This Issue: Owning a Business is Your Road to Success

“The bigger your business, the bigger your life, the bigger your problems are likely to be. Being prepared for that will save you a lot of emotional turmoil . . .”  - Donald J. Trump

I feel strongly about the importance of wholeness. It's a combination of all the components of life that make us healthy, happy, and productive. To my mind, the opposite of wholeness is failure. If it happens, and sometimes it does, the best remedy is to move forward, to realize that failure is not permanent, and to immediately focus in the right direction. Ultimately, a solution will show up.

I don't mean to sound like a faith healer, but there is something profound and yet simple about viewing failure as a lack of wholeness. I will also add, it's effective. Believing that a negative situation is temporary and wrong will give you the impetus to do something about it, to feel righteous and energetic about fixing it. Being unhappy and unproductive is simply not part of my game plan, and it shouldn't be part of yours, either. See a situation as unacceptable, as taking you away from wholeness, and you will be motivated to get out of it as quickly as possible.

When I had a financial setback in the early 1990s, I saw it more as an aberration from the norm than as a final sentence. I knew what it was like to be whole, and all I had to do was get back to that place. I felt that a comeback was what was expected of me, and I expected it of myself. All I had to do was take the next step and get my momentum going again, which is what I did. It didn't happen overnight, but eventually things started to sort themselves out.

I've seen some people get completely swallowed up by failures. The worst thing you can do to yourself is to believe that bad luck is your due. It isn't! It's not just intelligence or luck that gets us places, it's tenacity in the face of adversity. Some people see problems as bad luck, but I don't. Problems are a part of life and a big part of business. The bigger your business, the bigger your life, the bigger your problems are likely to be. Being prepared for that will save you a lot of emotional turmoil, unnecessary deliberating, and even illness.

I've known people who have come back not just from adversity but from tragedy. There's adversity and then there's tragedy. Thinking about both is a good way to get an objective view of what you may think your problems are. Your situation may be tough, but you can bet others have had far worse things to deal with. One way to pave your way for a comeback (or for a first victory) is to read about people who have been courageous against long odds. My guess is they felt they had an obligation to succeed, and in some cases, an obligation to survive. That's how I feel. I had the privilege of a great family and a great education, and I am serious about honoring those privileges -- which means expecting the best from myself.

You can have the same attitude, no matter what your situation or background. When failure comes your way, you must believe that you matter, that you can overcome it, and most importantly, that success is what is expected of you. You'd be surprised at what you can accomplish when that's your attitude. It's not just survival, it's not just success, it is your obligation. A sense of duty toward wholeness will go a long way toward your personal and professional success.

What I learned at the time of my worst financial problems is that I was resilient and that I had this indomitable sense of success that couldn't be taken from me no matter what the newspapers said. That brings me to another level of thought, which is faith. Faith is a bit like wisdom. People can help you along the way with it but above all you have to develop it yourself. Faith in yourself can prove to be a very powerful force. Work on it daily. Sometimes when you're fighting a lonely battle, keeping yourself company with positive reinforcement and faith in yourself can be the invisible power that separates the winners from the losers. Losers give up.

In summary . . .

Strive for wholeness, believe in yourself, keep your momentum at full throttle, and be strong and tough in your resilience. Don't expect anything less than that from yourself, and I can assure you that success will become a permanent situation for you, even when your external circumstances may not show it.

Never Give Up!

This article is adapted from Trump Never Give Up: How I Turned My Biggest Challenges into Success, the new bestselling book by Donald J. Trump, published by John Wiley & Sons.

Robin is a cosmetologist and massage therapist who recently began investing in real estate in hopes of supplementing her income. Robin is enjoying a comfortable lifestyle from her full-time job, but is basically a sole proprietor who leases space from a salon owner. Additionally, as a sole proprietor, she has few, if any benefits. Seeing that she needed to establish her own benefit plans and residual income, Robin began investing with a coworker who took real estate investment courses with her. Additionally, the salon owner, who didn't understand real estate investing, agreed to invest cash to help fund the deals that Robin and her coworker would find and put together.

Since they were all “pals” from work, the ladies had no formal entities or agreements other than their word for each of the deals. They basically operated on a “hand-shake agreement” whereby each received a portion of any of the cash flow from each investment, depending on how much work or cash they had put into that deal, respectively, and their ownership percentages varied accordingly.

In addition to partnership with her pals from work, Robin had taken some of her extra cash from the real estate deals and had begun “flipping” a property or two every year. The other two ladies weren't really interested in this venture, but Robin and her 12-year-old son Dean really enjoyed finding, fixing up, and selling properties.

Since they got along well and seemed to have a knack for finding properties that gave them at least a small cash flow, Robin and the other two ladies were perfectly happy with the hand-shake agreement that they had.

After being in business for a few years, Robin realized that not only was she personally liable for her investments, but for the liability of her two partners as well. She also realized that they had no buyout or right-of-first-refusal agreements if one of the three ladies wanted or needed to get out of a deal. Robin was relatively frugal and quite the saver, and she realized that her wealth was threatened by her fellow investors' debt.

After Robin's realization of how much her assets were at risk, she came into my office asking how she should structure her wealth and business dealings so as to provide the best asset protection, tax reduction, and estate planning benefits possible.

Our first job was to identify the holes in Robin's business structure and suggest ways to rectify the situation. We quickly discovered that Robin, individually, and together with her two pals, had by default set up the two worst types of business structures--the sole proprietorship and general partnership. Our next job was to help Robin restructure her business and personal assets.

Before even trying to counsel Robin on asset protection issues, we first had to think about estate planning because she was also a single parent. Accordingly, we set Robin up with all the essential estate planning tools.

Next, we next attacked her asset protection woes. Each of the properties owned by Robin and her two pals in the general partnership were fairly new purchases with little or no equity. Therefore, we decided to put the four properties into two LLCs.  Additionally, we executed specific operating agreements for each.

That’s not all. You can read the whole story in my new book, Trump University Asset Protection 101: Tax and Legal Strategies of the Rich.

My goal in writing this article for you today is to raise your consciousness about the dangers of establishing business entities with nothing more than a shake and a smile. To protect yourself, your family - and your business - you need to apply the latest strategic thinking and advice.

If you have read my articles in Inside Trump Tower and on the Trump Blog, you already know that I am Trump University’s expert on buying businesses. But that’s not all. I am also America’s biggest champion for the idea that buying a business, not starting one, offers the speediest and surest path to entrepreneurial riches.

Let me boil it all down for you by offering my reasons here . . .  

1. When done right, buying a business lets you achieve returns of 25 to 33 percent on your cash investment. Try getting that consistently in the stock market.

2. Unlike a job, there is no limit to how much money you can make.

3. There are enormous tax benefits when you own a company that you cannot take advantage of as an employee.

4. As you grow your business, the value of your investment will build exponentially.

5. Since you will be inheriting an infrastructure, you can take as much vacation as you would like. Try doing that with a job!

6. For every dollar of growth that you generate, you will get back three times or more when the time comes to sell the company.

7. You can acquire additional assets that complement your business - such as commercial real estate - and cover all the costs from the cash flow of the business.

8. From a tax perspective, the bulk of the business’ appreciated value can be taxed at favorable capital gains rates when you ultimately sell the business.

Want to know more about achieving significant success by becoming your own boss? Then take the next step and learn more about my Trump University course, The Art of Buying a Business.