Some Americans are rich, some are famous. Plenty are both. What’s rare is when the latter follows from the former — the phenomenon of someone who earned his fame specifically for earning his money. Such people come along perhaps once in a generation, and include names like John Rockefeller and Howard Hughes. But no one has successfully marketed himself as a celebrity tycoon quite like Donald Trump has and continues to.
What managed to propel Trump to three decades and counting of national and international renown, while other, wealthier magnates live quietly? It’s an involved story. The 68-year old father of five and occasional husband of three rose to fame in the early 1980s as a real estate developer in a vibrant and visible market — Manhattan. Then, not satisfied with money for its own sake, Trump began doing things that can’t help but generate publicity. For instance, in 1983 he purchased the New Jersey Generals of the fledging United States Football League, a short-lived competitor to the NFL that was overextended from day one. But a major league sports franchise, especially one in Greater New York City, and especially one with a roster of high-profile free agents, will allow its owner all the headlines he wants. And few people enjoy face time quite as much as Donald Trump.
Marketing a Persona
Whether it’s the beauty pageants (Trump bought the Miss Universe and Miss USA properties in 1996), or the ghostwritten bestsellers (The Art of the Deal, How to Get Rich, Think Like a Billionaire, Think Like a Champion), each leverages Trump’s fame into more fame. At times, the profitability of the enterprises seems almost secondary. While far richer billionaires such as Donald Bren and Dennis Washington consciously avoid the spotlight (and probably even wish we hadn’t cited them here as examples of the inconspicuously wealthy), Donald Trump’s modus operandi is to use the wealth to feed the fame, and vice versa. The one necessarily builds on the other. (For more, see: Billionaire Showdown: Donald Trump vs. Warren Buffett.)
A Silver Spoon
As plucky a background story as Trump has conjured up, the young brash upstart bucking the odds, he didn’t start from nothing. In fact, he started from plenty. His late father Fred was one of the premier housing developers of the postwar outer boroughs of New York, building thousands upon thousands of unremarkable but functional multifamily dwellings in Brooklyn and Queens. Fred Trump died in 1999 with a fortune estimated at around $400 million. He also financed Donald’s first real estate deal, in which he bid on a rundown government-owned housing development in Cincinnati and hired his 25-year-old Wharton graduate son to turn it into something habitable. The two succeeded, each Trump's deserved share of the credit becoming less important with time, and upon the development’s sale enjoyed a million-dollar profit.
That initial success in hand, Donald Trump began growing his empire. To be fair, mentioning his comfortable childhood isn’t meant to denigrate his accomplishments. Sure, Trump had opportunities available to him that other prospective moguls could only dream of. But he capitalized on those opportunities and turned them into something iconic, while many scions of other influential fathers can claim far less. (For more, see: Born To Be Millionaires: The Benefactors of Big Business.)
Start With Undervalued Assets
Throughout Trump’s storied career, he’s personified the axiom that rich people have implemented throughout history — you make your money going into the deal more than you do coming out of it. In other words, Trump has time and again enriched himself by finding undervalued assets and turning them into something profitable. The list begins with New York’s venerable Commodore Hotel (coincidentally named after another man famous for being rich, Cornelius Vanderbilt), which fell into disrepair in the mid-1970s and was in danger of going out of business. Trump bought the hotel for below market value, rebuilt it, and opened it as the Grand Hyatt four years later. He presented the resurrected building as an architectural triumph, and not merely for aesthetic reasons. Rather, it was the first step in Trump’s plan to distinguish himself from his father’s workmanlike efforts. Back then, the Trump name was still identified with a certain middling class of customer (to the extent that it was identified with anything. Trump wasn’t yet a viable brand outside of New York City.)
A Name You'll Remember
Donald Trump reasoned that if he made the family name synonymous with elegance and affluence, not only would the money follow, but the recognition. With the Grand Hyatt now in his personal win column, Trump began acquiring and building. Trump Plaza and other casinos in Atlantic City, N.J.; Trump Tower (stores, homes, offices) in New York City; the Trump Shuttle, a high-end airline with service among New York, Boston and Washington, D.C. Each eponymous project offered its own flavor of exclusivity and flair.
But Cash Flow That Hasn't Always Matched It
And each had a gigantic loan behind it. Creditors came calling when cash flow didn’t meet expectations, and by 1989 a diminished Trump came perilously close to being an ex-rich person (and worse yet, an ex-celebrity). After a debt restructuring that allowed his properties to operate under the bondholders’ ownership, by being forced to partner with them, Trump managed to avoid personal bankruptcy (while still declaring business bankruptcy). (For related reading, see: 5 Celebrities Who Went Bankrupt.)
To modify an old saying, if you owe the bank $1,000, you have a problem. If you owe the bank $1 million, the bank has a problem. Trump’s creditors allowed him to continue doing business because the alternative was worse. Trump was left to pursue real estate opportunities, building multi-use buildings in Chicago, Las Vegas, Istanbul and other exotic locales. Rents continue to make up the primary revenue item for the Trump Organization, and thus Donald Trump’s personal fortune, but that hasn’t stopped the company’s founder from embarking on other ventures. (For related reading, see: Excess Hollywood.)
From Hotels and Homes to Merchandising
Those other ventures are legion. Donald Trump has slapped his name on everything from menswear, to chocolate, to bottled water, to home furnishings, to cologne, to ice cream and steaks. Dollar figures for the privately held organization aren’t made public, but it’s safe to say that any Donald Trump bottled water sales probably made him less money than his The Apprentice reality T.V. shows or earned him less attention than his feigned run for the White House in 2012.
Trump is noted for publicly criticizing low estimates of his net worth, which has been estimated at $2.9 billion to as much as $7 billion since 2011. In a world in which any rational man would want the public to think he has less money than he does, Trump goes in the other direction. In his unusual case, it makes sense. If you crave a certain type of fame that’s contingent on you being rich, it’s important that estimates of your wealth be as large as reasonably possible.
The Bottom Line
Few real estate developers have an iMDB page with dozens of acting credits on it. Fewer still have hosted Saturday Night Live, or been inducted into the WWE Hall of Fame. Presidential hopeful, television mainstay, family court litigant: Donald Trump continues to pursue a curious hybrid of exposure and dollars with new chapters being written every year. (For more, see: 5 People Who Turned Career Disaster Into Success.)