• Bio

Grant Blindbury

Grant Blindbury has been working in the Investment Advisory industry since 2003 managing assets of affluent individuals and pension plans. Grant earned his bachelor's degree in Business & Economics at the University of California at Los Angeles (UCLA) in 2001. Grant specializes in working with clients approaching or entering retirement and positions them for success by coordinating their most important financial affairs. Grant's goal, as his client’s personal CFO, is to deliver both the financial outcome and experience necessary to accomplish their most important goals. In 2007, Grant earned the professional credential CERTIFIED FINANCIAL PLANNER™ (CFP®). He is president of his local Estate Planning Council and participates in multiple professional learning groups. He is on the Board of Directors for Big Brothers Big Sisters of Ventura County as well as being a “Big” himself. From the outset he was drawn to the client-centric model that fee-based advisory services provided and joined forces with Fields Financial Associates, Inc. He would later partner with the founders of Fields Financial Associates to form FMB Wealth Management. He has been a licensed Investment Advisor since 2003.

FMB Wealth Management does not endorse or recommend any candidates for presidential or any other office. This article is for editorial purposes only and does not serve as political commentary on any candidate’s qualifications for president.

Celebrity real estate mogul, media sensation and now-presidential candidate Donald Trump is probably best known for his enormous wealth and distinctly abrasive personality. In 1974, Trump inherited $40 million from his late father, self-made multimillionaire and developer Fred Trump, along with his father’s real estate empire. In 1982, Forbes estimated Trump’s net worth to be $200 million. Today – although his actual net worth remains a mystery – Trump’s wealth is estimated to be somewhere between $2.9 billion (according to Bloomberg ) and $4.1 billion (according to Forbes ). Other financial institutions – including two separate banks that assessed Trumps assets and liabilities for business loans and the Federal Election Commission’s financial disclosure report – suggest much smaller holdings.

Despite all of the buzz about Trump’s business acumen and wealth – particularly recently during his run for office — it is more than likely that he would have been a much wealthier man had he simply put that inherited sum into a mutual fund of S&P 500 stocks instead, then basically gone on a 40-year vacation. If Trump put the $40 million he inherited from his father in 1974 into index fund-equivalents (the first index mutual fund didn’t exist until 1976), instead of building skyscrapers and taking a chance on casinos, his wealth would have amounted to $3 billion – and without all the drama. If he put his total estimated $200 million wealth in 1982 into a hypothetical S&P 500 index fund, then simply rested on his laurels for 33 years, Trump’s fortune would have amassed to $8 billion today. Now let’s look at what would have happened if Trump had built upon the index-based strategy by simply further diversifying into index funds that track US small companies as well and also blend in International and Emerging Markets indexes; thus creating a more traditional globally diversified portfolio. By taking that one simple next step, his $40 million in 1974 would have amounted to over $10 billion by the end of 2014. Again, if he put his 1982 total of $200 million into a globally diversified portfolio, his fortune would have amassed over $14 billion today. While these figures are hypothetical and are not based on an actual portfolio of specific funds, this is still a compelling lesson in the power of global diversification.

Interestingly enough, there was another well-known businessman who was also worth $40 million in 1974, who did put his wealth into the market. That self-made businessman was Warren Buffett, who is now worth $67 billion. While Buffett’s financial gains are certainly tough to replicate, if Trump had followed in Buffett’s footsteps, his wealth too could potentially be worth a much larger sum than it is today. Even if he had simply put his wealth in “set it and forget it” index funds, his holdings could still be three and a half times as much as his highest reported wealth is today. What Trump may have gained in celebrity status, lifestyle, control, or the illusion of business acumen, he gave up for in actual earnings. Despite Trump’s self-proclaimed assurances that he is, in fact, a skilled businessman, his reported fortune today actually lags quite far behind the market gains over the years, revealing the attractions – but not necessarily the fruits – of active investing. So if Trump could have actually been much wealthier than he is today, why take on all the drama and stress that comes with active management? Why did he not simply relax and watch his wealth mount up on its own through decades of stock market gains?

It all comes down to the psychological attraction of active wealth management. Humans have a tendency to feel like they can control their destiny, and nothing seems more satisfying than skillfully building up a thriving empire or proactively choosing the right stock or asset class. For some, life is about more than maximizing returns. Perhaps it is the illusion of control, the need to have an identity, purpose or power, or maybe they believe they can beat the market on their own. Whatever the case may be, the attraction of active management is often not logical, but psychological.

Few people get to see their name in lights for sitting at home depositing dividends, but for those simply hoping to build their wealth without all the drama, a well-rounded global investment strategy may be the most attractive way to go.