This was pitch night for the Rich Dad Poor Dad three day seminar, and I decided to take my 17 year old daughter to the free “basic training class.”
Of all the wealth building schemes, I think Robert Kiyosaki’s Rich Dad Poor Dad makes the most sense. Speaking as one who has done several “no money down” deals, one of which has yielded me value of over $20,000,000 in less than 10 years, I believe his simple principles are generally valid.
I counted 100 attendees. The pitchman was friendly, and the presentation was relatively low key. I believe he had at least two shills that I could identify but that’s expected for the Get Rich Quick business. The overriding principles of achieving cash flow in Kiyosaki’s world are:
- Opportunity
- Knowledge
- Action
The seminar, known as the “Rich Dad Poor Dad Academy” is a 3-day affair, and the price (discounted 50% of course for tonight) was $495. He compared it to Robert Allen’s $1,500 and Trump’s $3000. The Academy is purported to 1) present methods of discovering opportunity with reference books and guides, and 2) teach some procedures for buying properties for no money down. Nothing unique here. Carleton Sheets is yawning.
He showed a video example of a young couple who bought a house for no money down, and re-sold it 6 weeks later for a gross profit of about $26,800. Here are the numbers, by memory:
- Asking Price $240,000
- Purchase Price $210,00
- Flip Sales Price $258,000
- Gross Profit $48,000
The couple reportedly obtained a hard money loan (individual investor loan) for $210,000. Now, let’s look at the cost of goods sold beyond the purchase price:
-$ 4,200 loan fees (2 pts)
-$9,800Upgrades/remodel
-$1,200 closing costs
Reported net profit $26,800
So, this previously pennyless, young couple living off the husband’s pizza delivery income put $26,800 in their pocket in 6 weeks?
I don’t think so
The fallacy is the hard money loan. NO ONE is going to loan her essentially 95%-100% market value for 2 pts, and I guess that was an interest free loan for 6 weeks? I am always in the private loan business for good circumstances, and for that deal I probably would have nailed her for 5-10 pts. and half the deal. She had to have a partner, being inexperienced and with no cash or collateral. My guess is they got thrown $5,000, maybe even $10,000, which is fine for them, but not $26,000 to them.
I had a little problem with the Rich Dad pitchman’s next topic, himself. Probably LDS like so many of the no money down guru crowd, he said he worked for Robert G. Allen in college, then started flipping houses. That makes sense. But then, he told of us his latest “coup,” an area development agreement for “the ENTIRE states of Maine, New Hampshire, and Vermont” for a Mexican QSR franchise! His reasoning was that the cost was $450,000 per store, and that Qboda and Chipotle both do about $1,450,000 in volume, and that at 1xgross he would be making$1,000,000 per store and that was a “no brainer.”
My ass it’s a no-brainer! I have been a strip mall developer for 30 years and trust me, NO restaurant is a NO BRAINER! 1x gross valuation is accurate, but only on stabilized volumes and it’s highly unlikely that those stores will do those volumes in those areas, even if they are run perfectly. So, the limited credibility he had went out the casa with that one!
Finally, I was watching for conversions. I would guess it was pretty strong, possibly 25%. Do the math. 25 x $500 = $12,500 x 4 seminars = $50,000 gross for our area and that’s a very generous estimate.
For the past three days, you could not turn on the radio or TV without hearing a spot for these seminars, nor could you find a local website without RICH DAD plastered all over it. They used affiliate marketing on the net, and I’m speculating that the deal with Kiyosaki was licensing, not a vertically owned enterprise. It looks like Russ Whitney is involved as well, and he’s got quite a history. If interested in this no money down, get rich quick real estate seminar topic, here’s some recommended reading. I’m guessing there was an easy $25,000 in promotion. That leaves $25,000 left to pay the bills.
$25,000 less
- License fees
- Pitchman’s cut
- Support staff
- Hotel meeting room; 4 seminars, 2 hours each, plus a 3 day meeting (includes a lunch)
- Materials
My guess is that if the promoters netted $10,000 from this deal they’d be lucky. As repetition is the engine of creating an annuity, one could argue that repeated twenty times a year there’s $200,000 in profit, and that’s probably the case, BUT….wouldn’t it be less risky and much less work to flip eight or ten houses, at $25,000 profit each??
You make the call. Is the Rich Dad Poor Dad 3 day seminar worth $500? Maybe, for some, it could be. I’m a huge proponent of education and training, and have spent that sum and more many times for legitimate seminars and conferences and have never felt like I was ripped. As a frequent speaker at regional and national shopping center seminars and conventions, I want to offer supreme value for the attendees’ time and money and I think we do. If you have no background whatsoever in real estate dealings, it’s probably not a bad deal, and at least Kiyosaki hasn’t gone bankrupt (to my knowledge) like so many of the “mega successful” gurus.
In reality, the “secret” to making money in real estate is no secret at all.
It’s exactly what Kiyosaki says in his original book, Rich Dad, Poor Dad: Opportunity, Knowledge, and Action. Where most people fail is not implementing the 3rd step–not taking action.
Subscribe to LocalCenters.com ,consider attending quality real estate seminars and conferences, and you’ll learn everything you need to know, and then some. Read the articles, ask your questions, even request articles on specific topics, and soon your ability to move forward with your retail or development goals will become greater than 95% of those who don’t invest their time as you are. While we don’t address residential properties to a great degree, the principles are the same as in commercial real estate.
