Barack Obama left the White House on January 20, 2017, after eight years as President of the United States, handing over the presidency to Donald Trump.
Although Obama’s reported personal fortune was considerably lower than some estimates of Trump’s wealth, the former president was leaving office financially secure, with several lucrative opportunities awaiting him and former First Lady Michelle Obama.
A study by an American University in Washington, D.C., estimated that the Obamas could earn as much as $242 million after leaving the White House, largely through speaking engagements, book deals and other post-presidential opportunities.
Obama’s financial position had changed dramatically since his early political years, when he earned a modest income as an Illinois state senator and university lecturer.
Obama’s Estimated Net Worth
According to Celebrity Net Worth, Obama’s net worth was estimated at about $12.2 million, while Michelle Obama’s was put at approximately $11.8 million.
As president, Obama earned an annual salary of $400,000 throughout his two terms in office.
In addition to his presidential salary, he was entitled to a $50,000 annual expense account, a $100,000 non-taxable travel account and an entertainment budget of $19,000.
His financial records also showed that writing had become an important source of income.
On April 15, 2016, Obama released his 2015 tax return, which showed that he and Michelle filed jointly and reported an adjusted gross income of $436,065.
They paid $81,472 in federal taxes, representing an effective tax rate of about 18.7 per cent, and donated $64,066 to more than 30 charitable organisations.
How Obama Built His Fortune
Obama’s financial rise accelerated after his emergence as a national political figure and the publication of his books.
In 2004, while serving in the Illinois State Senate, he earned $80,287 in salary and another $32,144 from his teaching position at the University of Chicago Law School. At the time, he also held assets in several financial funds.
By 2005, his financial fortunes had begun to change significantly. Following his keynote address at the 2004 Democratic National Convention, Obama secured a multi-book deal with Random House.
He received a reported $1.9 million advance for The Audacity of Hope, in addition to royalties. He also earned more than $847,000 from another book advance and about $378,000 in additional royalties that year.
His investments also expanded, including a Nuveen Floating Rate Income Fund and deposit accounts worth between $150,000 and $350,000.
In 2006, Obama reported nearly $150,000 in book royalties and another $425,000 from a book advance. He also held publicly traded investments involving funds managed by firms including Goldman Sachs and Vanguard.
His earnings rose sharply in 2007, when he reportedly received $3.3 million in book royalties from Random House and another $816,000 from Dystel & Goderich Literary Management.
During that period, his investments included a Northern Municipal Money Market Fund valued between $1 million and $5 million, as well as U.S. Treasury notes worth between $500,000 and $1 million.
He also reportedly established two 529 college savings plans for his daughters, each valued at around $200,000.
By 2008, when he was elected president, Obama held between $1 million and $5.1 million in U.S. Treasury bills.
In 2009, he received the Nobel Peace Prize, which carried a $1.4 million monetary award. Obama announced that the prize money would be donated to charitable causes.
From 2009 through 2015, Obama earned his presidential salary of $400,000 annually while continuing to receive book royalties and income from investments.
What Next for Obama?
After eight years in the White House, Obama was expected to enjoy a period of relative privacy before embarking on the next phase of his public life.
According to reports at the time, Obama joked that one of the first things he wanted to do after leaving office was to “sleep for two weeks.”
Beyond rest, however, the former president was expected to remain involved in issues that had featured prominently during his presidency.
Reports suggested that he could continue working on matters including gun control, immigration, nuclear non-proliferation, race relations and criminal justice reform.
Obama was also set to enjoy substantial financial and official benefits as a former president.
Under the Former Presidents Act of 1958, he would receive a lifetime pension equivalent to the salary of a Cabinet secretary. At the time, that amounted to about $205,700 annually.
He would also be entitled to office space, staff and other expenses, while continuing to receive health benefits and Secret Service protection.
The scale of the post-presidential security arrangements was not publicly disclosed, although the federal government continued to provide protection to former presidents.
Millions From Books and Speaking Engagements
Like several former presidents before him, Obama was expected to turn his international popularity and literary success into substantial post-presidential earnings.
Former presidents had established lucrative careers through public speaking, book publishing and charitable foundations.
Former President George W. Bush, for instance, reportedly earned between $100,000 and $175,000 for individual speaking engagements after leaving office.
Former President Bill Clinton and Hillary Clinton had also generated significant income from paid speaking engagements. Reports at the time estimated that they earned an average of $210,795 per speech over roughly 15 years, generating approximately $153 million from 729 engagements.
American University projected that Obama could deliver as many as 50 speeches annually after leaving office.
At a conservative estimate of $200,000 per engagement, such appearances alone could potentially generate close to $10 million a year, before taxes.
His memoir was expected to become another major source of income.
The New York Times reported that experts estimated Obama could command about $30 million for his presidential memoir, while Michelle Obama could potentially earn around $10 million for her own book.
Staying in Washington
Unlike many former presidents, Obama was not immediately leaving Washington, D.C.
He and his family planned to remain in the capital so that their younger daughter, Sasha, could complete high school.
The family was moving into an upscale rented mansion in Washington’s Kalorama neighbourhood, an area also associated with prominent political and business figures.
The property was an approximately 8,200-square-foot mansion with nine bedrooms, originally built in 1928. It had reportedly been sold for $5.3 million in 2014 and was estimated at the time to be worth about $6.3 million.
Obama’s departure from the White House therefore marked not an end to his public influence, but the beginning of a new chapter.
With a presidential pension, lucrative publishing opportunities, potential speaking engagements and continued involvement in public issues, the former president was poised to remain one of America’s most prominent figures long after leaving the Oval Office.
0 Comments