In many ways, this year’s presidential election may come down to a question of wealth … and, more specifically, a question of Mitt Romney’s wealth, as the GOP candidate’s holdings have become the subject of considerable discussion.
Democratic pundits have argued that Romney is a child of privilege, and out of touch with average Americans, while his campaign has pointed to his considerable business success as a demonstration of his economic acumen. Late last week, the political mill acquired some fresh grist when Romney released his public financial disclosure report, as every presidential candidate must.
Romney has been quick to highlight his years with Bain Capital, but he has also been quiet about how much money he actually raked in at the private equity firm. And, while Friday’s filing gives a better look at the candidate’s finances, it’s still unclear how much money he actually has. Romney’s campaign has claimed that he is worth between $190 million and $250 million. According to the filing, the true figure could be as high as $255 million.
Indeed, despite the filing, the picture of Romney’s finances is still maddeningly opaque, particularly when it comes to his investments. For example, the report notes, his 2011 income from his Bain Capital holdings netted him somewhere between a relatively modest $720,000 and a stunning $6.26 million. Similarly, his holdings in Goldman Sachs (GS) yielded upwards of $1.1 million, but there’s no way to know exactly how much money Romney has in the investment house — nor how handsomely that investment has paid off.
In addition to making it hard to gauge the full value of the House of Romney, the vagueness may obscure a significant part of the candidate’s decision-making process. Where Romney puts his money — and just as importantly, where he doesn’t — could reveal a great deal about his priorities.
While his investments are hard to determine, some aspects of Romney’s income are much clearer. For example, royalties from his book No Apology: Believe in America totaled somewhere between $50,001 and $100,000, and — his campaign announced — were given to charity. Similarly, his seat on the board of hotel chain Marriott International netted him $260,389.74 in stock. Meanwhile, his speaking fees brought in $189,975 in 2011.
When it comes to analyzing Romney’s wealth, getting hold of a figure is just the first problem; the second is putting his holdings into context. In the past, many commentators — myself included — have drawn comparisons between Romney’s cash and the average U.S. household income or Barack Obama’s more modest net worth. Romney makes more in a year than the average household will make in a lifetime, and his assets are more than 30 times those of the president.
On Monday, though, Bloomberg TV analyzed the income and holdings of another famously rich person: Queen Elizabeth II. Initially, it would appear that Romney and the Queen share little in common: He’s the scion of a political dynasty that stretches back a measly couple of decades, while she’s the scion of a royal line that stretches back for centuries. He’s a political candidate, while she’s a relic of an earlier form of government. She’s an institution, while he’s running on a platform based in political change. Then again, like the queen, Romney got his start with the help of a major boost from inherited wealth — and, like her, his finances are somewhat mysterious.
The vast majority of Elizabeth II’s holdings — roughly $11.2 billion — are tied up in the Crown Estate, a collection of artifacts and real estate that British sovereigns can use, but can’t sell. On the bright side, she essentially lives rent-free — though while Buckingham Palace is sure to impress the neighbors, it’s not like she can trade up. Then again, the queen recently fired the crown jeweler after 160 years of service, suggesting that she may have some leeway in matters of style.
Queen Elizabeth’s personal wealth of approximately $461 million is a fair bit more than Romney’s, but the two of them occupy a similar space in the wealth hierarchy: Romney lands somewhere between ordinary rich people and stratospherically superwealthy people like Bill Gates and Carlos Slim. Similarly, the Queen lands somewhere between lower-rent royals like Queen Beatrix of the Netherlands and epically wealthy monarchs like the Sultan of Brunei or King Abdullah of Saudi Arabia.
And, like Romney, Queen Elizabeth pays most of her bills out of a comparatively modest yearly income, comprised of a $21 million yearly stipend, investment income, and profits from her estates. By comparison, Romney took in $21.6 million in 2010.
Gallery: The Richest and Poorest U.S. Presidents
But when it comes to comparing the British monarch and the Massachusetts mogul, Queen Elizabeth II’s vast holdings could also serve as a cautionary tale. Romney’s inheritance was sufficient to provide him a good education and a healthy head start, but — as he’s often pointed out — the majority of his fortune was the result of his own efforts. It takes little more than a glance at the collection of dilettantes and tabloid fodder cluttering the Queen’s family tree to illustrate the dangers of raising a child who has a firm expectation of vast inherited wealth. If Romney wants to find examples a little closer to home, he might take a peek at the Hilton family, the Kardashian clan, the Gettys and the Grubmans.
As for Romney’s five sons, his campaign recently revealed that the candidate has created a trust fund of “roughly $100 million” for them. And, given that he campaigned against the estate tax, it would appear that he wants his boys — and other wealthy children — to enjoy the full, personality-corroding effect of their inherited wealth. As he progresses down the campaign trail, it might be a good idea for Romney to occasionally spare a thought to the cautionary tales provided by Prince Charles — or Kim Kardashian, for that matter.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.
Tagged: Bain Capital, Bruce Watson, Crown Estate, estate tax, EstateTax, inheritance, inherited wealth, InheritedWealth, Kim Kardashian, Mitt Romney, mitt romney money, MittRomneyMoney, Queen Elizabeth II,