Is Donald Trump Or Hillary Clinton Better For SIPPs?

Is Donald Trump Or Hillary Clinton Better For SIPPs?
St Vincent by Julian Cohen. Why?

As Donald Trump and Hillary Clinton fight to secure the world’s most powerful job, watch this short video to see the real story behind Donald Trump's billions and who wealth managers believe would be the better bet for your money

This Video On Donald Trump Examines His Business Successes And Failures, His Real Estate, Net Worth And Financial History

The Real Story Behind Donald Trump’s Wealth

Is Donald Trump Or Hillary Clinton Better For Financial Markets?

Investment Week has reported that Citigroup has warned global stockmarkets would suffer and the world could plunge into a recession if Donald Trump is elected as president of the United States, in an article entitled "Citi warns Trump victory could trigger global recession".

Citywire asked four wealth managers whether they thought a US election victory for Donald Trump or Hillary Clinton would be better for the markets.  It was reported in an article entitled "Four wealth managers decide: is Trump or Clinton best for markets?" Discover if they favour Donald Trump or Hillary Clinton.

Here is Money Marketing's observations in an article entitled "Clinton vs Trump: How should investors play the US election?"  Read it to see whether Donald Trump or Hillary Clinton is the better bet.

Donald Trump: Family Matters

The story started well over a century ago with Donald Trump’s grandfather, Frederick Trump. Real estate runs deep in the blood of the Trump family, and Frederick was the first Trump to own a hotel. During the famous Klondike gold rush in Canada, Frederick Trump owned an inn and restaurant that served gold miners. When he passed away, he left an estate worth just under half a million US dollars in today’s money.

His eldest son, Fred Trump, carried on the Trump legacy by going into business with his mother, using the nest egg for seed money. Fred became a very successful builder in New York City’s outer boroughs. He built single family houses in Queens in the 1920s, helped pioneer the supermarket with the “Trump Market” during the Great Depression, and even built barracks for the Navy during World War 2. But Fred’s real cash cow came in 1949, when he got a government loan to build Shore Haven Apartments in Brooklyn. The Federal Housing Administration paid him 10.3 million US dollars, but he was able to build the apartments for significantly less.

The government kept overpaying for houses in Brooklyn and Queens, and Fred kept building them. According to Donald Trump, his father became “one of the biggest landlords in New York’s outer boroughs”. By the time of Fred’s death in 1999, it’s said that Fred Trump was worth between 250 and 300 million US dollars.

Donald Trumps’ Vision

Born in Queens, Donald Trump joined his father’s company early on in his career. His father’s cash cow was now gone, but Donald had a different vision for the Trump name. He envisioned the “Trump” brand as being synonymous with luxury worldwide.

To do this, in the mid-1970s, Donald went into real estate in Manhattan. Relying on the business connections and creditworthiness of his father, he borrowed a “small sum” of 1 million US dollars to get started.

Donald Trump’s Biggest Successes

Donald Trump’s top three business successes include the Grand Hyatt, 40 Wall Street, and The Apprentice.

1. Grand Hyatt

In 1976, Donald Trump and Hyatt partnered to buy the rundown Commodore Hotel near Grand Central Station. At the time, the whole neighbourhood was in disarray with many nearby buildings on the verge of foreclosure. Trump negotiated contracts with banks and the city in an effort to fund the hotel and rejuvenate the area. The end result was the Grand Hyatt, a 25-story hotel, which Trump sold his share of for 142 million US dollars in 1996.

2. 40 Wall Street

Another big win for Trump was with 40 Wall Street, once the tallest building in the world. He bought it for 1 million US dollars after years of vacancy. Today, it’s prime real estate in the financial district, worth more than 500 million US dollars – a huge return.

3. The Apprentice

The Apprentice was also a financial home run for Trump. As the show’s host and executive producer, he raked in 1 million US dollars per episode for a whopping 185 episodes.

Donald Trump’s Biggest Failures

Like many businessmen, Donald Trump’s career has also had his share of failures.

1. Atlantic City

Donald Trump’s biggest failure may be his ill-fated venture into casinos in Atlantic City. The bleeding started in 1988 when he acquired the Taj Mahal Casino. Funded primarily by junk bonds, the massive casino would be 3 billion US dollars in debt within just a year of opening. Trump, who racked up 900 million US dollars in personal liabilities, had the business declare bankruptcy. To stay afloat, he ditched many personal assets such as half of his stake in the company, a 282-foot mega-yacht, and his airline.

Things were dire, and Donald Trump’s dad chipped in by providing a loan of 3.5 million US dollars in the form of casino chips to help make a loan payment. Trump’s casino holding company would enter bankruptcy two additional times: in 2004, after accruing debts of 1.8 billion US dollars, and in 2009, after missing a bond payment during the financial crisis. Each time, Donald Trump’s stake in the company fell.

2. Other Businesses

While three of Trump’s four bankruptcies involved Atlantic City casinos, he has also struggled in other ventures outside of real estate: Trump Airlines, Trump Vodka, Trump: The Game, Trump Magazine, Trump Steaks, and Trump University were all destined for failure. Trump Mortgages was launched in 2006 right before the real estate crash, and it also imploded.

Donald Trump’s Net Worth

According to Donald Trump’s campaign, he is worth “in excess of 10 billion US dollars”. However, he has also been accused in the past of artificially inflating his net worth. Forbes and Bloomberg News both have drastically different estimates of his wealth at 4.5 billion US dollars and 2.9 billion US dollars respectively.

Using the middle of the road figure from Forbes, here is how Donald Trump’s wealth breaks down:

  • 48 per cent is in New York City real estate
  • 7 per cent is in cash and liquid assets such as investments
  • 8 per cent is in golf courses
  • 4 per cent is in “toys” such as helicopters, penthouse, and his Boeing 757 plane

The remainder includes other real estate assets outside of New York City, as well as the value of the licensing agreements for hotels, real estate, and other Trump products.

This information was first published by The Money Project. The Money Project aims to use intuitive visualisations to explore ideas around the very concept of money itself. Founded in 2015 by Visual Capitalist and Texas Precious Metals, the Money Project will look at the evolving nature of money, and will try to answer the difficult questions that prevent us from truly understanding the role that money plays in finance, investments, and accumulating wealth.

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