Would Marco Rubio’s Personal Finances Be the Worst of Any President in History?

After seeing a few articles about Marco Rubio’s personal finance habits, I thought it would be fun to compare Rubio to other presidents in the past to see if he would have the worst money management skills in the history of the Presidency. Most folks outside of Florida had no clue who Marco Rubio was before the presidential campaign started this past year. His stellar GOP primary debate performances and the struggling campaign of Jeb Bush have led many to say that he will be the choice of the Republican establishment heading into the national primaries. That belief has caused a big change in the betting markets for his odds to win the nomination. Predictwise placed his odds of winning at 47% even though he usually places third to fifth place in the national polls. Clearly, it is not out of the realm of reason that Rubio could become the Republican nominee and possibly US President. 

Rubio’s Rise Outpaced Growth in Financial Wisdom

Newly elected to the Florida House of Representatives at the age of 28, Rubio showed up with about $180,000 of debt, $150,000 of which was student loans (thanks to NY Times for much of these facts that follow). The legislature pays very poorly and Rubio was very ambitious, so he was limited in his private sector opportunities by virtue of how much time he committed to his public job. He gradually made more money as he climbed the ranks but his personal spending habits rose just as fast.

Once it became clear that Rubio would win the House Speaker position, he grew in power and importance in Florida. He got a $300,000 a year law job that finally secured a high income for him and his family, but his spending went much higher too. He bought a house for his mother in law with a no money down mortgage in 2003. In 2005, he bought a $550,000 house in West Miami. He also purchased a third house along with a fellow lawmaker in Tallahassee for use during the legislative session. That Tallahassee home faced foreclosure after they failed to make the payments for five months because the house became worth less than what they paid for it. He eventually took a loss on the house and sold it.

During this period of the 2000s before his Senate run in 2010, he bought a $80,000 speed boat. Supposedly, his choice of cars was on the higher end as well, as his recent lease of a $50,000 Audi suggests. He also misused credit cards that were supposed to reimburse him for campaign expenses, often on accident. The published credit card statements show a penchant for wine, food, and relatively expensive tastes.

Rubio did not limit his questionable financial decisions to just his spending and use of debt. Perhaps the most troubling part of his financial history is his decision to liquidate his $68,000 retirement account instead of roll it over to an IRA. When you change jobs you usually have the the option to stay in your 401k plan, roll it over to another qualified retirement plan tax free, or ask for a check. The first two choices are smart because the money continues to build up in your account without being taxed. That decision to cash in the 401k cost him tens of thousands of dollars in unnecessary taxes and penalties. Cashing in your 401k is a novice move and indicated a real lack of understanding of personal finances. Taking a check or loan out of your retirement plan when you change a job is up there with carrying credit card debt as one of the worst decisions you can make with your money.

When he was about to run for Senate, he got a job at Florida International University. Because of the possible conflict of interest from a powerful politician receiving a large salary from a public institution, he secured most of the money for his paycheck from his billionaire Miami political backer, Norman Braman, who also hired Rubio’s wife to do work for him. Supposedly, when he was negotiating the salary he pushed harder than you would expect because of his spending habits. His $69,000 a year comp from teaching part time ranks up there with the most highly paid law and medical school professors on an hourly basis. While the high salary might give a questionable appearance, I think it is justified from the perspective of a FIU student or administrator. You want important decision makers in front of students. For $69,000, most of which came from a donation, the students getting to learn from him in his classes doubtlessly received a fantastic look at the inner workings of government. Universities routinely dole out $70,000 or more for a single night’s lecture from a celebrity. University of Florida stupidly spent $70,000 in student fees for Shaq to come on campus and lift a student up and down over his head. Marco Rubio definitely provided more educational value to the university in his long term teaching arrangement than most of these celebrity one night events so I don’t have a problem with it at all.

Marco Rubio’s Personal Finances Compared to Other Presidents

Even though he finally received a $800,000 book deal in 2012 as his profile began to rise, Rubio still has a very modest net worth at best. Just because someone grew up poor and did not know how to handle money does not mean he or she should be disqualified from the Presidency. Some other Presidents might have actually been worse off in their financial health and decision-making. Check out some fun facts I found from Investopedia on a few of our Presidents.

Harry Truman: lived with his mother in law after returning to Missouri from the White House. He made a lot of bad investments and was saved by the implementation of the presidential pension and Medicare. Otherwise he might have needed to get a job.

Ulysses S. Grant: He was probably the worst financial mind we have ever had in Washington. He had countless scandals in his administration coming from the smarter men that surrounded him and took advantage of his cluelessness. During Black Friday, a few men tried to corner the gold market and send the country into crisis. In the Whiskey Ring Scandal, a bunch of government agents used their positions of authority to help people avoid alcohol taxes and take a cut of the profits. He loved the high life and spent heavily, and when a trusted business partner defrauded him, he had to declare bankruptcy. He died broke. Only the sale of his memoirs after his death saved his family from financial ruin.

Thomas Jefferson: This name really surprised me. He was wealthy most of his life but used loans extensively, which were backed by his home at Monticello. When he couldn’t sell land to cover his loans, he basically went belly up. His daughter had to live off charity. Even so, his $15 million purchase of the Louisiana territory from France probably ranks among the best investments of all time, so thank you Mr. Jefferson.

Rubio IS The Average American Financially, Just with a Higher Income

I think it is fair to say that Rubio’s financial management is better than Ulysses Grant, however there is a cautionary tale in the famous Civil War General’s story. Men who do not understand spending, budgeting, and investing can be taken advantage of by savvier people around them. I think all of Rubio’s decisions and mistakes have been honest ones and that he is getting better as he gets a crash course in money management in real time.

He reflects the way a second-generation immigrant from a poor family might handle sudden high income. When you are poor, you generally react in two ways when you get a nice job, you either save a disproportiate amount because you remember how it was to be poor, or you spend like crazy because you have always wanted a better lifestyle for you and your family. Rubio supposedly told a friend he bought that $80,000 speed boat “because it had always been a dream to afford something like that.” Rubio came from nothing and worked hard to achieve the typical American dream of nice cars, nice houses, and a comfortable life. His clear lack of financial acumen does not mean he cannot learn because he is a young man still. Since 2012 his financial skills have tremendously improved, having put away $150,000 in savings and donated $60,000 to charity, more on a percentage basis than many of his peers.

The average middle to upper middle class American has credit card debt, student loans, big mortgages on houses that are too big, and expensive cars with loads of wealth destroying depreciation yet to occur. This average American also saves way less than he should for retirement, similar to the 2% on average Rubio saved during the 2000s. If you do not come from a family that educates you financially, you would probably make a lot of financial mistakes along the way too, like paying too much in investment fees, cashing out your retirement plans, and not saving enough to get an employer match on your 401k.

The reason the lack of money management skills from Rubio might not be a problem is because he is reflective of the average person. I could see working people being very attracted to his story of a son of a maid and a bartender rising up to potentially become President of the US. Rubio has charisma and is the best debater on the primary stage. As a banner carrier for the establishment wing of the Republican Party, he will be surrounded by experienced policy makers who will do most of the decision making anyway. For that reason, a Cruz, Bush, or Fiorina presidency would not be all that different from a Rubio one.

Regardless of your view on Marco Rubio, consider that your mom and dad are probably richer than someone who could become the President of the United States. For some reason that makes me proud of America and want to laugh a little at the same time.

*Thanks again to the NY Times and Investopedia for the use of their reporting in this article. If you have any thoughts on whether Rubio’s finances make him more or less qualified to be President, comment below!