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If theres one thing the whole world didnt see coming, its this.

Despite all of the poll and projections, what the mainstream media considered impossible

is now fact: Donald Trump is the President-Elect of the

United States and on January 20th 2017 he will be sworn into office.

He will then become the first president to have successfully memed his way into the White

House, with the help of nothing less than a cartoon frog.

More importantly though, he is going to become the wealthiest president in US history.

With his current fortune of 3.7 billion dollars, Mr. Trump will surpass the net worth of the

previous record holder, George Washington, by a factor of six.

What many people dont know, however, is where all of Mr. Trumps wealth actually

came from.

Thats why this week on Behind the Business well be looking into the heart of his business

empire, the Trump Organization.

Oh and if youre wondering why Im narrating this video, its because Jordans microphone


Our story starts in rural Germany in 1883.

In the quiet village of Kallstadt, Friedrich Trump struggled as the frail fourth child

in a family of seven grape farmers.

His dad had died of lung disease five years prior, and he had left his family with almost


Due to his own health, Friedrich was unable to help out in the familys vineyards and

so he desperately sought to learn a different trade.

For two years he worked as a barbers apprentice in a nearby town, but when he came home in

1885 he found that Kallstadt didnt have enough of a clientele for him.

Thus, the young Trump made a radical decision.

He would escape poverty and a looming mandatory service in the army by crossing the Atlantic

and finding work in America.

Friedrich left his family a hasty letter, packed what little he had, and boarded the

first steamship he could find to New York City.

While there, he lived with distant relatives and fortuitously found employment with a German


Friedrich worked there seven days a week and pretty soon he had managed to secure some

measure of financial stability.

Seeing how much success was to be had in the US, Friedrich broadened his ambitions and

in 1891 he moved to Seattle to try his hand at hospitality.

For $600 , he acquired a property, which he named the Dairy Restaurant.

It wasnt the largest of buildings, but its location was perfect.

It was in the middle of Seattles bustling Red Light District, and although Friedrich

certainly offered quality food and drinks, sources disagree on whether hired female company

was also on the menu.

Regardless, Friedrichs Dairy Restaurant earned him a tidy income and in 1892 he finally

obtained US citizenship.

Soon after, Friedrich heard that oil magnate John Rockefeller was planning a big mining

investment in the small Washington town of Monte Cristo.

Friedrich realized the town could become the site of a major gold rush, and so he happily

sold off the Dairy Restaurant and moved there in March of 1894.

He immediately found a prime spot for a hotel right in the town center, but there was a

slight problem: that the land already belonged to someone

else - absentee landlord Nicholas Rudebeck.

Friedrich didnt have enough money to both buy Rudebecks land and build a hotel there,

and so he opted for a rather unconventional solution.

He claimed mining rights over Rudebecks land, which would in theory allow him to sift

through the dirt for gold.

It most definitely did not allow him to build a hotel on the land against Rudebecks wishes,

but Trump sort of just went with it.

Fortunately for him, many of the rugged miners didnt really give a damn about his titles,

or lack thereof, and so most of them either supported his venture or built on Rudebecks

land themselves.

To add insult to injury, Trump obtained legitimacy by getting the authorities to add his name

under theReal Estatesection of the local directory.

While business was good for a time, it soon became apparent that Monte Cristos gold

deposits were nowhere near as rich as people thought.

The investors pulled out, the miners started to leave and Friedrich was forced to go looking

for new business opportunities.

In 1896 Friedrich heard rumors that gold had been found in the Klondike region of the Yukon

in northwestern Canada.

Eager to seize the opportunity, he packed his bags and went there, opening several incarnations

of hisArctic Hotel and Restaurantalong the way, first in Bennett, British Columbia

and then in Whitehorse, Yukon.

These establishments were located in one of the harshest, most unforgiving arctic climates

in North America, and yet Friedrich managed to to transform them into local pillars of


The Arctic in alone served several thousand meals a day and fostered copious amounts of

gambling, drinking, and most likely prostitution.

In 1901, however, the local government cracked down on all the illicit activities that made

the Arctic such a shining success.

By that point though Friedrich had already amassed a small fortune, and so he happily

closed up shop and went back home to Kallstadt in Germany.

