Donald Trump's US business empire holds at $650 million in debt

Damn Daniel,

New York Times finds Donald Trump has at least $650 million in debt - Business Insider

 

Though my personal goal is to someday holler "I'm debt freeeeeee" it's impressive that someone can accumulate that kind of debt. Most folks have a hard time getting a conventional mortgage.

 

General Electric has some 90 billion in debt: GE General Electric Co debt, bond, rates, credit - Morningstar

 

There is a difference between consumer debt and debt used to leverage business transactions.

Consumer debt, the sort of debt that most people aim to be "free" of one day, is typically the sort of thing like credit cards and the occasional personal loans.

Student loans, if used properly, are a necessary cost of doing business. If you have to choose between financing medical school and not going to medical school then the debt that comes with it is just part of the package. You, as an individual, have to choose if the potential reward of a career in medicine is worth the monthly payment. You can look at that objectively and just calculate straight ROI. Or you may just decide that it's worth it because you cannot imagine doing anything other than becoming a doctor.

Business debt more closely resembles your mortgage compared to all other debt. You need a place to live anyway. You can rent. But then you pay a markup. The landlord likely financed the place where you're living, plus pays the taxes and would like a small profit. Buying a house with a mortgage allows you to cut out the profit aspect and get your own place without laying out all of the cash upfront.

Yeah, businesses carry debt. Because many business don't have a lot of cash on hand and it makes better business sense to leverage business ventures rather than put your limited cash on the line.

Trump's debt isn't impressive if you ever look at other real estate tycoons and see that is just how the business operates. Drive past a large building or a shopping center under construction. Sometimes they hang a banner for the bank financing it. It isn't really anything out of the ordinary unless you cannot contextualize the notion of "debt."

 

Trump said the 650 million debt is about 5% of his aggregate holdings (including real estate) i.e. for every 100 dollars held, he is in debt about 5 of those dollars.

He is almost debt free (when the debt-to-holdings ratio is examined).

During his upcoming electoral tenure, it will be good if he can improve the horrible federal debt-ratio-to-national-GDP.

 

What is out of the ordinary is a person's ability to GET that amount of debt, their creditworthiness, and all that is entailed. I find it impressive!

 

$650 Million is nothing. Forbes Welcome

Impressive is the fact that he has pushed the family fortune from a $200 million split between him and his Father. To over $4 BILLION today....of course he says the real number is $10 Billion. Of course, his assets are real estate heavy and real estate is only worth whatever you can sell it for...In truth everything is speculative unless he liquidates.

 

I'm not saying you're wrong to be impressed.

But the reason an ordinary person cannot get that amount of debt is that an ordinary person doesn't have a legitimate business purpose for that amount of debt. If you have a business reason to secure lots of money then people will seriously consider giving it to you.

If I called my bank and asked for a $500k unsecured loan they'd laugh at me. But if I asked for $1M to build an apartment complex, had a background in real estate and a few investors of the right pedigree, I'd have banks crawling all over me trying to get in on the deal (as long as my numbers looked good).

No one is eager to give Mr. Neuhaus, the HR guy, that much money because Mr. Neuhaus would spend it on tacos, electronics and high end cookware. But even a fairly new Neuhaus Corp could offer a reasonable promise of repayment with its solid residential real estate plan.

Besides, my name would work perfectly with new residential real estate construction.

 

I does seem odd that a presidential candidate owes so much to China. In my mind, his debt to wealth ratio cannot be accurately determined because nobody seems to be certain of exactly how much Trump is worth since he won't release his tax returns. I believe around a year ago he claimed his debt to be around $300 million. This new figures just came about due to some deep digging. I wonder what else is out there waiting to be dug up.

 

Keep in mind, tax returns only tell a portion of the story. My tax returns look fairly complex by the time I'm done with turbotax. A lot is done to calculate the amounts that are input into the tax forms. But only the tax forms go to the IRS. The rest sits in a filing cabinet waiting for the IRS to audit or ignore me. Nor do my tax returns show how much money I have in my savings account, what I keep in my retirement account or how much real estate I actually own.

It might contain the interest I pay on my mortgage. But it doesn't contain the value of my land, pictures of my latest addition or an accounting of my wife's jewelry.

To calculate Trump's net worth we would need more than his tax return. We'd need a full list of all assets and all liabilities. He's unlikely to ever provide that. That's why Forbes rankings, while interesting, are also somewhat speculative. But it's all really academic once you surpass the billion mark anyway. A lot of people have a difficult time conceptualiz one how much $1B is. I usually explain it like this...

If you received $1M every year for 100 years you'd still only have one tenth of a billion dollars.

Anything above that and you're in the realm of there existing no one thing you cannot buy.

 

I think that for any of us that would be a crazy amount of debt but that in the corporate real estate world it's not that big of a deal? I don't know that to be true but I'm willing to accept, provisionally, that it's true. I think the concern about the debt is not so much the amount but who owns the debt. China, Deutsche Bank, Goldman Sacks, etc. and that this means that these entities will have influence over Trump in the Presidency. Is that true? I don't know, but I think that's the story line.

 

I've had a couple of mortgages and loans from Bank of America, but they never influenced my political decisions. Conversely, could the bank cancel a mortgage prematurely (and seized the property) if I didn't vote a certain way? Maybe, depending on how the contract is written.

 

Alternate Post Title

Guess who clearly doesn't have a business degree.

 

I might be going out on a limb here but I'm guessing that the BoA doesn't care about your politics because you have no real influence. Maybe.

 

LOL and if I did have political influence, then would BoA attempt to influence my political decisions? (The answer is no). Similarly, as you previously implied, would or will Trump's creditors (foreign or domestic) attempt to influence his decisions?

 

Harsh, but I thought it too.

 

Trump graduated with a bachelors in economics from the Wharton Business School at the University of Pennsylvania.

 

Yes (to both). The people who do this are called lobbyists. This is why people/corporations make political contributions. So that they have access and influence in Washington.
But you knew all that.

 

I was talking about the OP. In their zeal for something-anything please let there be something on Trump...well it gets embarrassing sometimes.