Is Trump A Genius With Money?
Did Donald Trump, with Buffett-like financial genius, really turn $1m into $10bn? Can we learn something from his self-proclaimed golden touch? For those of you who have more to do than tweet / watch TV (perhaps in a bathrobe?) and want the executive summary, the short answer is… No. And here’s why…
Daddy’s Money
Donald Trump’s father Fred ‘had a good war’, by which I mean he got seriously rich building houses for American soldiers. By 1974, the Trump business was worth $200m, at which point Donald inherited $40m* (not the $1m “small loan” he claims) plus tens of millions more in later years. Business Week estimated Trump’s net worth at $100m in 1978 and the Washington Post has pointed out that if he had simply put that money in the S&P 500 index he would be worth over $6 billion today.
Trump Net Worth
So what is his net worth today? This is as hard to nail down as a Trump tax return. The man himself claims he is worth $10bn whereas Forbes (which compiles the annual rich list) puts his true net worth at $3.7bn. So in other words, if he had put all his wealth into a simple stock market index fund, he’d be almost twice as rich as he is now. Or if he had asked Warren Buffett (now there’s a true financial genius) to invest his money for him, he’d be six times richer.
Can You Beat The Donald At Investing?
To borrow a phrase from his much-missed predecessor, yes you can. By sticking to an appropriate financial plan and investing over the long term in a simple index tracker you’ll almost certainly earn a much better percentage return than Trump has managed. Mind you, starting off with a “small loan” from the old man would also help!
*Sources: The Washington Post / The Motley Fool / Investopedia / Forbes / Business Week / Fortune / Bloomberg / Fake News Network (sorry I mean CNN)