Unlike the other recent newcomers to the Supreme Court, Sonia Sotomayor’s financial profile doesn’t make you think of Wall Street.
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Unlike the financial profiles of other newcomers to the Supreme Court, Sonia Sotomayor’s doesn’t make you think of Wall Street and the local country club. Sure, she’s got a million-dollar pad in Manhattan, but she also has plenty of credit card debt and no stocks, bonds or mutual funds. In fact, other than the money tied up in her home, her assets are slim.
|Sonia Sotomayor, who was confirmed Thursday to the Supreme Court by a 68-31 Senate vote.|
Photo credit: Stacey Ilys
Between her judicial salary of $171,800 and teaching the occasional college course, Sotomayor has been bringing in about $200,000 during the last few years. Like many of us, her most important holding is her home. She owns a four-room Manhattan apartment currently worth about $1 million, on which she owes $380,000 on the mortgage. (That’s about $20,000 more than she paid for it in 1998. It’s been refinanced.) Other assets: her white Saab convertible, Citibank saving and checking accounts and part-ownership (valued at $20,000) in a Florida condo owned with her parents.
Sotomayor owns no stocks, bonds or mutual funds. What she does have: four credit cards (American Express, Discover, Visa and MasterCard) on which she owes $16,000, plus $15,000 she owes her dentist for that nice smile. Politicians argue over whether Sotomayor is in the legal mainstream, but when it comes to credit card debt, the evidence puts her at the far end of the curve. Average credit card debt per household was more than $8,000 at the end of 2008, according to the Federal Reserve.
This information comes mainly from the financial disclosure statements all federal judges are required to file annually, plus the additional disclosures she made to the Senate Finance Committee upon being nominated to the high court.
Associate Justice Samuel Alito, who joined the court in 2005, filed a disclosure statement reporting investments that valued his list of stocks, bonds and mutual funds worth $600,000 to $1,600,000, not including the value of his New Jersey home. The other new member of the court, Chief Justice John G. Roberts, Jr., had been making about $1 million annually as a law firm partner at the Washington firm Hogan and Hartson. In disclosure forms that ran scores of pages, he listed more than 80 stock and bond funds, individual stocks and other assets.
When nominated, Sotomayor had $32,000 in her checking and savings accounts. Part of that may be the $8,000 she won at a Florida casino last year. (A White House spokesman was quick to say she’s not a regular gambler; “she got lucky.”) She has a net worth of $740,053, much of it in the form of home equity. Neither Alito nor Roberts included the value of their homes in their financial statements when they listed their assets.
She is known to be a generous gift-giver. Until it grew too expensive, she gave an annual holiday party attended by hundreds of friends, from fellow judges to building maintenance folks. The statement that accompanied her nomination told us she helps support her mother and stepfather.
“My grandmother would have been shocked and appalled to see someone who makes so much save so little,” observed Harvard economics professor Greg Mankiw in a blog post.
Readers hastened to point out that it can cost hundreds of dollars each month just to park a car in New York, much less make the car payments. Also, Sotomayor has no dependents, is reported to be a workaholic (long hours equal lots of restaurant meals) and, short of marching down Broadway drunk and naked, can’t lose her job. Said job comes with good health insurance and a pension equal to her salary, if she’s still a judge at 65.
My grandmother would have been shocked and appalled to see someone who makes so much save so little.
|— Greg Mankiw|
Harvard economics professor
When Sotomayor starts judging with the Supremes, she gets a salary boost to $210,000. On the other hand, she won’t be able to teach the occasional law school course at Columbia or NYU, so her income will stay roughly the same. She also has to move, and we all know what new curtains cost.
“Given her salary, I wouldn’t be too concerned about her credit card debt, especially if she’s recently run it up because of a vacation or two,” says financial planner Chris Jones of Keystone Financial in Allentown, Pa. Although Jones initially didn’t know the financial facts presented to him belonged to a future Supreme Court Justice, he didn’t suggest she start packing her lunches. “She could pay off $16,000 in a couple of months if she chose,” he noted.
Since Sotomayor will have a pension equal to her income when she does retire, Jones wasn’t too worried about her minimal savings and lack of investments. One thing the financial disclosure forms don’t tell is how long it took for her debt to build up. “If the credit card debt keeps growing at $2,000 or $3,000 a month over six months or longer, and she never manages to pay it off, that would be a red flag to me,” Jones said.
The bottom line, even for a Supreme Court justice: “We all need to live within our incomes.”