While he was out of office for four years, Joe Biden earned $17.3 million, yet his net worth is only assessed at $8 million. Why is he not wealthier?
Joe Biden, a member of the “middle class,” had a small wealth of $2.5 million, primarily made up of pensions and real estate, when he boarded the Amtrak out of Washington, D.C.’s Union Station on the day America’s first billionaire president took office. He was headed for Delaware. However, Biden was about to profit. He and his wife Jill had made $11.1 million at the end of 2017. The following year, they made $4.6 million, then $1 million in 2019, and $630,000 in 2020.
The legend of how Biden amassed a fortune after serving as vice president by using his notoriety to promote books and give speeches has been told numerous times. But a closer look at the numbers raises an unasked query: Why isn’t Biden even wealthier? You would anticipate that a person with a $2.5 million net worth who makes $17.3 million during a bull market would have a net worth of at least $8 million. How did Biden’s money end up? Well, out of that, $7 million went to pay taxes, $1.3 million to charity, $180,000 to household staff, and perhaps $80,000 or so for mortgage interest. Still, you’re a few million dollars over Biden’s projected net worth after excluding those goods.
It’s possible that Biden, who co-owns his wealth with his wife Jill, handed part to other members of his family. Or maybe he just spent everything. The president would have had to spend an average of approximately $2,000 per day over the four years he was out of office in order to lose $8 million, which is what an examination of Biden’s financial disclosure filings, property records, and career earnings suggests he is worth.
In spite of numerous demands for comment regarding Joe Biden’s wealth, the White House remained silent.
How a president has handled his or her private finances might teach you a lot about how they would likely manage the nation. Donald Trump may have come from a party that takes pride in being fiscally conservative, but anyone with even a passing familiarity with his financial background—which includes massive debts financed by lavish developments, many of which failed—could have told you right away that he wasn’t the kind of man who would be likely to watch the national budget carefully. And he didn’t; in fact, even before the pandemic, deficits grew by 68%, partly as a result of a huge tax cut for corporations and the wealthy.
Their priorities of Biden are different. He appears committed to supporting the middle class rather than the wealthy with his donations. He just proposed a $6 trillion budget and has already enacted a $1.9 trillion Covid relief program. But a close examination of his personal finances reveals a connection between him and Trump. They both enjoy spending money freely and don’t mind getting into debt. Therefore, don’t be shocked if the national debt continues to climb.
Trump vs. Biden
Even though Joe Biden has more money than the average American, he still has nothing on his predecessor.
Biden’s grandfather worked at American Oil as an executive. His father tried his hand at several other businesses, but they all failed, and the family was forced to struggle. Later, he was hired as a car salesman. However, Joe Biden had little interest in following a surefire career route. Early in the 1960s, while attending the University of Delaware, a buddy of mine quipped, “You guys could be guaranteed—upon graduation—a position at the DuPont business, with a decent starting salary and a job for life, but you would never make more than $40,000 a year (about $350,000 today). Alternately, you could accept a job paying half as much; there would be no guarantees, but your earning potential would be unrestricted. Which one would you choose? For Biden, the solution seemed evident. He assured his pals that he would take the risk.
After earning his law degree, Biden made a self-investment by starting his own business in Wilmington, Delaware, with money borrowed from the bank that provided financing for the automobiles his father sold. But he didn’t save much. Biden was given a $5,000 check after the company won its first significant lawsuit. He immediately spent money on a four-poster bed, a dining set, and a desk with his wife Neikia, a teacher. In his 2007 autobiography, Promises To Keep, Vice President Biden stated that the furnishings were also enormous, perhaps more so than the cost. Neilia was so certain about our future, and this was our adventure.
A modest array of real estate was soon part of that future. Biden bought three homes in a period of roughly six months, one of which was on 80 acres of land in Maryland where he had a lofty desire to one day build a family complex for his parents and siblings. He borrowed money from banks and his father-in-law to make ends meet while he and Neilia rented out the properties and found tenants. In return for running a local country club pool, Biden, his wife, and their two young sons were able to live in a modest home without paying rent. Money was still scarce even after collecting the rent. In his autobiography, Biden admitted, “I was in continual danger of slipping behind.”
That did not deter him from having even greater dreams. Biden purchased a new home for himself and his boys after a devastating car accident in 1972 claimed the lives of his wife Neilia and infant daughter. He paid $185,000 (the equivalent of $930,000 in today’s dollars) for a 10,000 square foot DuPont mansion in Wilmington. Biden made about $43,000 a year as a senator at the time he purchased it. He repeatedly refinanced the house throughout the years, taking out mortgages for far more money than he had originally paid for it. In 1996, Biden sold it for $1.2 million and spent $350,000 to purchase adjacent land. On the property, he constructed a new home and thereafter continued to refinance it frequently.
