As the current crop of presidential candidates release their personal financial data, I found one person particularly compelling. It wasn’t Donald Trump worth several billions of dollars.
If Donald Trump is worth $4 billion, Scott Walker is worth approximately $4.0000725 billion less than Trump. More precisely, according to the Boston Globe, Walker has an estimated net worth of -$72,500.
You would think he bought a house in the midst of the housing bubble and is currently upside down. But that isn’t it. His debt is credit card debt and student loan debt. He supposedly owes about $50,000 on a Sears card according to one report and a bunch more on a Barclays card.
Walker also has a large amount of student loan debt that is attributed to his son, but we don’t know the exact amount. It is somewhere in the six-figure range.
Walker earned over $222,000 as governor of Wisconsin last year, so it isn’t clear how he has managed to dig himself in this hole. His salary was lower before that, and he claims to have returned some of it to the taxpayers, but it was still well into six figures.
Worse, one of his credit cards reportedly carries an interest rate over 27%.
From my own libertarian perspective, it makes me wonder how he could possibly balance the federal budget if he can’t even balance his own budget. Of course, the answer is that he wouldn’t balance the federal budget. I suppose the one thing Walker could claim over all of the other candidates is that he really is more in touch with the average American. His salary is certainly higher, but his net worth is closer to the average American than any other candidate.
I’m not saying that anyone with credit card debt should automatically be disqualified as a presidential candidate. But in most situations, this is probably the case. If he had a middle class salary, I might be more sympathetic. But someone earning over $200,000 per year, or even $100,000 per year, not living in New York or California, should not be in the position that he is in. And it is even more pathetic that his interest rate is so high.
I believe that credit card debt is typically the worst kind of debt. The only thing potentially worse is student loan debt, which Walker also has for his son. He shouldn’t be forking over $100,000 or more for his son to go to college. His son can take CLEP exams and attend a local college that is inexpensive if Scott Walker can’t afford it, which he apparently can’t.
Student loan debt is bad when it doesn’t lead to significantly higher income. This is often the case in today’s world where people in their 20s (or older) have college degrees and are waiting tables or doing some other job that doesn’t really require a degree.
Student loan debt is also especially tough because it can be so big and cannot be discharged in most cases of bankruptcy. It is really a massive burden on a lot of young people. Apparently, in Walker’s case, it can be a major burden to older people too.
The credit card debt really gets me though because the rate is so high. Unless he tries to aggressively pay it down, the problem just compounds on itself. And it isn’t going to get any better as he campaigns for the presidency. Although, after seeing the first debate, his campaign may not last as long as people originally thought it would.
Staying out of credit card debt is one of my major pieces of financial advice. If you don’t pay off your cards every month, then you need to make a change. You should not direct any money towards investment until they are paid off, unless that investment is a virtual guarantee to make huge returns. In other words, the investment would have to be in a business, or something similar.
You get rich by collecting interest from others. This doesn’t have to be from a bank or a mutual fund. I am just referring to interest as any kind of return on your investments. Compounding interest, if high enough and on enough initial investment, can make you rich.
You don’t get rich by paying interest to others. That is how you get poor and stay poor. Credit card debt that isn’t paid off every month is a ticket to the poor house.
Scott Walker’s financial decision making is not good. Maybe he should look at a job in central banking instead of the presidency. At least then he could attempt to print his way out of debt trouble.
But then again, as a big spender, he would be a good fit as a 21st century president of the United States.