Donald Trump - millionaire or billionaire?

Danny Tse

From the Wall Street Journal....

Worth Rises, Falls 'With Markets and Attitudes And With Feelings, Even My Own Feeling'

It's one of the great mysteries of the business world: How much is Donald Trump really worth?

The world famous real-estate developer and television personality has consistently said it's in the billions. A 2005 book citing anonymous sources said it was between $150 million and $250 million. Mr. Trump sued the writer for defamation. He alleged damage to his reputation that caused him to lose out on future deals in locales from Philadelphia to Kiev.

A hearing in that case will take place Monday in a state court in Camden, N.J. As part of the proceedings, the Donald, as he's known to fans and detractors alike, has provided under oath the secrets to how he values his wealth and treasure. In one case, he says, he does "mental projections."

"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling," he told lawyers in the December 2007 deposition.

The deposition, marked "Confidential," comes to light at a time when some of Mr. Trump's projects, including several condominium developments that bear his name, are struggling. Among the problems are anemic sales, lawsuits, sharp declines in value and troubles with creditors.

In a telephone interview Sunday, Mr. Trump disputed that these are tough times for him. "We have a lot of cash right now. We're starting to buy things," he said while taking a break from playing golf at a Trump course in Bedminster, N.J. He said he stood by the statements he made in the deposition.

In the deposition, given to lawyers representing the book's author, Timothy O'Brien, and its publisher, a unit of French-based Lagardere SCA, Mr. Trump described his public persona. "I'm not different from a politician running for office," he said.

In the deposition, Mr. Trump said that his 2007 estimate of his net worth -- over $4 billion -- is "a very conservative number, in my opinion." He also said $6 billion is a good number, counting his brand value. (In the interview Sunday, he said he was worth $5 billion, not counting brand value.)

Mr. Trump was asked whether he has ever exaggerated in statements about his properties. "I think everybody does," he said in the deposition. "Who wouldn't?"

A follow-up question: Does that mean he inflates the value of his properties in general, nonfinancial public statements? "Not beyond reason," he said in the testimony.

The deposition reveals he told his bankers and New Jersey casino authorities in 2004 and 2005 that he was worth approximately $3.6 billion. In 2005, Deutsche Bank evaluated his net worth as part of underwriting a $640 million construction loan it made to Mr. Trump's Chicago condo and hotel project. The bank said his worth was $788 million, according to information presented by the author's lawyers present during Mr. Trump's deposition.

In his testimony, Mr. Trump discounted that and other low-ball evaluations as "ridiculous." And he noted, "They [Deutsche Bank] still come up with numbers that are many times" what the book's author, Mr. O'Brien, reported. In his interview Sunday, he said Deutsche Bank looked at some of his assets, not all of them, and didn't do independent appraisals. A Deutsche Bank spokesman couldn't be reached.

Mr. Trump said Sunday that Mr. O'Brien, author of "TrumpNation: The Art of Being the Donald," will "wish he never heard of that God damn book" and predicted that "the publishing company will pay me hundreds of millions of dollars" as a result of the suit.

Mr. O'Brien, who is an editor at the New York Times, declined to comment through his attorney, citing the ongoing litigation.

In the deposition, Mr. Trump discussed how he determined the value of a residential development on old rail yards on Manhattan's west side. According to the deposition, when a newsletter reporter writing about the project's 2005 sale for $1.8 billion said Mr. Trump had a "small interest," Mr. Trump wrote him a note. "You're a real loser. Thanks for the nice story. Is 50% small?"

But Mr. Trump had a 30% limited-partnership interest in the project, according to legal documents. A group of Hong Kong investors were the owners. Asked about this during the deposition, Mr. Trump explained that, in his eyes, he owned half because he gets paid fees for managing the buildings and because he didn't have to put up cash in the deal. "In my own mind I've always felt that," he said. "That 30% is equated to 50%," he said. In his interview Sunday, Mr. Trump said he had owned the equivalent of "more than 50%."

Mr. Trump often licenses his name to other developers in return for a fee or a cut of the sales. During the deposition, Mr. O'Brien's lawyer, Andrew Ceresney, noted that Mr. Trump had claimed publicly that he had a major ownership in one such project.

For example, in a November 2007 Wall Street Journal interview cited by Mr. Ceresney, Mr. Trump said he had sold out units at an eponymous condo-hotel project in Hawaii. "The building is largely owned by me," he said in the interview. But in the deposition, Mr. Ceresney produced the licensing agreement for the project. Mr. Trump wasn't a major equity holder in the project, it showed, a fact Mr. Trump didn't dispute.

"Because this is such a strong licensing agreement that I consider it to be a form of ownership," Mr. Trump said. "I'd rather have this than own the building," he said. Moments later he said: "I would say that it could be interpreted to be a form of ownership in the building."

