The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.
In this motion graphic video, we break down the full story behind Donald Trump’s wealth.
Not only do we examine his major business successes and failures, but we even look back at real estate’s prominent role in the history of the Trump family. To conclude, the video breaks down Trump’s net worth and financial history, while highlighting some of the help he has gotten along the way in building his fortune.
The story started well over a century ago with Donald’s grandfather, Frederick Trump. Real estate runs deep in the blood of the Trump family, and Frederick was actually the first Trump to own a hotel. During the famous Klondike gold rush in Canada, Frederick owned an inn and restaurant that served gold miners. When he passed away, he left an estate worth just under $500,000 in today’s dollars to his heirs.
His eldest son, Fred Trump, carried on the Trump legacy by going into business with his mother, using the nest egg for seed money. Fred became a very successful builder in New York City’s outer boroughs. He built single family houses in Queens in the 1920s, helped pioneer the supermarket with the “Trump Market” during the Great Depression, and even built barracks for the Navy during World War 2.
But Fred’s real cash cow came in 1949, when he got a government loan to build Shore Haven Apartments in Brooklyn. The Federal Housing Administration paid him $10.3 million, but he was able to build the apartments for significantly less.
The government kept overpaying for houses in Brooklyn and Queens, and Fred kept building them. According to Donald, his father became “one of the biggest landlords in New York’s outer boroughs”. By the time of Fred’s death in 1999, it’s said that Fred Trump was worth between $250 and $300 million.
Born in Queens, Donald J. Trump would join his father’s company early on in his career. His father’s cash cow was now gone, but Donald had a different vision for the Trump name anyways. He envisioned the “Trump” brand as being synonymous with luxury worldwide.
To do this, in the mid-1970s, Donald went into real estate in Manhattan. Relying on the business connections and creditworthiness of his old man, he borrowed a “small sum” of 1 million dollars to get started.
Trump’s Biggest Successes
Trump’s top three business successes include the Grand Hyatt, 40 Wall Street, and the Apprentice.
1. Grand Hyatt
In 1976, Donald Trump and Hyatt partnered to buy the rundown Commodore Hotel near Grand Central Station. At the time, the whole neighborhood was in disarray with many nearby buildings on the verge of foreclosure. Trump negotiated contracts with banks and the city in an effort to fund the hotel and rejuvenate the area.
The end result was the Grand Hyatt, a 25-story hotel, which Trump sold his share of for $142 million in 1996.
2. 40 Wall Street
Another big win for Trump was with 40 Wall Street, once the tallest building in the world. He bought it for $1 million after years of vacancy. Today, it’s prime real estate in the financial district, worth more than $500 million – a huge return.
3. The Apprentice
The Apprentice was also a financial home run for Trump. As the show’s host and executive producer, he raked in $1 million per episode for a whopping 185 episodes.
Trump’s Biggest Failures
Like many businessmen, Donald Trump’s career has also had his share of failures.
1. Atlantic City
Donald’s biggest failure may be his ill-fated venture into casinos in Atlantic City.
The bleeding started in 1988 when he acquired the Taj Mahal Casino. Funded primarily by junk bonds, the massive casino would be $3 billion in debt within just a year of opening. Trump, who racked up $900 million in personal liabilities, had the business declare bankruptcy. To stay afloat, he ditched many personal assets such as half of his stake in the company, a 282-foot megayacht, and his airline.
Things were dire, and Trump’s dad chipped in by providing a $3.5 million loan in the form of casino chips to help make a loan payment.
Trump’s casino holding company would enter bankruptcy two additional times: in 2004, after accruing $1.8 billion in debt, and in 2009, after missing a bond payment during the Financial Crisis. Each time, Trump’s stake in the company fell.
2. Other Businesses
While three of Trump’s four bankruptcies involved Atlantic City casinos, he has also struggled in other ventures outside of real estate: Trump airlines, Trump Vodka, Trump: The Game, Trump Magazine, Trump Steaks, and Trump University were all destined for failure. Trump Mortgages was launched in 2006 right before the real estate crash, and it also imploded.
