Subscribe to this BlogSonia Sotomayor: A spender, not a saver?
Supreme Court nominee Sonia Sotomayor
When you’re nominated to the Supreme Court, your life becomes an open book, and details of every public move or transaction you’ve made are scrutinized, including the state of your personal finances. Last week, Supreme Court nominee Sonia Sotomayor submitted a 172-page document (with another 129 pages of supporting information) in response to a Senate Judiciary Committee questionnaire. Two pages contained details on Sotomayor’s financial holdings and net worth.
It’s a modest accounting. Though she earns nearly $200,000 a year as a federal judge and from teaching, after 17 years on the federal bench, Sotomayor has just $32,000 in savings, nearly $16,000 in credit card debt and another $15,000 in outstanding dental bills. Most of Sotomayor’s net worth is in real estate. Her apartment in Greenwich Village is worth $997,500 (with a $381,775 mortgage) and she owns one-third of a condo with an estimated $20,000 value. She also lists $108,000 worth of autos and other personal property, leaving her with a net worth of about $740,000. There is no mention of other savings or investments, so it doesn’t appear that Sotomayor has much saved for retirement.
So, where is all her money going? She’s divorced and has no children, but according to the White House, Sotomayor has been generous with her income, helping her 82-year old mother as well as family and friends financially. Federal judges do have one advantage over most working stiffs, which may have allowed Sotomayor to be more generous with her money and not worry about saving: Once appointed, federal judges are like tenured professors and can continue working as a judge at full salary as long as they want. When Sotomayor does retire, she can count on a generous federal pension based on her salary and years of service.
Sotomayor doesn’t have overwhelming debt, and perhaps she purposely stayed away from investing in securities to avoid financial conflicts in her position as a judge. Still, it does raise the question of whether she should have more saved. Harvard economics professor Gregory Mankiw says his “grandmother would have been shocked and appalled to see someone who makes so much save so little.” Mankiw, who has written about consumers as “savers” or “spenders”, said Sotomayor is firmly in the spender category after reading Sotomayor’s financial disclosure report for 2007, which showed that Sotomayor’s main financial holdings were a Citibank savings and checking account with less than $115,000.
What do you think Sotomayor’s personal finances say about her? Do you think someone with a decent six-figure salary should be saving more? Do you ever help out family and friends instead of saving more for your own retirement? Tells us what you think.
- Donna Rosato
I'm a little worried about this appointment. Being Cuban myself, I applaud them for finally appointing a Hispanic, as that was long overdue. I feel though that there were better options out there.
Sotamayor's financial irresponsibility troubles me. She does not live within her means, and this usually reflects irresponsibility in other aspects of her life. I wish her well, but I find that aspect extremely troubling.
Check out my blog about her personal finances at http://www.thedebtgazette.com/2009/08/justice-sonia-sotamayor-financial-irresponsiblity/
She has $700,000 net worth and a Federal pension coming. Homegirl is doing fantastically! Though, she really needs to cut down that $16,000 credit card debt and $15,000 dental bill, if you ask me.
You dont have to be rich to be confirmed as a judge, do you? What she does with her money is her business. Did she pay her taxes?
Being single, with no dependents you better ask how much she pay in taxes? and besides she does not need to cook to any one so check her lunch and dinning… If I were in her position it would be delivery every single day.
Her finances say that she is a wise Latino woman who tends to reach better decisions than white males. Yes, I'm kidding. To be serious, she doesn't need to save a penny; her moral entitlements are her ethnicity and gender, and they have gotten her to a lifetime job of doing nothing but sitting around and giving her opinions.
This is how the family relationships work in Latino families. A well settled person in the family always looks forward to help the relatives in need. Being a divorcee and with no retirement age limits, she might have felt no urge to pile up money in the banks and stocks.
It is sad that she has little cash reserves for someone who makes 200K per year. She needs to read the book by Dave Ramsey, "The total money makeover." Bettet yet, she needs to learn about personal responsibility. She obviously is financially inept, but will that matter on the bench? Either way, she sounds like she is undisciplined at best.
I think, as long as she doesn't become a financial burden to society, that it's not our business how she spends her money. If she chooses to be generous with less fortunate members of her family, that's certainly more commendable than taking on high debt to obtain every modern convenience known to man and dressing like a fashion plate. Sharing the wealth, as it were.
