https://voat.co/v/politics/comments/699871 ()
submitted ago by didntsayeeeee
"Now, let's get some facts about Donald Trump's father. Fred Trump had a net worth which is estimated somewhere between $250 and $400 million, and he died in 1999. That's only sixteen years ago. If you take the most generous estimate and imagine you've invested all of Fred Trump's $400 million in the S&P500 with dividends reinvested, then by 2015 you'd have.... $868 million. And in fact Donald was only one of four heirs, plus there's taxes, so we'd be presumably looking at an actual inheritance of less than $100 million. Since the Donald was already a billionaire at this stage, it didn't make that much of a difference to him.
Now, what does this National Journal article actually say? Let's track it down:http://www.nationaljournal.com/twentysixteen/2015/09/02/1-easy-way-donald-trump-could-have-been-even-richer-doing-nothing
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.
OK, so the claim that we keep hearing is the Chinese-whispers conflation of two different claims. If he had taken his share of his inheritance in 1974 (why 1974? why not 1976 or 1963?) and invested it in mutual funds, and never spent a dime on anything then he'd have $3 billion, which still isn't as much as he has today. It would also require him to say "Yo, Dad, I know you're only in your sixties, but can I have my share of your inheritance now?" which would generally be considered rather rude. In order to get rich this way he'd have to access his inheritance a full 25 years before his father actually died. (And also never spend a dime, which I'll come back to.)
The second claim, about 1982, is probably true. In 1982 Trump was 36 and had already amassed $200 million, if he'd stuck that in the S&P500 and never spent anything then yes, he'd be a billion or two richer (this is where the $8 billion claim comes from). But this is a matter of arbitrarily choosing investment strategies and timelines with the advantage of hindsight. Why was 1982 picked? Because if you buy in 1982 you can get a dip. If you buy in 1981 you do worse. If you buy in 1983 you do worse.
What's more, both these analyses rely on Trump not spending any money. In fact Donald Trump has for the past several decades enjoyed a rather expensive lifestyle involving multiple garish penthouses, private jets, private helicopters, and two ex-wives. Living the same lifestyle whilst attempting the S&P500 thing would take away a lot of the money available for reinvestment.
So how did Donald Trump get rich? It sure as fuck wasn't his inheritance, which he didn't get until 1999 when he was already a billionaire. That's not to say that Donald didn't benefit from being Fred Trump's son; as well as the $1 million loan that Fred Trump famously gave his son to get started, Fred Trump was also a guarantor on the loans for a few of Donald's first projects. He also benefited from the Trump name, Trump contacts, and all the skills he'd learned from his father. Nonetheless, Donald Trump did manage to amass $200 million in his own name by the time he was 36 and $1.6 billion by the time he was 53. And that's pretty impressive.
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