With the aid of borrowed funds, Biden was able to send his three children to private schools and college. At a 2015 event for the Department of Housing and Urban Development, Biden stated that “home ownership is how most middle-class families save, how most middle-class families develop assets, and for many, it’s the way you send your kid to college, borrowing against it.” “That’s how I paid for my kids’ college tuition.” He was responsible for at least a half-dozen loans totaling more than $700,000 in 2001, while his daughter Ashley was a student at Tulane University.
Joe Biden’s Wallet Is Inside
Biden has accumulated an $8 million fortune as a result of a few successful years on the speaking and book tour. His current holdings include two homes totaling more than $4 million in value (net debt) and at least $950,000 in cash accounts.
These actions don’t make much sense from a business standpoint. Without much saving or investing, Biden was overextending himself. However, if you look at them in terms of quality of life, they make more sense—”middle-class Joe” wanted to live an upper-class lifestyle, enjoying large residences and sending his children to expensive schools, so he took on significant debt. “What is quite prevalent in the United States now is that most people are stressed for liquidity, even with high earnings,” says Megan Gorman, an attorney, and managing partner at a high net-worth financial planning firm who also contributes to Forbes. “When you look at the Bides’ tax records, what you see is a couple who have collected pensions, life insurance, and some money over the course of their lifetime. And becoming a person with an extremely high net worth is not part of some grand, deliberate plan.
Biden acquired some more money after being appointed vice president, which he used to pay for his home. In a characteristically Trumpian approach, he reportedly leased a cottage on his Wilmington property to the U.S. Secret Service, who was in charge of looking after him, for $26,400 per year.
You’re not necessarily broke just because you’re strapped for cash. Biden had an estimated net worth of $2.5 million when he resigned from office in 2017. He had some retirement savings and a life insurance policy, but the majority of his wealth came from his Delaware home and his government pension, which provided him with a lifetime income guarantee of about $160,000.
As soon as Joe and Jill Biden began publishing books and giving speeches, more liquidity quickly appeared. The ex-vice president was offered a prestigious position as a professor at the University of Pennsylvania. Increased expenditure followed increases in income. According to their tax records, Biden’s paid $8,600 for housekeeping services in 2017. That sum had increased to $95,250 by the year 2020. An inquiry concerning the type of personnel Biden had gone unanswered by a White House spokeswoman. More than two dozen nonprofits received $1.3 million from them, including the Beau Biden Foundation for the Protection of Children and the United Jewish Federation of Chicago. They also paid off two credit lines and one mortgage.
In June 2017, Biden paid $2.7 million for a 4,800-square-foot vacation home in Rehoboth Beach, Delaware, fulfilling a long-standing pledge to his wife. It ended up being a good investment since, as a result of rising housing values during the pandemic, the house is now believed to be worth $3.4 million, up roughly 25% from what they purchased four years ago.
But it doesn’t seem like the Bidens have taken many additional steps to increase their wealth through investments. Even though Biden has vowed to refrain from investing in diversified mutual funds—holdings that ethics experts frequently advise to avoid conflicts of interest—he has made vows to refrain from doing so in order to avoid ethical conflicts in his professional capacity. The Bidens have less than $200,000 in mutual funds kept in a variable annuity, according to a 2019 financial statement, with the rest of their wealth being held in cash accounts, state retirement accounts, life insurance policies, and holding businesses for their writing and speaking ventures. They missed out on stock gains that could have added millions more to their riches since they didn’t actively participate in the market.
The president indicated cash and retirement funds worth between $1.2 million and $2.9 million on Biden’s most recent financial disclosure report, which was submitted in May. You would end up with $5.5 million if you took his $17.3 million in revenues and subtracted all of his $11.8 million in known expenses, such as taxes, charitable contributions, housing bills, and so forth. Given that Biden’s report lists cash and retirement accounts with values ranging from $1.2 million to $2.9 million, which is significantly less than the $5.5 million estimate, it seems likely that Biden spent at least $2.6 million elsewhere. Giving gifts to his family is one option. Couples are not required to disclose gifts of up to $30,000 per year under federal tax guidelines. Joe and Jill Biden could spend more than $200,000 a year on their two children, Hunter and Ashley, as well as their grandchildren. Additionally, Biden might have given to organizations abroad that wouldn’t appear on his tax returns. For instance, the Bidens gave $25,000 to a British organization associated with Prince Harry in 2018.
Or perhaps they simply spent it all, taking pleasure in their wealth without exercising any forethought. In 2017, the Bidens upgraded the swimming pool at their Rehoboth home. Local pool experts estimated that it might cost more than $75,000 to complete. The Bidens were also renting a five-bedroom house in McLean, Virginia, according to a 2019 Washington Post report. The rent was reported $20,000 per month.
It’s unlikely that the Bidens will ever run out of money, even if they continue to spend lavishly. They would still walk away from a prospective second term with more than $2 million, just as they did in 2017, even if they spent $2,000 every day for the following eight years. They would be ready to give speeches and publish books once more, standing in line to receive yet another windfall.