How to Go to Congress and Become a Millionaire - John Ransom - Townhall Finance
Sunday, May 29, 2011
BY JOHN RANSOM
Ever wonder how people go to Congress and become millionaires?
A new academic report clears it up for us.
A report from four scholars, Alan J Ziobrowski; James W Boyd, Ping Cheng; and Brigitte J. Ziobrowski, titled Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives, shows that between 1985 and 2001 members of Congress enjoyed a considerable advantage over members of the public in their investment returns.
The article was published by Berkeley Electronic Press and is a follow up to a similar study done on investments by US Senators.
“A previous study suggests that U.S. Senators trade common stock with a substantial informational advantage compared to ordinary
Actually 12 times .55 percent comes out to 6.6 percent annually. That .6 percent return accounts for an additional $130,000 over a 17 year period.
A portfolio of $100,000 getting average stock market returns of 11 percent over a 17 year period would have grown to $589,000. If you were a member of the United States House of Representatives, though, enjoying the advantage that inside government information can bring you, your portfolio would have reached $1,573,000, according to an investment calculation I did using the finding from the study.
Assuming only average market returns for the next 20 years, a Representative would grow their portfolio to close to ........
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