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You Didn’t Build That Extremely Tacky Thing

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If you’d like to be extremely rich, being born extremely rich is highly useful:

“It takes brains to make millions,” according to the slogan of Donald Trump’s board game. “It takes Trump to make billions.” It appears that’s truer than Trump himself might like to admit. A new analysis suggests that Trump would’ve been a billionaire even if he’d never had a career in real estate, and had instead thrown his father’s inheritance into a index fund that tracked the market. His wealth, in other words, isn’t because of his brains. It’s because he’s a Trump.

In an outstanding piece for National Journal, reporter S.V. Dáte notes that in 1974, the real estate empire of Trump’s father, Fred, was worth about $200 million. Trump is one of five siblings, making his stake at that time worth about $40 million. If someone were to invest $40 million in a S&P 500 index in August 1974, reinvest all dividends, not cash out and have to pay capital gains, and pay nothing in investment fees, he’d wind up with about $3.4 billion come August 2015, according to Don’t Quit Your Day Job’s handy S&P calculator. If one factors in dividend taxes and a fee of 0.15 percent — which is triple Vanguard’s actual fee for an exchange-traded S&P 500 fund — the total only falls to $2.3 billion.

It’s hard to nail down Trump’s precise net worth, but Bloomberg currently puts it at $2.9 billion, while Forbes puts it at $4 billion. So he’s worth about as much as he would’ve been if he had taken $40 million from his dad and thrown it into an index fund.

In all fairness, I am compelled to observe that Trump has come out against the carried interest loophole, one of the most indefensible parts of the United States Code.

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