“He experienced bankruptcy”: where does Donald Trump’s fortune come from?

“It’s complicated to know where he is because it varies a lot. And he communicates a lot about his successes but not at all about his failures“, comments from the outset Sébastien Roux, specialist observer on the United States for the CNRS, who lived for a time in the United States and whom we interviewed.

Donald, the heir to an empire born during the Gold Rush

To make your fortune, you should not look for gold, but sell shovels to gold miners. This is what Donald Trump’s grandfather, Friedrich Trump (1869-1918), a German immigrant who called himself Frederick to Americanize his name, understood. Man took advantage of the gold rush to open hotels and restaurants around the mines and get his share of the pie. Towards the end of his life, he returned to the American east coast and invested in real estate in New York.

The rest was written by Fred Trump (1905-1999), Donald’s father. Born in Queens, he made his fortune thanks to residential real estate projects and founded the company with his mother, shortly before the 1929 crisis. Elizabeth Trump&Son. The contracts signed with the American state to house the numerous soldiers and their families during the Second World War would constitute the basis of his fortune. Under his leadership, The Trump Organisation will manage more than 27,000 apartments and homes in New York, primarily in Queens. If he is not a billionaire strictly speaking, which was rarer at the time, his fortune was still counted in several hundred million dollars. He was thus able to lend money to his son when he started out in the 1970s, but also sign numerous guarantees with banks in order to support Donald when his projects foundered in the 1990s. elsewhere also gave money indirectly by… buying casino chips held by his son. A form of non-taxable donation, he thought.

According to a New York Times investigation, Donald Trump received at least $413 million, taking inflation into account, via tax arrangements allowing him to avoid part of the tax. He also reportedly received funds from his mother and in total, Donald Trump’s parents passed on more than $1 billion to their children. And while donations were taxed at 55% at the time, the Trump family managed to only pay about 5% of the fee, paying just $52.2 million.

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An envious look at Manhattan

Donald Trump, a turbulent child, grew up jealous of the beautiful neighborhoods of Manhattan. Relegated to the “second division” in Queens, he will do everything to establish himself in the island of skyscrapers.

Shunned by a large part of the financial and real estate elite for his upstart and vulgar side, Donald Trump still succeeded in his bet and created the Trump Tower. A building officially 68 floors… Although it really only has 58. He then keeps the top floor, which he indicates is on the “68th”, for his pleasure (a penthouse of more than 1000 m2 estimated to $50 million). “The former president lied for years about the size of his penthouse atop Trump Tower, saying it was 3,066 square feet. City records indicate that it is actually 1,022 square meters. says for example Forbes. Its relationship with the truth already raises questions. He likes to lie to shine more. Which accentuates the hatred of its detractors, who for some, qualify the tower as vulgar, just like the man.

“He left with very high capital. Its first investments were rather unsuccessful in the 1970s but it must be recognized that it was during the oil crisis. He wasn’t particularly brilliant but still managed to get away with this trick“, notes Sébastien Roux. It was during this period straddling the 1970s and 1980s that Donald Trump called on Roy Cohn, a famous American lawyer known, among other things, for having worked with the mafia.

“He subsequently launched into real estate speculation in Atlantic City south of New York, as well as casinos. But he experienced real estate bankruptcy and almost lost a lot of money in the 1990s,” he explains. Moreover, he sold the gigantic and kitsch “Trump Taj Mahal” casino in 2014, after 25 years of constant losses.

For the record, spaces in Trump Tower did not sell in the first years and Donald Trump circulated the rumor that Prince Charles and Lady Diana had bought an apartment there. It was false, everyone knew it, but the publicity generated was enough to take off. The truth? Never mind. “Fake it until you make it” could be his mantra.

TMTG, diversification

“Much of his fortune was made in real estate. Today, it is around 5 or 6 billion. But he now has his social network, Truth Socialwhich appeared three years ago, which allows it to bring in funds. It’s not a big popular success but there were a lot of investors“, continues Sébastien Roux. It remains much less popular than X, ex-Twitter, of his friend Elon Musk or even more popular networks like Facebook and Instagram, owned by Mark Zuckerberg.

