Trump’s Wealth? Better Off Doing Nothing

Sorry, I do endeavor to keep each posting tied to something that was published somewhere that day but, in this case, Ritholtz's column from yesterday is a lot more interesting.  For months now, the financial media has been hinting that Donald Trump may not enjoy nearly the wealth he boasts of.  I'm sure that I've read articles in either or both Forbes/Fortune to this effect.  Since his is a privately held corporation, he is under no legal requirement to disclose his true financial holdings ... that is unless and until he becomes the nominee - and he certainly has not been volunteering.

Friday, Ritholtz offered some napkin scratchings that not only is it impossible that Trump started out nearly as modestly (about $200,000) as he claims, but that it is highly unlikely that he could have the current $10 billion dollar fortune he claims or, at the very least, that his fortune was not at all self-made.  I'm sure I've read in Forbes or Fortune that the Donald may actually be broke, that his debts are actually greater than his assets.  Of course, if he does by some fluke of history become the nominee, then federal election law will require a full disclosure, at which time the excrement will hit the fan if it hasn't already done so.  And, according to the Wall Street media, his finances are but one of a long list of skeletons suspected to be in his closet.  Wouldn't it be the most delicious irony of all if the candidate whose platform is accusing lies and cover-ups in Washington (and other candidates) turns out to be covering up the biggest lie of all?

Trump’s Wealth? Better Off Doing Nothing | The Big Picture

Trump’s Wealth? Better Off Doing Nothing

by Barry Ritholtz - September 11th, 2015, 12:00pm

Astonishing:

Trump understates his early wealth as much as he overstates his present wealth. He says when he started out he was worth “about $200,000” but he’s just burnishing his brand.

A son of a real estate mogul, he’s in no position to spin a “rags to riches” yarn. By saying he was worth $200,000 then and $10 billion now he can pose as a sort of a self-made guy who really does know the art of the deal.

But when he went into the family business, his dad had already built or acquired 14,000 New York City apartments. Lacking access to company records, no one can appraise their value with any precision, but anyone can do better than Trump. So here it is on the back of a napkin. In those days, city apartments sold for about $45 a square foot. Most Trump apartments were outside Manhattan, which lowers the price, but many were family units, which raises it back up some. A reasonable inflation adjusted estimate of their value back then approaches $3 billion. But New York real estate prices have since skyrocketed. If Trump had just paid down the mortgages and kept up the apartments, they’d be worth $8 billion today.

In other words if he’d done nothing at all he might now be worth what he says he’s worth.