Nonpartisan Post - Trump vs. Index Funds

[Frank S.]

I hope you enjoy this iconoclastic and nonpartisan perspective.   Please do not comment on political issues as this is simply a comparison between performance of investment strategies related to Trump. 

Additionally, this is not an evaluation between the returns of REI or equities. There are other posts that address that.

Trump inherited his fortune and contacts.  What if he had retired immediately after getting his daddy's money?

Link:

http://fortune.com/2015/08/20/donald-trump-index-f...

In 1982, the first year Forbes published its list of the wealthiest Americans, the magazine calculated Donald Trump’s net worth at $200 million. According to Timothy L. O’Brien’s book, TrumpNation: The Art of Being The Donald, Mr. Trump said he was worth $500 million in 1982, not the $200 million reported by Forbes

By 2014, Forbes said his wealth had jumped to $4.1 billion. That’s a compounding annual return of 9.9 per cent. But Trump cries foul. He complains that Forbes downplays his wealth. According to Business Insider, he recently said his net worth is $8.7 billion.

Therefore, lets's go with Trumps estimate of $500 million and his assertion that he is worth $8.4 billion. Then, it follows that if Trump had invested that initial $500 million in Vanguard’s S&P 500 index fund, he would have compounded his money by 11.3 percent annually over 33 years. His $500 million would have grown to $17.11 billion. That’s $8.41 billion more than Trump says he has today or $13.01 billion more than what Forbes estimates he is worth today. 

Math is a wonderful way to debunk media myths.