Trump University and the art of the get-rich seminar | Ars Technica

Avatar

Tod Kelly

Tod is a writer from the Pacific Northwest. He is also serves as Executive Producer and host of both the 7 Deadly Sins Show at Portland's historic Mission Theatre and 7DS: Pants On Fire! at the White Eagle Hotel & Saloon. He is  a regular inactive for Marie Claire International and the Daily Beast, and is currently writing a book on the sudden rise of exorcisms in the United States. Follow him on Twitter.

Related Post Roulette

35 Responses

  1. Avatar Kolohe
    Ignored
    says:

    Like the featured comment said, who would have known that Matt Lesko would eventually be the *good* guy in one of these stories.Report

  2. Avatar Saul Degraw
    Ignored
    says:

    There seems to be a good part of the American population that thinks the only purpose we have in the world is to get rich and the best way to get rich is by exploiting the fears and insecurities of other people and making them feel bad when your scheme fails to net them millions.

    I suppose grifters gotta grift but I wonder what makes people think of these ways to make money.

    I suppose in my current on and off career state, I get the psychological perks that come with a windfall. There have been times that I have thought “Wow, look at how high Powerball is, it would make everything so easier to win the lottery.” Yet I have maybe spent about ten to fifteen dollars on lotto tickets in my life. I didn’t even buy a ticket when it was at the over a billion value. But I have never thought of signing up for any of the schemes featured in the article or other pay to play multi-tier marketing schemes. Partially because I realize that the 999 dollars would be better spent on other things and I certainly don’t want to sign up for more. I’ve never even been tempted to go to one of the events.

    Now what makes the difference between me and the people who fall for these schemes?Report

    • Avatar LeeEsq in reply to Saul Degraw
      Ignored
      says:

      A combination of education and pessimism. People who tend to fall for these schemes tend to be trusting, optimistic, and not prone to thinking. The sales people also know how to manipulate. The first step to not falling for this is not listening in the first place.Report

    • Avatar Mike Schilling in reply to Saul Degraw
      Ignored
      says:

      There seems to be a good part of the American population that thinks the only purpose we have in the world is to get rich and the best way to get rich is by exploiting the fears and insecurities of other people and making them feel bad when your scheme fails to net them millions.

      Which is foolish. Only the second of those is true.Report

    • Avatar Kazzy in reply to Saul Degraw
      Ignored
      says:

      “Now what makes the difference between me and the people who fall for these schemes?”

      With all due respect, didn’t you get pulled into the law school bubble?Report

  3. Avatar Kazzy
    Ignored
    says:

    “I got rich and you can, too! All you have to do is BUY my book telling you EXACTLY how to get rich. REMEMBER… I GOT RICH! So why not BUY the book I’m SELLING so you can learn how to be RICH!”

    Conveniently glossed over: selling books is how the man got rich.Report

    • Avatar Burt Likko in reply to Kazzy
      Ignored
      says:

      Amusing, but Trump’s path to wealth is more complex than this. Loosely:

      1. Start out with billions of inherited dollars.

      2. Consume! Aggressively and conspicuously. Build and maintain a reputation for a “Midas touch.”

      3. Buy the most expensive real estate you can find in an area that will increase in value anyway no matter what you do. Use as little of your own money as you can, create a special business entity to hold the debt liability.

      4. Gold-plate everything in the building (or otherwise make superficial improvements).

      5. As the property increases in value, periodically borrow against the new equity, to keep the total leverage in balance with the increased market value.

      6. THIS IS THE MOST IMPORTANT STEP: Immediately use the borrowed cash secured by the new equity, so as to render it unavailable for use later.

      7. When the price starts to fall, have the entity declare bankruptcy or otherwise restructure the loans. Get out of the liability umbrella.

      8. Wash, rinse, repeat. The goal is to keep ahead of consumption + inflation so as to eventually be staking nothing but alpha.

