In a world of billionaire politics, Tim Walz is an outlier.
The governor of Minnesota, and now Democratic Vice President Kamala Harris’ running mate, doesn’t own a single share of stock. He owns no mutual funds, bonds, private equity or other securities, according to his most recent financial disclosures in January. He doesn’t have a complex web of investments, trust funds or family business dealings, and he hasn’t reported receiving any consulting or speaking fees.
He’s approachable in a way that other politicians aren’t. Waltz is very middle class. I know people like him. You know you, too. When I see his smile, it reminds me of my dad. My dad never owned a stock.
The fact that most of Waltz’s wealth came from his and his wife’s time as teachers, and from military and public service, seems pretty standard. I know that’s not the whole story, but it’s refreshing.
Below are some observations and lessons learned from what we learned about Waltz’s financial profile.
Minnesota Governor and Democratic vice presidential candidate Tim Walz gestures during a campaign rally at the University of Nevada, Thomas and Mack Center in Las Vegas, Nevada, August 10, 2024. (Photo: Rhonda Churchill/AFP) (Photo: Rhonda Churchill/AFP via Getty Images) (Rhonda Churchill via Getty Images)
Old-fashioned retirement plans: traditional pensions
Walz, 60, has a pension from decades of public service, life insurance and savings for college. His wife, Gwen, receives a teacher’s pension. After 12 years in Congress, Walz’s federal pension could be worth $800,000, according to a Wall Street Journal analysis. That sounds like a lot of money, but it’s not. It amounts to roughly $5,000 a month, or $60,000 a year.
But he’s in luck: Pensions are a benefit that most Americans don’t have access to today. In a traditional pension plan, employers contribute to, invest, and manage retirement funds for their employees, guaranteeing that employees will receive a monthly check for the rest of their lives after they retire.
Workers who, like the Waltzes, are most likely to still receive traditional pensions include federal, state and local government employees, teachers, union members and active-duty military members with at least 20 years of service.
Today, only 11 percent of private-sector companies offer pensions, up from 35 percent in the early 1990s, and more than half of private-sector employees now participate in a 401(k) plan, according to the Bureau of Labor Statistics.
Average finances in above average political fields
What’s Waltz’s net worth? It’s also pretty average, estimated to be in the range of $112,000 to $330,000, according to his 2019 financial disclosure.
According to the Federal Reserve, Waltz and his wife have a combined net worth equal to the U.S. median of $192,900.
Governor Walz’s current annual salary is about $127,000 per year. According to the Census Bureau, the effective median household income in 2022 was $74,580. In other words, Governor Walz’s income is relatively high overall, but he is far from being considered an ultra-high-income earner.
The story continues
And unlike millions of middle-class American families, the Waltzes don’t own their home. They bought a house in Mankato, Minnesota, in 1997 for $145,000 and sold it in 2019 for $315,000, reportedly less than the asking price. Presumably the house is worth much more now: The average selling price of a home in Mankato was $350,000 last month, up 12.4% from last year, according to Redfin.
For many Americans, homeownership is a key way to build wealth over time.
By comparison, Republican candidate for the same post, J.D. Vance, is a billionaire who owns multiple homes, including in Cincinnati, Ohio, and Alexandria, Virginia, and has investments in a myriad of assets, including gold and cryptocurrencies, according to his latest financial disclosure. Vance also receives royalties from his 2016 memoir, “Hillbilly Elegy.”
According to a Wall Street Journal analysis, he and his wife Usha Chirukuri Vance have a net worth of about $4 million to $10.4 million, including real estate.
Only a small percentage of Americans own stocks directly.
While Waltz’s revelation that he doesn’t own stocks has attracted a lot of attention, he is by no means alone: the vast majority of Americans don’t own stocks.
According to the Federal Reserve’s Survey of Consumer Finances, only 21% of U.S. households own stocks directly — a figure that jumps to 58% when you include those who hold stocks in retirement plans — but there are millions of Americans like Waltz.
Race also plays a role: A recent study by the Federal Reserve Bank of New York found that 35% of white Americans’ personal financial assets are invested in stocks and mutual funds, compared with 8% and 14% for black and Hispanic Americans, respectively.
The harsh reality is that those with the highest incomes are also the ones most likely to own stocks: Gallup reports that 84% of adults in households earning more than $100,000 owned stocks last year, compared with just 29% of those earning less than $40,000.
Waltz is like other politicians.
Of course, in some ways Waltz is not like the average person. His financial situation is modest, but here’s how he is potentially different:
As vice president, he would earn an estimated $284,000 a year, a big increase that would put him in the top 5 to 10 percent of Americans with high incomes, and his cost of living would be significantly lower, given the vice presidential perks of housing, travel, a car and driver, and the many other bells and whistles of the job.
Perhaps best of all, after his time in the sanctum of the White House, Waltz likely has a book deal, a speaking tour and a think tank position lined up — opportunities that typically come with attractive six-figure salaries.
By the time Trump leaves the White House, he’ll be 64 or even 68, likely well into his prime earning years — a stark contrast to most people in their 60s who are nearing the end of their careers and beginning to think about how to live off their savings.
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Not investing should not be the default
A former public school teacher, National Guardsman and member of Congress, Walz has had a career in which he hasn’t had to make many investment decisions on his own.
But for the rest of us, saving for retirement or our children’s college funds depend on taking on some risk by investing in stocks and bonds in the hopes of growing our wealth.
And it’s working: Over the past 20 years alone, the S&P 500 has returned 9.7% annually. So far this year, the S&P 500 is up 11.78% and up 20.34% year-over-year.
So here’s a bit of advice: It’s unlikely you’ll ever get a job that gives you a lifetime pension, and it’s unlikely you’ll ever get a cushy speaking gig that pays you $100,000 a pop.
Waltz’s financial choices aren’t necessarily ones to emulate. Most of us have investment needs.
Kelly Hannon is a senior columnist for Yahoo Finance. She’s an expert on career and retirement strategy and the author of 14 books, including “In Control at 50+: How to Succeed in The New World of Work” and “Never Too Old to Get Rich.” Follow her on X. Kelly Hannon.
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