/biz/ - Business & Finance

>>957428
A liberal acquaintance posted a meme on Facebook that asserted that if he'd just tossed his initial money in an index fund that matched the market he'd be worth twice as much today.

Any validity to that claim?

>>957438

No. He might be worth $200-300 million if he invested his dad's $1 million loan in an s&p index fund 50 years ago. I assumed a generous 12% return. (my math might suck… I did it in my head in bed)

>>957428
Nope

>>957444
>>957428
He inherited $200 million in 1974, if he would put that money in an index fund producing average return of 8%, he would have $4.692 billion today, which is approximately what he has. In other words, he did not do anything special, on the other hand he did not waste the money, he is a bit richer, but did not exceed his father's position among top 1% by far.

If he would make generous 12% return after taxation, he would have almost $21 billion today.

>>957458
If stock picking generally loses out to index funds, isn't the fact that he equalled an index's profit unusual?

>>957458
Also he claims to have $10B - being connected in NYC and doing shit during the boom of the 80's and knowing what NYC RE has done he could have gotten there.

Add in random holdings like that scottish golf course n shit that he is probably at 10B

How hard can it be to run a casino, or a major hotel or real estate holdings? That shit is practically passive income.

>>957467
strangely enough picking stocks at random tends to beat the S&P

>>957489
though for some reason plenty of fund managers will lose against the S&P

>>957458
>implying historic SP500 returns were good enough before 1995 to make that sound viable
>implying name recognition and celebrity is worthless
>implying he hasnt spent billions on himself since the 70s
>implying he could run for President on an index investor platform
Go home, Zuckerberg

>>957480

You still need to find the right managers, be in contact with the authorities about permits and shit, and you need to have a good plan for it as well.

There are plenty of hotels that change owners because of hard times/bad management, the same especially goes for casinoes. There is hardly a casino in Vegas that hasn't had a change in ownership or that has been demolished the last 30 years.

>>957620
I think that's what he means. But he's getting the best advise because he's bumfuck rich

>>957489
No

>>957458
But that does not include any money spent, which I'm sure is a lot since he owns a supermodel, several jets, and a fleet of turbine helecopters.

>>957625
>But he's getting the best advise because he's bumfuck rich

you don't have to be the smartest guy in the room if you can afford to hire all the smartest guys away from everyone else's rooms

>>957653
Those are not even capital assets, you can't count helicopter or jet as part of net worth, those are liabilities and pretty bad ones, depreciating assets. Certainly not investments.

>>957467
All right, he is above average investor. But so is every owner of house in London and UK over the last hundred years. But the thing is the speed of growing wealth of his father was faster than his, of course it was way over the inflation rate, but hey that's how you do business.

>>957601
I really do not think he has spent billions on himself since the 70s.

>>957476
No, he is at $4.5 billion, what he claims is not what it is worth http://www.forbes.com/video/4516880807001/

>>957428
Every single one of us know who he is, that's worth a lot right there, and he did that.

To me, a good businessman isn't what they've done with what they had, to me it's if this man were to lose EVERYTHING- be at square zero, could they get back on top?

And he has.

I value myself more as a businessman more than I did last year, even though I was more successful this time last year, because I am back at square zero, but I've gained connections, I know how to work those connections, I know how to remain disciplined, I know how to keep track of sales and productivity etc.

If trump were to lose everything, be billions in debt, be hated by the public (which he already is lets be real), and lose ALL capital assets, he'd be in 100X better position by next year than all of us here put together.

Is he a good businessman, yeah, is he "the best" or anything close, absolutely not. But he's got something going on.

>>957698
This nigger knows the score.

>>957682
>Those are not even capital assets, you can't count helicopter or jet as part of net worth, those are liabilities and pretty bad ones, depreciating assets. Certainly not investments.
That's the anon's point. You can't say "he'd have as much money if he just invested it all" when he's spent lots of money on shit. Clearly he's had more money at various points in time than he would have if he simply invested if he's managed to sink a bunch of money and still have as much as he woudl have if he just invested, you see?

>>957601
>on an index investor platform
You'd think someone on /biz/ would at least understand the concept of compound interest. The growth is exponential. So if you start with a big number, it's actually not very shocking to end up with a much bigger number in 40 fucking years.

>>957601
>implying historic SP500 returns were good enough before 1995 to make that sound viable
The average returns on the S&P from 1974-2015 have been 7.63%, which still puts him above 4 billion.

>>957886
And if he reinvested the dividends, it'd be $13 Billion right now, though obviously much less since he'd still have to live fabulously during that time.

>>957886
>>957458
>>957444
The Rates are published why would you estimate anything.

Using this site to calculate the Gross Returns
http://www.moneychimp.com/features/market_cagr.htm
the 200M interest Free in 1974 would be

14.83B at the beginning of this year if he never touched it again. but he lived extravagantly for decades. Assuming he used 2% of his holdings for living that would drop to $ 6.61B
We'd need to know how much he was spending to really gauge the degree of his success.

