The 1 Easy Way Donald Trump Could Have Been Even Richer: Doing Nothing

By putting his inheritance into the stock market back in the 1970s, Trump might have been “really rich” without all the drama.

Donald Trump in New York, Wednesday, August 26, 2015.
Bloomberg AFP/Getty
S.V. Dáte
Add to Briefcase
S.V. Dáte
Sept. 2, 2015, 1:25 p.m.

As “really rich” as Don­ald Trump is today, he might have been even rich­er if, in­stead of dab­bling in sky­scrapers and casi­nos, he’d simply taken his eight-fig­ure in­her­it­ance dec­ades ago and sunk it in­to the stock mar­ket.

Had the celebrity busi­ness­man and Re­pub­lic­an pres­id­en­tial can­did­ate in­ves­ted his even­tu­al share of his fath­er’s real-es­tate com­pany in­to a mu­tu­al fund of S&P 500 stocks in 1974, it would be worth nearly $3 bil­lion today, thanks to the mar­ket’s per­form­ance over the past four dec­ades. If he’d in­ves­ted the $200 mil­lion that For­bes magazine de­term­ined he was worth in 1982 in­to that in­dex fund, it would have grown to more than $8 bil­lion today.

Even the smal­ler fig­ure ex­ceeds the lower range of his pos­sible net worth as re­por­ted to the Fed­er­al Elec­tion Com­mis­sion, while the lar­ger num­ber ex­ceeds by bil­lions re­cent es­tim­ates of Trump’s worth by fin­an­cial pub­lic­a­tions. And it would have come without the high-drama, roller-coast­er ca­reer that has in­cluded four cor­por­ate bank­ruptcies.

That a purely un­man­aged in­dex fund’s re­turn could out­per­form Trump’s hands-on wheel­ing and deal­ing calls in­to ques­tion one of Trump’s chief selling points on the cam­paign trail: his busi­ness acu­men.

Among those drop­ping dried corn ker­nels in­to Trump’s jar at the Iowa State Fair last month, many cited Trump’s busi­ness ex­per­i­ence as a top reas­on he’d make a good pres­id­ent—a no­tion that sup­port­ers in New Hamp­shire also share. “He’s a good busi­ness­man,” said Bed­ford, New Hamp­shire, re­tir­ee Frank Savino. “He cre­ates a lot of jobs.”

Trump’s cam­paign did not re­spond to Na­tion­al Journ­al quer­ies about his story. Trump him­self fre­quently speaks of his great wealth—he claims it ex­ceeds $10 bil­lion—as proof of his skill as a ne­go­ti­at­or, which he says cur­rent Amer­ic­an of­fi­cials lack in their deal­ings with oth­er coun­tries.

“Who would you rather have ne­go­ti­at­ing against China, against Ir­an?” he asked a Dubuque, Iowa, audi­ence last week. “Jeb Bush, Hil­lary Clin­ton, or Trump?”


“I’m proud of my net worth,” Trump said dur­ing his June an­nounce­ment speech. “I’ve done an amaz­ing job.”

Trump has spent dec­ades mak­ing sure that the pub­lic be­lieves he’s ex­tremely rich. In 1982, as For­bes magazine put to­geth­er the first of its an­nu­al list of the wealth­i­est Amer­ic­ans, Trump ar­gued to ed­it­ors that he was worth $400 mil­lion, not the $200 mil­lion the magazine as­signed him. It was only the first of many such lob­by­ing ef­forts.

“Every year, Trump shares a lot of in­form­a­tion with us that helps us get to the fig­ures we pub­lish. But he also con­sist­ently pushes for a high­er net worth—es­pe­cially when it comes to the value of his per­son­al brand,” For­bes re­port­er Erin Carlyle wrote this June, ex­plain­ing the magazine’s as­sess­ment that Trump was worth $4.1 bil­lion, less than half of his claimed net worth. A sub­sequent re­view by Bloomberg found he was worth $2.9 bil­lion.