The article very clearly points out that Judge Sotomayor is going to collect a generous federal pension when, and if, she retires. She has job security that is unheard of in this day and age. She's got a net worth of $740,000 and helps to support her family. What is the issue? She does not need to save up for retirement like regular working stiffs in "employee-at-will" situations and appears to be managing her finances quite well.
Since when is having a net worth of $740k on an income of $200k nothing? How many high-earners never come to a savings/income ratio like that?
This article shows that CNN/Money is once again biased and leaning heavily to the right. You should have started the article with pointing out that her net worth is $740,000.
There are plenty of people that prefer to invest in real estate and collect rental income. This type of investment in general generates more income on a yearly bases in most cases than having a savings account that may get you 0% return (after inflation and taxes).
You really should write from a more politically balanced perspective. Anyone who reads this article would think that Judge Sotomayor is an irresponsible person and may conclude that she would be an irresponsible judge.
With her steady secured job and income, there is no need for her to save. When retired, the pension should allow her to contine to receive sufficient income to live on. Helping her mother and relatives are more important and gracious than saving for herself.
She is managing her finances well. Living in New York as a single and with a mortgage, $200k salary will not stretch that far. Forget about 401k, my six figure savings was wiped out with the dotcom bust and after rebuilding over the last decade with the current financial bust. Good she has a pension to count on.
Riverside, CA: you should read more of Sotomayor Biography. She is of Puerto Rican descent, her mother moved from Puerto Rico to New York. Last time I checked Puerto Rico still a US territory not a Third World Country.
I would prefer the Justices of our Supreme Court to be as polar opposite of Gordon Gekko as possible without straying into socialism. I think it's great she spent more than she saved. Maybe she saved some jobs over the years.
This story moves from reporting the facts on her financial worth to wondering if she SHOULD be spending this much? I don't think that is anyone's business but hers. I wonder if we should have asked if Justice Souter should be living in a nicer house? Looks like a slow news day to me.
Let me ask this question back, "Who Cares"? if she is qualified to sit on the bench as a judge, then sit her on the the Supreme Court. It seem we concern ourselves with the most trivial stuff and not the important issues, let just move on. We have more important fish to fry, like the economy and the survivorship of the middle class people.
Why is the public so concerned about the finances of this nominee? If she owed back taxes, child support or other court ordered responsibilities I would raise concern. Given the amount of foreclosures and delinquencies most Americans have no room to judge. I’m glad my financial affairs is not critiqued on an internet article.
Heck,
She sounds like some of my family. The retirement plan is as paid off home (oh, how un-american), paid off cars with a long life projected (more un-american), state pension, and SSI. These people are well on the way of having their plan in place and will likely be quite comfortable.
As opposed to some other people I know who last a wopping 90% of retirement savings in the crash of 2000 and then lost 60% of what the built back up in the last year. They will also likely not be able to sell their house for enough to pay the mortgage, much less buy another cheaper home, they owe almost as much on their cars as they are worth, and are likely to get hit with "early retirement" from their jobs.
So perhaps Ms. Sototmayor is doing it right.
Beside, it really isn't any of our darn business. I just care how she rules on cases.
I am more concerned about having a court that is all millionaire judges than I am about her modest savings.
This is more likely a plus than a minus.
What is she being accused of? Being generous? Removing possible conflict of interest by not investing in equities? Not being beholden to any one individual or organisation who could supplement her income? Being non-ideological?
How ridiculous. This woman has no baggage to bring to the Court. Instead a stellar record of public service for which she is being pilloried by "nattering Republican nabobs of negativism."
i didn't see where she was taking bribes and kickbacks, so the rest is none of my business. it is nice that she shares this info, but the fact that she helps her family, IS very important in my view. family is the most important thing one has in life.
Yea, she is a regular friggin matriarch. She is worth a ton of money (on paper) and yet you want to make her out to be some poverty stricken welfare bunny. That really great that she helps her family and friends…She is probably the only one that does I guess. Give me a break!! What do you think her personal finances say. It seems to me that she makes 200k a year and has no savings is a clear sign that she makes bad decisions…oh, but I guess she has already show us that one. I guess if she was a "white male" that financial statement would look a lot different.
My only concern is the size of her outstanding debt. Being familiar with the customs of Latin families, her mother is actually, effectively, her dependant. This is significantly different that the Anglo-centric monetary philosophy that has been fostered in the U.S. thus far and could potentially have large-scale effects on interpretation of monetary policy.