      The sale of books bragging of one’s business prowess is an important part of step 2. The sale of steaks, vodka, magazines, water, wine, trail mix, and candy? Well, perhaps that’s part of step 2 also, but some of it may also have been intended to vertically integrate step 4.Report

      • Avatar Stillwater in reply to Burt Likko
        Ignored
        says:

        Trump: “Yeah, I think – look, I have borrowed, knowing that you can pay back with discounts. And I have done very well.”Report

      • Avatar Stillwater in reply to Burt Likko
        Ignored
        says:

        AN interesting comparison: Remember when Romney was getting took to the cleaners merely for running a successful hedge fund? People were flipping out! As I recall, neither Florida nor Texas investigated his business practices with intent to prosecute…Report

        • Avatar Stillwater in reply to Stillwater
          Ignored
          says:

          The Associated Press on Monday provides additional details around the unusual circumstances of Trump’s $25,000 donation to Bondi. After the money came in, Bondi’s office nixed suing Trump.Report

      • Avatar Tod Kelly in reply to Burt Likko
        Ignored
        says:

        There is a growing suspicion, backed by some data, some logical inference, and some guesswork that is likely wishful thinking, that Trump really isn’t that wealthy. That he’s more likely worth a couple hundred mil, and isn’t a billionaire at all, yet alone one ten times over.

        In this theory, part of what Trump sells is the illusion that he is a billionaire who is rich enough to do whatever he wants.Report

        • Avatar Chip Daniels in reply to Tod Kelly
          Ignored
          says:

          @tod-kelly
          In which case Trump’s path is even simpler:
          1. Start out with billions of inherited dollars.
          2. End up with hundreds of millions.
          3. Run for President!Report

        • Avatar Burt Likko in reply to Tod Kelly
          Ignored
          says:

          Well, maybe. He has substantial personal assets, and he has self-financed his primary campaign thus far, which is a LOT of luxury spending. I’m just saying this is how he got it. I’m not accusing him of breaking the law or not having found a way to transfer multiple MST’s of money to himself. I kinda don’t care if he’s worth $10B or $6B or $900M; he is sufficiently in the realm of the $MST such that he could run for President on his own dime (at least thus far).

          (“MST = “Metric Shit Ton.”)Report

          • Avatar Tod Kelly in reply to Burt Likko
            Ignored
            says:

            @burt-likko Well, except that it now appears that he has not, in fact, self-funded his campaign. But that’s also niggling, obviously. Even if Trump is only worth the same as you or I on a balance sheet, he manages to balance that sheet with a ridiculously opulent lifestyle.

            But, I confess, I think that there is something important here that we need to know if he’s the nominee. I just don’t know exactly what it is we need to know.

            What’s fascinating to me about all of this is how important it is to Trump that you and I think that he is worth $10 billion. That he sues journalists for saying that they think he’s padding his numbers, to note one obvious manifestation of this complex, is… well, fascinating.

            My instinctual response to this is not, “Yeah, well, he’s still rich, and you don’t need to be a ten-times billionaire to be successful.” It’s more like, “Why???? Why do you do this???Report

            • Avatar Stillwater in reply to Tod Kelly
              Ignored
              says:

              I just don’t know exactly what it is we need to know.

              I agree with you that Trump’s claimed networth is way, way, waaaaay more than his actual (hell, when he talks about he just picks a really big number without any regard for its accuracy since it changes from week to week), so for me the thing it would confirm is that he’s about 90% charlatan.Report

            • Avatar j r in reply to Tod Kelly
              Ignored
              says:

              Yeah, Trump’s self-financing is likely of the ‘Trump Organization loans the Trump plane to the Trump campaign’ rather than Donald Trump spending loads of his personal wealth, whatever that wealth actually amounts.

              Trump’s shtick has always been to equate the Trump name with opulence and then license that name to a bunch of products (some owned by the Trump Organization, most not). As far as I know, golf courses are the one area where the product that Trump is shilling is worth the price and the rest is just about a price markup based on the brand. Lots of folks buy into that crap, though.Report

        • Avatar Mo in reply to Tod Kelly
          Ignored
          says:

          Tax forms he’s filed with the state of New York indicate income of under $500K. That’s hard for a billionaire to pull off.Report

          • Avatar Burt Likko in reply to Mo
            Ignored
            says:

            “Income” not the same as “wealth” or “net worth,” but the point is made: many MST’s of money whether or not it’s in the same area code as the $10B we’ve been asked to believe.Report

            • Avatar Mo in reply to Burt Likko
              Ignored
              says:

              Sure, but his wealth is tied up in commercial property, which, in order to have any value, is income. Now he could be writing off losses to reduce his tax liability, but according to Crain’s, he has been getting this credit for years. It’s likely he’s still using up losses from the 2008 crash. However, if his portfolio was worth as much as he claimed, he would not be able to keep this up for close to a decade (unless he was much much wealthier in 2008). The other interesting thing, is that he spends a lot of time, effort and reputation on penny ante schemes that someone actually worth $10B likely wouldn’t engage in. He made $5M from it. That’s the equivalent of someone worth a million working with scammers to make $500.Report