In the deposition, Mr. Trump is asked about the Bedminster, N.J. golf course, which financial statements showed had a net loss of $4.6 million in 2005. Has he ever done a financial analysis of his investment there?

"Yes, I've done mental projections," he said, figuring he'd eventually make $120 million. He never put them down on paper. "You don't really have to," he said. Mr. Ceresney, asks: "Have you discounted in your mind for the risk that you won't sell [memberships] at the prices you are anticipating?"

"I think I will, but it's possible I won't. But I think I will," Mr. Trump said.

At one point during the deposition, Mr. Trump explained the importance of putting his projects in the best light possible. "Would you like me to say, oh, gee, the building is not doing well, blah, blah, blah, come by, the building -- nobody talks that way. Who would ever talk that way?"

cnh

It's still unclear from that article what Trump is actually worth. Certainly a lot more than the suggested 150 million or so.

What is important to remember with Trump is that he started his career by receiving his father's fortune....which I think was around 40 million. So in the NYC real estate market in the 70's and 80s you'd have to be brain dead not to have been able to multiply that 10 to 20 fold--or more! Not trashing Trump but just pointing out he's NOT self-made!

cnh

amulford

The Donald is a piece of ****. 'nuff said...

sucks2beme

He's so full of ****. He was at one time so far underwater the banks
couldn't forclose. It would of ruined them. He ex wife was the real estate
genius. I doubt currently that he's worth a billion. Or HAlf that.
He's all smoke. Millionaire, not a Billionaire.

CaligulaPolk

lol

i was just reading it on yahoo

apphd

Millionaire, billionaire.... who cares, it's just a status point for the egotistical. IMHO a multi millionaire has more than they could spend in their life time, if just a portion is invested correctly. So a billionaire is just braggin' rights more than anything else. Plus most of the time much of this $$ is on paper not in the bank. And it sounds like Trump likes to do his own appraising of the value so he can over value it and himself as much as possible.

Sherardp

Hey Trump if you're reading this man, let a brother borrow a dollar or sum sum man. Brother gotta eat ya dig.

mhardy6647

apphd wrote: »

IMHO a multi millionaire has more than they could spend in their life time, if just a portion is invested correctly.

It would have to be a pretty big multi, given the cost of living in this day and age. One can piddle through a million dollars quite quickly, buying quite banal things.

apphd

mhardy6647 wrote: »

It would have to be a pretty big multi, given the cost of living in this day and age. One can piddle through a million dollars quite quickly, buying quite banal things.

I'm not sure how many "multi" would be needed. A couple million couldn't do it for sure, but 6 or 7 with about half of that invested in anything with a piddly but safe return could probably do it. Of course some restraint and some common sense would be needed, but I am and have lived on far far less as have the majority

mhardy6647

apphd wrote: »

I'm not sure how many "multi" would be needed. A couple million couldn't do it for sure, but 6 or 7 with about half of that invested in anything with a piddly but safe return could probably do it.

A couple (edit: i.e., 2 million)? No way (unless one is, say, 65 or older); Six or 7? Borderline (for a middle aged person who might want to take, say, an annual vacation that didn't involve a Motel Six) -- 'specially at current rates of return.

treitz3

All I know is that it sure would be nice if y'all were trying to figure out whether or not I was a billionaire or not........

Hey, one can dream right?

Sami

For 6mil I would consider 3% a minimum rate of return. That's 180k a year. Enough for modest one family living. A more reasonable 5% would be 300k and that's enough for quite a nice lifestyle.

oifvet0608

Trump is a jackass, he has been developing high rise condos in Chicago for the last few years and he actually sold condos to investors that he had sold previously to other investors. All he did was tell the origional investors that he had found a better offer and gave them their money back. What an a$$hole.

apphd

mhardy6647 wrote: »

A couple (edit: i.e., 2 million)? No way (unless one is, say, 65 or older); Six or 7? Borderline (for a middle aged person who might want to take, say, an annual vacation that didn't involve a Motel Six) -- 'specially at current rates of return.

What's wrong with Motel 6? Like I said some restraint and common sense would be needed. Like be happy with a 300k home instead of a 3 mil. home, if you are stuck some place where $300k won't buy much, move you no longer have a job tying you there.

Sami

+1 ^

I was just looking at recent foreclosures here in Dallas area. 100k for 2000 sq.ft. home built in 2007 in Grand Prairie which is roughly in the middle of the metroplex. Required new flooring. Buy a few of those as investment and get tenants. Easily 10% annual return for your money.

mhardy6647

apphd wrote: »

What's wrong with Motel 6? Like I said some restraint and common sense would be needed. Like be happy with a 300k home instead of a 3 mil. home, if you are stuck some place where $300k won't buy much, move you no longer have a job tying you there.

