The world was shocked with the result of the 2016 United States presidential election. A newcomer in politics, billionaire, defeating a seasoned politician, serving on the legislative and executive branch of the government. Well, maybe people needed something new, something different.
We’ve seen from around the globe world leaders who came unconventional roots; from Ukraine’s Volodymyr Zelensky, who was a comedian before entering politics, Haitian President Michel Martelly who was a singer before becoming the president, British actress Glenda Jackson, who served in Parliament, and Donald Trump, a businessman and TV personality.
Disregarding his politics, we’d like to focus more on how much is President Trump’s net worth. During the campaign, Trump claimed that he’s worth an estimate of $10 bn, and said that he’d self-fund his campaign, but some economists say that his real net worth is far way less than $10 bn.
How he started
Donald Trump was the fourth of the five children of Fred Trump and Mary MacLeod. His father was a successful real estate developer. With the help of federal loan guarantees to drive the construction of affordable housing, Fred Trump started building single-houses and row houses up to thousands of apartment building around New York from the 1920’s up to the 1940’s.
Just like Donald, Fred was also controversial. In a Senate Banking committee, Fred Trump was investigated for overestimating the costs of his construction project to get larger loans from commercial bank, earning him more than his construction cost. In 1954, he did admit building an apartment complex in Brooklyn for $3.7 million less than the government-insured loan.
Upon graduation, Donald joined his father’s real estate empire. During the 60’s and 70’s, the Trumps were targets of criticisms over racial profiling and discrimination over minority groups. Donald helped his father’s empire grew, and started investing in residential properties and luxury hotels. His crowning glory? The Trump Tower: a 58-story office, retail, and residential complex on 56th Street and Fifth Avenue of Manhattan, New York.
Trump also ventured into other industries. During the 80’s, Trump heavily invested in casinos. He also ventured on sports, being an owner of the New Jersey Generals of the short-lived United States Football League.
Trump even invested on air-shuttle services, Trump Shuttle. Trump likes to market his name as brand on almost all his ventures and property. Once prime example of this is the Trump Entrepreneur Initiative (formerly Trump University), an online education company that offers courses on business and real estate. Trump also premiered on a television show The Apprentice, even getting an Emmy nomination for his show. In 1996 Trump together with the NBC television network, purchased the Miss Universe Organization, which produced the Miss Universe, Miss USA, and Miss Teen USA beauty pageants.
Hitting Rock Bottom
But not all ventures struck gold for Donald Trump. In the 90’s, the United State’s economy was in a recession, and a lot of Trumps businesses were hit hard. He had a hard time paying of his almost $5 bn loan. With a restructuring agreement with the bank, Trump was forced to sell his airline to US Airways, reduce his ownership stakes in his properties and to commit himself to living on a personal budget of $450,000 a year. Amid those agreement, the Trump Taj Mahal, two other casinos owned by Trump, as well as his Plaza Hotel declared for bankruptcy.
The Trump University also became subject of an inquiry by the New York Attorney General’s office for illegal business practices. Also, contrary to its name, the organization was not an accredited university or college and it did not confer college credit, grant degrees, or grade to its students.
His current numbers
Donald Trump still has real estates of great value especially his properties in New York, such as the Trump Tower, and other golf courses, resorts and casinos around the United States.
During the 2016 presidential elections, the Journal’s estimate Trump’s pre-tax income in 2016: $160 million. Applying a federal tax rate of twenty per cent to this figure, would bring it down to $128 million. It’s hard to put a figure on Donald Trump’s over-all wealth, but a simple way to value any business is to capitalize the income that it generates using an earnings multiple. If you take a multiple of twenty and apply it to $128 million, you get a figure of $2.56 billion, which is still far less than the $10 bn net worth that he claims.
According to Forbes, Donald Trumps net worth is around $2.1 bn as of May 14, 2020. It’s a far decline from what Forbes estimate last September 2017, which was $4.7 bn.
Furthermore, as Coronavirus has hit the United States hard, his business were hit hard also by the pandemic. His net worth drops $1 B in just one month.
Nearing the end of his presidency, we’ll see how he’d handle on recovering the loss, and will he be serving America for another 4 years, or would he be going back to where he all started, real estate and business.