These days it’s assumed that any presidential candidate is relatively wealthy. The degree of that wealth can range from a few million like President Barack Obama, made mostly from his two best-selling books before his presidency, to the mega-bucks of Gov. Mitt Romney, made from inherited wealth and a successful private equity career. Even relatively poor chief executives, like Bill Clinton, have wealthy benefactors who help them until that autobiography hits the best-seller list.
The annual salary of the president today is $400,000, last raised in 2001, and it includes a $50,000 expense allowance. After leaving office a former president will earn a taxable pension of $199,700 per year.
In the 19th century, things were a little different. Several presidents, Thomas Jefferson for instance, saw their finances melt down after serving the nation. Part of the problem was that in the early days of the nation, presidents were responsible for paying for travel, diplomatic entertaining and the salaries of their staffs. Expenses ate into the proscribed annual salary of $25,000 (adjusted for inflation, that’s $316,000 today) that did not rise until 1873.
By 1949, when the salary for the first time reached $100,000 ($904,000 today), plus a nontaxable expense account of $50,000, it had been decades since anyone of less than considerable wealth had ascended to the nation’s top office.
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It must have been quite an amazing moment for Harry Truman when his salary reached six figures. As a young man, Truman had been on the brink of bankruptcy. It was the classic tale of the American dream that any boy can grow up to be president.
Here’s AdvisorOne’s look at 7 U.S. Presidents Who Flopped Financially:
1. Thomas Jefferson: 1801-1809
The nation’s third president might seem an unlikely candidate for bankruptcy. His Virginia estate, Monticello, his work as an inventor and his interest in science all add up to the image of a wealthy landowner who was free to help lead a revolution—the Revolution.
But things are often not what they seem. Growing tobacco in colonial Virginia was risky and often left landowners in debt because of loans taken out to purchase crops. This was the case for Jefferson. Add to that a debt of about $10,000 ($137,000 today) incurred conducting the nation’s business while president and a downturn in land values after the Louisiana Purchase, and the seeds were sown for a financial meltdown.
As he neared the end of his life in 1826, according to Monticello.org, the debts had mounted, causing Jefferson to hatch a lottery scheme with his estate as the big prize. The state legislature assented to the idea. The idea was to raise enough money to pay off the debts and help his heirs. Intervention by private citizens urging Jefferson to raise the money through private subscriptions stopped the lottery. Jefferson died before more than a fraction of the approximately $100,000 ($1.9 million today) needed was raised. His heirs sold off Monticello and its slaves by 1831.
2. James Monroe: 1817-1825