- Date : 04/03/2017
- Read: 3 mins
When it comes to building financial wealth, here are some lessons you can learn from one of the world’s richest real estate developers- Donald Trump.
Ever since Donald Trump, the current President of United States of America, started his journey as a candidate, several stories about his financial ups and downs have been released. But despite a few bad financial decisions in the past, the man has managed to come out of four bankruptcies, and still owns considerable wealth. Even if his political idiosyncrasies do not resonate with you, there is still a lot you can learn from him about managing money for a better future.
- Don’t put all your eggs in one basket
All four bankruptcies that Trump has faced in his life, came while he was trying to work out his casino business. While he invested a lot of money in the business, he failed to put money away for a rainy day. In the end, he had a number of casinos under his belt in Atlantic City, and all his ventures were competing against each other for the same customers. This led to major financial conundrum for him. What you can learn from this mistake is- diversify your investment portfolio.
- Set achievable and clear goals
As you begin your investment journey you may choose to concentrate on the more easily achievable goals. As you move further on this trajectory, it is best to have clear mid-term and long-term financial goals, and planning for them. A relevant example from Trump’s life in this case is in 1995, when he bought a building on 40 Wall Street for $1 million. He spent around $35 million on renovations, and now that same building is worth $500 million. Trump found success in the field of Real Estate with the likes of Trump Towers in New York and Trump Hotel in Las Vegas. His success in these ventures can be attributed to clearly set goals with a focus on ROI early on.
- Take risks but only after careful research
As a businessman, Donald Trump has taken his share of risks, and on a number of occasions, has failed. Businesses like Trump Steaks that lasted only 5 years and attracted 51 lawsuits, or Trump University which lasted only 6 years are examples of bad business decisions. The main reason for failure here was that he probably did not do adequate research before jumping headfirst into these businesses. So before starting a new business or investing in a new financial instrument, make sure you do your research, weight the pros and cons, get all the information you need and only then make a decision.
- Do not blindly follow trends and predictions
While it is necessary to be informed about market trends and listen to experts, it is evident from the recent US Presidential election results, how wrong trends and predictions can turn out to be sometimes. Blindly following the herd and believing ‘news’ may not yield the best results. Instead, carry out your own research and form your own opinion. After all, we all have seen underdog sectors, stocks or mutual funds performing much better than expectations, much against the trends more times than we may like to count.
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