When Donald Trump sent his detailed accounting of his personal finances to the Federal Elections Committee, we learned that his net worth is close to $8.7 billion.
As most of us know, he inherited much of his fortune. But what’s interesting is that he would have made more money investing in index funds, according to Forbes, than he made by building his own empire.
Trump’s net worth has grown about 300% to an estimated $4 billion since 1987, according to a report by the Associated Press. But the real estate mogul would have made even more money if he had just invested in index funds. The AP says that, if Trump had invested in an index fund in 1988, his net worth would be as much as $13 billion.
The S&P 500 has grown 1,336% since 1988.
– Fortune, “Donald Trump Would’ve Been Richer if He’d Invested in Index Funds”
Not for nuthin’, but I’m impressed that he decided to work hard for a living … to build a brand that goes beyond the Kardashian-esque “famous for being famous” lifestyle … to create companies and jobs and TV shows that employ thousands upon thousands of people … instead of coasting on his family’s wealth and partying on a yacht in the Keys. (Although, I wouldn’t be mad at that either …)
The man has lost billions, yes — anywhere from $1 billion to $6 billion in failed businesses, depending on which source you read. But he’s made up for the shortfall with roughly $3.3 billion in royalties thanks to licensing and branding deals.
I’m not parlaying that as a reason to vote for him in 2016. But I think we can learn two very important things from his net worth:
1. Smart, conservative investing pays off over time, and
2. Having fun and taking calculated risks may not pay off as much, but it sure makes you a smarter person with more character in the end.
So, whether you’re a conservative investor or you’re experimenting with different trading strategies, you can reach your investing goals. In the latter case, you will probably earn every gray hair on your head. But you’ll probably have the better stories to tell at cocktail parties!