Governor Tom Wolf’s re-election campaign announced it ended 2017 with $11 million on hand, without any contributions by Wolf.
Wolf’s campaign manager Jeff Sheridan told the Associated Press the campaign had $11.1 million at the end of the year.
Unlike in 2014, Wolf did not donate any money to his campaign during the current cycle. In 2014, Wolf took out a personal loan to donate $10 million to his campaign. During that cycle, Wolf spent $32 million.
Wolf is not expected to have a challenger in the Democratic primary, which will allow him to continue to build up a war chest while the four Republicans running will be spending money to win the primary.
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2 Responses
Highlighting the loan like this without any context is somewhat deceptive as it seems to imply he did not have the $10 million to donate to his campaign. Of course he took out a loan; he would have been foolish not to, and taking out a personal loan was the financially savvy thing to do.
If his investments are earning 7 percent per year (likely much higher, but let’s go with the long-term average) and considering that someone with his assets and credit profile likely can take out a loan at a low interest rate – let’s say 3 percent – then he can continue to earn a 4 percent return on the $10 million while simultaneously freeing it up to be used in his campaign.
If he had pulled the $10 million from his investments, he would have “saved” 3 percent in interest only to lose all 7 percent in return on investment.
See why this is a no-brainer?
This is a great example of how the wealthy use loans and banking to make money (i.e. accessing their principal with minimized opportunity cost) in contrast to how the middle class and working class use loans to purchase things they cannot otherwise afford (e.g. house, vehicle).
Bro- Wolf’s $10m was a contribution not a loan. BIG DIFFERENCE.