A couple of weeks ago, Max Ehrenfreund of the Washington Post’s Wonk blog wrote an excellent piece outlining what a lackluster businessman Republican presidential frontrunner Donald Trump has been, based his net worth now versus his net worth if he had done nothing but invest the money he started with into an index fund based on the S&P 500.
Citing an independent evaluation, Business Week put Trump’s net worth at $100 million in 1978. Had Trump gotten out of real estate entirely, put his money in an index fund based on the S&P 500 and reinvested the dividends, he’d be worth twice as much — $6 billion — today, according to the calculator maintained by the blog Don’t Quit Your Day Job.
(In this scenario, Trump doesn’t quit his day job. The calculation above does not include any allowance for living expenses, so if he had put all his money in index funds, he would have had to live off the dividends or find some other source of income.)
Trump disputes the independent appraisals of his wealth by Forbes, Business Week (now Bloomberg) and others. He says he is worth about $10 billion today.
Using Trump’s preferred estimates of his wealth, he has still performed worse than our hypothetical Main Street retiree. He told The New York Times he was worth $200 million in 1976, an amount that would be worth $12 billion today.
“That a purely unmanaged index fund’s return could outperform Trump’s hands-on wheeling and dealing calls into question one of Trump’s chief selling points on the campaign trail: his business acumen,” writes S.V. Dáte in National Journal.
This report, along with the well-known fact that Donald Trump has filed for bankruptcy four times, should completely debunk the myth of Donald Trump as a “successful” businessman.