Nancy Pelosi is the 52nd Speaker of the United States House Of Representatives. A member of the Democratic Party, Pelosi is the only woman in U.S. history to serve as Speaker, and is the highest-ranking female elected official in United States history. Nancy Pelosi's net worth is also massive. Let's look into Nancy Pelosi's finances.
At 81 years old, Nancy Pelosi should have a high net worth. She's been in Congress for decades. As a result, she has had plenty of time to invest in stocks, bonds, real estate and other risk assets that have done well over time. It shouldn't come as a surprise that a powerful 80-year-old woman is so rich.
Nancy Pelosi Salary
To begin with, Nancy Pelosi earns a salary of $223,500 a year as House Speaker compared to $174,000 a year for normal members of Congress.
Although $223,500 is a healthy income, it doesn't crack the top 1% income threshold in America, which currently stands at roughly $470,000 a year. Remember, everything is relative in finance.
From a high income usually comes a high net worth with proper personal finance fundamentals as taught on Financial Samurai since 2009.
Nancy Pelosi Net Worth
Despite only earning a top 20% salary, Nancy Pelosi's net worth puts her in the top 1% of wealthiest Americans in America.
According to the House Speaker's personal financial disclosure in 2018, Nancy Pelosi had a net worth estimated at $114 million.
However, given the S&P 500 increased by 31% in 2019 and increased by another 16% in 2020, despite the coronavirus pandemic, Nancy Pelosi's net worth in 2021 is closer to $130 – $150 million.
Pelosi is the sixth-richest member of the House of Representatives and the 10th richest overall. This is according to data tracked by the Center for Responsive Politics.
Even though President Joe Biden has a net worth of around $12 million today, Nancy Pelosi's net worth is more than 10X greater!
How Did Nancy Pelosi Get So Rich?
With a net worth of between $130 – $150 million, how did Nancy Pelosi's net worth get so large?
Nancy Pelosi was born on March 26, 1940, into a family of privilege and power. Her father was a Democratic Congressman from Maryland who later became Mayor of Baltimore seven years later. Therefore, her family has consistently made a top 20% salary and had a significant pension.
People may not think about politicians when they think about those who make a lot of money. However, with six-figure lifetime pensions, these pensions are worth millions, especially with interest rates so low.
Below is a chart that shows how much more capital you need to generate $50,000 a year in income due to a big drop in the 10-year bond yield since 2019. For those thinking about blindly following the 4% Rule in retirement, please consider withdrawing much less.
In addition to Pelosi's father being the Mayor of Baltimore, Pelosi's brother, Thomas D'Alesandro III, also a Democrat, was Mayor of Baltimore from 1967 to 1971.
Although Nancy Pelosi was elected to Congress in June 1987, her long-standing tenure still does not fully explain how she got to be so extraordinarily wealthy.
The answer comes from Pelosi and her husband's investments, which is what being a Financial Samurai is all about.
Nancy Pelosi's Investments Have Made Her Rich
Pelosi's husband, Paul Pelosi, owns and operates Financial Leaving Services, a California real estate and venture capital investment and consulting firm. Their holdings include $46.5 million in real estate and various blue-chip stock holdings in companies like Apple, Facebook and Disney.
Apple stock went from a market capitalization of $1 trillion in early 2020 to a market cap of $2 trillion by August 2020. With the NASDAQ up over 30% at one point in 2020 and the S&P 500 hitting a record-high in 3Q2020, Nancy and Paul Pelosi have gotten extraordinarily wealthy from their stock holdings.
Roll Call reported that the Pelosis have $13.46 million in liabilities including mortgages on seven properties. According to Roll Call, Pelosi and her husband hold properties “worth at least $14.65 million, including a St. Helena vineyard in Napa Valley worth at least $5 million, and commercial real estate in San Francisco”.
Each commercial real estate building in San Francisco likely worth at least $5 million and probably much more. After all, the median home price alone is $1.6 million. Commercial real estate in San Francisco often consists of office buildings or multifamily homes.