While many Trump sup­port­ers be­lieve he is a self-made man, it was ac­tu­ally his fath­er, Fred Trump, who built the real-es­tate em­pire that Don­ald Trump took over in 1974. It was worth about $200 mil­lion at the time, which Trump and his four sib­lings ul­ti­mately in­her­ited after en­joy­ing siz­able trust funds for years.

(Co­in­cid­ent­ally, there was a self-made busi­ness­man who was also worth about $40 mil­lion in 1974: War­ren Buf­fett. Had Trump al­lowed Buf­fett to man­age his for­tune, too, Trump might also be worth what Buf­fett is today: about $67 bil­lion—or about 22 times bet­ter than what the stock mar­ket would have pro­duced.)

Be­cause Trump’s busi­nesses are privately held con­cerns, they’re not re­quired to file Se­cur­it­ies and Ex­change Com­mis­sion re­ports, as pub­licly traded com­pan­ies must do. Even the fin­an­cial dis­clos­ure Trump had to file after start­ing his pres­id­en­tial cam­paign of­fers only lim­ited guid­ance be­cause it asks for val­ues in broad ranges, with a top cat­egory of “over $50 mil­lion.”

A Na­tion­al Journ­al re­view of that 92-page doc­u­ment found as­sets total­ing at least $1.37 bil­lion and li­ab­il­it­ies total­ing at least $265 mil­lion. But Trump claims 22 as­sets he says are worth more than $50 mil­lion each and four loans also ex­ceed­ing $50 mil­lion. Which means that based solely on that doc­u­ment, Trump could the­or­et­ic­ally be worth $100 bil­lion—or be $100 bil­lion in debt.

Per­haps the most deeply re­searched ac­count of his wealth is a dec­ade old: the book TrumpN­a­tion, by former New York Times journ­al­ist Tim O’Bri­en, who found three sources close to Trump who es­tim­ated that he was worth between $150 mil­lion and $250 mil­lion. (That same year, Trump was claim­ing a net worth of $6 bil­lion, and For­bes found a value of $2.6 bil­lion.)

Trump’s re­sponse? To ac­cuse his as­so­ci­ates who gave O’Bri­en that es­tim­ate of hav­ing obese wives. “You can go ahead and speak to guys who have 400-pound wives at home who are jeal­ous of me, but the guys who really know me know I’m a great build­er,” he told O’Bri­en.

Trump wound up su­ing O’Bri­en for de­fam­a­tion, claim­ing his book had dam­aged his busi­ness. The suit was even­tu­ally dis­missed, but not be­fore Trump sat for a de­pos­ition in which he ad­mit­ted that he routinely ex­ag­ger­ated the val­ues of his prop­er­ties.

“I think every­body does,” he said in the de­pos­ition. “Who wouldn’t?”

Trump said his es­tim­ate of his net worth on any giv­en day was based on a lot of dif­fer­ent factors—in­clud­ing his mood. “My net worth fluc­tu­ates, and it goes up and down with the mar­kets and with at­ti­tudes and with feel­ings, even my own feel­ings,” Trump told O’Bri­en’s law­yer. “I would say it’s my gen­er­al at­ti­tude at the time that the ques­tion may be asked. And as I say, it var­ies.”

(This sum­mer, when Trump’s cam­paign is­sued a press re­lease that stated, in all cap­it­al let­ters, that Trump was worth TEN BIL­LION DOL­LARS, O’Bri­en wrote a column for Bloomberg View that an­nounced that he, too, was worth $10 bil­lion, based on his own feel­ings.)

That 2007 de­pos­ition also re­vealed that in 2005, two sep­ar­ate banks had as­sessed Trump’s as­sets and li­ab­il­it­ies be­fore agree­ing to lend him money. One, North Fork Bank, de­cided he was worth $1.2 bil­lion, while Deutsche Bank found he was worth no more than $788 mil­lion.


