How Donald Trump Got His Money

President Donald J. Trump, the controversial real estate tycoon who was elected the 45th president of the United States, has widely boasted that he has a net worth of more than $ 10 billion. Forbes lists President Trump’s net worth in 2018 at $ 3.1 billion.What others are sayingSee moreThis makes him the 259th richest person in the country.What others are sayingSee moreWhile Trump dropped eleven points in Forbes ranking compared to the previous year and shifted 138 points since he announced his presidential bid in 2015, he is one of the richest presidents in the USA.What others are sayingSee moreWhat others are sayingSee more What others are sayingSee moreWhat others are sayingSee more

Top Takeaways

  • Donald J. Trump was a real estate tycoon and reality show star before he became President of the United States.
  • Biographers attributed much of Trump’s wealth to gifts and inheritance left to him by his father, Fred Trump, who established a real estate empire in New York City.
  • As a businessman, Donald Trump has a history of bankruptcies and business failures, but also several victories in branding himself and the Trump name on various platforms, such as The Apprentice.
  • As president, his continuing commercial interests have raised concerns among some that politics and profits may violate the constitution’s emoluments clause.

The Trump family fortune

Trump reached a milestone in 1980 when he partnered with Holiday Inn, Corp., then the parent company of Harrah’s casino resorts – to develop a $ 250 million Atlantic City hotel and casino complex called Harrah’s at Trump Plaza .

Eventually, Trump would purchase partners and rename the Trump Plaza Hotel and Casino property. After the successful launch of Trump Plaza, Trump bought a second property in Atlantic City from Hilton Hotels for an amount of $ 320 million. After the hotel chain failed to obtain a gaming license, Trump renamed this latest purchase, Trump Castle.

Trump’s setbacks

When Trump bought an apartment building and an adjacent hotel in Manhattan, his plans for a large condo tower on the site were constrained by the city’s rental control programs. In 1985, Trump revealed his plans for a $ 88 million complex on the West Side of Manhattan, dubbed the “City of Television”. However, community opposition and a lengthy approval process ended Trump’s vision for the project.

These two flaws pale in comparison to the setbacks that would soon occur in the Trump organization. In 1990, when the booming 1980s housing market began to decline, many of Trump’s highly leveraged investments began to weigh heavily on the company’s investments. balance sheets.

Trump faces bankruptcy

Finally, in the early 1990s, Trump’s winning streak stopped. The national economy began to slow and the New York economy stopped, causing Trump’s income flows to slow. Soon, he found it difficult to make the interest payments on the debt he had accumulated to finance his different businesses. Its annual loan payments were $ 300 million. The Trump Organization and its subsidiaries owed $ 9 billion and Trump’s personal debt totaled $ 975 million.What others are sayingSee moreWhat others are sayingSee more

To avoid having to file for bankruptcy, Trump met with four of his main creditors, Citibank (Ç), Bankers Trust, Chase Manhattan Bank and Hanover Trust Co. Manufacturers – now owned by JPMorgan Chase Bank, National Association. Banks were concerned that if they hindered on their properties, they would also lose huge amounts of money.

An Additional Loan

In the end, Trump convinced the banks to lend him another $ 65 million, which he would use to keep his business running. The banks also agreed to defer interest and principal payments on Trump’s outstanding loans for five years.What others are sayingSee moreSome of Trump’s debts were paid for with proceeds from the sale of his assets, which included an airline (Trump Shuttle) and a yacht (sold to Saudi billionaire Prince Al-Waleed bin Talal). Trump also sold his stake in the Plaza Hotel and turned his Florida beach house, Mar-a-Largo, into a resort.

The Trump Organization revealed it was $ 5 billion in the hole in 1990, with up to $ 1 billion guaranteed by Donald Trump personally. The deal survived thanks to a combination of bail-out and postponement by more than 70 banks. Many point to the purchase of the Taj Mahal Casino in 1988 as an important catalyst for Trump’s debt cycle. There is some truth to this, particularly after Trump tried unsuccessfully to finance the construction of his sister casinos in 1989, mainly junk bonds.

Rescue package results

The rescue package allowed him to take out the second and third mortgages in most of its properties. Leverage became a common theme for Trump, who notoriously dealt with bankruptcy four times. Trump used the extra rope from his creditors to get into debt, raise their rents and buy other companies, including more casinos.

The early 1990s were tumultuous for the prospects of the Trump organization and Donald’s business. In 1991 and 1992, two of Trump’s casinos in Atlantic City (Trump Taj Mahal and Trump Plaza Hotel) filed for Chapter 11 bankruptcy, which allowed them restructure their debt. As a result of the onerous debt, in 1991, Trump was forced to cede 50% of the Taj Mahal’s property to his bondholders in exchange for lower interest payments and extra deferrals. Shortly after, Trump combined his three casinos in Atlantic City, forming a single company, called Trump Entertainment Resorts.

1995 and Trump’s turnaround

In addition, in the mid-1990s, one of Trump’s initial investments, the Grand Hyatt building, opened in 1980, was hugely successful. Trump quickly sold his stake back to Hyatt for $ 140 million.

