The Hidden Financial Cost of Hillary Clinton's Presidential Run

This month, 2016 presidential hopefuls reported their required financial disclosures, revealing to the public how much income they generate and what assets they own.

Democratic candidate Hillary Clinton's disclosure drew a lot of attention, largely because of the $25 million of income her husband, former president Bill Clinton, earned from giving private speeches. However, dig a little deeper and you'll uncover a clever financial strategy that's a little odd, but serves the Clinton's political and financial needs..

The Clintons' personal financial statementBill and Hillary were reported to be worth somewhere in the neighborhood of $50 million. Those dollars are divided into two assets.

About half of their fortune is held in a single savings account at JPMorgan Chase. The other $25 million is held in a low-cost index fund from Vanguard.

First of all, that's a ton of money. And at first blush, it's an odd way to invest it.

Going back to Hillary's financial disclosures from her time at the State Department, you'll find that the index fund is a new investment. Back in 2012, the Clintons' sole asset was the savings account at JPMorgan.

That implies that the power couple has left sizable returns on the table for some time and only recently made the decision to invest in the markets. Of course, going with a low-cost index fund is an exceptionally smart way to invest for the long term, but it's just unusual that they didn't do it sooner.

Back to the savings account: It's odd that they would choose to lump all of their cash into a single account, effectively forgoing the benefits of FDIC insurance. Yes, the Clinton's do still qualify for FDIC insurance on $250,000 of that cash, but the remaining $24.75 million -- 99% of the account -- is uncovered.

It doesn't have to be this wayThe Clintons' decision to hold their assets in cash and an innocuous index fund is unusual for presidential candidates.

The Obamas, for example, report assets between $1.9 million and $6.9 million held primarily in U.S. Treasuries. In today's low-interest rate environment, the pair aren't exactly maxing out their yields, but they've probably done a better job than the Clintons over the past eight years. And at least Treasury notes are backed by the full faith and credit of the U.S. government, a benefit the Clintons declined by failing to structure their accounts to take full advantage of FDIC insurance.

The Obamas also reported the value of their home in Chicago, a college savings account for their daughters, and some assets in retirement accounts.

Former presidential hopeful Mitt Romney took an entirely different approach when he ran for office in 2008 and 2012. The former Wall Street executive elected to put the entirety of his assets into a vehicle known as a blind trust. In this arrangement, a third party was given complete authority to invest the Romneys' money as a fiduciary. Neither Mitt nor his wife, Ann, was ostensibly allowed any input into the investment decisions. The Romneys' trust was estimated to be worth about $250 million when Mitt last ran for president in 2012.

Former President George W. Bush also utilized a blind trust, as well as holding significant real estate assets.

Why don't the Clintons use a blind trust?When President Bill Clinton held office in the 1990s, the Clintons also used the blind trust structure.

While the blind trust structure in theory removes conflicts of interest between a politician's duty in office and his or her financial interests, questions do invariably arise. Romney's trust, for example, at one point owned shares in the Chinese state-owned oil company CNOOC, a company with known ties to Iran.

I think it's safe to assume that the Clintons see the risk of that kind of political fiasco outweighing the investment returns they've left on the table over the years. The couple has been on the national political scene for nearly three decades; by structuring their finances in the simplest, least controversial way possible, they're taking every precaution they possibly can to avoid scandal.

Regardless of the side of the aisle, don't follow the example of these politicosFor the other 319 million Americans (read: you and me), this money management strategy simply wouldn't make sense. We don't have political consequences to worry about, and we therefore shouldn't emulate the Clintons, the Obamas, or the Romneys. Keeping half of our wealth in a savings account seems imprudent to put it mildly. Using a blind trust would just be silly.

If you really want to mimic the politicians, the Clinton's index fund strategy is probably your best bet. Low cost index funds are universally applauded as a smart, easy investment option. That's a bipartisan decision everyone agrees on.

The article The Hidden Financial Cost of Hillary Clinton's Presidential Run originally appeared on Fool.com.

Jay Jenkins has no position in any stocks mentioned. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.