Welcome back!
So, in the first part How Trump Made a Fortune you saw how Donald Trump built his gigantic fortune using various fair and unfair (but legal) means in the past 40 years.
He relied on his father to deal out heavy loans for him.
He used political connections.
And, above all, he used ‘exaggeration’ to make himself into a BRAND!
Now, he sure did make a lot of money, but the four Atlantic City bankruptcy cases in his closet will still haunt him to the grave.
When grilled he says the bankruptcies didn’t ‘hit him hard’, and he got out just in the nick of time.
OK, let’s read and find out how Donald Trump investments fell one by one – and the reasons behind.
Donald Trump Top Four Business Fails
1) Trump Taj Mahal (TTM), 1991
Just as gambling was made legal in Atlantic City, New Jersey in the 1980s Trump snapped the opportunity and began building his billion dollar casino Trump Taj Mahal.
It was going to be the biggest casino in Atlantic City and Trump hyped it into something Out Of This World.
TTM opened in 1990.
Guess what? Within a year the casino was $3 billion in the red.
Hence came Trump’s first bankruptcy in 1991.
He was forced to give up half of his holdings in the property after filing for chapter 11.
2) Trump Plaza Hotel, 1992
The next year in 1992, Trump Plaza Hotel which Donald Trump acquired in 1988 for $390 million was about $550 million in debt!
Trump went to court and filed for bankruptcy protection once again…
This time he gave up 49% of his stake in the company plus handed over the Trump Shuttle to his creditors, narrowly escaping going broke personally.
Eventually, Trump disposed off the Plaza Hotel in 1995.
3) Trump Hotel and Casino Resorts, 2004
Mr. Trump rushed back to the courts in 2004, to file protection against bankruptcy for the company that held his three Atlantic City casinos and a riverboat.
The company had run up $1.8 billion in debt.
Again, the company was restructured, shed debts (about $500 million) on court orders and Trump gave up part of his stake.
Still, he retained control over the casinos though.
4) Trump Entertainment, 2009
The last nail in the coffin was the 2008 financial crisis – the Great recession.
Trump’s casino chain, now running collectively by the name of Trump Entertainment, was clearly struggling to meet interest payments.
So, when over a 53 million dollar payment was missed, Trump took another trip through chapter 11 in 2009.
This time he was made to resign as chairman and his partner Carl Icahn took over.
That was Donald Trump’s last bankruptcy filing. After that his career in the casino business pretty much winded up.
And, that’s the story of the dramatic downfall of the Trump empire!
Now, let’s go through the reasons why Trump’s embarrassing (he’s not embarrassed though), 4 major bankruptcies came about.
What Caused Donald Trump’s Downfall?
1) Trump’s Inability to Focus
At numerous times Donald Trump has admitted to the fact that he has a hard time focusing on a business’s growth once he has acquired it.
In his own words, “… then you have a tendency to take your eye off the ball.”
So ‘lack of focus’ has been his problem.
He loves the deal-making part but not the ensuing day-to-day management of the business he bought.
What he enjoys the most is the run to get his hands on a property or company.
Once he has it he lacks the determination to push his investment to grow.
2) Over-the-Top Debt Financing
The Trump empire was destined to meet disaster since its very base was ‘debt & other people’s money!’
Lucky Trump always got away with so much debt on his shoulders, sometimes with the help of his father and sometimes by ‘using’ the law – which he brags about publicly.
Trump has the power of exceptional speaking skills.
He was able to convince the banks and his small-scale investors to finance him time and again (FOUR times – Gosh! how blind were they?)
And, since all his business had little of his own money he never ever ended up broke himself.
3) A Self-Centered Approach
Trump praises himself that he got out of Atlantic City at the right time and that his good timing sense allowed him to bag riches for himself.
He has never apologized to the thousands of his unpaid employees, financers and creditors who wrote off losses for him year after year and handed out more money each time.
So, it’s pretty obvious that Trump’s business journey wasn’t a team effort at all.
He was there for himself ONLY.
He ditched his partners and got out when it was time for the Great depression bomb to explode.
With this self-centered mindset Trump was never in it for the long haul. He was never going to make long-term success – and he kind of knew it.
After all, how could his never-ending grifts and blarney ever bear lasting fruits – could they?
Takeaway!
What’s the takeaway for you from this series?
Here: Learn to brand yourself and make connections and avoid conning people always because karma does catch up!
