Millionaires-in-chief

The top White House contenders are a lot richer than the rest of us. But a review of their finances shows they make a lot of the same mistakes we all do.

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By Marlys Harris, Money Magazine senior editor

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NEW YORK (Money Magazine) -- In this great nation, any boy or girl can grow up to be President, but it sure helps to get rich first.

By the time he was elected President in 1860, Honest Abe, whose campaign made much of his poor, backwoods upbringing, had amassed a tidy nest egg - about $15,000, according to "The Personal Finances of Abraham Lincoln," by Harry E. Pratt. That made Lincoln one of the more prosperous citizens of Illinois and the country. And so it goes - and then some - with this year's crop of presidential candidates.

The seven front-runners, those with the highest standing in the polls and the biggest campaign troves, all have assets that would place them in the nation's top 10% of households, and most of them in the top 0.5%.

Mitt Romney, former governor of Massachusetts, heads the list with from $92.3 million to $276.2 million, not counting three homes valued at $18.7 million. (Presidential candidates are required to report the value of their assets only in broad ranges. We've used midpoints throughout this story.)

Barack Obama is the "poorest," with assets of $405,000 to $1.03 million, not counting equity in his $1.9 million house.

Most of the candidates came into their money only recently. All but one earned it. The exception: John McCain, who along with his other accomplishments, married an heiress.

As the campaign unfolds in the coming months, you're going to hear a lot about money: which candidate raised the most cash, who it came from and what conflicts of interest those contributions could pose.

But there's another financial story - and this is where Money Magazine comes in - about the candidates' personal fortunes and how they manage them.

Getting an inside look at the financial doings of the contenders certainly has prurient entertainment value, we don't deny. But what a candidate has, how he or she got it and how it's deployed can offer clues about personal biases and their potential effect on a presidential agenda.

Would a President Edwards, for example, who earned many of his millions suing doctors, sign off on damage caps in medical malpractice cases as part of a plan to bring down health-care costs? Would a President Romney support bringing back the estate tax in 2011? And would a President Giuliani, whose business and campaign are all 9/11 all the time, crack down on defense or homeland-security contractors?

No matter where the money comes from, wealth gives a candidate the same advantage an ample bosom provides a Hollywood starlet. It doesn't ensure success, but it sure helps.

Monied candidates needn't worry about bringing in a paycheck. And in what seems to be turning into a permanent campaign, that's no small leg up. "A candidate has to take one to two years off," says Fred Wertheimer, president of Democracy21, a nonprofit that promotes campaign finance reform. "It's very hard to do if you're the average person on an average salary."

To survive the months out on the hustings, a would-be President needs to have a trust fund or hold a public office that allows for extended periods of unexcused absence, an offense that would likely get the rest of us canned.

A rich candidate can also contribute as much as he wants to his own campaign unless he accepts public financing, in which case the limit is $50,000. (Of the top seven, Edwards and McCain have said they will accept it.)

So far only Romney has written big checks to himself - about $17.4 million, or 28% of the total he's raised. (His campaign says that the money is a loan.)

Candidates who are rich also have rich friends, colleagues and extended networks to tap. Former plaintiffs lawyer Edwards, for example, has raised $8.1 million, or more than a third of his contributions, from other lawyers and lobbyists.

Ron Burkle, a billionaire and chairman of the Yucaipa Companies, hired Bill Clinton to promote his Yucaipa investment funds. In March, Burkle threw a dinner that raised $1 million for Hillary Clinton.

Heavy scrutiny

Of course, wealth comes at a price. The more vast a candidate's array of assets, the more opportunity for opposition campaign operatives and pesky journalists to spotlight conflicts of interest - some of great import, others a bit of a reach.

Edwards, Giuliani and Obama, for example, have all called on the United States to do more to end genocide in Sudan. But then the press found out that Giuliani and Obama owned shares in the Vanguard Wellington Fund, which in turn had 0.7% of its billions invested in Schlumberger Ltd., a French oil-services company that does business there - and Edwards owned shares directly and through mutual funds. Anxiety about a possible fuss forced Obama and Giuliani to unload their holdings. Edwards had already sold his direct stake, and a mutual fund he held did so later.

Wealthy politicians can set up a blind trust to escape accusations that they are voting in their own financial interest. The arrangement, however, is more misty-eyed than sightless. Officeholders know what goes into it, and they get letters notifying them that the trustee is liquidating a specific asset.

Rich candidates have other crosses to bear. They routinely take heat for being out of touch with Mr. and Mrs. Middle America. Remember that clip of President George H.W. Bush supposedly enthralled by a grocery scanner in the 1992 campaign? Pundits said he was too la-di-da ever to shop in supermarkets where scanners had been in use for almost 20 years.

Loaded candidates are also dinged for lavish spending - think Edwards' $400 haircut or Romney's $300 expenditure on makeup.

But no matter how well heeled they are, there are a few ways the candidates are like the rest of us. They work long hours (yes, speech making, handshaking and rubber-chicken-eating is real work), and they don't manage their money full time.

And even with the help of highly paid advisers, they make mistakes. Several hold too much cash (often to avoid the appearance of conflicts, sometimes out of an abundance of caution) and make other common goofs.

They may put too much into a single asset or asset class, or fail to pay attention to the tax consequences of selling an investment or - for shame! - they don't save enough.

To get a sense of how the potential leaders of the free world stack up when it comes to their money, we asked several professionals, as a matter of patriotic duty, to offer the candidates some unsolicited advice: Christopher Cordaro, wealth manager at RegentAtlantic Capital in Chatham, N.J.; Jason Mirsky, director of wealth management at RiskMetrics, a financial-analysis software company in New York City; Allan Roth, president of Wealth Logic in Denver; and Stewart Welch and Hugh Smith of the Welch Group in Birmingham.

Our information about the candidates' money comes from Federal Election Commission disclosure forms, except where specified. As mentioned, we're using midpoints of reported asset ranges. Because the law allows candidates to employ such wide ranges (say, $100,000 to $250,000 or, worse, $5 million to $25 million), going low, high or in between yields at best a rough approximation.  To top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.