>>957993
I didn't estimate. I used the calculator on

http://dqydj.net/sp-500-return-calculator/

>>957737
thanks senpai

>>957444
if everyone with 250M put their money in the S&P500 who would create a 500-level company?

>>958333
Oh. I guess you just cracked why the whole "job creator" thing is a myth.

>>957886
Hey autist, the point was index returns didnt get good till '95. Go look at a chart of the S&P 500 mid '70s and tell me if you would invest your life savings there or start buying up NY real estate.

You're also calculating his hypothetical net worth at current index record highs. Go back a mere few years and the hypothetical $8 billion index Trump is worth $3 billion and gets BTFO by realworld Trump.

>don't listen to FB infographics

>>958369
>You're also calculating his hypothetical net worth at current index record highs.
No. We're using calculators that calculate interest each month given the average returns on the index during that given month, you dumbfuck.

>>958369
And I find it ironic that you're calling someone else autistic when you failed to understand the entire point of the post. It's not that Trump missed a good financial opportunity in investing all his money in an index fund. It's that trump performed just as well--maybe even worse than the market as a whole. Meaning all of his business "expertise" and skills have bought him the same or less than passively letting his money accrue interest would have. It's to paint the picture that Trump, actively managing an empire, couldn't beat the market with his own net worth.

>>958521
Are you old enough to be here? I dont think you understand basic math

>>958523
Stop trying to stump the Trump, anon. It isnt going to work

Protip: stop repeating yourself and address the points that have proven you wrong:
>given historic returns in the mid 70s, no idiot would have put their life inheritance into tge S&P 500
>you arent accounting for the billions he has spent over 40 years
>you arent putting a value on the intangibles of his real-estate career (i.e. celebrity)
>you are calculating at all time S&P 500 highs and if you aren't, your calculations aren't based in any reality and can go into the trash along with your infograph

>>957682
trump tower alone is probably close to a billion not to mention everything in that list is low balled heavily

>>958573
He does not own entire property you faggot, he sold many flats and offices individually and left only the best to rent out.

>>957438
Even with this.
>>957444
>>957458
>>957698

You have to remember real estate development is a massive employment generator. Those huge rises and casinos he loves employ 1000's of people. It's great for the economy, skilled labour pool, consultants, surrounding landowners, future tenants and residents.

There is wealth growth in other ways with his money.

>>958553
>Address the points
I literally fucking did. You're either trolling or actually a retard.

There are readily available S&P 500 index calculators that access the interest rate from each month of the index and will show you returns over any time period the index has operated during. You can google them, or use the two already linked in this thread.

Again. Nobody ever said Trump SHOULD HAVE invested in the S&P 500 in the 1970s. And the post you're directly replying to covered what that as well as I possibly can so in order to avoid "repeating myself", I'm not going to say it again.

As for the "billions" he spent, you're drastically overestimating how much money Trump has spent of his own wealth. I find it unlikely he's ever spent more than 1 billion dollars of his own money--easily below the range for how he'd fair in an index fund while reinvesting dividends.

You're right. If celebrity is what's important to him, then he's probably faired pretty damn well. But if a person with several billion dollars wants to become a celebrity, it's honestly not that difficult. Buy a media conglomerate and put your face on all of your shows. Do what Mark Cuban's done with Shark Tank, etc.

>>958657
Nobody's arguing differently. Again, and I'm not sure why people ITT are having a hard time grasping this, the idea behind this isn't that Donald Trump would be better off putting his money in the S&P 500 40 years ago. It's that, for his personal wealth, he hasn't really beaten the market considering what he was given at the start. Of course everyone would prefer someone do like Trump with their money and create jobs. In real life that's probably not usually the case. I doubt the remaining Vanderbilts, Rothschilds, and Rockefellers are very entrepreneurial.

I don't know about the anon's liberal friend's facebook meme, but the idea that trump's money would have made more in passive investing is simply a fun little fact that doesn't really reflect all that much on Trump as an individual. It simply says that he's not a good enough businessman to beat the market, merely ride along with it.

>>958788
Index calculators like that have no bearing in reality. You cannot average the returns over 40 years and get an accurate number, since the SP500 was A THIRD of what it is now just a few years ago. This is not difficult to understand unless you are one of those people who cannot admit they are wrong

>>958797
Oh suddenly moving the goalposts? Go lool at the OP.
>is Trump a good businessman?

>>957458
When you have than much money it's more about preventing loss or depreciation than it is gaining money.

Anyone who would just park $200 million in VOO or whatever you're suggesting, is a fucking retard

>>957886
I don't think you guys understand how bad taxes really are when you have tons of assets
after all capital gains and estate taxes he would have had well over half his money taken away if he actually wanted to live extravagantly

He would have been set for life with $200 mil. But he would never be able to live like a billionaire until he's very old

>>958797
>I doubt the remaining Vanderbilts, Rothschilds, and Rockefellers are very entrepreneurial

Most Rothschilds actually are. They own several private banks, vineyards, real estate companies, etc.

