Wealth and Cash Flow Lessons from Donald Trump.
Are you Prepared to Be an Apprentice?
For most men and women the name Donald Trump conjures up a lot of pictures: The hair. The pout. The Tower. The casinos. And, of course, The Apprentice. He is absolutely a single of our society&rsquos most recognizable personalities, and considering that the 1970s he has accumulated huge wealth. But has that wealth made him financially independent? Not necessarily, at least not till not too long ago. To see why, let&rsquos take a brief look at how his monetary investments and priorities have evolved over the years.
1970s to 1980s &ndash The Asset Accumulation Years
In 1971 Donald Trump moved to Manhattan, where he speedily established a name for himself as a top New York City actual estate developer. At 1st, he focused on multi-unit residential complexes but then expanded into industrial properties, like hotels and office buildings
. By the 1980s Trump&rsquos assets from genuine estate holdings, improvement activities, and property sales had grown substantially. There had been liabilities (mortgage debt) linked with these assets, but at initially they didn&rsquot appear to be excessive, and as a result Trump had substantial net worth, or wealth.
1990s &ndash The &ldquoBad Wealth&rdquo Years
By 1990 Donald Trump had broadened his investment interests to include things like football, airlines and casinos. It was the latter, in specific the Taj Mahal Casino in Atlantic City, that with each other with rising debts on his other properties led to a serious debt dilemma. In fact, by the early &lsquo90s his personal debt had grown to $900 million and his small business debt was nearly $three.five billion.
The problem? In spite of getting substantial assets, the liabilities were excessive. To make uudet kulutusluotot
matters worse, the assets weren&rsquot producing sufficient cash flow to cover the debt payments. On paper, Trump may possibly have nevertheless been a multi-millionaire, with total assets numerous million dollars additional than total liabilities so he had wealth. But negative money flow meant he was far from financially independent. In reality, he was on the brink of personal bankruptcy. Therefore, the &ldquobad wealth&rdquo years.
Donald Trump&rsquos various economic ventures
illustrate the difference in between
negative wealth &ndash which generates debt &ndash and
very good wealth &ndash which generates money flow.
2000s &ndash The &ldquoGood Wealth&rdquo Years: Apprentice to the rescue
In 2003, NBC launched The Apprentice, a reality Television show hosted and made by Trump. In the course of the initial season Trump was paid $50,000 per episode, or roughly $700,000 for the year. Now, offered the show&rsquos huge results, he is reportedly paid $3 million per episode. Calling this venture a money cow would be an understatement. It is a great instance of &ldquogood wealth&rdquo: an asset (in this case a company) that generates substantial constructive money flow.
But &ldquoThe Donald&rdquo knew how to take a good factor and make it better. Starting with his real estate activities and especially now with his media achievement, Trump has established and completely leveraged the branding of his name. And he&rsquos accomplished so with a particular concentrate on fairly low expense (and for that reason low debt) ventures that generate numerous earnings streams. Some examples:
&bull Books and tours
&bull The Apprentice memorabilia and game items
&bull Speaking engagements, exactly where he reportedly receives up to $1.five million per presentation
&bull Allowing (for a fee) his name to be displayed on buildings owned by other individuals
These distinct kinds of activities are commonly beyond our reach. But the monetary principles they illustrate
are simple and relevant to us all: Seek to develop a portfolio of assets that generate optimistic money flow. And, by all means, don&rsquot let your debts spiral out of handle. Getting been there himself, The Donald has an expression for men and women who let that occur: &ldquoYou&rsquore fired!&rdquo
Supply for Donald Trump biographical details and financial data: Wikipedia