Diary

Trump's Overstated Wealth and Why He Will Not Win the Presidency [Updated]

Trump claimed $10 billion in wealth last year when he entered the race, and submitted disclosure forms claiming $8.7 billion in net worth. However, a Bloomberg analysis of the values of his properties slashed his net value down to $2.9 billion, and Forbes and other analysts only credited him with about $250-$300 million available as cash or securities. Most of his wealth is tied up in commercial real estate or airplanes, and not available for cash infusions to the campaign. Estimates based on 2012 Presidential campaign spending indicate that Trump would run out of cash long before running a full campaign against Hillary and the Obama fundraising machine.

Bloomberg analysis – knocks $7 billion off Trump’s own estimate

Bloomberg analyzed the values of his commercial real estate properties – which is the overwhelming source of his wealth. These properties include a stake in various buildings and condos in New York including Trump Tower, and golf and resort properties. Bloomberg values these assets based on current income production, and takes into account purchase dates, square-footage figures, rental, occupancy and capitalization rates, operating margins, valuation ratios, leasehold arrangements and other mortgage data.

Bloomberg found that his golf and resort properties should be valued at $570 million, whereas Trump valued them at $2 billion on his disclosure. Trump also claimed $3.3 billion in value for his “brand” – or the value of the Trump name. Bloomberg discounted that to $0.

Bloomberg also estimated his cash and liquid securities position to be about $230-$250 million.

Forbes and other estimates of his cash and securities position

Business valuation analyst Tom Pastore last summer estimated Trump’s cash and securities at $250 million. Forbes did their own analysis, and went with a figure of $302.3 million.

Bottom line? Trump probably has anywhere from $250-$300 million available to run his campaign and cover his lifestyle. But we know he won’t spend himself down to $0. In fact, if he continues to insist that he’s self-funding, his ceiling on total contribution to his campaign could reasonably be expected to be limited to around $75 million.*

How much does it cost to compete with Hillary and the Obama fundraising machine?

For the 2012 election, Obama raised $540 million in hard money and $131 million in Super PAC money. The DNC contributed $292 million. Total spent: $964 million.

Romney raised $336 million in hard money and $418 million in Super PAC money, with the RNC chipping in $386 million. Total spent: $1.1 billion.

So a modern general election campaign costs over $1 billion to wage, of which $300-$400 million should be anticipated to come from the national party.

Total money a candidate needs to bring to the table? At least $700 million between hard money and Super PAC’s.

Based on these numbers alone, there’s no way Trump would be able to self-fund a general election.

Can Cruz and Rubio force Trump to spend enough to quit the race?

Possibly. But they would need to overcome all his free TV media to force him to spend. Unrelenting campaigning and advertising across the 21 states in the March 1st-8th primaries could force the issue.

[Update]

Trump was interviewed by Greta on Fox tonight and stated that he has now spent $20-$25 million on his campaign. If true, that would mean his spending has picked up significantly in February, as his disclosure at the end of January reported $12 million in loans to the campaign since last July.

——–

*I base his ceiling on campaign expenses as a percentage of available funds based on a rough comparison to prior self-funded campaigns by Forbes and Perot.

trump cash