Rich People Gone Broke: Donald Trump
Admittedly, this month’s theme for the PF Bloggers Group Writing Project, Rich People Gone Broke, is a little heavy on the Schadenfreude.
The fact that we often feel joy when confronted with another person’s misfortune is something I’ve never fully understood. Don’t get me wrong, I’m not preaching; As it happens, I’m just as bad as the next guy (…or possibly a little worse), I’m just not sure why exactly. I know it’s wrong, but when I heard about Mike Tyson’s TKO with Chapter 11 back in 2003, I couldn’t help but laugh.
What’s the deal with that?
To be honest, I’m not really sure. My best guess is that it gives us comfort to know that, ultimately, we all play by the same set of rules. No matter who you are (or were, as the case may be), if you go against the natural order of things – like living beyond your means – you’re going to pay the price eventually. Then again, maybe I was just glad to see a thug like Tyson in the poor house.
At any rate, my choice for this project is a bit of a twist on things, since the rich person gone broke I’ve chosen has since gotten rich again: the inexorable Donald Trump.
Love him or hate him, The Donald is a survivor. Today he has a net worth of $3 billion, yet only a mere 15 years ago he had $900 million of personal debt.
Wikipedia enlightens:
“By 1989, the effects of recession left Trump unable to meet loan payments. Trump financed the construction of his third casino, the $1 billion Taj Mahal, primarily with high-interest junk bonds. Although he shored up his businesses with additional loans and postponed interest payments, by 1991 increasing debt brought Trump to business bankruptcy and the brink of personal bankruptcy.
Banks and bond holders had lost hundreds of millions of dollars, but opted to restructure his debt to avoid the risk of losing more money in court. The Taj Mahal re-emerged from bankruptcy on October 5, 1991, with Trump ceding 50% ownership in the casino to the original bondholders in exchange for lowered interest rates on the debt and more time to pay it off.On November 2, 1992, the Trump Plaza Hotel was forced to file a prepackaged Chapter 11 Bankruptcy protection plan after being unable to make its debt payments. Under the plan, Trump agreed to give up a 49% stake in the luxury hotel to Citibank and five other lenders. In return Trump would receive more favorable terms on the remaining $550+ million owed to the lenders and retain his position as chief executive, though he would not be paid and would not have a role in day-to-day operations.”
It’s tempting to believe that Trump’s survival is nothing more than proof of the expression “When you owe the bank a hundred dollars, it’s your problem, but when you owe the bank a billion dollars, it’s theirs”, but this doesn’t tell anywhere near the full story.
The bottom line is that Trump’s subsequent resurgence is due to one factor more than any other: his own iron will. Love or hate the man, you can’t help but admire his strength of character and perseverence.
Make sure you check out the other entries in this week’s PF Bloggers Group Writing Project!
Related posts:
- Can the Rich Teach The Rest of Us Anything About Money?
- Lifestyles of the Rich and In Debt
- Credit Cards for people with really bad credit
- Surprising Purchases that Put People In Debt
- Howdy to the Get Rich Slowly readers!
You do have to admire his perserverance. That and a full head of hair will get you far. Too bad I only have half of that equation.
Jonathan – the site looks fantastic. I haven’t been visitng or posting to my site the last few months because I was finishing paying off my debt and it basically paralyzed me. I really did spend the last two months looking at my finances every waking second (except while at work).
Almost $10k in 9 months and it was not easy – I think I ate vegetables and rice for dinner almost every night.
All I have to say is credit cards are a necessary evil and it’s great that you are helping people master their cards.
- Josh
Many thanks, Josh! I hope you’ll start updating regularly again – I’ll be reading!
I am not broke. I will sue you for calling me broke. I am a billionaire and you probably live on the streets. Enough Said.