[thaumasiotes]

> Donald Trump, if his public finances are to be believed, would have roughly the same net worth had he just invested the money his dad gave him in mutual funds.

There was a factoid going around years ago that said Donald Trump's net worth was equal to the value of his inheritance if it had been invested in an index fund.

But note that under that hypothetical, he never would have spent any of it. Do you think the historical Donald Trump ever made any splashy purchases? Where did that money come from?

Having a high net worth while living the high life involves a lot more money than having a high net worth while living an ascetic life, and implies that his returns were a lot more than the index fund experienced.

[philwelch]

Trump's net worth is actually measurably lower than what his inheritance would have been worth if it were invested in index funds.

Also, while some of Trump's lavish expenses are pretty much just lavish expenses (business jets and the like), some of his superficially ridiculous personal expenses, like gold-plating half of his entire penthouse apartment in Trump Tower[1], don't necessarily hurt his net worth that much because he could always sell the tower with the tacky gold-plated penthouse to someone else who could extract some value by removing the tacky gold plating and having two valuable assets left over: (a) a penthouse apartment in a Manhattan high-rise and (b) gold.

Most of Trump's losses came from a variety of failed business ventures, which isn't necessarily a huge criticism. Some people just like doing a bunch of business ventures and they don't all have to succeed to be a net positive. It's just that if Donald Trump spent the same lavish amounts of money and invested less money in his own ventures and more money in index funds, he would be richer today.

Of course, in this hypothetical scenario, would he become a cartoonish real-life personification of American capitalism, host a reality TV show, get a lot of Twitter followers, and develop the dedicated fanbase necessary to eventually be elected President? Probably not.

[1] I'm not entirely making this up, though my only source is a foggy memory of the first season of The Apprentice, when Donald Trump invites the guests to tour his penthouse apartment.

[spaceman_2020]

Of all the very rightful criticisms leveled at Trump, ridiculing him for not putting his money into index funds is one of the worse ones. Building businesses is its own reward. People don't get it that just like painting or writing, people can get satisfaction from seeing a venture to completion or inking a good deal

[philwelch]

And if he enjoys building businesses enough to make up for the massive opportunity costs for investing his money in Trump Steaks instead of index funds, that’s entirely up to him, but let’s not laud him as a business genius for it.

[superhuzza]

>that said Donald Trump's net worth was equal to the value of his inheritance if it had been invested in an index fund.

Incorrect, it would have been worth substantially more, at about 13 billion (his current wealth is around 3-4 billion). So he still would have been able to spend billions and be further ahead than he is today.

Source: https://www.forbes.com/sites/katestalter/2016/09/01/would-do...

[ars]

You clearly did not read your own article. He would only be worth that if he was margined to the hilt.

If he invested without margin then he would have made half of what he actually made. And that's without any spending at all.

[superhuzza]

First of all you're wrong, I did read the article. Secondly, the author directly addresses that point. He was leveraged when buying real estate too, so why not assume he would be leveraged up in the stock market? It's not an uncommon practice at all, and the comparison wouldn't make sense without factoring in loans.

Frankly I would have done the same, I think running a bunch of different businesses would be more stimulating than maximizing wealth through stocks. But objectively he's paid a financial price for that.