There he married a family neighbor, Elizabeth, and together they moved back to New York in


The couple wanted to visit Germany regularly, but the German government labeled Friedrich

a military draft dodger and banished him forever.

Friedrich stayed in New York with his wife and three children until the Spanish Flu struck

him down in the great epidemic of 1918.

By that point, his estate was worth roughly half a million dollars by todays standards

and after his death it went into the hands of his wife, Elizabeth.

She kept the real estate business going by hiring contractors to build houses on empty

Trump properties, and then selling those houses at a profit.

Her son Frederick, who went by the nicknameFred”, was eager to help out in the business

and started doing so in 1920, when he was just 15.

When Fred finally came of age in 1923, the mother-son duo officially founded Elizabeth

Trump & Son.

The young Fred quickly built his first family house in Queens that same year, turning an

$800 dollar investment into a $7000 dollar building.

The companys responsibilities slowly passed onto him and by 1927 he was pretty much running

the show.

Before the Great Depression stopped him, Fred had built several hundred single-family homes

and turned a significant profit selling them.

During the Great Depression, he adjusted his strategy away from the slumping housing market

and invested in one of the worlds first supermarkets - Trump Market.

Then in 1934, as part of the New Deal, the Roosevelt administration created the Federal

Housing Administration, which guaranteed loans and mortgages to help every American own a


With the secure funding offered by the FHA, Fred once again began building single family

homes and steadily revitalized the entire Brooklyn housing business.

His efforts continued throughout World War 2 and by the mid-forties he had advanced to

building large apartment complexes.

Shore Haven and Beach Haven were some of his biggest projects, though his magnum opus was

undoubtedly the quaintly-named Trump Village from 1964, which featured over four and a

half thousand separate apartments.

The village would be Freds downfall, however, as state officials accused him of exaggerating

project costs in order to get extra funding, which he would then pocket without saying

a word.

Fred ended up having to return more than a million dollars to the state of New York,

but what suffered the most wasnt his wallet, but his credibility.

He found it increasingly difficult to secure funding for his housing projects and it wouldnt

be until 1968 that he found a solution.

That was the year his son Donald graduated college and Fred happily welcomed him into

the family business.

Just three years later Fred made Donald president to give the company a fresh new face, while

he himself took a backstage role as chairman of the board.

In 1974, as part of the rebranding effort, Donald renamed his enterprise the Trump Organization,

which at this point had become a conglomerate comprised of more than sixty separate enterprises.

Donalds takeover resulted in a dramatic shift in the companys business strategy.

His approach to publicity was ingenious, and he took Freds concept of marketing the

Trump brand name to a whole new level.

Whereas Fred had focused on large scale low-to-medium income housing in Brooklyn, Donalds ambitions

were much greater in scope.

Donalds goal was to transform himself into a living brand synonymous with opulence and


To that end, he sought out as much media attention as he could get.

He established himself as an aggressive, brash dealmaker and he used that reputation to fuel

his initial forays into the hotel business.

Trumps first major acquisition came in 1977 when he bought the failing Commodore

Hotel in Manhattan, whose previous owner was on the verge of bankruptcy.

Trump saw a lot of potential in the building and so he decided to renovate it in order

to resell it at a profit.

What really made his investment successful, however, was that he managed to negotiate

a groundbreaking 40-year tax abatement for the Commodore, the first of its kind for a

commercial property.

Trump then partnered with the Hyatt Corporation to secure a construction loan and got to work

overhauling the once-mighty Commodore.

The hotel was successfully reopened in 1980 as the Grand Hyatt Hotel and its success convinced

Donald to pursue similar deals.

He would buy a failing high-profile building for cheap, renovate it to make it look great

again and then resell it at a huge profit.

This strategy was so successful that in the span of just a few years Donald had acquired

enough capital to finance one of his most ambitious plans ever: the Trump Tower.

Completed in 1983, the luxurious behemoth quickly paid for its cost and earned a $70

million dollar profit in just 3 years.

It also became the centerpiece of the Trump empire and the seat of the Trump family itself.

Throughout his career, Trumps business strategy would revolve around similarly opulent,

extravagant buildings whose ultimate purpose was to establish the Trump brand as a mark

of grandeur.

After New York City, Donald turned his gaze towards Atlantic City and its bustling casino


At the time, Atlantic City was investing heavily in gambling with the hope of becoming the

Las Vegas of the East Coast.

