In fact, a number of well-known Presidents were close to penniless in their later years.
Thomas Jefferson left no inheritance and was saddled with enormous debt when he died. Jefferson's debts were such a problem in his old age that Congress attempted to bail him out by buying his collection of library books at $4 per volume to replace the books in the Library of Congress which had been burned in the War of 1812.
Harry Truman had almost no assets when he left the Presidency and his only income was a small pension from World War I. He and his wife Bess moved into his mother-in-law's house in Independence, Missouri when he left Washington, D.C. Truman's precarious financial condition was a prime reason that Congress first enacted a pension for former Presidents in 1958. However, this was not done until almost 200 years after the nation's founding.
Ulysses Grant was another President who was almost penniless when he died. Grant spent his last days writing his memoirs while battling throat cancer in order in the hope of providing some income to his wife Julia. His book, published posthumously, was a great success and went on to secure the financial future of his wife.
How times have changed today.
When Bill Clinton entered The White House in 1993 he has stated he had the lowest net worth of any President in the 20th century. His net worth is now estimated at $75 million by 24/7 WallStreet.com.
That puts Clinton in the Top Ten for richest ex-Presidents according to that same analysis (in constant 2016 dollars). Not bad for someone who came in with what was arguably zero net worth when he took office.
Until Donald Trump took office, George Washington was considered the richest President. Washington had a net worth estimated at $580 million (in 2016 dollars). His salary as President was also generous. At the time, it made up 2% of the entire federal budget.
If that percentage of pay based on the budget still held today, President Trump would be making $80 billion per year. Trump is effectively working without pay as he is donating his entire salary to charity.
You would think the Democrats and the Never Trumpers would give him some credit for that! Even George Washington did not turn down his salary.
Like Bill Clinton, Barack Obama had a very modest net worth when he became President. Four years before he became President of the United States he was an Illinois state senator making $85,000 per year.
Over the next 11 years, Barack and Michelle Obama made $20.5 million according to an analysis by Forbes magazine. And all of this while he was an elected government official!
How times have changed since the days of Harry S. Truman.
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| Credit: Forbes.com |
Notice that about three-fourths of the income of the Obamas over that period was from book royalties.
Now that Barack Obama is a private citizen he can really take advantage of the private enterprise, capitalist economy that he often spoke critically of as a public official.
He is making $400,000 per speech. He is in advanced discussions with Netflix to be paid to produce a series of high profile shows for the streaming service. Most significantly, the Obamas have received a $65 million advance for each of them to write a memoir about their White House years.
That $65 million number got my attention because I know a little about how the financial aspects of book deals typically work regarding royalties for authors. Let's put that number in context by looking at the general guidelines that most New York publishing houses follow for book royalties for authors.
This is from Alan Jacobson on "The Business of Publishing".
Typically, an author can expect to receive the following royalties:
Hardback edition: 10% of the retail price on the first 5,000 copies; 12.5% for the next 5,000 copies sold, then 15% for all further copies sold.
Paperback: 8% of retail price on the first 150,000 copies sold, then 10% thereafter.
Most people are shocked to see how little the typical author makes from writing a book. However, consider the fact that the publisher must pay the costs of printing, binding, warehousing, distributing, shipping, promoting and advertising the book and it makes more sense.
Let's look at the Obama deal more closely from the economic perspective of the publisher.
If you apply a 15% royalty on a $30 book that would equal $4.50 per book. Assuming normal financial terms for the publisher, it would need to sell 14.4 million books by Barack and Michelle in order to recoup the $65 million advance.
I have no doubt that the Obama books will sell a lot of copies. However, 14.4 million copies? At $30 per book that would put total gross sales for the two books at $432 million.
The best-selling book of 2017 sold 1.1 million copies. Here is the top 10 list in unit sales as compiled by Statista. Hillary Clinton's book, "What Happened" did not make the list. It sold 449,000 hardcover copies in 2017 according to Wikipedia
I may prefer non-fiction but most readers seem to favor fiction titles.
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| Best Selling Print Books in the USA by unit sales |
For additional perspective, here is a list of the best-selling individual books of all time (the Bible excluded).
Notice that they are all fiction titles and only Harry Potter and The DaVinci Code were published in the last 20 years.
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| Credit: BookRiot.com |
For additional context, consider that Barack Obama only received 69.5 million votes when he was first elected President in 2008. That means he needs about one out of every five people who voted for him to buy one of the books.
How does this make any economic sense?
It does not in the world that you and I live in. However, in the world of political elites, payoffs, and paybacks, it is par for the course.
It also seems to be more profound when liberals are in control and making the decisions.
For example, I am always frustrated when I go to the local library and find that all of the titles I am interested in are checked out or they don't even have the book. I don't know if the people who make the decisions on what books to buy are Liberals. However, I would guess that they are more liberal in their political outlook than the average American voter.
How do I know?
Here is a photo I recently took of the new book section at my local library branch as I was browsing the bookshelves.
What is on the shelf waiting to be checked out?
5 copies of Hillary Clinton's book, "What Happened".
7 copies of Al Franken's book, "Giant of the Senate".
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| New Non-Fiction Bookshelf The Public Library of Cincinnati and Hamilton County Symmes Township Branch |
Mind you this is a small branch library.
My tax dollars at work.
Just as assuredly your tax dollars will also be put to work buying multiple copies of the Obama books for your local library.
What I find most ironic in all of this talk about Presidential net worths is that our current President is so often criticized for his wealth (and supposed conflicts of interests). However, unlike most other recent Presidents, he is very likely to leave office with less net worth than when he went in.
Forbes reduced its estimate of Trump's net worth by $600 million during his first year office due to the personal costs he paid for his campaign and fallout to his businesses due to his "unpopularity".
Obama has always been portrayed as the "selfless public servant" and Trump as the "greedy opportunist" by the mainstream media.
Could it be that they have it reversed?
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