Ramesh, I don’t disagree in any particular with what you wrote about Rubio, but I’ll say this: About 92 percent of U.S. households would love to trade places with the Rubios, in terms of their finances. The Rubios are relatively young people earning a stable six-figure income and in possession of some good assets.
The most under-appreciated asset, of course, is Rubio’s future earning potential. Which is to say, his career path from here is pretty straightforward: He will continue to have a successful political career until the year he doesn’t, at which point he will almost certainly start earning sums that make those earlier liabilities look like chickenfeed.
The Rubios had some unusual expenses, as politicians do, namely the need to set up housekeeping in two different cities. But Rubio bought two houses (one at home, one in the state capital) for a total of $685,000, during a period when he was earning more than $300,000 a year. The rule of thumb on mortgage debt is keeping it under 2.5 times your income, which in fact puts the Rubios slightly on the conservative side in this regard. He spent $135,000 on that house in Tallahassee; when I was a youngster, my family, who were not quite so upwardly mobile as the Rubios (my mother was a secretary, and her husband was a janitor at a high school) bought a second house for a roughly equivalent sum, using the larger house to accommodate the four children and the smaller one as a rental property. This hardly seemed extravagant, and in the end it proved to be a decent investment.
The implications are sometimes distasteful (in the case of the Clinton clan, vulgar) but being in politics is a little like being in your last year in a top-tier law school: You probably aren’t earning all that much at the time, but there is a very strong likelihood of a fat payday in your immediate future, if and when you want it. Spend any time on Capitol Hill and you’ll meet staffers who are making very little money in November but a multiple of their former salaries in January. That is the nature of financial life in politics for those who do not enter the arena independently wealthy or, as in the case of John Kerry, dependently wealthy. (Seriously: His second heiress, her second senator—how creepy is that?)
And the Rubios bought a boat, following the familiar popular custom (guilty!) of treating 10 percent of any unexpected windfall as fun money. (Some people call it something else, only a few letters different.) I look forward to the day when I am confronted with the problem of an $800,000 book advance and how to divide it between business and pleasure.
Irresponsible?
Here is a photo of Bill Clinton wearing a platinum Rolex Day Date watch, the current retail price of which is about $65,000, not far from the cost of the Rubios’ boat (which would fit in the Clintons’ swimming pool, incidentally). It is one of many.
“Dead broke,” she said.
Funny how things change, and how quickly.