Romney's True Net Worth

[yottabit]

This is what I feel is a very important topic, and I've seen so little press coverage of. I haven't seen any threads on this here recently, except for that weird one talking about his wife devaluing him.

I would like this thread NOT to turn into a flame war, but some knowledgeable people parse through the information we know and try to figure out the truth. As long as the flaming keeps going on, no one will figure anything out!

Romney's seemingly accepted net worth of $250 million is based on a number of assumptions and exclusions, and also seems artificially low compared to others in private equity from his time period

There have been some proposed explanations for this, such as he missed out on the biggest gains by pursuing a political career being the most widely accepted. For the purposes of this discussion let's not treat this as FACT, but rather analyze the possibilities.

I feel it's important to understand because I think there is a big social stigma around Billionaires and the 250 million number seems carefully positioned to me. First off it's an easy number to remember, and it leaves the average person with the impression, "Wow that guy was really successful!" and that he's generally loaded. Were Romney perceived as a Billionaire I think he may have a much more negative perception, someone who is too entwined in the financial system that he may not be fit for office. Bear in mind there has never been a Billionaire president.

For a good read about this subject read here: http://www.washingtonpost.com/opini...128882-0c20-11e2-a310-2363842b7057_story.html

Granted I acknowledge there is a strong liberal bias there, so again let's not take everything as fact.

I've seen articles indicating Romney also has an unknown amount of wealth in offshore bank accounts. I'm not sure how much truth there is to this or what we can glean from it.

The main thing that got me interested in all this was Romney's income from his tax Returns I felt a natural incongruity from the amount of capital gains and his net worth. I'm also working on the assumption that Romney knew he would be running for president, and planned his investments to keep his annual income rather low, or at least not go overboard with it.

The analysis in the article seems to indicate that the magnitude of his gains seem more in line with a $300-500 million dollar nest egg, which I feel seems more plausible. What do you think about this?

There's also $100 million or more that's excluded for his kid's trust funds or something to that affect, and a question of how much wealth his children have.

There's also the fact that Bain capital has never gone public. How much of Bain does Romney still own? Is it possible that they have intentionally not gone public because of Romney's presidential aspirations? Seems possible to me. Assuming he still owns a significant portion of Bain, I imagine his wealth could double if they went public. I almost expect if Romney does win, a few years after serving his term we'll hear something like "Haha I'm a Billionaire! Suckers!"

 

[Jaskalas]

I'm not sure 2-4x his current worth is a significant difference in his life style and/or personal identity. He's 'filthy' rich now, he'd still be filthy rich then. Yeah, I appreciate he'd be viewed differently by the public, but that's their fault for not seeing him that way already.

I've a problem with public companies and their share holder's constant obsession with ever rising profits. So maybe they don't ever want to go public and lose control to pure greed. Not saying they aren't greedy already, but I fear the public option makes it even worse.

As for them going public and making Romney a billionaire, that makes sense post-Presidency. Less hassle and spotlight.

 

[Genx87]

Who cares? Where was all this hate for a rich guy running for president in 04? Kerry's welath dwarfs Romneys. Yet the left lectured us how it shouldnt matter and Kerrys 11.7% income tax rate was his duty as a tax paying american.

 

[DominionSeraph]

Who cares? Where was all this hate for a rich guy running for president in 04? Kerry's welath dwarfs Romneys.

Kerry's wife's wealth dwarfs Romney's. Kerry's doesn't seem to come close. And the Heinz fortune was made on the sale of real products, not thievery, unlike Romney.

 

[Genx87]

Kerry's wife's wealth dwarfs Romney's. Kerry's doesn't seem to come close. And the Heinz fortune was made on the sale of real products, not thievery, unlike Romney.

Oh I see, Kerry's wifes wealth is different from John Kerrys wealth. More spin from the left.

 

[Anarchist420]

It's not like he knows how to use it like Dr. Paul would.

That said, it's often the most inefficient people are the wealthiest. Lincoln and Hamilton both come to mind (they were pisspoor materially and somewhat as individuals as well but they knew how to live life fuller than most people). Jefferson was bright and he intended to give all of his wealth away for the public good. Would you rather bright like Jefferson or wasteful, dumb, and inefficient like Washington and myself? Was FDR even self-made? No. Was George W Bush? No. Hell, even "poppy" George HW Bush wasn't even self made, he took what rightfully belonged to his older brother and he made his money through just as much worthless BS as Romney did. Clinton wouldn't have been rich without the state either or without being fraudulent.

