Trump: The Art of the Deal

by Donald J. Trump

I DON’T do it for the money. I’ve got enough, much more than I’ll ever need. I do it to do it. Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. That’s how I get my kicks.

You can’t be imaginative or entrepreneurial if you’ve got too much structure. I prefer to come to work each day and just see what develops.

I hate lawsuits and depositions, but the fact is that if you’re right, you’ve got to take a stand, or people will walk all over you.

That experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make.

To me, a gambler is someone who plays slot machines. I prefer to own slot machines. It’s a very good business being the house.

I believe in the power of negative thinking. I happen to be very conservative in business. I always go into the deal anticipating the worst. If you plan for the worst—if you can live with the worst—the good will always take care of itself.

once I’ve made a deal, I always come up with at least a half dozen approaches to making it work, because anything can happen, even to the best-laid plans.

That’s why I don’t hire a lot of number-crunchers, and I don’t trust fancy marketing surveys. I do my own surveys and draw my own conclusions. I’m a great believer in asking everyone for an opinion before I make a decision. It’s a natural reflex.

The other people I don’t take too seriously are the critics—except when they stand in the way of my projects. In my opinion, they mostly write to impress each other, and they’re just as swayed by fashions as anyone else.

The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have. Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without.

leverage often requires imagination, and salesmanship. In other words, you have to convince the other guy it’s in his interest to make the deal.

My leverage came from confirming an impression they were already predisposed to believe.

One thing I’ve learned about the press is that they’re always hungry for a good story, and the more sensational the better. It’s in the nature of the job, and I understand that. The point is that if you are a little different, or a little outrageous, or if you do things that are bold or controversial, the press is going to write about you. I’ve always done things a little differently, I don’t mind controversy, and my deals tend to be somewhat ambitious.

The final key to the way I promote is bravado. I play to people’s fantasies. People may not always think big themselves, but they can still get very excited by those who do. That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It’s an innocent form of exaggeration—and a very effective form of promotion.

But when people treat me badly or unfairly or try to take advantage of me, my general attitude, all my life, has been to fight back very hard. The risk is that you’ll make a bad situation worse, and I certainly don’t recommend this approach to everyone. But my experience is that if you’re fighting for something you believe in—even if it means alienating some people along the way—things usually work out for the best in the end.

You can’t con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don’t deliver the goods, people will eventually catch on.

Even in elementary school, I was a very assertive, aggressive kid. In the second grade I actually gave a teacher a black eye—I punched my music teacher because I didn’t think he knew anything about music and I almost got expelled. I’m not proud of that, but it’s clear evidence that even early on I had a tendency to stand up and make my opinions known in a very forceful way. The difference now is that I like to use my brain instead of my fists.

Perhaps the most important thing I learned at Wharton was not to be overly impressed by academic credentials.

If you want to buy something, it’s obviously in your best interest to convince the seller that what he’s got isn’t worth very much.

I’m the first to admit that I am very competitive and that I’ll do nearly anything within legal bounds to win.

discovered, for the first time but not the last, that politicians don’t care too much what things cost. It’s not their money.

It comes down to the fact that everyone underneath the top guy in a company is just an employee. An employee isn’t going to fight for your deal. He’s fighting for his salary increase, or his Christmas bonus, and the last thing he wants to do is upset his boss. So he’ll present your case with no real opinion.

This guy was what I call an institutional man, the type who has virtually no emotion. To him it’s purely a job, and all he wants to do is go home at five and forget about it. You’re better off dealing with a total killer with real passion. When he says no, sometimes you can talk him out of it.

The point is that despite what some people may think, I’m not looking to be a bad guy when it isn’t absolutely necessary.

good publicity is preferable to bad, but from a bottom-line perspective, bad publicity is sometimes better than no publicity at all. Controversy, in short, sells. So, it turned out, does glamour.

