How does someone like this also make such brilliant business decisions as to get to be a billionaire?
(Maybe should be in IMHO but I’m hoping there is a factual answer of some kind.)
Short answer: He was born rich.
Son of this guy, worth some $250-$300 million according to Wikipedia.
Why do you think he’s a nutcase?
For example, he enters the Presidential race purely for publicity (and maybe vanity), then drops out before he has to commit to anything serious.
He makes outrageous statements - but so do career politicians (particularly from the Tea Party :smack: )
Also, chance. The idea that skill, intelligence, and “work ethic” are the main promotors of economic success rather than starting equity and pure chance is not supported by data, it’s just a lie that successful people tell ourselves.
Eh, like anything it’s not so simple to just say “all rich people got lucky.” Famous rich person Warren Buffett admits that much of his wealth is luck, but things had to be in place (that Warren himself put in place) for that luck to have a chance to work. Other investors who have followed similar investing practices haven’t become as rich as Buffett, and some of that is luck, without luck he wouldn’t be where he is today. But luck isn’t the only thing that separates Buffett from my cousin who has spent most of his life as a con artist, in and out of jail, smuggling cigarettes across state lines and etc.
Trump basically made some real estate investments that paid off handsomely. He was well positioned to do this because of familial connections. His finances have actually gone up and down pretty dramatically over the years and of well known billionaires Trump has made a ton of bad decisions. But he’s made a few good ones that insulated him from the consequences of the bad, particularly building up a property portfolio that enabled him to get back into the green when essentially almost all of his other businesses failed. In the later 2000s he converted to making most of his money off of media deals that paid him guaranteed money and such, essentially further cashing in off of his celebrity at that point.
Can we see the data?
He graduated second in his class at Wharton, one of the top 3 business schools on the world IIRC.
This does not disprove your premise, but your premise is not applicable to this situation.
Scratch that - looks as if on further inspection there is greater evidence his academic record has been inflated in the media.
After being born, he was also allowed to go billions of dollars in debt. At one point his net worth was around Negative $1 Billion. So, he started with millions, lost a lot of money on bad deals. Then there was always some bank or other investor willing to bail him out or extend him additional 8-9 figures of credit even when he was negative. He used strategic business bankruptcy and (from what I’ve read) later made more money by licensing his name and doing other deals with no risk.
There are two types of rich - one is the person who builds something - Microsoft (Gates), Apple (Jobs, Wozniak), Facebook (those twins… no wait, I’m kidding) - and the other is the salesman. Trump is the latter.
The trouble with building something is being able to manage it. At a certain point it gets away from you (like Apple did) or the idea gets tired or obsolete (VisiCalc, Polaroid). Rarely is a maker also a good manager, and knowing when to pass it to a good manager is part of the key to getting rich.
Salesmanship is a lot easier, but requires a much different personality. Have you ever wondered why the hell a real estate salesman should collect 5% to 7% of your house for a few days’ work? The richest part of the USA is Wall Street, where the essence of the job is to sell things - drop your bucket in the river of money flowing by, and take as much as you can. The second richest is probably Hollywood, where the guys collecting commissions and percentages take home the lion’s share, much more than the talent that makes the product.
It takes a weird personality to sell real estate, used cars, or development deals. Trump has that personality. He talks people into deals, they put down their money, he skims off his percentage and management fee for doing the organizing and selling the deal, and someone else takes most of the risk. CHutzpah.
I think it was one of the Michael Lewis books where he describes selling securities in London; he realized that the research people had been pushing a bunch of product that was pure crap just to unload it before it tanked, then had another revelation when the German buyer begins screaming at him over the phone - he’s just screwed the guy and there’s nothing the guy can do but yell. That’s sales.
I think it’s more than that. The estimates of his wealth vary wildly, and this is in large part because much of his wealth is tied up in certain rights that he retained in properties that he doesn’t otherwise own, and the value of which is tied to the value of the name “Trump”. So to the extent that you think rights to the name “Trump” are worth a lot, then he’s worth a lot too, and likewise if the reverse is true. Trump himself thinks the name “Trump” is worth a lot, so he values these rights very highly, but it’s not clear how much others agree with him.
See e.g. Donald trump financial statement: He says his name alone is worth $3 billion.
