Trump: How to Get Rich

Stay Focused

In the 1980s, I was riding high. After learning the essentials of real estate development from my father, Fred, a builder in Queens and Brooklyn, I’d become a major player in Manhattan, developing Trump Tower, the Grand Hyatt Hotel, and many other top-tier properties. I had a yacht, a plane, a bestselling book.

One magazine headline said, EVERYTHING HE TOUCHES TURNS TO GOLD, and I believed it. I’d never known adversity. I went straight from Wharton to wealth. Even in down markets, I bought properties inexpensively and made a lot of money. I began to think it was easy.

In the late eighties, I lost focus. I’d fly off to Europe to attend fashion shows, and I wasn’t looking at the clothing. My lack of attention was killing my business.

Then, the real estate market crashed. I owed billions upon billions of dollars—$9.2 billion, to be exact. That’s nine billion, two hundred million dollars. I’ve told this story many times before, but it bears repeating: In the midst of the crash, I passed a beggar on the street and realized he was worth $9.2 billion more than I was. I saw a lot of my friends go bankrupt, never to be heard from again.

The media had me for lunch. Forbes, Business Week, Fortune, The Wall Street Journal, The New York Times—they all published major stories about my crisis, and a lot of people seemed to be happy about it.

I’ll never forget the worst moment. It was 3 A.M. Citibank phoned me at my home in Trump Tower. They wanted me to come over to their office immediately to negotiate new terms with some foreign banks—three of the ninety-nine banks to whom I owed billions.

It’s tough when you have to tell a banker that you can’t pay interest. They tend not to like those words. An ally at Citibank suggested that the best way for me to handle this difficult situation was to call the banks myself, and that’s exactly what they wanted me to do, at three o’clock on a cold January morning, in the freezing rain. There were no cabs, so I walked fifteen blocks to Citibank. By the time I got there, I was drenched.

That was the low point. There were thirty bankers sitting around a big table. I phoned one Japanese banker, then an Austrian banker, and then a third banker from a country I can no longer remember.

In The Art of the Deal, I had warned readers never to personally guarantee anything. Well, I hadn’t followed my own advice. Of the $9.2 billion I owed, I’d personally guaranteed a billion dollars. I was a schmuck, but I was a lucky schmuck, and I wound up dealing with some understanding bankers who worked out a fair deal. After being the king of the eighties, I survived the early nineties, and by the mid-to-late nineties, I was thriving again.

But I learned my lesson. I work as hard today as I did when I was a young developer in the 1970s.

Don’t make the mistake I did. Stay focused.