First, let’s go back in time to the 1920s. Picture a massive estate built by Marjorie Merriweather Post, one of the richest women in the world, nestled in Palm Beach, Florida. She named it Mar-a-Lago, which means “Sea-to-Lake” in Spanish—a nod to its unique location stretching from the Atlantic Ocean to the Intracoastal Waterway.
Mar-a-Lago became a playground for the elite, hosting parties that rivaled those in The Great Gatsby. From the 1920s to the 1940s, anyone who mattered in American high society came through its doors. It wasn’t just a home; it was a symbol of extravagance, culture, and influence.
Fast forward to 1964. Marjorie, preparing for her passing, decided to gift this treasure to the U.S. government. Her vision? To make Mar-a-Lago the “Winter White House.” It sounded like a dream come true for the nation, but there was one major problem: upkeep. The cost to maintain the estate was staggering—$250,000 a year in the 1960s. After a few years, the government said, “Thanks, but no thanks,” and handed it back to her foundation.
For years, Mar-a-Lago sat in limbo. Few buyers could handle the expense of owning such a grandiose property. But then came Donald Trump.
In the early 1980s, Trump set his sights on the estate. At first, his offers were rejected. So, he devised a strategy. He began purchasing nearby properties for over $2 million, subtly lowering Mar-a-Lago’s appeal to other buyers. The tactic worked. In 1985, he acquired the mansion for just $7 million—a steal even back then.
At first, Trump used Mar-a-Lago as his private residence, but the estate came with a hefty price tag. Maintenance alone exceeded $1 million annually, putting a strain on even his considerable resources. That’s when Trump had an idea: Why not turn this massive liability into an income-generating asset?
In a bold move, Trump proposed transforming Mar-a-Lago into a private club. After securing approval from local authorities (with the condition that he preserve its historical integrity), he invested heavily in renovations, adapting the mansion to suit its new purpose. Trump even bragged in his book The Art of the Deal that he saved money on the remodel by negotiating discounts on chairs and furnishings.
The result? A members-only club that became the pinnacle of exclusivity. Wealthy individuals from around the globe paid steep membership fees for the chance to rub shoulders with the rich, powerful, and, of course, Donald Trump himself.
By the time Trump became the 45th President of the United States, Mar-a-Lago’s status skyrocketed. Membership fees surged, and the club began generating around $40 million annually. What started as a costly liability had transformed into one of Trump’s most iconic—and profitable—investments.
Today, as Trump reclaims his role as the 47th president, Mar-a-Lago stands as a testament to strategic thinking. What can we learn from this story?
- Spot undervalued assets: Trump saw potential in a property no one else wanted.
- Leverage location: By buying nearby properties, he created a favorable buying scenario for himself.
- Reimagine value: Transforming Mar-a-Lago into a private club turned an expense into an income stream.
So, the next time you encounter an asset with potential, ask yourself: How can you transform it into a wealth generator?
Let me know in the comments if you’d like me to cover more stories like this.
I’m Francisco, PhD researcher and MIT innovator. Subscribe for more tips on global investing.