Alexandria Ocasio-Cortez (AOC) is the current super star in the Democratic party. No politician has risen as fast in the past three years as AOC has. She is the second most popular politician on social media. What's more, Alexandria Ocasio-Cortez's income level is in the top 5% given she has a $174,000 annual income.
The self-proclaimed “Democratic Socialist” graduated from Boston University with an Economics degree, bartended for a few years, and is now New York’s 14th Congressional District after defeating Joe Crowley.
Given AOC's popularity, it is all but a guarantee she will be a congresswoman for a very long time. Members of the House of Representatives serve two-year terms and are considered for reelection every even year.
Senators however, serve six-year terms and elections to the Senate are staggered over even years so that only about 1/3 of the Senate is up for reelection during any election.
Alexandria Ocasio-Cortez's Income
As a Congresswoman, Alexandria Ocasio-Cortez earns a salary of $174,000, just like every other member of Congress. If you earn over $160,000 a year in income, you are in the top 5% according to the IRS.
However, if AOC ever becomes Speaker of the House, she will earn a salary of $223,500. If AOC becomes a Majority or Minority Leader, she will earn a salary of $193,4000.
Notice in the chart below how the salary of members of Congress have not changed since 2009. Just as well since $174,000 is still a healthy income that puts AOC and her colleagues in the top 10% of income earners in America.
AOC also announced on Feb 22, 2019 that all her congressional staff will be paid a minimum of $52,000 a year compared to the median $28,000 – $37,000 entry level wage for congressional staff around Congress according to Glassdoor.
AOC has a $1 million budget and can employ up to 18 staff members. She said in order to pay the minimum $52,000 salary, she plans to cap the maximum salary at $80,000. This is up to half the amount top experienced congressional staff members make.
Alexandria Ocasio-Cortez's Net Worth
The median net worth for members of Congress is roughly $1,100,000 as of 2021. The average net worth for members of Congress is in the millions. There is a heavy skew on the upside. For example, Nancy Pelosi has an estimated net worth of between $80 – $100 million!
Before entering Congress, AOC only had roughly $15,000 in savings in 2018 according to public records. After all, if you're a bartender in NYC, you're not exactly earning and saving a lot of money.
Despite having $15,000 in savings, AOC had roughly $20,000 in student loans from Boston University. Therefore, AOC was technically broke before becoming a Congresswoman.
With a $174,000 annual income, AOC should be able to grow her net worth a healthy amount over the years if she demonstrates sound financial habits. In fact, I expect AOC to be a millionaire by age 40.
How AOC Can Become A Millionaire By 40
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 expense 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.
Therefore, AOC should be able to save roughly $7,400 a month in after-tax income if she keeps her spending to $4,200 or less. After one year, her net worth should grow by $88,800.
If AOC is able to invest her savings and have it earn 5% – 10%, AOC should have a net worth of roughly $100,000 by early 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.
Plenty Of Income Opportunities For AOC
Alexandria Ocasio-Cortez's income level will stay relatively steady while she is in government. But once she gets out, Alexandria Ocasio-Cortez's income will skyrocket.
With AOC's popularity, it is all but a certainty she will make millions writing books during or after her time in Congress. She just needs at least five years of leadership experience under her belt before every single publishing house will come knocking.
For some perspective, Senator Elizabeth Warren got a $525,000 advance 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 is infinitely more interesting than Elizabeth Warren, and will likely easily command a book advance of $2 million or more.
Besides book deals, AOC can earn money doing public speaking. Bill and Hillary Clinton each make $100,000 – $250,00 per speech. It's not hard to see AOC earn $30,000 – $50,000 per speech when she's in her late 30s or 40s.
Making Money Giving Speeches
If AOC gave 12 speeches a year, she could easily earn an extra $360,000 – $600,000 a year. She can also be a pitch woman for many different products.
AOC also is a fan of investing in real estate crowdfunding through Fundrise. They are the best platform today that allows you to strategically invest in some of the best real estate deals around the country.
It's hard to come up with a 20% downpayment in places like Washington D.C. and New York City. Instead, AOC invests wisely in real estate all across the country with lower valuations and higher net rental yields.
Fundrise is free and easy to sign up and explore. In a rising interest rate environment, investing in real estate is a smart play. Inflation acts as a tailwind for real estate values and whittles down the real cost of dbt.
Recommendation To Grow Your Wealth
It's not so much how much you make, it's how much you keep. There are plenty of people who make a lot of money who have nothing to show for it at the end of each year.
There are no income guarantees, therefore, we must save aggressively and grow the gap between our income and our expenses. The larger the percentage of our income we can save, the quicker we can achieve financial independence.
If you save 50% of your gross income, you can retire in 18 years. Unfortunately, the average American only saves around 2.5% of their income and will likely work until their mid-60s and rely on our underfunded Social Security program.
Track Your Finances Like A Hawk
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 AOC have leveraged technology to their advantage to get ahead. AOC is using social media to amplify her voice and her power for greater things. AOC and others like her are utilizing technology to improve other facets of their life as well.
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. Track your finances diligently because nobody cares more about your money than you.
About the Author:
Sam worked in investing banking for 13 years. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. 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, largely thanks to real estate crowdfunding. He spends time playing tennis and taking care of his family. Financial Samurai was started in 2009. It is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month.