Alexandria Ocasio-Cortez is the rising star in the Democratic party. The 30-year old self-proclaimed “Democratic Socialist” and former bartender is New York’s 14th Congressional District for 2020 and beyond.
AOC, for short, is the third most popular US politician on Twitter after Barack Obama and President Trump.
One of the biggest question marks is what is Alexandria’s net worth?
Given the average member of Congress has a median net worth of around $511,000 in 2020, Congress members are roughly five times wealthier than the median net worth of an American household of $97,300, according to the Federal Reserve.
But given Alexandria Ocasio-Cortez is only 30 years old as of 2020, and the average age of a Congressman is 57, and the average age of a Senator is 62, it is logical to conclude that AOC’s net worth is much lower than the median or average Congressperson’s net worth.
Alexandria Ocasio-Cortez’s Net Worth
AOC positions herself as a working-class person for the people of New York.
“I think we need to be a party that is first and foremost accountable to working-class people again, and to marginalized people,” she told the Progressive in September 2018.
After Ocasio-Cortez defeated Rep. Joe Crowley in the primary in June and won the general election in November, she said in an interview with the New York Times that she was worried about paying for an apartment in Washington, DC, before her $174,000 annual congressional salary kicked in.
According to public records, she had $15,000 in savings in 2018, which should have been more than enough to pay for a $2,700 average apartment in Washington DC.
$174,000 is a very healthy paycheck for anybody in America, not to mention for a 30-year old as of 2020.
The median household income in America for 2019, after all, is only about $62,000 ($72,000 is the average income). See the chart below by the US Bureau of Census. The median and average income in 2020 is likely quite similar due to the volatility in the stock market and the recession.
According to AOC’s communications director at the end of 2018, Ocasio-Cortez had around $7,000 in savings. Where the rest of her $15,000 in savings went, it’s hard to know. Perhaps she spent her money on moving expenses and preparation for her new government position.
She made about $26,600 in 2018. On July 10, 2019 during a House Committee on Financial Services on Capital Hill, she revealed in a statement that she still has $19,000 in student loan debt.
“I literally made a student loan payment while I was sitting here… and I looked at my balance and it [was] $20,237.16,” Rep. Alexandria Ocasio-Cortez (D-NY) stated towards the end of the hearing. “I just made a payment and it’s now down to $19,000.”
Her student loan debt is high because she attend Boston University, one of the most expensive private schools in the country that has a 2020 tuition of over $53,000. Kind of strange going to such a school given she’s a Democratic Socialist.
Despite only having around $7,000 in savings, Ocasio-Cortez is actually fairing better than the median 30-year who has just $2,430 in savings, according to a story by CNBC in 2018.
Given AOC doesn’t own property, and does not look like she owns any stock either, her current net worth is likely around $0 given her student loans cancel out her savings.
But don’t worry, Ocasio-Cortez will likely becoming one of those millionaires she despises within the next 10 years.
Ocasio-Cortez Will Become A Millionaire
Assuming Ocasio-Cortez pays the median $2,700 for an apartment in Washington D.C, spends another $1,000 for food and drinks, and another $500 for entertainment and transportation expenses, Ocasio-Cortez will have a monthly burn of roughly $4,200 after-tax.
Assuming a 20% effective tax rate on her $174,000 Congress salary, she is left with roughly $139,200 in after-tax income a year or $11,600 in after-tax income a month.
In other words, Ocasio-Cortez can continuously save roughly $7,400 a month in after-tax income as long as she keeps her spending at $4,200 a month and stays on as a Congresswomen.
After one year, Ocasio-Cortez will have boosted her net worth by $88,800 through savings alone. Add on a 5% rate of return if she invests in stocks or real estate plus her existing $7,000 in savings, and Ocasio Cortez should have a net worth of roughly $100,000 in 2020.
AOC Net Worth Progression
Here’s a realistic path to AOC’s net worth if she remains in Congress, continues to live modestly in her $2,700/month apartment, spends no more than $4,200/month, saves 50% of her gross income a year, and sees her investments grow by 2% – 8% a year on average.
Yes, having the discipline to save 50% of her gross income is aggressive when the average American only saves about 6%, however, AOC was recently making less than $30,000 as a bartender, and she doesn’t want to be seen as living high on the hog now that she’s in Congress. Spending $50,400 a year of her $174,000 a year salary seems like a reasonable amount.
2020 at age 30: $100,000
2021 at age 31: $189,000 – $230,000
2022 at age 32: $270,000 – $320,000
2023 at age 33: $360,000 – $450,000
2024 at age 34: $450,000 – $550,000
2025 at age 35: $550,000 – $650,000
2026 at age 36: $650,000 – $800,000
2027 at age 37: $750,000 – $900,000
2028 at age 38: $850,000 – $1,100,000
2029 at age 39: $950,000 – $1,300,000
2030 at age 40: $1,050,000 – $1,500,000
If Ocasio-Cortez can remain in Congress for nine years and maintain her spending habits, she will likely have over a $1,000,000 net worth by the time she is 39 years old.
Being a millionaire by her late 30s is just the beginning for AOC. She will likely emerge to be one of the most powerful and interesting women in Congress if she’s in office that long.
For example, in addition to her $174,000 salary, Senator Elizabeth Warren got an advance of $525,000 to write “A Fighting Chance.” The book chronicles Warren’s rise from a struggling childhood to the Senate and her fight for middle class Americans.
AOC also is a fan of democratizing access to investments that were once only available to the very wealthy. For example, investing in real estate crowdfunding enables you to buy buying a piece of commercial real estate. In the past, you’d have to spend millions to buy an office building or student housing complex.
It’s hard to come up with a 20% downpayment in places like Washington D.C. and New York City, where AOC is based. Instead, you can invest in real estate across the country with lower valuations and higher net rental yields through crowdfunding.
Fundrise is free and easy to sign up and explore. All savvy investors have a diversified real estate portfolio. Real estate is one of the most tried and true ways to build great wealth in America.
The opportunities to make lots of money for AOC is endless.
The Key To Growing Your Net Worth
Growing your net worth is all about widening the gap between income and expenses. The more you can save and invest, the higher your net worth will grow as your money compounds over time.
Where people get in trouble is inflating their lifestyles faster than their income inflates. We all know people with high incomes who never seem to be able to get ahead. Hopefully Ocasio-Cortez doesn’t let her newfound power, income, and fame disrupt her frugal ways.
If you want to grow your net worth, you must diligently track your finances. Use a free financial tool like Personal Capital to track your cash flow, analyze your investments for excessive fees, manage your net worth, and plan for your retirement future all for free.
The younger generation like Ocasia-Cortez have leveraged technology to their advantage, so should all of us. I’ve tracked my net worth with Personal Capital since 2012 and have seen my net worth more than quadruple since.
Don’t be like the typical American who wings it with their finances and wakes up 10 years later wondering where their money went. Take charge of your finances because nobody cares more about your money than you.
About the Author: Sam started Financial Samurai in 2009 as a way to make sense of the financial crisis. He proceeded to spend the next 13 years after attending The College of William & Mary and UC Berkeley for b-school working at Goldman Sachs and Credit Suisse. He owns properties in San Francisco, Lake Tahoe, and Honolulu.
In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends time playing tennis, taking care of family, and writing online to help others achieve financial freedom.