Washington was the wealthiest President (and he received the highest salary of any President) and Hamilton started the Whiskey Tax to keep the former artificially wealthy FFS. Not only that, wealthy inefficient people will actually extra-legally protect their wealth... see what Ted Kennedy did.

Material wealth isn't everything and that should never be forgotten.

Most wealthy people didn't build their wealth and they never could've either. I don't want material wealth because it doesn't really matter and I don't want corruption. I'll go bankrupt under the current system because I'm not going to fool myself into thinking I'm self-sufficient... ever.

 

[yottabit]

Personally, I feel the distinction between 250 million and 1 billion (or multiple Billions) is very important. However, that's irrelevant to the discussion I'm trying to have, which is figuring out how much he is actually worth.

Jaskalas seems to think he's not more than a skip and a hop away from being a Billionaire if he wanted to, which is kind of how I feel. I think Romney would artificially lower his annual income running for a presidency, but I'm sure he wouldn't throw away significant capital and assets. And since he is not required to clearly define all his wealth, he may be worth much more than how his campaign is portraying him.

I agree John Kerry's Heinz fortune made him wealthy. I also don't think there was really a strong democratic support for Kerry, many who did support him only did it out of reluctance and as the "lesser of two evils". I heard that tossed around a lot back in 2004.

However, John Kerry never went around pretending he was the king and savior of small business like Mitt Romney does, and given the way Romney has made his fortune I don't think he should be allowed to say anything about small business. His father who actually built things from the ground up I can understand.

I don't think common people understand that Mitt Romney's company, Bain Capital, bought and sold companies such as Staples, Domino's Pizza, Dunkin' Donuts, the list goes on... the wealth of $250 million doesn't equate to that in people's minds, whereas a wealth of $1B+ would, I believe.

 

[WHAMPOM]

Oh I see, Kerry's wifes wealth is different from John Kerrys wealth. More spin from the left.

Glad to hear it, sometimes educating a conservative seems like teaching the works of Shakespeare to rocks.

 

[Anarchist420]

which is figuring out how much he is actually worth.

Fuck it... on a scale of [0, 1], he's worth -.99. He had to be trained and have his whole first debate written for him, while his opponent is the only the third President since Coolidge inclusive to write their own speeches.

Obama is way wealthier than the chimp he's running against.

/thread.

 

[Fanatical Meat]

Who cares? Where was all this hate for a rich guy running for president in 04? Kerry's welath dwarfs Romneys. Yet the left lectured us how it shouldnt matter and Kerrys 11.7% income tax rate was his duty as a tax paying american.

Here's my perspective, Kerry is a wealthy man but Kerry was not champion of tax cuts for wealthy people he was the opposite. Romney is the current wealthy people need more tax breaks champion and personally I find it offensive that someone would be the spokes person for lowering taxes on a very small amount of the population that they ironically belong to.

 

[Charles Kozierok]

Romney's true net worth is zero -- because he has no character and believes in nothing and lies a hundred times a day about everything without flinching.

The issue isn't his money. It's his mendacity.

 

[DominionSeraph]

Oh I see, Kerry's wifes wealth is different from John Kerrys wealth.

Duh, of course.

 

[Lemon law]

I get a little bored with conspiracy theories. Because anyone with half a brain can invent them. With sheer beauty of conspiracy theories being, they can't be proved or disproved.

But still the issue of true Mitt Romney is not wholly inside of the definition of a actual conspiracy theory, simply because, with the proper investigation, it may possible to prove Romney is using illegal tax shelters to conceal his true wealth. As already at least one Bain capital Insider has already dumped some evidence to that effect in the lap of the IRS and any interested investigative reporter.

Of course the problem with such leaked information, is that sometimes its false, sometimes it leads no where positive, but at least it can give the determined a hint on what tree to bark up in finding the hard evidence.

At the same time, its often a time intensive process. Take the case of Bernie Madoff, lots of investigators had been screaming bullshit for a least a decade and were ignored, but when the hard evidence was finally revealed, Bernie was SWIFTLY jailed and the key was thrown away. Or take the case of Richard Nixon and watergate that surfaced before the re-election of Nixon in 11/1972. It was never proved the Richard Nixon had per-knowledge of the watergate burgley, as Nixon instead got caught for his role in his obstruction of justice in the coverup.

