‘He never went right’: Warren Buffett revealed the ‘big problem’ behind Donald Trump’s business failures. What to learn from the president’s mistake

In recounting where and how Trump went astray in his business ventures, Buffett observed simply that “the big problem with Donald Trump was he never went right.”

And he is not the only one to think that. In fact, Trump’s debts are legendary.

The Washington Post reported that Trump has filed for bankruptcy six times during his career (2), and CNBC lists Trump: The Game, Trump Super Premium Vodka, Trump magazine and luxury-travel booking site gotrump.com as just some of his ill-advised ventures (3).

However, perhaps his most significant — and public — misstep was purchasing the Taj Mahal casino in Atlantic City in 1987 (4). Having raised $675 million in high-interest junk bonds to complete the unfinished casino, the Taj Mahal declared bankruptcy by 1991.

Paying off those high-interest rates swamped the whole project.

The lesson here is that while most Americans likely wouldn’t knowingly, or at least willingly, overpay for assets, it can happen to anyone — regardless of the capital involved. Fortunately, there are strategies to avoid falling into those traps or to bounce back if you’ve stumbled.

Building your real estate portfolio the right way

In his lecture, Buffett also expressed his belief that “you really don’t need leverage in this world.”

That is great advice. But if you’re still drawn to the real estate market, some amount of leverage is often essential for most Americans, particularly those looking to buy a home.

These days, home ownership is far from your only option when it comes to investing in real estate. Besides, the median down payment on a home as of December was $68,000 according to Redfin (5) — down 1.5% — but still a significant chunk of change. And that’s before you start thinking about the next 30 years of mortgage payments.

But there are now several ways to tap into real estate without leveraging assets or taking on tons of debt.

Invest in residential real estate

For example, Arrived’s online platform allows you to invest in shares of rental homes and vacation rentals without taking on the responsibilities of property management.

With Arrived, you can browse a curated selection of homes, each vetted for their appreciation and income potential. Arrived also offers a secondary market, which is open every quarter, so you can shuffle your shares if you need to. Sign-up is also easy, just plug in your email, answer some basic questions and you’re ready to start investing.

Once you find a property you like, you can choose the number of shares you want to buy and start tapping into the resiliency of real estate with just $100.

But Arrived is just one avenue for you to pursue. Another option is to broaden your real estate beyond single-unit typologies.

Multiply your investment with multifamily and industrial real estate

Now, accredited investors can tap into that same approach through platforms such as Lightstone DIRECT, giving you access to institutional-quality multifamily and industrial real estate — with a minimum investment of $100,000.

Founded in 1986 by David Lichtenstein, Lightstone Group is one of the largest privately held real estate investment firms in the U.S., with more than $12 billion in assets under management.

Over nearly-four decades, their team has delivered strong, risk-adjusted performance across multiple market cycles — including a 27.6% historical net IRR and a 2.54x historical net equity multiple on realized investments since 2004.

With Lightstone DIRECT, you gain access to the same multifamily and industrial deals Lightstone pursues with its own capital .

Here’s the kicker: Lightstone invests at least 20% of its own capital in every deal — roughly four times the industry average. With skin in the game, the firm ensures its interests are directly aligned with those of its investors.

Investing like Buffett

Given Buffett isn’t a fan of taking on debt, perhaps it’s no surprise he’s made most of his money by investing in companies at low prices.

As he once explained in a letter to his partners, “This is the cornerstone of our investment philosophy: Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results (6).”

While it’s hard to find anything inherently flawed with that logic, price isn’t everything. A low price tag might very well be indicative of a low-quality investment.

Getting the inside scoops

If you want the inside scoop on which investments to make, Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.

In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.

Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts, and it can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

Avoiding being overleveraged

Before Trump’s political career began, Buffett also found fault with Trump’s strategy when it came to debt and loans.

At his 1991 lecture, he estimated Trump owed “perhaps $3.5 billion now, and, if you had to pick a figure as to the value of the assets, it might be more like $2.5 billion.”

To avoid similar pitfalls, securing a loan that accurately reflects the asset’s true value is critical for anyone looking to manage debt responsibly.

Consolidate and pay off your loans

For those already paying off debt, Credible is a loans marketplace for personal loans from the top lenders. It’s designed to make it easier to find the best debt solution for your needs, all in one place.

And with Americans predicting a 14.2% chance of missing a minimum debt payment over the next three months (7), debt consolidation might be a focused way to get back on track.