Donald knew the Trump brand name would easily attract casino high rollers and so he did

his best to acquire Atlantics most popular casinos.

His biggest deal in Atlantic City came in 1988 when he bought the Taj Mahal, the worlds

largest casino at the time, for a stunning 273 million dollars.

To attract publicity Donald hosted high-profile events like the famous 1988 boxing match Tyson

v. Spinks.

He also bought the worlds second largest yacht, a specialized airline and a helicopter


Despite all of its success during the 1980s, however, the 1990s would bring the Trump

empire to its knees.

As the US entered into a recession, many of Donalds ventures saw their profits tumble.

Some of them, in fact, had never even turned a profit.

The Taj Mahal and other Atlantic City casinos were the first to crumble, and after consolidating

them Donald was forced to take them public.

He also ended up selling Trump Air, Trump Shuttle and the Trump Princess, but even that

wasnt enough to topple the 9 billion dollar mountain of debt he had accumulated.

In the end, the Trump empire barely managed to survive after a costly bankruptcy and a

restructuring of most of its debts.

Donald took this opportunity for a fresh start by entering entertainment business.

In 1996 he acquired three beauty pageants, the most notable one being Miss Universe.

His new strategy was to apply his brand name to everything, from bottled water to modelling

agencies to even his own video game.

One of his best moves came in 2004 when he started hosting the hit reality TV showThe

Apprentice”, where he basically gets to fire people.

The 21st century has seen Donald restore the Trump Organization, whose current portfolio

is made up of golf courses, a winery, and vast amounts of other real estate.

One of the key factors in Donalds lifetime success is perhaps also the most controversial

one: the way he makes deals.

Donald has, over the course of his business career, mastered the art of aggressive negotiation.

At the most basic level, that means he always questions every single invoice his contractors


He doesnt pay before the job is done and when it is he mercilessly pushes the other

party into accepting a lowball offer.

If circumstances ever change and force a renegotiation, Donald rarely agrees on afairsum and

strives to pay as little as possibly.

When hes particularly unsatisfied by his contractor, Donald might not even pay at all,

in which case the matter usually ends up in court.

This strategy doesnt always work, as evident by the numerous such lawsuits that Donald

has lost, but when it does work, he comes out ahead immensely.

Donalds strategy, as unethical as it may sometimes appear, is illustrative of the world

world of business.

Underneath the mask of friendliness and cooperation, the world of business is a battleground where

only the strongest survive.

For hardballing developers like Trump, doing business is not about ethics, but rather about

securing the best possible economic outcome for your business.

Trumps strategy isnt unique - while reprehensible to some, it is actually so common

that just in 2010, the US construction industry saw a total of 64.5 million dollars being


Of course, not all of the Trumps lawsuits are the result of shrewd and ruthless business


Some lawsuits are simply the consequences of a failed, ill-thought out venture, with

Trump University being the most obvious example.

Trump University was a pricy and supposedly-educational initiative that actually had very little in

the way of accreditation or academic rigor.

The misleading claims and practices of Trump University eventually resulted in several

lawsuits for fraud, which Donald only just recently settled after winning the presidency.

Speaking of the presidency, Donalds unexpected victory has left a bit of a gap in his companys


As president of the US Donald would be unable to manage the Trump Organization without running

into serious conflicts of interest.

Presidents in the past have solved this problem by temporarily putting their assets into a

blind trust, run by independent trustees who manage the assets without the Presidents


Thats exactly what Donald intends to do, but the trustees he has in mind are none other

than his own children - Eric, Donald Jr., and Ivanka.

Now whether or not a trust run by your children can be blind is a pretty difficult question,

but in any case its clear that Donald is getting ready to pass down the family business

to the next generation.

At this point all three of them have served as executive vice presidents, essentially

micromanaging the Organizations vast real estate portfolio.

Whether or not theyll be successful in managing the company during Donalds presidency,

however, remains to be seen.

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In case you missed it it, do check out our previous video on the history of Lamborghini,

from their earliest tractor ventures to their recent games of corporate hot potato.

You can also check out the full Behind the Business playlist, in case youd like to

see some of our older videos.

Once again, thanks a lot for watching, and as always: stay smart.

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