Alexandria Ocasio-Cortez is the rising star in the Democratic party. The 29-year old self-proclaimed “Democratic Socialist” and former bartender is New York’s 14th Congressional District for 2019 and beyond.
AOC, for short, is the second most popular US politician on Twitter, second to President Trump, and is therefore closely followed by millions.
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 2018, Congress members are roughly five times wealthier than the median net worth of an American household of $97,300 in 2016, according to the Federal Reserve.
But given Alexandria Ocasio-Cortez is only 29 years old as of 2019, 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 29-year old as of 2019.
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.
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, and she’s paying off somewhere between $15,000 – $50,000 on her student loan debt.
Her student loan debt is huge because she attend Boston University, one of the most expensive private schools in the country that has a 2019/2020 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 29-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 by 2020.
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 38 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.
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 $220,000 a year in passive income. He spends time playing tennis, taking care of family, and writing online to help others achieve financial freedom.