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“He presents himself as a polymorphous entrepreneur, full of success in several fields, but that is false. He is not a diversified businessman“, specifies Sébastien Roux, even if he has diversified a little since 2021 with TMTG, the Trump Media and Technology Group, parent company of Truth Social, among others. Note also that he has tried his luck in several areas, such as aviation, with his company Trump Shuttle, which only existed from 1989 to 1992.

“She’s a bit like the Kim Kardashian of business. It’s all about the Trump brand. When he arrived in politics in 2016, it was a joke… But he had built an image as a businessman thanks to the show The Apprentice. It’s very New York-centric but it got into every American household because of that. He is telegenic, some found him funny, despite his assumed taste for vulgarity, his escapades, his sentimental life exposed to the general public. It was not a classic bourgeoisie, it was conspicuous consumption“, specifies our observer.

He does not hesitate to make launches with great fanfare to capitalize on his name, as with his golden sneakers launched at the beginning of January 2024 with a large “T” written on them. “It works because it’s meant to be a ‘one shot’. Event business. This is not meant to last. It is also aimed almost exclusively at people who vote for him, at Trumpists. No one would buy this otherwise“, continues Sébastien Roux.

Note also that he owns or holds numerous shares in buildings in New York, San Francisco, Miami, Palm Beach, in numerous golf courses and even hotels in Las Vegas.

“You’re fired !”

If Trump has established himself in American politics, his “star” role in the reality TV show The Apprentice will therefore certainly have allowed him to establish himself as a competent businessman in the eyes of the public. And so why not by leading the country, some will say. While he launched a famous “You’re fired !” (“you’re fired”) at the end of episodes when the candidates failed in their mission. But this reality TV show about the world of business was largely scripted. No matter, the man will have capitalized on his charisma during the 14 seasons of the program and the image he built during these years.

“He probably hasn’t opened a book in his life. There is no coherence and political depth in his positions“, says Sébastien Roux. “The financiers who will support him are radically right-wing. Like the founder of Domino’s Pizza or Elon Musk, the world’s first fortune, who has completely changed since her daughter Vivian’s gender transition”he continues.

“The way Elon Musk intervenes is grotesque, clownish. He is a bad speaker but no one contradicts him”he asserts.

“The American business community does not like instability. But that is its fuel, instability. A few tech gurus now follow him, but before, he was a pariah. And the not very clear position of Jeff Bezos (who refused to allow the Washington Post, which he owns, to officially support Kamala Harris, Editor’s note) is also something new”he continues.

Less funds than Kamala Harris?

Even if he is criticized, looked down upon by some, and came close to bankruptcy, Donald Trump has still managed to make a name for himself in the business world. Yet, surprisingly, he received less funding for his campaign, which began more than a year ago, than Kamala Harris, whose campaign began when Joe Biden withdrew late last July, shortly after the assassination attempt on Donald Trump. A much shorter period.

Certainly, she benefited from the funds of the “PAC” and “super PAC” (political action committee raising money for the parties) which were planned to support Joe Biden, but she still managed to attract several important donors, including Bill Gates, in the home stretch before the elections. “Biden didn’t generate much enthusiasm, but Harris’ arrival catapulted donations.”explains Sébastien Roux on this subject. It remains to be seen whether this will change the situation, as the two candidates are extremely close in the polls before the November 5 election.

Inconsistency? No problem

During a recent meeting, Donald Trump admitted that money could be king. If he was very critical of electric cars in the past, he is now changing his position and supporting Tesla, Elon Musk’s company. “Elon supports me… We love him. And Tesla is amazing“, he said. Even if he also added that ““Not everyone has to have an electric car.”

“His speeches are completely disjointed. It no longer shocks anyone and it doesn’t discourage his voters. From the outside, we point out his inconsistencies, but in the American context, it no longer makes sense. It’s not something one who arouses support for what he proposes, but for what he makes people believe he embodies. As long as at the end of the meeting he raises his fist and speaks of American pride, that’s enough.“, comments Sébastien Roux, CNRS expert, on this subject.

“Lack of consistency can disturb us, but not him. And let’s note that his obsession is China. It’s the enemy. He has warrior software, even if he admires Xi Jinping. This is also why he didn’t like electric cars, because the Chinese are active in the field. It is a protectionist vision of defense of American industry. The only consistency it has is in its reactionary form of rejection of ‘wokism’ and migrants“, concludes Sébastien Roux.