>>958822
oops property taxes, not estate

>>958801
Wrong.

S&P 500, 12 nov. 2010: $1199.
S&P 500, 12 nov. 2015: $2061.

Trump's net worth, end 2010 (Forbes): $2.4 billion.
Trump's net worth, end 2015 (Forbes): $4.5 billion.

So Trump actually beats the S&P 500 for the last 5 years.

>>958822
Yeah the Trump index idiots just throw out the large amounts of money he spends and lavish lifestyle and compare realworld Trump to this $80k a year dividend miser and say it's the same on facebook.

>>958830
In 2009 it was high 600s. Thats what I was referring to. Thats actually LESS than a third of what it is now.

>>958822
When you're a millionaire passive investor, you can go live where's there's no tax.

>>958834
https://en.wikipedia.org/wiki/Expatriation_tax

>>958833
Come on, that didn't last for long. From that point, it almost doubled in one year.

You're talking like price swings don't happen in real estate too.

>>958835
Can be avoided in several ways. Anyway, in 1974, and with a "cleared" inheritance, it wouldn't have been a problem.

>>958841
Yeah for sure. Im just not sure why you called out my post for being "wrong" when it was right but whatever. And commercial realestate in NY doesnt have 300% jumps and drops overnight. Different game

>>958841
not if you're trying to live off passive investments

Here's a graph: Trump vs. S&P 500 vs. other billionaires.

>>958854
Those don't look like Real Numbers, Nor is it a net wealth equation which is appropriate for a real estate owner b/c leverage.
Improper Valuation penalty; suck 10 dicks

>>957698
>everyone knows who he is
>most of them believe he actually is a billionaire
>most of them believe his story about losing everything
>no one even talks about all the political favors his father used to get him where he is today

Fred Trump was a brilliant businessman, Donald was basically just given everything and managed to not fuck it up. To his credit that is something rare.

My money is he will end up as prez to top it all off.

>>958863
I'm not the author, and I don't enthusiastically agree with all the pictures I post.

Dumb As Fuck penalty, swallow rat poison.

>>958880
Here is some sauce if you want it. You can find tons of it with a quick google.

http://www.nytimes.com/2009/07/16/business/media/16trump.html

Trump made a lot of his money from corrupt deals involving local government and taxpayer money

http://www.villagevoice.com/news/behind-the-seventies-era-deals-that-made-donald-trump-7380534

>>958801
>You cannot average the returns over 40 years and get an accurate number
That isn't what the goddamned calculators do. Are you literally illiterate? I've told you not once but twice now that the calculators take the average for EVERY MONTH the S&P has existed and calculate the returns based on each month. There's no cumulative average.

>>958806
I'm not OP, nor was I the person who first suggested anything about it. I've said since my first post that Trump is not a great businessman, adn not a bad businessman based on this one metric.

I don't know why i"m bothering replying because you won't read all of this message either, I reckon.

>>958880
Wealth usually fails in the third generation.

But Ivanka and Eric Trump seem pretty competent.

Also I consider myself a Donald Trump expert.

I have read every single one of his books, I have watched every video he appears in I think, at least all public videos. I know almost every single one of his deals, how much they were etc etc. Yes, autism, I get it.

I'll be here for 2 hours if anyone has any questions.

>>959196
So he good or nahh.?

>>959214
Yeah he's pretty amazing. I'm surprised he can do what he does with only 5-6 hours sleep a day. Thatcher did that too. Genetics helped him a lot - some people can get by on less sleep thus they get 2 hours extra a day to get on with things. In his entire life Trump has had 50370 extra hours.

>>959220
Why suck Trump's cock? Aren't there better businessmen?

>>959231
I just remember everything I read about people, and I've read all his books. I do not "suck his cock", thanks.

I could also tell you about Michael Porter...

>>959220
as someone that has no motivation but can only sleep 5-6 hours a day it fucking sucks

>>959196
how can he eat his pizza CRUST FIRST?!

>>959196
Hello Pat Bateman, didn´t expect to see you here.

>>958880
and Fred did all that while being a klansmen

>>959196
>>959534
if the pizza at Pastels is okay with Donny then its okay with me

>>957428
No. He's an awful businessman. Seriously, he *failed* in the casino industry. Now that said, he's a brilliant face man and a leader in the concept of personal branding.

>>957438
Not quite true. Forbes did a forensic analysis of his numbers and if he'd put all of his cash in a basic savings account, he'd have had a better rate of return.

>>957458
$4.692 billion? Where did you get that number for his net worth? His self-reported bit to Forbes says "about" 4.5, but every other number that researches and doesn't just take their word for it puts him at about $2b. This also ignores that he's previously said he's worth $10b just weeks before he tells Forbes "Ok, 4.5."