              • Avatar Tod Kelly in reply to Mo
                Ignored
                says:

                Actually, we know that wherever the $10 billion sits, it isn’t in real estate, because that is part of the types of assets that have to be filed in a federal election. All of Trumps various liquid assets/ real estate only make up $165 million.Report

              • Avatar Mike Schilling in reply to Tod Kelly
                Ignored
                says:

                The bulk of the rest is in TrumpBucks, an alternative currency that’s going to be yuuge.Report

              • Avatar Stillwater in reply to Mike Schilling
                Ignored
                says:

                “The Trumpbuck exchange-rate is determined by a function applied to both sides of the ledger, increasing assets by a factor of 100 and reducing payment of debt obligations (ie., “paying back with discounts”) to less than one-tenth of their value in US Dollars.”

                Vote Now! and in addition to receiving a detailed plan on how to convert your holdings into Trumpbucks we’ll throw in three Shamwows and a kit to remove scratches from your car paint!Report

      • Avatar Kazzy in reply to Burt Likko
        Ignored
        says:

        @burt-likko

        I’m thinking of this guy, not Trump.

        His PERSONAL secret to getting rich was convincing other people to buy his book. But the secrets he was selling YOU were useless crap he filled his books with.Report

        • Avatar Kolohe in reply to Kazzy
          Ignored
          says:

          He’s the guy in the article! He’s the good guy!

          His books always had accurate information, it’s just that a) a lot of it could be obtained for free from official government brochures b) a lot of it was highly niche programs that had very particular eligibility requirements that most people don’t meet.

          So yes his book was overpriced for the value you generally got, but not obscenely so.

          And before the internet was really a thing, there *was* a legitimate market for books that aggregated publicly available data.Report

          • Avatar Mike Schilling in reply to Kolohe
            Ignored
            says:

            There still is. For instance, Amazon sells ebooks called MegaPacks, which are big collections of science fiction stories. They cost a dollar. The stories are all public domain, of course, or there’s no way they could sell them so cheap, so in principle you could find them and download them all for free. But however small a value you place on your time, the MegaPack is a better deal.Report

        • Avatar Burt Likko in reply to Kazzy
          Ignored
          says:

          Remember the “Real Estate The Vu Way” guy? The one with tons of bikini babes lounging around his mansions on his infomercials? That was a guy I always figured made his actual money selling books.Report

      • Avatar j r in reply to Burt Likko
        Ignored
        says:

        1. Start out with billions of inherited dollars.

        2. Consume! Aggressively and conspicuously. Build and maintain a reputation for a “Midas touch.”…

        8. Wash, rinse, repeat. The goal is to keep ahead of consumption + inflation so as to eventually be staking nothing but alpha.

        So, in other words, Donald Trump is America?Report

  4. Avatar Chip Daniels
    Ignored
    says:

    Trump is, of course, running the oldest con in the book. And part of me wants to smugly sneer at the rubes who fall for it, like the people who were ushered by PT Barnum to a door marked “This Way To The Egress”, and hurried through assuming they would see some spectacular female oddity, only to realize the “Egress” means “Exit”.

    But I also think of the rubes falling for snake oil cancer cures, and about how desperate anxious people will believe anything. While there is a fraction of the population that will be desperate and anxious even in the best of times, I can’t help but think that the persistent economic instability and insecurity gnaws at even intelligent reasonable people.

    Especially in our modern economy where many people are in fact, getting rich, insanely plutocrat court of Versailles rich, in ways that seem mysterious to outsiders.

    Tech kids who tap out some code and become billionaires, bankes who jiggle this or that formula and receive a windfall billion dollar bonus; hell, even Trump who ran half a dozen businesses into failure walked away with millions.

    I recall watching one of the chat shows and Bill Kristol was on, and someone made a comment like “wealth comes from labor” and he smirked and corrected them, “no, wealth comes from investment”.

    IOW, wealth does magically grow by itself, needing not labor but just some alchemical formulation sprinkled over it, and if you only had this packet of magic beans, you too would see the fruits.

    There are villains abounding in these con games, but they didn’t create this fertile soil that is so ready to believe their lies.Report

  5. Avatar Mike Schilling
    Ignored
    says:

    There are all voluntary transactions; that is, they wouldn’t take place unless they made both parties better off (Q.E.D.) Why is the nanny state interfering?Report

Leave a Reply

Your email address will not be published. Required fields are marked *