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| Why winning the White House would be the best deal of Donald Trump's business career | |
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| With New York in his back pocket Donald Trump is one big step closer to capturing the White House – a move that could prove his most lucrative deal ever. | With New York in his back pocket Donald Trump is one big step closer to capturing the White House – a move that could prove his most lucrative deal ever. |
| For many US presidents, the process of winning a primary battle and the subsequent general election is enough to cripple them financially. Trump, with his personal wealth and an influx of donations, faces fewer obstacles than many of his peers in financing a campaign. | For many US presidents, the process of winning a primary battle and the subsequent general election is enough to cripple them financially. Trump, with his personal wealth and an influx of donations, faces fewer obstacles than many of his peers in financing a campaign. |
| But it’s in getting off the campaign trail, and away from business, that Trump, ironically enough, could really end up doing himself some financial good. | But it’s in getting off the campaign trail, and away from business, that Trump, ironically enough, could really end up doing himself some financial good. |
| The bombastic billionaire might be trying to play nice now but his, often vile, comments on the campaign trail have wreaked havoc on the value of the Trump brand. Macy’s, which sold his branded menswear collection (branding is the key to the Trump fortune) severed ties with Trump last summer after the candidate said Mexico was sending rapists and criminals to the United States as immigrants. The PVH Corporation, also known as Phillips-Van Heusen, followed suit, winding down their arrangement to manufacture Trump’s clothing line three years before it was due to expire. | The bombastic billionaire might be trying to play nice now but his, often vile, comments on the campaign trail have wreaked havoc on the value of the Trump brand. Macy’s, which sold his branded menswear collection (branding is the key to the Trump fortune) severed ties with Trump last summer after the candidate said Mexico was sending rapists and criminals to the United States as immigrants. The PVH Corporation, also known as Phillips-Van Heusen, followed suit, winding down their arrangement to manufacture Trump’s clothing line three years before it was due to expire. |
| Whether its race-cars (Nascar) or pageant queens (Miss Universe), Trump’s support has proved to be more liability than asset. As someone who is all brand, that’s a problem. | Whether its race-cars (Nascar) or pageant queens (Miss Universe), Trump’s support has proved to be more liability than asset. As someone who is all brand, that’s a problem. |
| It’s tough to value a brand, although Trump himself pegged his as being worth $3bn in his own financial disclosure forms. But it’s not hard to see given the losses his branding empire has suffered that this election has cost him. Winning the election would probably right some of that. | It’s tough to value a brand, although Trump himself pegged his as being worth $3bn in his own financial disclosure forms. But it’s not hard to see given the losses his branding empire has suffered that this election has cost him. Winning the election would probably right some of that. |
| But perhaps even more importantly while in the White House, he would not be able to run his own business affairs: they will have to be placed in a blind trust. And while that almost certainly will drive Trump to the edge of insanity, it probably will be a good thing for his net worth. | But perhaps even more importantly while in the White House, he would not be able to run his own business affairs: they will have to be placed in a blind trust. And while that almost certainly will drive Trump to the edge of insanity, it probably will be a good thing for his net worth. |
| The fact is that Trump hasn’t always been as good a steward of his inheritance. He’s had a lot of flamboyant fun with it but as countless articles have pointed out, his business career includes – in addition to some great golf course developments and a string of savvy marketing arrangements – a lot of failed deals. | The fact is that Trump hasn’t always been as good a steward of his inheritance. He’s had a lot of flamboyant fun with it but as countless articles have pointed out, his business career includes – in addition to some great golf course developments and a string of savvy marketing arrangements – a lot of failed deals. |
| Some of those were in his core area of expertise – real estate. Trump may claim to be New York City’s largest real estate developer, but while his name adorns many buildings, he doesn’t actually own them. | Some of those were in his core area of expertise – real estate. Trump may claim to be New York City’s largest real estate developer, but while his name adorns many buildings, he doesn’t actually own them. |
| It’s common for entrepreneurs to focus on their willingness to take risks – often big risks – in pursuit of their vision. But the other thing that many entrepreneurs have in common that all too often goes unrecognized or unremarked is that they come from affluent or financially comfortable families. Researchers hunting for a “risk gene” came up dry: instead they discovered that environmental factors triumphed. Even if a well-off family doesn’t provide kids with access to capital, they appear to be more willing to take risks, knowing that they may have a safety net to cushion any falls. | It’s common for entrepreneurs to focus on their willingness to take risks – often big risks – in pursuit of their vision. But the other thing that many entrepreneurs have in common that all too often goes unrecognized or unremarked is that they come from affluent or financially comfortable families. Researchers hunting for a “risk gene” came up dry: instead they discovered that environmental factors triumphed. Even if a well-off family doesn’t provide kids with access to capital, they appear to be more willing to take risks, knowing that they may have a safety net to cushion any falls. |
| In Trump’s case, his safety net came in the form of an inheritance that has been estimated to be about $40m, or a one-fifth share of the $200m fortune accumulated by his developer father, Fred Trump (The Donald was one of five children). Had he invested that money, which he received somewhere around 1974, in the Standard & Poor’s 500 index, he would have ended up making $2.3bn, almost as much as the $2.9bn he is worth today. And all for doing next to nothing. Had he waited until 1982 to invest his assets in the S&P 500, he’d be even richer: worth $6.3bn. | In Trump’s case, his safety net came in the form of an inheritance that has been estimated to be about $40m, or a one-fifth share of the $200m fortune accumulated by his developer father, Fred Trump (The Donald was one of five children). Had he invested that money, which he received somewhere around 1974, in the Standard & Poor’s 500 index, he would have ended up making $2.3bn, almost as much as the $2.9bn he is worth today. And all for doing next to nothing. Had he waited until 1982 to invest his assets in the S&P 500, he’d be even richer: worth $6.3bn. |
