The real reason Donald Trump is so rich

“I’m running for office in a country that’s essentially bankrupt, and it needs a successful businessman,” he told Rolling Stone.

.. Yet Trump has not done nearly as well as other American business magnates, or even a typical middle-class retiree following sound financial advice, as a review of the numbers over the past four decades shows. He is a billionaire today despite this poor performance because when he started his career, his father had already built a colossal real-estate empire. And the wealth Donald Trump has accumulated since then has at times come at the expense of taxpayers or the banks and investors who have lent him money.

.. Citing data from Forbes, The Associated Press estimates that Trump’s net worth quadrupled from $1 billion to $4 billion between 1988 and today. That’s an impressive gain, but it’s nothing compared to the wealth produced by investors such as Warren Buffett and Bill Gates. Gates’s wealth increased from about $1 billion to $80 billion over the same period. Buffett had about $2.5 billion in 1988, and has $68 billion today.

.. perhaps the most telling comparison is between Trump and his golf buddy, Richard LeFrak. The LeFraks and the Trumps have been rivals in New York’s real estate business for generations.

.. “He might be strutting around like a peacock today, but he’s gonna be a feather duster tomorrow,” the elder LeFrak told Business Week when asked about Trump.

.. Over time, the LeFraks came out ahead of their competitors. LeFrak is worth $7 billion today, and he’s 181st on Bloomberg’s list of the world’s richest people. Bloomberg puts Trump’s wealth at just $2.9 billion — far less than Forbes’s estimate. He doesn’t even make the list.

.. The LeFraks are a family with long experience in a very competitive industry, but Trump’s returns are less even than those of an ordinary investor saving for retirement.

.. 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
.. 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.
.. 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,”
.. Donald Trump’s father, Fred Trump, built his real-estate business on federal subsidies
.. The younger Trump has continued that strategy, boasting about his ability to secure taxpayer dollars from local officials, as the Los Angeles Times has explained.
.. Firms under his control have gone bankrupt on four occasions, but those catastrophes aren’t fully reflected in Trump’s net worth today, since his lenders absorbed the losses. The LeFraks, by contrast, have avoided imposing losses on their creditors, while still finding a way to turn a profit.
.. Trump is running for president on his business acumen, but over his long career in real estate, he just hasn’t been able to put up the numbers.