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Learnings from president obama's portfolio


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President Barack Obama's declaration of financial holdings was made public this month. Here are a few tips we can learn by looking at it.

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Learnings from president obama's portfolio

  1. 1. Learning’s from President Obamas portfolioPresident Barack Obamas declaration of financial holdings was made public this month. Here area few tips we can learn by looking at it.Author : iFast Content TeamAround two weeks ago, the White House released US President Barack Obama’s financialdisclosure, which can be seen here. The president of the United States has to mandatorilysubmit his investments with the United States Office of Government Ethics.According to an article in Nasdaq, the biggest mistake he has made is to give too little attentionto equity in his portfolio.President Obama’s retirement portfolio is mainly in an index fund – the Vanguard 500 IndexFund. This fund invests in 500 of the largest US companies across sectors and industries.According to Business2community, Vanguard 500 Index Fund returned 13.8% over the last yearand 12.5% over the last three years. What’s interesting is that this is the only equity exposure hehas. More than half of his savings are in Treasury Bills and Notes, yielding just over 2%.This is a mistake many investors make. When it comes to their retirement portfolio, they arecompletely risk averse. Always include equity when saving for your retirement. The aim of yourretirement portfolio is to generate growth as well as beat inflation. Equity is the best asset classto deal with both issues.But Obama has also done some smart saving.1. Started a college fund for his daughters. It is estimated that currently there is around$200,000 in that fund.Putting money aside for a child’s education should be one of the top saving goals offamilies.2. Has a ‘rainy day’ fund. The family also has between $250,000 and half a million inchecking accounts, with between 4% and 7% of its net wealth in cash.It makes sense to always keep a few months expenses in an emergency stash. You neverknow when you might need it. Or alternatively, you can also take advantage of aninvesting opportunity should one crop up.The disclosure statement lists assets and liabilities in dollar ranges, so pinpointing thepresidents exact net worth is difficult.According to Celebrity Net Worth, President Barack Obama earns a base salary of $400,000 peryear. Once his annual expense account, travel account and entertainment stipend are accountedfor, it totals over $550,000 each year.USA Today reported that much of Obama’s cash flow comes from book royalties. Since thedisclosure statement does not deal with specifics, but with ranges, it is not possible to narrowdown on a figure. The disclosure form lists $100,000-1 million in royalties from Dreams FromMy Father, $100,000-1 million from Of Thee I Sing: A Letter to My Daughters, and $50,000-100,000 from The Audacity of Hope: Thoughts on Reclaiming the American Dream.However, the President need not fret too much about not having sufficient funds to pay for hisdaughter’s education or run out of money in his retirement fund. His royalties will continuefrom the three books and nothing stops him from writing a fourth once he finishes his term.Then there is money to be made in speeches. In 2009, 2010 and 2011, Bill Clinton earned $7.5
  2. 2. million, 10.7 million and $13.4 million, respectively. Just for his speeches!George W Bush had delivered almost 140 paid speeches for at least $15 million in his first two-and-a-half years after leaving the White House.Nasdaq has one suggestion though to help Obama save some more right now. Obama refinancedhis Illinois residence in 2005 at a rate of 5.25%. By refinancing hismortgage at the current3.58%, he could save up to $16,700 annually in interest.Do make note: Responsibly tackling your debt can help you save a lot!By investing via Fundsupermart, you have access to 41 AMCs in India. Heres why youshould invest via no cost to you, the Fundsupermart Mobile Application helps you take charge of yourportfolio with up-to-date information at your fingertipsTo buy and sell mutual funds online, click here.Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual fundsof any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or bematerially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or saleof any mutual fund. No investment decision should be taken without first viewing a mutual funds scheme information documentincluding statement of additional information. Any advice herein is made on a general basis and does not take into account thespecific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, andlegal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative ofthe future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise.Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website. Please read ourdisclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is noguarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAVof the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Pastperformance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. The name of theScheme does not in any manner indicate the quality of the Scheme, its future prospects or returns. Please read the Statement ofAdditional Information and Scheme Information Document carefully before investing.