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I find it curious that so many politicians leave office much more wealthy than they enter it. I read the question about why do politicians make so much money, but the answers focus on their salary of $200K. That is NOT what I am asking about. $200K annually is reasonable for the job they do.

I am talking about the serious wealth of over 10 million dollars that accumulated over the course of their tenure. I know it is not limited to one party either. My concern is corruption and shady business dealings like inside information. I am sure part is due to book deals and the like, but there are few things in life that guarantee wealth without creating or making something. It seems wrong. And would seem to violate founding principles.

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  • This is not just related to corruption things like book deals can also impact their wealth since depending on the position people will want to know more about them.
    – Joe W
    Commented Nov 12, 2021 at 21:54
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    The perks for being in a position that influences the fortune of the others or avails the others to make more wealth. The line between perk and corruption is so thin and quite vague. It is a "Politics 101" course :)
    – r13
    Commented Nov 12, 2021 at 21:56
  • should point out they have lower expenses than most because of official benefits like HC, franking, transportation and office/technology funds, etc. They also get comped meals and drinks by sympathetic business owners. Lastly, their campaigns can cover a lot of day-to-day stuff (food/entertainment, transportation, phone bills, etc) where the other funds fall short. All that makes it easier to aggressively invest.
    – dandavis
    Commented Nov 17, 2021 at 23:33

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I don't see how those numbers contradict each other. Investing $10K a month (which seems reasonable at your $200K yearly figure) for 30 years at a rate of 6% (which also seems reasonable, slightly below average market yields and well below average S&P 500 returns) leaves you just shy of 10 million dollars. Feel free to verify the math using a compound interest calculator.

Note that the politicians you mention, Speaker Pelosi and Senator McConnell, are both around 80 years old. Assuming they invested part of their income throughout their careers it's unsurprising that they've accumulated a lot of wealth by now. That's even without considering other factors like marrying rich, being born rich, having a previous career in which they made a lot more money (which may apply to some politicians).

Another way of making more money is by having a second job. This doesn't seem to be allowed in the US but it's fairly common in other countries. In the UK there's currently a row over members of parliament (MPs) earning much more than their politician's salary on a second job while serving as an MP.

In the Netherlands, being a senator is a part time job which is taken in addition to one's regular work outside of politics. As the linked analysis states, some also combine the work with positions in regional government.

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    Surely they would not have been on $200k thirty years ago? This seems to be applying interest/inflation only in one direction, which will distort your calculation.
    – Dave
    Commented Nov 12, 2021 at 23:08
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    @Dave you're right, 30 years ago the salary was just under $100K. Nevertheless, the reasoning that politicians can build wealth by investing holds (and disproves that making 10 million over a politician's career implies something nefarious went on). You could change the numbers to monthly investments of 4,000 dollars over 45 years and you still beat the 10 million target at just 6%.
    – JJJ ♦
    Commented Nov 12, 2021 at 23:23
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    And because politicians tend to be independently wealthy to start with, many could invest their entire salary each year.
    – Obie 2.0
    Commented Nov 12, 2021 at 23:35
  • @Obie2.0 That's probably true for most Senators, less so for Representatives. They're like "entry-level" politicians.
    – Barmar
    Commented Nov 13, 2021 at 10:33
  • @JJJ: Index funds weren't widely known then - indeed, the first one was only started in 1975: en.wikipedia.org/wiki/Index_fund But low-cost mutual funds that invested in the broad market, or specific market segments, had been around longer, and were widely available by the mid-1980s, when I first started to invest. (After a short, bitter experience investing in individual stocks with a broker :-() Even today, only about a third of my holdings are strictly index funds.
    – jamesqf
    Commented Nov 14, 2021 at 3:37
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From this article about Bernie Sanders — who is, perhaps ironically, a millionaire — it seems that the bulk of his income comes from book deals and sales. He is also collecting two pensions from previous political jobs, in addition to his 174,000 dollar salary as a Congressperson. I'm sure that's true of all Congresspeople, particularly the older, more established ones.

It's a sad fact of life that social standing by itself bings increasing opportunities for wealth. Book deals, interviews, speeches or lectures, public appearances... many of these come with fees that are increasingly steep as one's fame and notoriety increase. This is as true of A-list actors, reality tv stars, crazed extremist pundits, twitter mavens, and tik tok celebs as it is of politicians. Do you think Alex Jones, Tucker Carlson, or Kim Kardashian would talk and act the way they do in public if they weren't making book on various side hustles?

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