Will this be the ultimate fate of Mitt Romney regardless if he is elected POTUS in 11/2012?

As there is no way to tell YET

But like Bernie Madoff demonstrated, it just takes one crack in the wall before the deluge.

 

[Fern]

-snip-

Romney's seemingly accepted net worth of $250 million is based on a number of assumptions and exclusions, and also seems artificially low compared to others in private equity from his time period

There have been some proposed explanations for this, such as he missed out on the biggest gains by pursuing a political career being the most widely accepted. For the purposes of this discussion let's not treat this as FACT, but rather analyze the possibilities.

Well, I would assume that basically retiring back in 1999/2000 would have a substantial effect on his wealth. He's gone more than 10 yrs without working for income (salary from Salt Lake City and MA gov was all donated etc.)

While he makes a lot from his investments he's also been using his investment accounts to live on. He also donates a ton to charities

I've seen articles indicating Romney also has an unknown amount of wealth in offshore bank accounts. I'm not sure how much truth there is to this or what we can glean from it.

Romney seems to have all his investments in Bain companies/funds. The financials of these companies/funds have already been published and are available on the net.

The IRS has added a number of forms that will show the value of all foreign financial accounts. If you know what you're doing just go find his 2011 tax return. I understand it was released.

The main thing that got me interested in all this was Romney's income from his tax Returns I felt a natural incongruity from the amount of capital gains and his net worth. I'm also working on the assumption that Romney knew he would be running for president, and planned his investments to keep his annual income rather low, or at least not go overboard with it.

The analysis in the article seems to indicate that the magnitude of his gains seem more in line with a $300-500 million dollar nest egg, which I feel seems more plausible. What do you think about this?

His investments are so complicated, so numerous and in so many countries I don't see how anyone can possible make such an estimate.

Even if you correctly estimated his average RoR you're going to be off by foreign currency fluctuations. Investment income from foreign countries, denominated in foreign currency, must be translated back into US $'s for reporting. Foreign currency fluctuations can make a poor investment look awesome, assuming that currency appreciated with respect to the US $, etc. And it can make a great investment look awful if the value of that currency depreciated relative to the $.

IMO, way too complicated to get a an accurate estimate with any degree of certainty.

There's also the fact that Bain capital has never gone public. How much of Bain does Romney still own?

I'm pretty sure he sold his ownership back while he was running the Olympics, or shortly afterwards.

Is it possible that they have intentionally not gone public because of Romney's presidential aspirations? Seems possible to me.

IMO, extremely unlikely if not impossible. The many partners in Bain are not going to forgo profit merely because of Romney's political aspirations.

That's not how rich people operate.

Assuming he still owns a significant portion of Bain, I imagine his wealth could double if they went public. I almost expect if Romney does win, a few years after serving his term we'll hear something like "Haha I'm a Billionaire! Suckers!"

Looking at recent IPOs I see zero reason to expect any sort of "doubling" whatsoever. (In any case, I'm pretty he sold out long ago.)

Bain Capital doesn't seem suited to be a publicly traded company to me. They acquire troubled companies, fix them up and sell them later. They would split up the profits, likely basing each partners' share upon the performance of projects they were personally involved with. Why would they go public and forgo that income?

Further, if they were to become a public company their compensation would likely be taxed as salary. I.e., 35%. They wouldn't be able to allocate the income as cap gains and dividends etc. I suppose they could organize as PTP (Publicly Traded Partnership), but for what purpose?

If they're looking for more capital to invest a one-time IPO is a poor way to handle it IMO. Just raise funds from investors on a project-by-project basis, they would be 'lenders' not owners, and pay them interest income and possibly a profit kicker if things went well on that project. This latter option gives them needed flexibility and it can be repeated as often as needed, unlike an IPO.

But I think most importantly, trying to determine someone's net worth is usually 'more art than science'. Yeah, if all their net worth is in US savings accounts you can easily just add up the amounts of $'s. But, LOL, that ain't how it is. You've got all kinds of assets other than $'s, and trying to place an accurate FMV on them is anybody's guess. E.g., what value do you place on real estate? What value do you place on securities (his many shares in investment partnerships) that are not publicly traded?

You could take a moderately wealthy person and give his info to 5 different CPAs etc. for a net worth calculation. You would probably get 5 different answers. (Hopefully, their ranges would overlap so it was reasonable.)

Also, be aware that when doing a net worth calc we have to act as though all the assets will be sold and figure out how much tax would be due and subtract it as a liability. I.e., you're looking at after-tax numbers.

