Seemingly every time I open my computer or turn on the TV, there is some mention of
Donald Trump. Whether it is John Oliver verbally eviscerating him on Last Week Tonight or clips of Trump discussing his “hand size,” there is a never-ending media frenzy centered on the real estate mogul and reality TV star. Regardless of your political leanings or views on Trump himself, there is one fact that we can all agree on – he would not be in the race if it weren’t for the amount of money he has.
Recently, ex-Massachusetts senator and founding partner of Bain Capital (which has approximately $70 billion in assets under management according to their website) Mitt Romney called Trump a “fraud” and attacked Trump’s business record. In light of these comments, let’s look at Trump’s business record from the beginning. First, one must consider that his father, Fred Trump, was a real estate mogul himself, renting out tens of thousands of units in New York City boroughs Brooklyn and Queens and amassing a fortune estimated between $200 and $300 million. Donald used his father’s success, expertise and money to foray into the real estate market in Manhattan. Trump’s first major success and most notable building to date is Trump Tower, completed in 1983. Trump Tower is located at 725 Fifth Avenue in Midtown Manhattan, and is the only building in Manhattan that Trump built from the ground up. Most of the other Trump brand buildings have simply licensed his name. According to The Atlantic, due to Trump’s fame, Trump does not have to put up any of his own capital for almost all of the residential projects he is involved in now. He simply helps with the redesign of condos as well as
selling them. For this he receives a fee and a minority stake in the building.
A recurring theme in Trump’s statements about both his success (and specifically his net worth) is that Trump tends to be misleading. In a deposition mentioned in Newsweek, when asked about his net worth, Trump stated, “My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings – even my own feelings.” From a financial perspective, this is almost impossible unless one wants to make the concession – which I do not – that Donald Trump’s feelings on the Trump brand makes its value fluctuate.
One detractor from the Trump brand is the high profile failure of some of his businesses. Four Trump-run resorts or hotels have filed for corporate bankruptcy since 1990: Trump’s Taj Mahal in Atlantic City (1991), the Trump Plaza Hotel in Atlantic City (1992), Trump Hotels and Casinos Resorts (2004) and Trump Entertainment Resorts (2009). Trump’s checkered past of his companies filing for bankruptcy is also tied with many of his business ventures failing outright. Yahoo Finance did an exposé on 12 Trump-run companies that have failed, including Trump Steaks, Trump Vodka, Trump Magazine and Trump: The Game. Almost all of these companies lasted for less than two years and seem like interesting business ventures for a real estate developer to get involved in. There is no doubt that Trump has a great deal of money. However, the next time he begins talking about his business
record on the campaign trail, it is worth keeping these facts in mind.