| True, that analysis doesn’t account for the fact that Trump would have wanted to pull money out of his account to live on, or for the fact that his business activities have generated jobs for varying numbers of other individuals. The bottom line remains that, in all probability, entrusting his wealth to a team of professionals to run in a blind trust might not be such a bad idea, especially if they don’t charge him much in fees. | True, that analysis doesn’t account for the fact that Trump would have wanted to pull money out of his account to live on, or for the fact that his business activities have generated jobs for varying numbers of other individuals. The bottom line remains that, in all probability, entrusting his wealth to a team of professionals to run in a blind trust might not be such a bad idea, especially if they don’t charge him much in fees. |
| An alternative would be to turn his business over to others to run. Trump’s daughter, Ivanka, while she has no independent track record, is a savvy dealmaker in her own right, and no reputation for alienating the people she needs to bring onside to make deals. Turning the business over to her to run while he runs the country could only leave him in better financial shape – and quite possibly in better financial shape than if he had continued to run it himself, since all the “noise” would be gone. | An alternative would be to turn his business over to others to run. Trump’s daughter, Ivanka, while she has no independent track record, is a savvy dealmaker in her own right, and no reputation for alienating the people she needs to bring onside to make deals. Turning the business over to her to run while he runs the country could only leave him in better financial shape – and quite possibly in better financial shape than if he had continued to run it himself, since all the “noise” would be gone. |
| Then there are the post-White House earnings to consider. | Then there are the post-White House earnings to consider. |
| Let’s face it, if being president is one of the most arduous jobs on the planet, being an ex-president isn’t just the biggest bully pulpit in the world, but possibly its most lucrative gig. You’ll get an annual pension and benefits, including an office and security detail. Publishers will bid for your memoirs and the final deal will be in the seven figures. | Let’s face it, if being president is one of the most arduous jobs on the planet, being an ex-president isn’t just the biggest bully pulpit in the world, but possibly its most lucrative gig. You’ll get an annual pension and benefits, including an office and security detail. Publishers will bid for your memoirs and the final deal will be in the seven figures. |
| Bill Clinton – and his wife, Democratic presidential candidate Hillary Clinton – has attracted the most attention for his ability to make a fortune since leaving office. He insisted that the couple entered the White House with “the lowest net worth of any American president in the 20th century” (probably not true when Harry Truman, with all his financial woes, is considered), and that their latter affluence hasn’t left them out of touch with ordinary Americans. True or false, they are one-percenters now. The former president earned $104.9m for speeches delivered over a dozen years since leaving office. Hillary, much to Bernie Sanders’ annoyance and her own political detriment, has been pulling in a fortune making speeches on Wall Street. | Bill Clinton – and his wife, Democratic presidential candidate Hillary Clinton – has attracted the most attention for his ability to make a fortune since leaving office. He insisted that the couple entered the White House with “the lowest net worth of any American president in the 20th century” (probably not true when Harry Truman, with all his financial woes, is considered), and that their latter affluence hasn’t left them out of touch with ordinary Americans. True or false, they are one-percenters now. The former president earned $104.9m for speeches delivered over a dozen years since leaving office. Hillary, much to Bernie Sanders’ annoyance and her own political detriment, has been pulling in a fortune making speeches on Wall Street. |
| They are not alone. George W Bush also set out explicitly to “replenish the ol’ coffers” by speechmaking, and pulls in anywhere from $100,000 to $175,000 apiece – without the hullaballoo that accompanies the Clintons’ moneymaking. | They are not alone. George W Bush also set out explicitly to “replenish the ol’ coffers” by speechmaking, and pulls in anywhere from $100,000 to $175,000 apiece – without the hullaballoo that accompanies the Clintons’ moneymaking. |
| For Trump, speechmaking would be a bit trickier. Some of the groups that hire ex-presidents want to be flattered, not hectored. Who wants a loose cannon on the podium? Still, there are all kinds of groups, and all kinds of opportunities. Another reality TV show, perhaps. Political Apprentice: You’re Elected! | For Trump, speechmaking would be a bit trickier. Some of the groups that hire ex-presidents want to be flattered, not hectored. Who wants a loose cannon on the podium? Still, there are all kinds of groups, and all kinds of opportunities. Another reality TV show, perhaps. Political Apprentice: You’re Elected! |
| But while a Trump presidency may be good for his bottom line, I can also see many, many reasons why it would be a fairly bad deal for millions of Americans. | But while a Trump presidency may be good for his bottom line, I can also see many, many reasons why it would be a fairly bad deal for millions of Americans. |
| Trump has all but promised a trade war with China. Bad, bad idea. However much we deplore working conditions in low-wage Chinese manufacturing facilities; however much we’d like to repatriate manufacturing jobs to the US, a trade war is not the solution. All it would do is drive up prices of imported goods for consumers. | Trump has all but promised a trade war with China. Bad, bad idea. However much we deplore working conditions in low-wage Chinese manufacturing facilities; however much we’d like to repatriate manufacturing jobs to the US, a trade war is not the solution. All it would do is drive up prices of imported goods for consumers. |
| Deporting immigrants to help boost employment? The jobs those people do, many economists agree, probably would be left unfilled. Construction work would slow, activity in hotels and restaurants would slump. That would hurt GDP. His tax plan would simply cause the national debt to balloon. | Deporting immigrants to help boost employment? The jobs those people do, many economists agree, probably would be left unfilled. Construction work would slow, activity in hotels and restaurants would slump. That would hurt GDP. His tax plan would simply cause the national debt to balloon. |
| Putting Trump in the White House might make his America great again. I’m not sure what it would do for the rest of us. | Putting Trump in the White House might make his America great again. I’m not sure what it would do for the rest of us. |