From wikipedia:
He started rich, at Steken said, and later became an example of “if you owe the bank $1000, the bank owns you, if you owe the bank $1 million, you own the bank” (or however that old saw is most commonly formulated).
actualliberal and wiki (via rsa) are quite right. I worked for Spy magazine for a while and worked on a very carefully reported article that showed in convincing detail that not only was Trump broke, he was very broke. In typical Trump fashion he made a big deal out of suing Spy but never did–then he would have been proved in open court to be broke.
He recovered because the banks figured it might be better to restructure his debt than to force him (or his companies) into bankruptcy. They were right.
One detail that always stuck in my head was that at one point Trump needed to make a loan payment or go into serious default on a loan, I forget whether the loan was on one of his AC properties or not. Fred Trump, the father, walks into the Taj and buys $30 million of casino chips, and walks out with them. Donald Trump then makes a $30 million payment on the loan. The NJ Casino Control Commission made a lot of harrumphing noises, because this kind of thing isn’t allowed, but ultimately they did nothing.
This kind of shit is why Las Vegas would never let Trump in.
PS, this was in 1990, before the 1991 events mentioned in the Wiki article.
Apparently, since sometime in the early 1990’s, he hasn’t been investing himself in the businesses he has been associated with. He lets them use his name, gives speeches touting the business, and is given a certain amount of money as a simple payment for being the spokesman for the business. He invests nothing himself. Apparently, some of those businesses lost money for the people who did invest in them. His relationship to the businesses he’s been associated with are like his relationship to the show Celebrity Apprentice. He doesn’t own it; rather, he gets paid for being associated with it. Calling him a salesman is one way of putting it. I would call him just an entertainer.
He’s a real estate developer. They’re all self-aggrandizing semi-literate assholes - it’s basically a job requisite.
He got his start in his father’s real estate business. He then started developing properties on his own. His big successes were in the luxury apartment business. He picked a good time to enter this business as Wall Street began to take off in the 80’s and then when crime in NYC started to plummet in the 90’s real estate became much more valuable. He then went into the casino business in Atlantic City and ended up failing at that, but still retains 5 percent of the Trump casino’s stock. He sold most of his New York real estate holdings and now his holdings are mostly Trump Tower, 40 Wall Street, and NikeTown. He also has commercial real estate in San Francisco. His commercial real estate is estimated to be worth 1.8 -2.3 billion dollars. He also has residential real estate estimate to be worth around 400 to 500 million. He has alot of golf courses and luxury resorts around the world. That is estimated to be worth around 1.5 billion dollars. He also does alot of deals where he licenses his name to properties around the world and luxury brands. These deals are estimated to be worth 200-500 million dollars. He also has half the Apprentice TV series and several beauty pageants.
He is something of a buffoon but that does not mean he is not also very smart and very good at business.
I’ve never met the guy, but what I’ve read from others that have met/known him personally is that his public persona is much different than when he is alone with friends and family. Most of them say he is a lot more quiet and calculating when actually working.
As someone already mentioned, he is a great salesman. Most great salesmen behave much differently when they are selling than when they are working alone. He behaves the way he does because it is good marketing and it gets people talking. I think he strategically chose to take this route in marketing himself because it works. I don’t think his behavior is a byproduct of his incompetency or lunacy.
He certainly got lucky in more ways than one - but it takes a smart person to leverage that luck into long term sustained success. Many lottery winners have demonstrated that much. His corporate bankruptcies were even leveraged to end up favoring him. All of this takes planning, execution, and follow through. Say what you will, but he is demonstrably good at business.
Sort of.
Gawker posted a chart of his fluctuating net worth. Objective estimates had it in negative territory in 1988 and the early 1990s. If somebody makes market returns for himself and his investors, I’d say they were competent in business. If your partners take a bath and you wind up in the black, I’d say you were good at negotiation. Or self-promotion. Not business. That’s a wider skill set. Mitt Romney was good at business. I’m not so sure about Donald Trump.
http://gawker.com/donald-trumps-grossly-exaggerated-net-worth-a-timeline-1711718182
In addition to the valid points made by many posters above, it’s also worth noting that many celebrities and rich/famous people tend to have a lot of eccentricities. IMO a lot of this has to do with the fact that they tend to be surrounded by sycophants and to be shielded from the impact of societal opinion. As a result, any eccentricities and/or self-aggrandizing tendencies that others might suppress (whether consciously or subconsciously) are enabled to flourish.
I imagine this accounts in part for Trump’s persona and mindset.
He is also a teetotaler. I have no opinion one way or the other on that, but it does say that instead of boozing it up in South Beach and getting home at dawn, he is in bed at a decent time ready to tackle the next day.