Wheth­er Trump is ac­tu­ally worth $4 bil­lion or $1 bil­lion or merely hun­dreds of mil­lions likely makes little dif­fer­ence to the typ­ic­al voter, who in any of those cases can claim but a tiny frac­tion of that fin­an­cial where­with­al. But the dis­tinc­tion could af­fect Trump’s will­ing­ness to spend his own money on his pres­id­en­tial race—par­tic­u­larly if it’s as a third-party can­did­ate with little like­li­hood of suc­cess.

Trump wound up spend­ing $1.4 mil­lion on his cam­paign through the end of June, all but $92,000 of which was his own money. He has con­tin­ued hir­ing staff and fly­ing to events on his per­son­al 757 jet­liner—which burns $10,000 of fuel every hour it’s in the air. It’s un­clear how many ac­tu­al con­tri­bu­tions are now com­ing to the cam­paign or wheth­er Trump will so­li­cit big dona­tions to a pro-Trump su­per PAC. In speeches so far, he has told audi­ences that he doesn’t want big donors be­cause they will then want fa­vors in re­turn should he win. “I don’t need any­body’s money. It’s nice. I don’t need any­body’s money. I’m us­ing my own money. I’m not us­ing the lob­by­ists. I’m not us­ing donors. I don’t care. I’m really rich,” Trump said in his Ju­ly an­nounce­ment speech.

But should Trump want to pay for a ser­i­ous pres­id­en­tial run just at the time when a cam­paign must shift in­to a high­er gear and cost dra­mat­ic­ally more, it could quickly eat in­to his ready cash.

Ac­cord­ing to Trump’s fin­an­cial-dis­clos­ure state­ment, he has no more than $63 mil­lion in cash, money-mar­ket ac­counts, or sim­il­ar hold­ings, and as little as $13.1 mil­lion. He also has as much as $169 mil­lion and as little as $65 mil­lion in stocks, bonds, and sim­il­ar in­stru­ments. Everything else is tied up in real es­tate or air­craft, ac­cord­ing to the dis­clos­ure.

So while Trump said last month he’s ready to spend $1 bil­lion on his cam­paign—“If ne­ces­sary, I will spend it, yes”—one GOP con­sult­ant is not buy­ing it.

“From where?” wondered Flor­ida’s Rick Wilson, a fre­quent Trump crit­ic. “I will be­lieve it when I see it. That’s the bull­shit call of this cam­paign: Is he really go­ing to spend a $100 mil­lion?”

What We're Following See More »
Republican Polling Shows Close Race
Roundup: National Polling Remains Inconsistent
8 hours ago

The national polls, once again, tell very different stories: Clinton leads by just one point in the IBD, Rasmussen, and LA Times tracking polls, while she shows a commanding 12 point lead in the ABC news poll and a smaller but sizable five point lead in the CNN poll. The Republican Remington Research Group released a slew of polls showing Trump up in Ohio, Nevada, and North Carolina, a tie in Florida, and Clinton leads in Pennsylvania, Wisconsin, and Virginia. However, an independent Siena poll shows Clinton up 7 in North Carolina, while a Monmouth poll shows Trump up one in Arizona

Colin Powell to Vote for Clinton
11 hours ago
Clinton Reaching Out to GOP Senators
16 hours ago

If you need a marker for how confident Hillary Clinton is at this point of the race, here's one: CNN's Jeff Zeleny reports "she's been talking to Republican senators, old allies and new, saying that she is willing to work with them and govern."

Trump Admits He’s Behind
16 hours ago
Ron Klain in Line to Be Clinton’s Chief of Staff?
16 hours ago

Sources tell CNN that longtime Democratic operative Ron Klain, who has been Vice President Biden's chief of staff, is "high on the list of prospects" to be chief of staff in a Clinton White House. "John Podesta, the campaign chairman, has signaled his interest in joining the Cabinet, perhaps as Energy secretary."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.