Basically, you're asking to know the 'unknowable'.

Fern

 

[Fern]

Here's my perspective, Kerry is a wealthy man but Kerry was not champion of tax cuts for wealthy people he was the opposite. Romney is the current wealthy people need more tax breaks champion and personally I find it offensive that someone would be the spokes person for lowering taxes on a very small amount of the population that they ironically belong to.

Well, you're wrong.

Romney's tax plan does NOT cut taxes on LTCG or dividends, which is what the very wealthy like he live on.

I.e., you've gotten it completely backwards.

Fern

 

[IronWing]

Glad to hear it, sometimes educating a conservative seems like teaching the works of Shakespeare to rocks.

Don't u b dissin rocks. I like rocks.

 

[DaveSimmons]

Romney moved $100 million into a family trust to shield it from gift and estate taxes, so his worth is really ~$350 million.

Beyond that, I haven't seen anything to make these financial conspiracy theories plausible. We need a term like "Birther" for the believers in this -- Hiders? Bainy Babies?

 

[yottabit]

...
But I think most importantly, trying to determine someone's net worth is usually 'more art than science'. Yeah, if all their net worth is in US savings accounts you can easily just add up the amounts of $'s. But, LOL, that ain't how it is. You've got all kinds of assets other than $'s, and trying to place an accurate FMV on them is anybody's guess. E.g., what value do you place on real estate? What value do you place on securities (his many shares in investment partnerships) that are not publicly traded?

You could take a moderately wealthy person and give his info to 5 different CPAs etc. for a net worth calculation. You would probably get 5 different answers. (Hopefully, their ranges would overlap so it was reasonable.)

Also, be aware that when doing a net worth calc we have to act as though all the assets will be sold and figure out how much tax would be due and subtract it as a liability. I.e., you're looking at after-tax numbers.

Basically, you're asking to know the 'unknowable'.

Fern

I acknowledge the startling complexity of the task, and I'm not knowledgeable enough to do it myself. I just think it's something that can so easily be skewed in one way or another, I can't believe I haven't seen anyone else attempt an analysis at it besides Romney's campaign

If there WERE other estimates besides the one put out by Romney's campaign, I would be a lot less skeptical. However how do we know the 250 million is not the lowest out of 5 said estimates? It would be nice to have a little more transparency

I just read this article: http://www.washingtonpost.com/blogs...ure-from-bain/2012/07/12/gJQAASzUfW_blog.html

This explains a little more the plausibility of a ~250 million wealth. One of the puzzling facts was that I knew Romney was the sole stockholder of Bain through 2002, however the article states the Bain stock itself was not immensely valuable since the company's main purpose was to pay out salaries

 

[Fern]

Romney moved $100 million into a family trust to shield it from gift and estate taxes, so his worth is really ~$350 million.
-snip-

Moving assets into a trust does not shield it from gift or estate taxes. In fact it would trigger gift taxes unless it was grantor trust. (Grantor trust are treated as nonexistent for tax purposes. I.e., all the property would be seen as belonging to Romney for income, gift and estate tax purposes.)

Fern

 

[yottabit]

Searching "Romney True Worth" on Google now returns this thread as the second result. While that makes me feel happy on some level, it also makes me feel really sad that there's so little discussion on the topic out there.

 

[werepossum]

Oh I see, Kerry's wifes wealth is different from John Kerrys wealth. More spin from the left.

Oddly enough, McCain's wife's wealth was not different from John McCain's wife's wealth. Weird, huh? It's almost as if there was some systematic issue here we're not seeing. If only we could identify this illusive but pervasive factor, then we could just add a letter in parentheses after a candidate's name to let us know whether they have good wealth or bad wealth.

Oh, wait . . .

 

[Fern]

Searching "Romney True Worth" on Google now returns this thread as the second result. While that makes me feel happy on some level, it also makes me feel really sad that there's so little discussion on the topic out there.

Here's an independent valuation of Romney's net worth:

http://www.forbes.com/sites/edwindurgy/2012/05/16/what-mitt-romney-is-really-worth/

For those who don't want to click the link they calculate $230 million.

Fern

 

[Smoblikat]

Kerry's wife's wealth dwarfs Romney's. Kerry's doesn't seem to come close. And the Heinz fortune was made on the sale of real products, not thievery, unlike Romney.

Im glad you admit Romney earned his money legally just like everyone else.