Grant Cardone, a renowned sales trainer, speaker and entrepreneur with an estimated net worth of $600 million, recently took to X, formerly Twitter, to raise a thought-provoking question: “Can someone explain to me how public servants (politicians) are becoming multimillionaires on $100,000 salaries?”
While the message did not specify which public servants he was referring to, it is presumed that Cardone’s remarks were primarily aimed at members of the U.S. Congress.
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A 2020 Open Secrets report revealed that more than half of the 535 members of Congress are millionaires, implying a substantial contrast between their financial status and the average American. The $100,000 salary Cardone mentioned remains unclear. According to a 2022 Congressional Institute report, the average annual salary for a rank-and-file member of Congress stands at $174,000, a figure consistent with recent estimates provided by The Washington Post.
The speaker of the House earns $223,500 annually, while the Senate president pro tempore and the majority and minority leaders each earn $193,400.
Though the salaries are substantial, they do not guarantee millionaire status. They provide a solid foundation upon which to build additional income streams during congressional service.
Congress members are not restricted from earning income outside their official roles, but there are regulations to ensure transparency and prevent conflicts of interest. The regulations limit additional income to no more than 15% of the Level II of the Executive Schedule, a system used to determine the pay scale of political appointees in the executive branch. Members are also required to disclose the sources of both earned and passive income, including stock dividends.
Investments in stocks are a common source of income for many politicians. But concerns have arisen regarding the possibility of members of Congress leveraging insider knowledge to achieve higher-than-average returns on their investments, as noted in a New York Times report last year.
Economist Serkan Karadas identified a “suspicious pattern” in Congress members’ stock investment returns, suggesting that some may be profiting from their positions through access to nonpublic information. This raises questions about the ethics and legality of such practices.
But beyond stock investments, there’s another intriguing facet to the financial lives of politicians—venture capitalism. It’s not uncommon to find politicians who have invested in startups, revealing a different dimension to their financial strategies. The potentially lucrative investment option has grown in popularity in recent years, especially among retail investors on platforms like StartEngine.
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For instance, Sen. Mark Warner (D-Va.) cofounded the venture capital firm Columbia Capital. He was among the pioneering investors in FleetCall, a company that evolved into Nextel. Through these entrepreneurial endeavors, he played key roles in founding MRW Enterprises, Capital Cellular and Columbia Cellular.
Colorado Gov. Jared Polis, a prominent political figure and entrepreneur, cofounded Techstars, a renowned startup accelerator and investment program in Boulder, Colorado, in 2006. The initiative focuses on nurturing early-stage technology companies, and it has successfully raised over $2 billion in capital.
In some cases, elected officials entered politics with substantial personal wealth. Utah Sen. Mitt Romney, for example, hails from a family of means, with his father George Romney having served as CEO of American Motors Corp. Others, like former House Speaker Nancy Pelosi and California Sen. Dianne Feinstein, married into wealth, further facilitating their political careers.
This phenomenon is not exclusive to the United States. Globally, numerous politicians have amassed wealth that defies their official incomes. For instance, former Italian Prime Minister Silvio Berlusconi, a media tycoon, entered politics with substantial personal wealth. Russian President Vladimir Putin’s wealth has also come under international scrutiny.
Having significant personal wealth before entering politics can significantly aid in financing election campaigns, especially for those with limited legislative experience. Some members of Congress, such as Florida Sen. Rick Scott, amassed substantial wealth in the business world before transitioning to public service. Scott’s fortune, estimated at $300 million, was primarily built through founding Columbia Hospital Corp., which later transformed into the world’s largest healthcare provider, Columbia/HCA, via a series of acquisitions.
Not all politicians are able to amass wealth. Many struggle to make ends meet. This is especially true for politicians who are not in high-ranking positions or who do not have wealthy families to support them.
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