Trump’s Net Worth
According to Trump’s campaign, he is worth “in excess of TEN BILLION DOLLARS”. However, he has also been accused in the past of artificially inflating his net worth. Forbes and Bloomberg News both have drastically different estimates of his wealth at $4.5 billion and $2.9 billion respectively.
Using the middle of the road figure from Forbes, here is how Trump’s wealth breaks down:
- 48% is in New York City real estate
- 7% is in cash and liquid assets such as investments
- 8% is in golf courses
- 4% is in “toys” such as helicopters, penthouse, or his Boeing 757 plane
The remainder includes other real estate assets outside of New York City, as well as the value of the licensing agreements for hotels, real estate, or other Trump products.
Trump as an Investor
So how did Donald Trump do in managing his fortune?
See Trump’s performance as an investor compared to other benchmarks in the next video for The Money Project.
About the Money Project
The Money Project aims to use intuitive visualizations to explore ideas around the very concept of money itself. Founded in 2015 by Visual Capitalist and Texas Precious Metals, the Money Project will look at the evolving nature of money, and will try to answer the difficult questions that prevent us from truly understanding the role that money plays in finance, investments, and accumulating wealth.
Sustainable Investing: Debunking 5 Common Myths
Do sustainable strategies underperform conventional ones? This infographic shines a light on the realities of sustainable investing and the ESG framework.
Sustainable Investing: Debunking 5 Common Myths
It began as a niche desire. Originally, sustainable investing was confined to a subset of investors who wanted their investments to match their values. In recent years, the strategy has grown dramatically: sustainable assets totaled $12 trillion in 2018.
This represents a 38% increase over 2016, with many investors now considering environmental, social, and governance (ESG) factors alongside traditional financial analysis.
Despite the strategy’s growth, lingering misconceptions remain. In today’s infographic from New York Life Investments, we address the five key myths of sustainable investing and shine a light on the realities.
|Sustainable strategies underperform conventional strategies||Sustainable strategies historically match or outperform conventional strategies|
In 2015, academics analyzed more than 2,000 studies—and found that in roughly 90% of the studies, companies with strong ESG profiles had equal or better financial performance than their non-ESG counterparts.
A recent ranking of the 100 most sustainable corporations found similar results. Between February 2005 and August 2018, the Global 100 Index made a net investment return of 127.35%, compared to 118.27% for the MSCI All Country World Index (ACWI).
The Global 100 companies show that doing what is good for the world can also be good for financial performance.
—Toby Heaps, CEO of Corporate Knights
|Sustainable investing only involves screening out “sin” stocks||Positive approaches that integrate sustainability factors are gaining traction|
In modern investing, exclusionary or “screens-based” approaches do play a large role—and tend to avoid stocks or bonds of companies in the following “sin” categories:
However, investment managers are increasingly taking an inclusive approach to sustainability, integrating ESG factors throughout the investment process. ESG integration strategies now total $17.5 trillion in global assets, a 69% increase over the past two years.
|Sustainable investing is a passing fad||Sustainable investing has been around for decades and continues to grow
Over the past decade, sustainable strategies have shown both strong AUM growth and positive asset flows. ESG funds attracted record net flows of nearly $5.5 billion in 2018 despite unfavorable market conditions, and continue to demonstrate strong growth in 2019.
Not only that, the number of sustainable offerings has increased as well. In 2018, Morningstar recognized 351 sustainable funds—a 50% increase over the prior year.
|Interest in sustainable investing is mostly confined to millennials and women||There is widespread interest in sustainable strategies, with institutional investors leading the way|
Millennials are more likely to factor in sustainability concerns than previous generations. However, institutional investors have adopted sustainable investments more than any other group—accounting for nearly 75% of the managed assets that follow an ESG approach.
