I’ve read a couple articles recently about Donald Trump and whether or not he is as savvy of an investor as I’m sure he believes himself to be. Fortunately for us, we can take an objective look at the numbers and see for ourselves.
Donald has recently stated his net worth is somewhere around 10 billion, and though this is the Donald, we’ll take him at his word. No small sum of money indeed. Donald must have been a brilliant investor to grow his wealth to such an amount from 500 million – what he claimed was his net worth in 1982 when he first appeared on the Forbes 400 list. But was he?
As it turns out, he would have been better off if he had just retired in January 1982 and invested all his money in a plain old S&P 500 index fund.
To demonstrate this you can simply look at the chart below what his original 500 million dollars would have grown to as of the end of September 2015, if he had invested in an S&P500 index fund with an expense ratio of .20%.
… $17,591,818,893. He’d be almost 8 billion dollars richer than he is now if he would have invested in an S&P 500 index fund, one of the simplest and most widely used investment options available today. I’ve found that just about every 401k plan I have looked at has an S&P 500 index as one of the investment options, and it is included in one form or another in (almost?) all our client portfolios. So if you own the S&P 500 index somewhere in your portfolio go ahead pat yourself on the back, you’re a smarter investor than the Donald!