In Anglo-centric monetary philosophies, the parent takes care of the child until the child becomes a parent but in Latin monetary philosophy, the parent cares for the child until adulthood, and then the child pays "tithe" (sorry, best word I could come up with on short notice) to the parent to honor them.
She is in the positive at $700K so she sell jer condo and moves to Puerto Rico or Florida when she retires her federal pension will support her in later years. Its about time that people who actually need to work for a living get on the Supreme Court. Most people in this court outside of their 401K and their home don't have much savings. Stocks were the big thing to do in the past decade but not a sure bet.
You are usually a savor or a spender in this world. My Dad said it best,"You can divide all the money up equally in this country, and five years from now it will be right back where it is!"
I happen to be a big saver, it is just in my DNA.
This is the classic case of common American. No saving Just spending. Government policy are not helping either ( to save ). Thumb rule is try to save , every month , 1/3 of your net earning.
She'll probably be all in favor of debt forgiveness for wannabe homeowners and cancelation of student loan debt. Probably rule against creditors and savers if given the chance.
I agee with Mary in Austin that the judge probably has almost $10K per month in discretionary income after the basics are paid. Although how one spends their money is their own business, the judge's saving are certainly very modest for someone at this income level. Even though the cost of just about everything in NYC is ridiculous, it certainly seems like she should have more. Her federal pension is no doubt generous, but I doubt it will cover her later years unless she relocates. Having said all that, I think it would look much worse for her if her net worth were several million dollars.
she is probably sending all of her money back to her home country to take care of a bunch of muching relatives. next thing she will do is give tem our money with social sercurity benefits, health care, etc.
WAKE UP AMERICA….IT'S MORE OF THE SAME….SPREADS THE WEALTH…NOW IN THE COURT!
The absence of publicly traded securities, bonds, mutual funds, and ETFs is really interesting—interesting in that Sotomayor's financial profile looks like what is wrong with America. Spend everything you have and then some (see dental debt and credit card debt) and hope that you don't get sick so you can continue to earn enough to at least service the interest on the debt.
Why should she not spend her money, she has no one to take care of but herself?
She will have a fabulous pension. The reason we are in the straits we are currently is people are too busy trying to accumulate and become rich to leave it behind. She seems to be very generous in sharing while she lives.
You are not considered wealthy on $200K /year salary especially if you live in a major urban center. 50% of earnings goes to State and Federal taxes thanks to AMT.
One of the reasons people completely give up on trying to save for retirement is because of articles like this. How can any of us ever save enough if a professional single woman with a net worth of $740,000, guaranteed employment and a generous pension is deemed to have not saved enough? I think the financial services industry tells us that we all need a million dollars or so for retirement just to sell more of their money-losing, fee-grabbing financial products. Many older Americans are getting by with far less and are perfectly happy and content doing so.
As I'm unemployed, with no pension after 25+ years at the same employer, I really cannot sympathize – if the purpose of this article was to generate sympathy for the justice elect.
Also – I'm a registered democrat. Don't begrudge Ms. Sotomayor her good fortune – just don't see any reason to sympathize.
Who cares? Once it is determined that she has done nothing wrong with her money, it should not be our business.
We have more pressing issues than this.
I'm concerned it shows a lack of responsibility on her part. Should something come up to the courts to further relieve Americans of the need to be fiscally responsible… It worries me.
I am from an Eastern European family. We take care of our elderly and sick and if we don't have enough money saved for our retirement, that's when our relatives are meant to help us. We don't put our parents in nursing homes, we scrimp and live on one salary, so one member of the household can stay home with our sick family members. I was rasied to believe this is the right way to take care of our family.
One can assume that most of her spending went to "shopping"; however, we do not know how much she spend getting her mother out of the Bronx and how much she probably helped her brother for his Doctorate. She truly exemplifies a US Citizen that with hard word and determination made it in this wonderful Free Market Country.
When you have a guarenteed retirement you do not need to save as someone else would.Just make sure you can afford to live where you retire.
Kathy from Portland, OR: You really don't think it is any of your business to look a potential supreme court justices' finances? How a person runs their personal life is very important – it shows their judgment. Seems very relevant to me. If they don't like it they can stay in the private sector.
I cannot expect Mankiw to understand
what it would be like to help family
and friends. He carries a silver spoon
with great pride, thinking that he has
actually achieved something on his own.