In addition, over half of surveyed consumers are “values-driven”, having taken one or more of the following actions with sustainability in mind:
- Boycotted a brand
- Sold shares of a company
- Changed the types of products they used
Women and men are almost equally likely to be motivated by sustainable values, and half of “values-driven” consumers are open to ESG investing.
5. Asset Classes
|Sustainable investing only works for equities||Sustainable strategies are offered across asset classes|
This myth has a basis in history, but other asset classes are increasingly incorporating ESG analysis. For instance, 36% of today’s sustainable investments are in fixed income.
While the number of sustainable equity investments remained unchanged from 2017-2018, fixed-income and alternative assets showed remarkable growth over the same period.
Tapping into the Potential of Sustainable Investing
It’s clear that sustainable investing is not just a buzzword. Instead, this strategy is integral to many portfolios.
By staying informed, advisors and individual investors can take advantage of this growing strategy—and improve both their impact and return potential.
Venture Capital Mega-Deals on Pace to Set New Record in 2019
With bigger deals and multi-billion dollar IPOs, venture capital financing is reaching new heights. This infographic explores the latest trends.
The Rise of Mega-Deals in Venture Capital Financing
Venture capital “mega-deals”—which rake in $100 million or more—have taken off at breakneck speed. A total of 185 were signed by the end of September, setting the pace for a record number of mega-deals in 2019.
Interestingly, mega-deal counts aren’t the only thing ballooning in venture capital financing. Almost everything has gotten bigger: venture capital funds, deal sizes, and exit valuations.
Today’s infographic comes from Pitchbook’s quarterly Venture Monitor, and visualizes the trends shaping the U.S. venture capital landscape.
Venture capital fundraising remains robust, with $29.6 billion raised across 162 funds year-to-date. Not only that, a higher proportion of funds are quite large. Roughly 9% were sized $500 million or more, with 15 such mega-funds closed year-to-date.
What does it mean to “close” a fund? Before they can begin operations, a venture capital fund manager will raise money from investors. The fund closes to signify the end of a fundraising round and can go through multiple closings until it reaches its targeted fundraising amount.
In the coming years, fundraising will likely remain strong. Venture capital net cash flows have been positive since 2012, which means capital is being returned to the limited partners of a fund faster than they can reinvest it into new vehicles.
With this excess cash, investors will likely contribute to the next round of venture capital funds—continuing the virtuous cycle.
Total deal value is set to surpass $100 billion for a second consecutive year, partly driven by the rise of mega-deals. At every stage of startup financing, average deal sizes remain elevated.
While the focus has shifted to the massive amount of capital available at later stages, angel and seed-stage deals are still quite healthy, with an average deal size of over $2 million.
At late financing stages, the 2019 average deal size is nearly $35 million, second only to 2018’s record of $44 million. Companies continue to raise large sums of capital prior to going public, with 140 late-stage mega-deals completed in 2019.
Total exit value reached $200 billion for the first time in a decade. Interestingly, initial public offerings (IPOs) comprised a whopping 82% of overall exit value.
Multi-billion dollar IPOs continue to dominate headlines, with six such public debuts occurring in the third quarter.
|Company||Industry||Pre-Money Valuation at IPO||Amount Raised at IPO|
|Datadog||Network Management Software||$7.2B||$648M|
|Peloton Interactive||Recreational Goods||$6.9B||$1.2B|
|Cloudflare||Network Management Software||$3.9B||$525M|
Notably missing from the list is WeWork. The company failed to go public due to profitability concerns, and anchor investor Softbank recently provided $9.5 billion in bailout financing in an attempt to rescue the company.
Sky High Valuations
As venture capital reaches new heights, analysts will be paying closer attention to each startup’s profitability potential.
“… new companies are shifting their focus to measured growth in an effort to prioritize long-term success and a more sustainable, scalable business model.”
–Alex Song, CEO and Co-Founder of Innovation Department
With 2019 coming to a close, will fourth quarter venture capital activity be able to maintain its present momentum?
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