300k still won't get you much in Massachusetts (even now).

mhardy6647

Sami wrote: »

For 6mil I would consider 3% a minimum rate of return. That's 180k a year. Enough for modest one family living. A more reasonable 5% would be 300k and that's enough for quite a nice lifestyle.

Got to net taxes into that!

Sami

mhardy6647 wrote: »

Got to net taxes into that!

Like from any income. 300k a year is still much more than the average income in the US. It's more than two middle class parents would make in a year, no?

mhardy6647 wrote: »

300k still won't get you much in Massachusetts (even now).

Like he said, you could move. Although there would be no job restrictions, there might be family restrictions but even then you could find something more remote for less. In any case, it's not like you don't have any income and if the house was paid off, no mortgage to pay either. I don't see how you could not make 300k a year last, and even save part of it to offset inflation eating away your capital.

cnh

Apphd is not far off. You can Endow an Academic chair for about that which means that you can pay a full professor from the interest accrued from several million dollars for many many years! Sure it's not a huge salary...but comfortable enough if, as apphd said, you cool your spending of outrageous amounts of money.

Personally, I'd say you need a few hundred million not to go through it all in a lifetime. You'd really have to be pretty lame to bankrupt yourself with that sum..

But hey! Professional athletes squander that amount regularly and often end up destitute in their retirement years. So yeah...you can blow it.

cnh

mhardy6647

Sami wrote: »

Like from any income. 300k a year is still much more than the average income in the US. It's more than two middle class parents would make in a year, no?



Like he said, you could move. Although there would be no job restrictions, there might be family restrictions but even then you could find something more remote for less. In any case, it's not like you don't have any income and if the house was paid off, no mortgage to pay either. I don't see how you could not make 300k a year last, and even save part of it to offset inflation eating away your capital.

I was thinking about the net from 180k per year for a couple. Knock it down 35%; can be more if AMT kicks in. Yes, you can certainly move.

BTW, I hope you guys are right, since my plan (EDIT: hope!) is to retire at 55 (and, yes, move to New Hamster). Anyways, I still say 2 to 3 million to count on a reasonable retirement life (for a couple)... and this assumes no catastrophic illness. I think that's why The Donald is still working (just to get back on topic).

66chevyIISS

Hasn't he filed for Bankruptcy more then once?

Sami

mhardy6647 wrote: »

I was thinking about the net from 180k per year for a couple. Knock it down 35%; can be more if AMT kicks in.

The point is, 180k is still much more than the average household US income. You can certainly live on that money w/o any problems. Not a lavish lifestyle but comfortable life. 3% return would be a very minimum anyways, you could easily get much more. 300-600k a year would be a more reasonable return for 6 million.

1 million cash (not IRA or 401k) right now, that's on the borderline and for one person might be enough. 2 million for sure for one, for a family would be enough as well. Anything more than that, you COULD retire with a safe mind, if you wanted to. I know I would.

DarqueKnight

cnh wrote: »

It's still unclear from that article what Trump is actually worth. Certainly a lot more than the suggested 150 million or so.

What is important to remember with Trump is that he started his career by receiving his father's fortune....which I think was around 40 million. So in the NYC real estate market in the 70's and 80s you'd have to be brain dead not to have been able to multiply that 10 to 20 fold--or more! Not trashing Trump but just pointing out he's NOT self-made!

Trump's paternal grandfather was a very successful New York restaurateur who built a fortune in the tens of millions.

Trump's father parlayed his inheritance into a New York real estate empire and left Donald Trump and his four siblings a fortune conservatively estimated at a little over 200 million dollars. If that 200 mil was split evenly among Trump and his other four siblings, he started out with approximately 50 million.

Because of his celebrity status and position in the business community, Trump has been the subject of a considerable amount of scholarly research by business school faculty and students. The consensus of much, if not most, of that research is that Trump's personal fortune is in the hundreds of millions of dollars.

However, Trump assigns considerable value to his "brand name" and typically includes that projected, mystical, mythical figure in his self assessment of net worth. So, if he is actually worth between 500-700 mil and he assigns a present worth of 500 mil or more to the value of the "Trump brand name", then, in his mind, he is a billionaire.

sucks2beme wrote: »

He's so full of ****. He was at one time so far underwater the banks couldn't forclose. It would of ruined them. He ex wife was the real estate genius. I doubt currently that he's worth a billion. Or HAlf that. He's all smoke. Millionaire, not a Billionaire.

Trump's main talent, similar to Paris Hilton, seems to be that of self promotion. People managing billion dollar business empires typically don't have considerable time to devote to beauty pageants, starring in television shows, and engaging in bitter public arguments with Rosie O'Donnell.

66chevyIISS wrote: »

Hasn't he filed for Bankruptcy more then once?

Business bankruptcy, not personal bankruptcy.