The Pelosis' primary residence in Pacific Heights is worth over $15 million. I've driven by it many times before and many of the homes in her neighborhood are worth between $10 – $30 million.
Real estate has performed very well in 2019 and 2020 so far because mortgage rates declined dramatically. As of 2021, the 10-year bond yield is around 1% and the average 30-year fixed mortgage rate is below 3%, a record low.
Everybody should at least be refinancing their mortgages to take advantage of record-low mortgage rates. The easiest way to get real free quotes is to check with Credible, one of the leading online mortgage marketplaces today.
Get Rich Like Nancy Pelosi
The combination of owning stocks and real estate over the long term has made the Pelosis incredibly wealthy. Nancy Pelosi's net worth is actually in the top 0.1%, not just the top 1% of all Americans.
If you're looking to invest in stocks, I'd figure out a proper asset allocation between stocks and bonds first. Then I'd allocate 80% – 90% of your stock allocation to the S&P 500 index. With the remaining 10% – 20% of your stock allocation, you can invest in stocks you think are likely winners. This is what Nancy Pelosi and her husband have done.
For real estate, I believe it's important to own your primary residence and get neutral real estate. Renting is shorting the real estate market, which is no good long term due to inflation. Inflation is too powerful of a force to combat, which is why you need to at least get neutral inflation.
After buying your primary residence using my 30/30/3 home buying rule, then look to invest in rental properties and commercial real estate.
An Easier Way To Invest In Real Estate
Personally, I'm a fan of being publicly traded REITs and private eREITs. They allow investors to make money 100% passively through real estate. As a father of two, I no longer have as much time managing rental properties.
Instead of taking on a mortgage to buy a single property to manage, it's easier to invest directly in funds without having to take on debt.
My favorite real estate crowdfunding platform is Fundrise. It was founded in 2012 and it allows investors to invest in real estate across the country in their eREITs, which are diversified property funds. Returns have been relatively stable and much less volatile than the stock market.
If you're interested in investing in specific real estate investments across the country, check out CrowdStreet. CrowdStreet focuses on 18-hour cities, those cities with lower valuations, higher rental yields, and potentially stronger growth due to demographic trends.
With work from home now ubiquitous, there is a demographic shift towards lower cost of living areas like Austin, Memphis, and Charleston. CrowdStreet primarily focuses on providing investment opportunities in these areas.
I've met people at Fundrise and CrowdStreet before and I think they're doing a good job democratizing access to commercial real estate. In the past, only people with a net worth like Nancy Pelosi's had access to such investments. Both platforms are free to sign up and explore.
I've personally invested $810,000 in real estate crowdfunding to diversify my San Francisco real estate holdings. The heartland has inexpensive real estate with high cap rates.
Give Your Investments Time To Grow
Nancy Pelosi's net worth is massive because she invested in stocks and real estate, and allowed her investments to compound over the decades. Yes, it helps that she's lived a privileged life with knowledge and access to various private investments. However, compound growth over many years is what makes people very wealthy.
For example, $1 million today would grow to be $15 million in 40 years at a 7% annual growth rate. If you regularly added $50,000 a year for 40 years at a 7% annual growth rate, you would end up with $26 million.
You must develop an investing mindset if you want to get as rich as Nancy Pelosi. Once you do get rich, it's important to stay humble and practice stealth wealth.
The coronavirus pandemic has caused a K-shaped phenomenon in America. The rich have gotten richer due to their investments, and the poor have gotten poorer given their tremendous job loss.
Going to the hair salon and getting your haircut indoors while salons and other small businesses have been forced shut for months is not good leadership. But that is a different topic of conversation.
Finally, please diligently track your net worth along the way. The more you can stay on top of your finances, the better they will be. I recommend using Personal Capital, the free financial app that lets you track your net worth, x-ray your investments for excessive fees, and plan for your retirement future.
There is no rewind button in life. Take control of your finances so you can live a life of freedom. The award-winning app by Personal Capital is also free to use.
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