Donald Trump: The Art of Human Marketing, How did Trump Make $3 Billion?

Donald Trump: The Art of Human Marketing, How did Trump Make $3 Billion?

Many Americans are still holding their breaths as to when the new Commander-in chief will release, his much coveted tax returns. However, we here at The New Gentleman are more interested at how Trump made the billions that are being taxed.

 You may have heard Trump say he made his billions by using his genius to flip his “small loan of a million dollars” into the $3.5 billion he has today. We are going to get to the bottom of that claim.

Family tree.

The Trump family is a German and German-American family, descended from Johann Philipp Trump, a native of the village of Kallstadt, now in Rhineland-Palatinate, Germany. Yes, the Trumps are immigrants themselves.  To find the origins of the events that lead to Trumps, enormous net worth, we have to begin with his grandfather Frederick Trump.  After the patriarch of the Trump family died, they were left in a sea of debt from the medical expenses to treat Johannes from emphysema. The Trump kids were forced to work in the grape fields , however, Frederick was too sickly for the labour intensive work, and soon made the decision to leave German for America. 

Frederick began his life in America as a barber, he worked seven days a week for two and half years until his training was complete. He then moved back to Germany, but to his dismay there was not enough demand for barbers to make a living. Again, he left for America, he said “I agreed with my mother that I should go to America”, it has been revealed by family members he left in the middle of the night, and left a hastily written note.

Frederick, arrived in America and after moving in with older sister Katharina and her husband Fred Schuster, he again found a job as a barber and worked as one for six years. After accumulating a several hundred dollars he moved to Seattle where he opened his  first profitable business. The Poodle Dog was located in the bustling streets of the Red Line District located in Washington.  Described as “a hotbed of sex, booze, and money”, Trump made healthy profits from the venture. When rumours of financial investments  in the mining town of Monte Cristo John D Rockefeller started to circulate. Frederick packed sold his restaurant and joined the gold rush in Yukon. However, the amount of gold in the area was over-exaggerated and there was no profits to be made. This led to Frederick’s most successful venture the Arctic, which was a restaurant in Benner, British Columbia. The Arctic was very successful, it served over 3,00 meals a day and there was more than enough space for gambling. Frederick had no other major businesses after this, until his death in 1918. This is where the story of Trump begins.

Frederick’s wife and son carried on the real estate investments he had made, under the Elizabeth and Trump moniker. They  found success especially when Fred Trump Jnr took over. At its peak Elizabeth and Son had built over 27,000 apartments in New York. However, after an investigation by the federal government it was found Fred was lying about the cost to build the houses and acquiring federal funding to help. The funding which he would just pocket as profit. His credibility was severely damaged and this is where Donald Trump comes in. 

Donald Trump: The Art of Human Marketing

After being publicly shamed, Fred Trump could not acquire any investments to carry on his work, as a a result son Donald fresh out of college was the re-branding the company needed. Fred  took a backseat as chairman of the board. To re-brand the company Trump changed the name to the Trump organisation that we know now. It is now a conglomerate with over 60 various enterprises  under it. 

Trump even in his beginnings loved the media, and it’s that flashy attitude that would make him the billionaire he is today.  Whereas his father had focused on building affordable housing in Brooklyn, New York.  Donald had larger ambitions. He wanted to forge himself as a living brand associated with wealth and opulence.  To achieve this goal he sought out as much media attention as he could get. His first businesses to was acquiring the failing Commodore hotel, which bought at a low price, renovated and he partnered with the Hyatt group. The hotel was a massive success, and cemented Trump as no-nonsense deal maker. Trump carried on with this trend of buying failing hotels, by using his aggressive business tactics of low offers. In three years he had amassed enough capital to build Trump tower, where the current First Lady lives.  Trump tower paid for itself, in three years it had made over $70 million in profits. It is now the centre piece of the Trump empire. And it does well in creating the image of Trump as larger than life character and the Trump organisation as might business empire.  With success of Trump Tower, Donald moved his attention to Atlantic city, seeing this as the Las Vegas of the east coast. Trump bought multiple casinos knowing the Trump name would attract high rollers. Even more, he bought the Taj Mahal which was the largest casino at the time. During this period Trump was obsessed with acquisition that were huge. He purchased the Trump Princess which at the time was the second largest yacht, a helicopter fleet and a specialised airline.

 

The 1980’s were good times for the Trump empire but as America started to dip into a recession, Donald’s business’s started to fail, many of his ventures had not even made profit. He was forced to sell the Trump princess, his airline and helicopters after accumulating $9 billion dollars of debt. Also he went through a costly bankruptcy period in which the Trump organisation’s debts were restructured.

After this Trump changed his business model, to applying his brand name to anything he could think off. After buying the right to Miss USA ans Miss Universe, Trump also created the show the Apprentice. This saw him rebuild the Trump organisation, which now owns golf courses, wineries and many other ventures(Trump University). 

Despite your political opinions one cannot discount that Trump is very good at business and marketing. For example, he negotiates like a true businessman should. He questions every invoice from contractors, he also never pays before a job is complete. When the job is done he low balls the company with a low payment offer. The morality here is questionable, although it is a practice you will find is done by many businesses. However, Trump’s greatest strength is how he has built a brand around himself, not a watch or car. He is the brand and anything he is involved in is directly associated with wealth.  

What do you think of Trump’s business acumen?

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