On May 19, the White House released the 2010 disclosure reports for President Barack Obama's financials. With the brightest financial minds in the world at his disposal, holding the job of President of the United States would be the perfect job for the armchair investor, right? Actually, it's not. To avoid conflicts of interest, the President doesn't have a lot of options when it comes to investing, but some of his investment choices may help us make some good choices of our own. (For higher return who should you vote for? check out For Higher Stock Returns, Vote Republican Or Democrat?)

TUTORIAL: Five Minute Investing

Checking Accounts
The Obama family has up to $500,000 in checking accounts. (The federal financial disclosure forms don't give exact amounts. Instead, they give a range.) Although the President is bound to different rules, if he was making the same decisions with his money that ordinary people make, half million in a checking account would generally not be a sound investment.

If you find yourself with a large amount of cash sitting in a checking account, seek out the help of a wealth manager. Even with $500,000, that's only $5,000 at the most in interest. That 1% interest doesn't even keep pace with inflation. Although the Obamas may have to keep that money where it is, you don't have to. If you have a sizable sum (say, more than $5,000) in a bank account, consider other options. Mutual funds, bonds and index funds are all great choices. (To learn more about bank accounts, read Demystification Of Bank Accounts.)

Vanguard 500 Index Fund
According to President Obama's financial disclosure form, he has between $50,000 and $100,000 in this fund, which is listed as a mutual fund residing in a retirement account. In the past two years alone, this fund has added an impressive 52% to its value. Not bad, but should ordinary Americans take the President's lead? Since this fund tracks the S&P 500, it's easy to understand and an effective way to invest in a large array of large companies.

The Obamas have a sizable net worth but they still commit a lot of financial resources to retirement planning. This is something that all Americans should follow. (For more on saving for retirement, read Saving For Retirement: The Quest For Success.)

U.S. Treasury Bills
This is the Obama family's largest asset class with well over $1 million dollars invested in U.S. Treasury bills and notes. So should an investment in U.S. debt be a substantial part of your portfolio? Probably not. With rates around 0.5% there are numerous other investment options available. How about purchasing stock in a large company that has a healthy dividend? A company like AT&T with a dividend yield of 5.5% might be an option that a financial advisor would recommend, and there are many others like that. However, investing in stocks is a riskier choice and won't be suitable for everybody.

There are many reasons why the Obamas would have a large investment in treasury bills, but most of those don't apply to the ordinary American. Unless you're the leader of the United States, you probably aren't worried about finding the best investment vehicles to avoid conflicts of interest with multiple government agencies as well as tens of thousands of businesses. (For more information on bonds, read How To Compare Yields On Different Bonds.)

529 Plan
Also on the Obama's financial disclosure form are a series of 529 plans. A 529 plan is an investment account specifically for the purpose of starting a college fund. With two daughters who are most likely attending private, high-tuition schools, the Obamas are practicing sound money management by funding 529 accounts, but should you?

Absolutely yes! As of 2011, statistics show that undergraduate college students will graduate with an average debt load of $27,204. That's up from just $9,300 a decade ago. With jobs more scarce and salaries stagnant, helping your child graduate without a large amount of debt should be high on your financial priority list. Thumbs up to the Obamas for leading by example!

The Bottom Line
While most public officials put their money into blind trusts where they can't readily access it or control how it's invested, the Obamas prefer complete transparency. They don't invest in individual stocks that would cause conflicts of interest. Instead, they prefer government debt and diversified funds.

Remember that not only is the Obama portfolio not necessarily suitable for your needs, neither is your friend's investment choices. Investment choices must be tailored to your needs and those decisions are best made with the help of a financial advisor. (To help you with your portfolio, check out Get Personal With Your Portfolio.)

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