Why do you think he's a successful businessman? Because he says so?
Here's how Donald Trump made his money: he got a $1 million loan from his father, and then borrowed an additional $19 million against his future inheritance from banks. So his father's wealth allowed him to start with $20 million in capital that Trump himself had done nothing to earn (he'd eventually inherit $200 million from his father.)
So he took that money and invested in commercial real estate, mainly in New York City… hotels, office buildings, apartments, etc. At the time he began making these investments, the value of commercial real estate in NYC was fairly depressed, so prices were low.
Trump then had to manage the properties he purchased. But here's the thing: he proved to be really bad at it. His properties — all of them — were losing money. He couldn't turn a profit! Brilliant businessman. But he was saved by one thing: the depressed commercial real estate market of the 1970s underwent a boom in the 1980s. The value of his properties skyrocketed, even though they were not profitable, because commercial real estate values all over the city were rising dramatically. So Trump was able to cover his losses by borrowing against the equity in his properties. And as those properties continued to rise in value, he borrowed more and more and more. And he used some of the money he borrowed against the value of his properties to get into real estate developing, building some properties of his own around the city; he also expanded into other markets, including Atlantic City, where he began building casinos. He also began his lifelong interest in owning golf courses.
Along the way, he began to engage in unethical and highly questionable business practices, including refusing to pay contractors he hired the agreed-upon amounts for their work. He would sign a contract requiring him to pay them a certain amount, and then he'd actually pay them a fraction of that amount, and dare them to sue him to enforce the contract. Some did, and some did not; Trump has been sued more than 3,200 times. And before you say, "That's good business, he saved money!" it's never good business to violate a contract without cause. It's never good business to routinely break your word. Good businesspeople keep their agreements because they understand the value of a good reputation. Good businesspeople run a business well enough that they can afford to pay their workers what they promised and still turn a profit.
In any event, all of this was financed with debt. He was borrowing against the steadily-rising value of his commercial properties. He was behaving like a homeowner who kept running up charges on their credit card, and kept paying off the credit card by taking out home equity loans against the rising value of his house. As long as the value kept going up, there was always more equity to tap into.
But the commercial real estate boom was a bubble, and it burst in the late 1980s. Trump was stuck with a bunch of properties with negative cash flow and a massive overhang of debt, to the tune of some $5 billion. In 1990, he declared his first and biggest bankruptcy. And this one nearly destroyed him.
To survive, Trump had to work out a deal with 70 different banks, under which they would agree to defer a portion of the debt and write down an additional portion, agreeing to be repaid less than the full amount they were owed.
My father worked for one of the banks that Trump owed money to. He was present in a meeting when Trump met with his bosses to try and negotiate the write-down of his debt. He told me this story many years before Trump ran for president. What he said was that Trump was unrepentant for his losses and basically told the banks that they could either bail him out and write down a portion of his debt or he'd go completely out of business and lose everything, but if that happened they'd never get any of the money he owed them. He basically gave the banks a choice between a partial loss and a total loss, so they took the partial loss. My father said his bosses were sure Trump would be back in a few years asking for more help, because none of them believed he actually knew what he was doing.
Trump would declare bankruptcy 5 more times over the next 20 years. And today, American banks will not loan money to him. So he has to go to foreign lenders, like German-owned Deutsche Bank or (ironically) the Bank of China.
When Donald Trump Needs a Loan, He Chooses Deutsche Bank
Trump's Empire: A Maze of Debts and Opaque Ties
Several of his bankruptcies have involved his casino company, Trump Hotels and Casinos, which he created and took public in 1995, attracting thousands of investors.
Trump took the money he got from the sale of stock in Trump Hotels and Casinos (his only publicly traded company) and used it to have the company buy the casinos he already owned, like the Trump Taj Mahal and Trump Castle. Trump owned these properties personally, and they were massively in debt. He used his shareholders' money to buy these indebted, unprofitable casinos from himself, transferring the debt to his casino company while earning a nice payout for himself. Trump transferred $1.7 billion in debt from himself to his shareholders in this way. And the Casino company, which Trump continued to run, floundered; shares in the company were selling for $35 per share in 1995, but the price fell to $12 a share just a year later. Trump Hotels and Casinos would be in and out of bankruptcy for the next 15 years. Eventually, his board of directors made the brilliant businessman resign as chairman of the company because they had no confidence in his ability to turn it around. He remained as a member of the board (though not the chairman) until 2009, when the company entered yet another bankruptcy and he resigned. According to published reports, a $100 investment in Trump Hotels and Casinos in 1995 would have been worth $4 a decade later.
The Trump Files: How Donald Made a Fortune by Dumping His Debt on Other People
And then there are the businesses that Trump invested in and lent his name to:
Trump Steaks (failed)
Trump Ice bottled water (failed)
Trump Mortgage (failed)
Trump Airline (failed)
Trump University (failed, and he's currently being investigated for fraud and racketeering in connection to this one)
Trump Wine (failed)
Trump estimates his worth at anywhere from $8 billion to $10 billion. But in 2005, he sued a journalist named Tim O'Brien who wrote a book called Trump Nation alleging that he was really worth only $250 million.
Trump made a mistake in suing O'Brien, however. To prove his libel charge, he'd have to prove that he really was worth more than O'Brien said. He was questioned in a sworn deposition regarding his own estimation of his worth, which he said was based on his "feelings":
"You said that the net worth goes up and down based upon your own feelings?" he was asked in the deposition.
"Yes, even my own feelings, as to where the world is going, and that can change rapidly from day to day," Trump responded.
In the deposition, the attorney presented estimates of his net worth by two banks where Trump had applied for lines of credit. Both concluded Trump was worth about a third of the $3.5 billion he claimed in 2005.
In lawsuit deposition, Trump repeatedly called out for exaggerating wealth
Trump's suit was eventually thrown out of court.
Many financial experts and publications have estimated that if Trump took the money he got from his father and invested it in a simple index fund he'd be worth a lot more than he is today. Here's a report from Fortune magazine, which says Trump would be worth about 3 times as much as he is today if he had just invested in index funds: What's More Lucrative: "The Apprentice" or the S&P 500?
So…Trump's a great businessman, who financed his rise with money from his father and massive amounts of debt borrowed against the value of his properties. He has filed six bankruptcies, and is still in business only because his banks could not afford to let him go under, and had to accept a partial write-down of his debts. He routinely refuses to pay his workers and contractors his agreed-upon rates, and has been sued more than 3,200 times as a result. He routinely lies about how much money he is actually worth, dumped loads of his own debt on his shareholders, tanking the value of his own company in the process, and would have made a lot more money if he invested in index funds, which doesn't mean index funds are so great; it means Trump hasn't managed his money well enough to beat the returns on a conservative investment. American banks won't loan him any more money, and he remains massively in debt to foreign banks, while estimating his own net worth based on his day-to-day "feelings". Oh, and most of the businesses to which he has lent his name in the last 10 to 15 years have failed.
Trump is a wealthy man. He owns a lot of properties, and is still involved in some development deals (though he leases out his name to other developers far more often than he actually develops new properties today) despite all his debts. He will continue to be far richer than most of us will ever be long after the presidential campaign is over.
But as far as "why do people forget Trump is a successful businessman," well, perhaps Trump is an example of how it is possible to continue to be rich without actually being successful at running a business. Let me put it this way: it's very hard to imagine someone starting out in the real estate business today trying to imitate Trump's business "model" or "strategies" such as they are, to become successful.
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