Why Donald Trump went broke
August 21, 2021
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Did you know that Donald Trump went broke? This story is described in detail in the book “The Art of Making Deals” by D. Trump:
The bankers acted like they were hypnotized. A construction tycoon could walk into any bank and say, “I need $ 25 million,” and no one thought to ask him for a financial statement. They said, “Donald Trump, $ 25 million. Ready!” But soon everything collapsed. Donald Trump’s company was unable to service its $ 9.8 billion debt, of which $ 900 million was owed personally by Donald. Trump fought to the end.
The bankers were terrified of the fact that they were about to have $ 9.8 billion in losses on their balance sheets. Trump convinced them that he would come out on his own if they loaned him some more. In the end, the banks gave up: Trump’s biggest borrowers agreed not to sue and restructure debts.
Trout advised: “It’s better to be strong in one thing than …”
In return, the bankers demanded to start a sale of assets and limited Trump’s personal income to 450 thousand dollars a month – the rest went to pay off the debt. But the most frustrating for Trump was the demand to hire a CFO. Prior to that, Donald preferred to manage the conglomerate personally and toughly. He not only handled financial affairs himself, but also visited his construction sites and casinos daily.
In 1993, income from real estate and casinos allowed Trump to invest again. He managed to retain ownership of most of New York’s buildings and three casinos in Atlantic City. Trump’s new rise began, albeit less bright. Donald began using the services of consultants and hired a CFO. He preferred to work with large investors, offering in return a well-known name and knowledge of all the dangers in the big minefield of New York. Trump’s assets rose to $ 2.5 billion. This was the most significant personal financial recovery in US history.
But in November 2004, the casinos of the fortunate billionaire again fell into bankruptcy. Trading his name has become Trump’s only truly big business. And most of his efforts are aimed at maintaining his own recognition. According to a study by Forbes magazine, Donald Trump is the most famous businessman in the United States. He’s even more famous than titans like Bill Gates and Steve Jobs. This was facilitated by the fact that Trump is a frequent guest on television, he owns the Miss America and Miss Universe contests.
After two bankruptcies, Donald Trump has become more cautious in business. Here is what he wrote in his book The Art of Making Deals:
“You can survive falls if you are prepared for them. The ability to anticipate a problem saved me from wasting energy and will save you from unpleasant surprises. Ups and downs are inevitable. I am a very careful person, but this does not mean that I am a pessimist. Call it positive thinking with an eye to reality. ”
Trump said that one day his friend from Texas decided to put together a team of rich guys to buy a small oil company: “Donnie, I suggest you invest 50 million in this business. This is a win-win. In a few months your capital will double. ” A friend told Trump all the details of the project, and since everything looked very convincing, Donald agreed.
But when the documents were prepared, Trump sensed that something was wrong. He called a friend: “Look, there is something about this project that worries me. Maybe the fact that this oil is underground and I cannot see it, or maybe the fact that I have no constructive ideas about this oil. Does not matter. The main thing is that I just don’t want to be involved in this business. ” The friend replied, “Know you are missing out on a great opportunity.” This story had a disastrous end. A few months later, the oil ran out, and investors lost their invested money – every single cent. “This incident taught me important things,” Donald Trump writes. “First, you should always trust your instinct, no matter how attractive the project looks on paper. Second, it’s always better to do what you know. And the third is that sometimes the investment that you haven’t made is the most profitable one. By refusing to participate in this project on time, I saved 50 million dollars and a friend. ”
7 things for a successful Donald Trump deal
“I make deals very simply,” writes Donald Trump in his book The Art of Making Deals. “My style is straightforward. I always set big goals for myself and then act decisively. I lay on and on until I get what I want. Looking back at the deals that I have successfully completed, or failed, or simply missed, I definitely see some common elements in them. ”