I have an almost perverse attraction to complicated deals, partly because they tend to be more interesting, but also because it is more likely you can get a good price on a difficult deal.

When you’re negotiating with people who’ve been promised the world a half dozen times and gotten nothing, credibility is critical.

What I needed was someone totally competent, totally honest, and totally loyal to oversee the project. There is nothing to compare with family if they happen to be competent, because you can trust family in a way you can never trust anyone else.

One way we stood to save money was from something known as value engineering.

The second way we saved money was by producing very complete plans, so that contractors could bid on every aspect of the job.

For me the relevant issue isn’t what I report on the bottom line, it’s what I get to keep.

I have a very simple rule when it comes to management: hire the best people from your competitors, pay them more than they were earning, and give them bonuses and incentives based on their performance. That’s how you build a first-class operation.

I wasn’t running a public company, so I didn’t have to worry constantly about Wall Street and shareholders and the next quarterly-earnings report. The only person I had to please was myself.

Often, the easiest part of a deal is price. It’s all the other points—in this case, guarantees about construction completion, responsibility for defects, size of deposit, allocation of expenses between contract and closing—that end up creating problems and killing deals.

You don’t act on an impulse—even a charitable one—unless you’ve considered the downside.

To me, committees are what insecure people create in order to put off making hard decisions.

When it comes to making a smart decision, the most distinguished planning committee working with the highest-priced consultants doesn’t hold a candle to a group of guys with a reasonable amount of common sense and their own money on the line.

The jury system is designed to ensure the fairest possible trial. The problem is that a pool of randomly selected jurors isn’t necessarily qualified to make judgments on complicated issues. Sometimes that isn’t bad, particularly if you have a case that’s weak and a lawyer who is very persuasive. The problem is unpredictability. You can have a great case and come out a loser, and you can have a terrible case but come out a winner.

If there’s one thing I’ve learned from dealing with politicians over the years, it’s that the only thing guaranteed to force them into action is the press—or, more specifically, fear of the press. You can apply all kinds of pressure, make all sorts of pleas and threats, contribute large sums of money to their campaigns, and generally it gets you nothing. But raise the possibility of bad press, even in an obscure publication, and most politicians will jump.

Bullies may act tough, but they’re really closet cowards. The only people bullies push around are the ones they know they can beat. Confront a strong, competent person, and he’ll fight back harder than ever. Confront a bully, and in most cases he’ll fold like a deck of cards.

The truth is that unless you design a project to be self-supporting as you build it, you risk getting eaten alive before you’ve turned the corner into profit.

In developing real estate, it’s a whole different ball game. You can budget building costs, but you can’t truly project revenues, because you’re always at the mercy of the market. The variables include how much you get per unit, how long it takes to sell out, and what your carrying costs are along the way. The less you commit to spend up front, the less you’re at risk later.

One of the first things that anyone should learn about real estate—and New York real estate in particular—is never to sign a letter of intent. Years can be spent in court trying to get out of a seemingly simple and “nonbinding” agreement.

Most reporters, I find, have very little interest in exploring the substance of a detailed proposal for a development. They look instead for the sensational angle. In this case, that may have worked to my advantage.

It irritates me that critics, who’ve neither designed nor built anything themselves, are given carte blanche to express their views in the pages of major publications, whereas the targets of their criticism are almost never offered space to respond.

The problem is that when officials in a huge city government stop making decisions, you get the bureaucratic equivalent of gridlock. Dishonesty is intolerable, but inaction and incompetence can be every bit as bad.

If it took making some compromises to get the project moving forward, and the result didn’t undermine the project’s economic viability, I was prepared to make the changes.

I’ve never been tempted to take any of my companies public. Making choices is a lot easier when you have to answer only to yourself.

In my life, there are two things I’ve found I’m very good at: overcoming obstacles and motivating good people to do their best work. One of the challenges ahead is how to use those skills as successfully in the service of others as I’ve done, up to now, on my own behalf.