkey chili, instead of eating out.
Charity
A good portion of the Obamas’ money goes to charity. They spent $1.1 million on charity between 2009 and 2015. They donated to charities focused on:
African-American causes
homelessness and housing
veterans
health
disaster relief
They gave more than half their donations to organizations for children. Obama even donated all profits from his book, "Of Thee I Sing." The money went to provide scholarships for children of wounded and fallen soldiers. The amount totaled $392,000 during the period 2009 to 2015. The Obamas also donated 15% of their income in 2015. They gave more than $64,000 to 34 charities. Obama’s biggest donation was his $1.4 million Nobel Peace Prize award. He donated the 2009 prize money to multiple charities.
Conclusion
Based on Barack Obama's net worth, he was as intelligent with his money as he was in his political career. Besides, he was just as generous with his money as he was diligent in making it. He developed smart investment strategies long before he became president. His net worth is growing even more after his presidency.