Well Judge Sotomayor has. That is the
biggest problem with Mankiw, and his
comment, he probably was not raised to
understand that others may not have a
silver spoon to feed from. Quite a fit
for the Bush administration, were most
seem to have a silver spoon, and all
answers to the world's economic
problems. As my grandfather would say,
"boy, if you work hard, the money will
follow. If you just focus on the
money, you will never produce anything
of substance". So, I guess the
difference between my grandfather and
Mankiw's grandmother is that each had
a different sense of family and
community. I wonder which is better?
she's not financially irresponsible,she lives and works in NYC where $200M/yr barely affords middle class life. I, a wasp, am willing to bet that she probably does have more wisdom as a result of how and where she was raised & that she will be a dandy supremem court justice !!
I agree, this is none of our business and a violation of Sotomayor's privacy. I'm disappointed in this article.
Doesn't owing credit card debt automatically constitute a conflict of interest when deciding cases involving major banks to whom you owe money?
Since she has a generous government pension and can work as long as she wants, what incentive does she have to save? This is a world that most Americans do not live in.
While how she manages her money is her own business, it appears this person is not corrupt (probably the reason why her finances are being checked by Congress) or otherwise she would not have debt.
Ok, so she does not have what we think she should have in bank. But remember this, there are alot of us who do not have money bank either, that includes anyone who is making over at least $150,000 or more. So lets not be so judgemental about her finances until we can control own finances. She has worked hard in her own right to be choosen for this position by President Obama, so her spending is not the issue, its her decision making on the Supreme Court that is important. This is her day and her time to reflect all of work she has done to get to this point. Go for it Sotomayor, you deserve it!!!!!!!!!!!!!!!
Re: Sotomayor's finance:
Coming from third world country, I can understand why she has less cash & more generosity in her holdings. When one member of the family makes it becomes that person's responsibility to pick up your relatives who are not as fortunate. Otherwise you are a candle light in the longest dark tunnel.
I don't think it is really any of my business.
Sounds to me like she has a significant net worth and a Federal Retirement Package.
I wish all those people had the same insecurity I do for HEALTH INSURANCE and retirement benefits.
She pays income taxes at "single" rates to the feds, NY state, and NY City, and may very well be paying alternative minimum tax too . . . I bet she takes home about half of her pay.
At $200,000 a year, she is below the definition of President Obama for "weathly" american. Her savings is enough to cover her credit card and medical debt so she should be able to avoid bankruptcy.
Being single without childre, she probably still qualitfy for the AMT, so she kicks back around $48,000 to Uncle Sam in income tax. Her mortgage also run about $3,000 / $3,500 a month (based on 7% for another 20 years, she looks like she doesn't refi too often).
That leaves around $9,500/months to cover daily expenses, property taxes (likely hefty in Greenwhich village), and helping out her family. Not bad, but not that enormous either.
And why would she not help support the economy by shopping when she is garanteed a federal pension at retirement?
I want to withhold judgement until she speaks for herself in public hearings. Personally, I see nothing wrong with spending money- she has no children and is divorced. Her pension will take her through her later years- why does everyone have to jump onto the investment wagon? Isn't speculative behavior what caused the financial crisis in the first place? Perhaps she sees money as a means to an end- to buy things to make herself and her extended family happy. Perhaps she should have saved more but nothing stops her from doing that in the future and since her debts are modest she should be able to finance retirement quite well which is more than I could say for myself or other people who fell for the 401k hoax.
Wow ! That is one very busy person, just documenting all that activity is a job !
I have GOT to start keeping a diary.
We The People should require all lobbyists to also publicly report their activities the same way, after all, they are professional manipulators.
But, at least in Texas, the legislators refuse to provide much information of substance about their own business interests. Former Speaker Tom Craddick refused to give much of an accounting on his personal business operations.
And we should require all excessive-income people to also report their activities the same way, especially the con artists of Wall Street, Hollywood personalities, and professional sports people, and so on. Too much money means too much influence on legislators.
She's going to have to reduce her generosity to her "relatives" – they need to help each other more.
I really don't see a problem.
She has lifetime job security; even if she wasn't confirmed, she would still be able to work for as long as she wants. when she hits 65, she would be eligible, as a retired judge, for a pension equal to her salary. She has guaranteed income as long as she doesn't do anything stupid to get herself kicked out of her seat or impeached. Her savings are enough to cover her credit card and dental bill debts. Even if she were to retire a few years from now, she would still be able to make a fortune with book deals worth millions. I think she's in better shape than the vast majority of citizens can imagine. Her abstaining from investment in securities protects her from conflict of interest. I think it's wonderful that she is in a position to be so generous…