Later, in 1995, Trump bought the old Bank of Manhattan Trust building, located at 40 Wall Street. This building would become one of its most famous properties. Trump says he bought the building for just $ 1 million. The building was available at a discount, however, after another deal with ex-Filipino president Ferdinand Marcos failed and the building’s owners were desperate. The net value of this building, better known as the Trump Building, is now worth $ 327 million, according to Forbes.What others are sayingSee moreWhat others are sayingSee more

Trump heritage

Fred Trump died in 1999, with estimated net wealth between $ 250 million and $ 300 million, according to a New York Times article at the time of death.What others are sayingSee moreAlthough the specific amount that Trump inherited from his father has not been revealed, a January 2016 article from New York Times shows that Trump will split $ 20 million after tax between his living children, including Donald.What others are sayingSee moreWhat others are sayingSee more

In addition, in 2003, it was reported that Donald and his brothers sold a portion of his father’s real estate for about half a billion dollars.What others are sayingSee moreIn addition to this heritage, Trump’s father helped the tycoon financially throughout his life, granting loans and access to trust funds and establishing a wealth of real estate and political connections for his son.

An October 2018 report on New York Times alleges that Trump was involved in dubious practices that helped his parents avoid taxes and enriched him in the process.What others are sayingSee moreWhat others are sayingSee more

The Apprentice

Trump started on TV as a wrestling character at World Wrestling Entertainment’s Wrestlemania in the 1980s and never looked back, finally starring in a reality show about his business called, The Apprentice. Trump’s name recognition skyrocketed after The Apprentice aired in 2004.

Each season, more than a dozen competitors vied for a six-figure management position at one of Trump’s many companies. A press statement issued by the Trump presidential campaign states that, during the 10-year history of the The Apprentice and its derived series The Celebrity Apprentice, Trump earned a total of $ 214 million.

The Trump brand: a best seller

If you want to understand Trump, the billionaire you have to look beyond Trump, the real estate investor. You have to think of Trump as a brand name, just like Coca-Cola Co. or Nike Inc.

Many of the properties that bear the Trump name are not owned by the tycoon. The Trump Organization is known to partner with developers in licensing agreements. In this arrangement, a developer pays Trump a licensing fee. In return, they are allowed to mark their building with Trump’s name and logo.

Trump benefits from receiving a regular flow of royalties, while the developer can increase the fees charged because the name Trump means high quality and luxury. According to Trump, his real estate licensing agreements, intellectual property, brands, and brand development is worth more than $ 3.3 billion. However, Forbes estimates that figure at about $ 253 million.What others are sayingSee moreWhat others are sayingSee more

In addition to real estate, Trump has lent his name to a diverse list of products, ranging from mattresses and clothing to fragrances and furniture. These licensing agreements contribute to Trump’s annual income. In 2014 alone, Trump earned $ 3.25 million from licensing consumer products.

Trump found another way to monetize its frank nature – charging fees for lectures at conferences and other functions. Between May 2014 and March 2015, he spoke on several commitments and charged up to $ 450,000 for each performance. Overall, speaking engagements contributed $ 1.75 million to Trump’s income in that period alone.What others are sayingSee moreWhat others are sayingSee more

Trump Books

While Trump gained prominence and notoriety in the 1980s through his colorful business and television appearances, he rose to a new level of fame when he released his first book. The art of the deal was released in November 1987. It has spent 51 weeks on the bestseller list and has sold about a million copies so far, according to most reports.

The art of the deal is in the headlines again in 2016 after a controversial interview in The New Yorker with the co-author of the book Tony Schwartz.What others are sayingSee moreSchwartz says he wrote “every word” in the popular book. “Donald Trump made some red marks when I handed the manuscript to him, but that was it,” he said in an interview with ABC. Good Morning America.What others are sayingSee moreWhat others are sayingSee more

Schwartz, who observed Trump almost daily for 18 months while writing The art of the deal describes Trump as a dangerous sociopath whose successes have been mitigated in The art of the deal. Schwartz says he now regrets writing the book: “I feel a deep sense of remorse for having contributed to introducing Trump in a way that caught his attention and made him more attractive than he is,” said Schwartz. The New Yorker.What others are sayingSee moreWhat others are sayingSee more

In response to Schwartz’s Good Morning America interview and New Yorker article, the Trump field issued a letter of termination and withdrawal from Schwartz and asked Schwartz to send a check to Trump for the royalties generated from The art of the deal, plus its advance.What others are sayingSee moreWhat others are sayingSee more

Trump’s real estate fortune today

Although the Trump empire spans many industries, real estate development and acquisitions it has always been your main business. Trump’s real estate income is derived from many different types of properties. The Trump Organization, for example, owns hundreds of residential units and offices that create income. According to Forbes, the Trump Hotel Collection and real estate licensing raised $ 128 million in 2014.What others are sayingSee moreWhat others are sayingSee more

The bottom line

Donald J. Trump launched an empire, based mainly on his name. Taking large loans, Trump has built many luxury hotels, apartments and casinos, which have become iconic monuments to the excess and exuberance of the 1980s. However, Trump’s business has faced four bankruptcies over the years. The most recent was in 2009, when Trump Entertainment Resorts was devastated by the 2008 recession. Although it faced near financial ruin and several commercial bankruptcies, Trump brand products and real estate licenses remain popular and helped land him at Forbes 400 for several decades.

Paula Fonseca