The current President of the United States is definitely a controversial figure, both as a politician and as an investor. It’s quite a common belief that the lion’s share of Trump’s wealth has been inherited, and that he amassed the real wealth thanks to intermediaries managing his assets on his behalf. Where does the truth lie? Here are some investment secrets of Donald Trump:
1. In fact, Trump has inherited some of his assets. The real investor here was Trump’s grandfather, who came to America as a sixteen-year-old poor immigrant. Frederick Trump made his fortune on the famous Klondike gold rush – but not on the gold itself, but on providing services to incoming prospectors. Donald’s grandfather saved the equivalent of half a million dollars, which his youngest son later invested in a development company.
2. When Donald took over the company from his father, it was worth $500 million. So, if you’re looking for advice on how to go from rags to riches, Trump is definitely not the right person to ask. Even after taking the company over, Donald used mostly his father’s contacts and money. Frank Trump guaranteed his son’s corporate loans for the construction or restoration of luxury hotels in Downtown Manhattan.
3. But, that doesn’t mean that Donald didn’t make good investment decisions. Taking advantage of the growing economy, Trump targeted at luxury goods and services, as the demand for them in the US continued to grow. The Trump’s hotel chain began to be a symbol of success, building a strong market position for itself and becoming a recognizable brand.
4. Trump’s example shows that it’s much better to tread on familiar ground. His hotel business, which he took over from his father and grandfather, was flourishing, facilitated by good decisions. But, when this entrepreneur started to invest in other sectors, he almost always failed. Trump has made unsuccessful investments in Broadway plays, sports, or casinos, and the latter almost left him bankrupt. Within fifteen years, Trump’s only bigger business which allowed him to make considerable profit, outside of the hotel industry, were beauty contests, which he finally withdrew from because of the controversy around them.
5. The billionaire invested a lot in his surname. Trump was known for pushing his surname through wherever he could. The famous Trump Tower is proof of that, as is a chain of other businesses that operate under Trump’s surname. Investments may have collapsed, but the surname was still associated with success and luxury of the upper class. Thanks to this, Trump has always managed to find more investors and lenders to cooperate with.
The story of Donald Trump is, on the one hand, a confirmation of a popular wisdom that it’s best to inherit your first million. Certainly, it’s difficult to consider him as a model for small entrepreneurs – those may be rather interested in the figure of Donald’s grandfather, who built his business from scratch. However, Donald has made some interesting investment moves, has built an incredibly strong personal brand and has had a long history of successes and failures.
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