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{ 16 comments… read them below or add one }
Hey people, I am a sophomore in high school in Knoxville, Tennessee and I will be attending this 3-day seminar with my dad this Friday, Saturday, Sunday. As I expected the seminar to be great, after reading the comments above I found it kind of flattering to some people who said that it would be a rip off paying K’s amount of money for more advanced training. Well as I high school student, I foresee the world that the people who are limited in as a high schooler. Way before in my life I thought I wanted to be an orthodontist or medical field area job. I had completely ignored the idea of businesses and real estate. I thought it was boring. After reading the first series “Rich Dad Poor Dad” it had changed the paradigm concept in my brain thought that was very enticing to me. I really before hand thought of being someone in the medical field like an orthodontist would be fun but not as money making, but to real estate I had found the ideas of becoming rich instantly. I had got more interested and had continued to read the series of rich dad poor dad and read the book “why you want to be rich” by both the biggest real estate developer and investor Donald Trump and Robert Kiyosaki. I had definitly got more interested and that is why I had attended that seminar that held in my city, which lead to me to attend the $495 3-day seminar with my dad. My dad is also an open minded person, he seeks new ideas to live life too which is great having him with me for support on this subject.
I also besides real estate investing thought of other ways to make “big” money. Investing into the “Iraqi Dinar” is a big one also. I have recently bought dinar for a relatively cheap price. The dinar that I bought now would be worth 3X the American Dollar about 10-20 years ago. Since then, it fluctuated to a real cheap price $1USD=1206IQD currently. But researches say that the dinar will probably not reach that mark again but it will definitely someday reach up to the 1/1 mark.
Well that is all I got to say for right now. I will post again how the experience goes during this 3-day seminar this friday and please leave comments for me and questions! Thanks!
D Hu
I attended today and loved it! I decided not to attend or buy the 3 day seminar, but the free seminar had great info. I went to look for industrious, hardworking partners wanting to help me with global expansion. I met great people and we will see. If you know anyone that wants to work hard for 1-3 years in order to have finanacial and time freedom , let me know. The best! But, I loved today! I love RK!!!
I initially discovered the RDPD phenomenon about 6 months ago when I found a copy of the first book and read it. The book was inspiring for me for several reasons but I immediately recognized it’s double use as an advertising tool for other products, notably the Cashflow games. I continued to explore by reading most of the other published works by Kiyosaki and his RDPD collaborators including “Why we want you
to be rich” written with Donald Trump. After reading several of the books I ordered Cashflow 101 and admit that it is a challenging and very fun board game to play – where as I despise the boredom of Monopoly, Cashflow delivers on it’s promise of excitement coupled with education benefits.
Several weeks ago I attended a free 3 hour training expecting a sales pitch but curious to hear about the RDPD education and also anxious to get some idea of the real effort involved in applying the RDPD principals and strategies. The entire 3 hours is a hard sales pitch, but it was enjoyable enough to sit through. Needless to say I ponied up the 490 dollars to attend the 3 day training understanding that I knew very little about real estate and knew that I needed a look behind the curtain so to speak. After signing up and charging the 490 dollar “doodad” I was presented with my “free” guide to real estate investing and the 3 step guide to financial freedom book, as well as some other reading and CD / DVD products. The materials are well presented and very informative, but nothing ground breaking for anyone with personal finance savvy, and nothing that can’t be substituted for at a local book store.
Before attending the 3 day seminar I set a limit for myself, knowing that it too would involve a salespitch, that I would not impulsively purchase any thing else if the cost was ridiculous or the product was not measurably tangible from the outset.
Having just attended the 3 day event I must say the introductory level training was worth every penny of my 490 dollars with my only caveat that I have only a very basic understanding of Real Estate. For someone at my level the course was most likely valuable. But a real estate agent that was at the same seminar admitted to me openly that they already knew everything we had learned up to that point of the program. The age and experience level of the class varied and nobody seemed overtly unsatisfied.
One who attends this 3 day seminar should expect a broad stroke introduction to several real estate investing subjects, including financing methods, wholesale tactics, foreclosure process, due diligence, etc… However it is emphasized over and over that to be successful one needs intensive training in each of these subjects. This of course is where the sales pitch for more advanced training comes in. In addition to the training that you do receive, and I re-iterate that you do receive good training at this seminar, you get to play Cashflow 101, meet new people with similar interests, and receive more literature and information to study on your own.
Anyone who has read the RDPD books is very aware of and familiar with the concept of the “rich” mentality vs the “poor and middle class” one. During the sales pitches, which are a continuous part of the 3 days, this “mentality” becomes a tactic. This is where I began to detach from the experience and hastily put down my glass of “kool-aid”. I felt it was a tad insulting to use the validity of the RDPD message in it’s inspiring context as a subtle manipulation to get one to do such things as consider credit cards “investor card” and then attempt to convince one that investing in education is the only way to succeed. Not that this is inaccurate, but once you are presented with the pricetag of the advanced training the ploy becomes blatantly obvious. The advanced training packages, consisting of more weekend seminars, vary from 2 to 8 training events for prices ranging from 9K to 65K. I am not exaggerating when I say that the speaker / salesman suggested that people could take money out of their retirement savings to “invest” in these classes. It quickly becomes evident that it is ridiculous to expect to learn the complex advanced subjects at a 2 or 3 day weekend seminar with a price tag in the neighborhood of 3K to 5K each. In addition to the audacity of the inflated prices the speaker made several claims regarding the company owner (which is not Robert Kiyosaki) as well as herself which were easily refuted with some online research. It is worth mentioning that on the first day the class was encouraged not to use Google to look up unreliable internet information. My unreliable Google search netted a NY Times article about the Wealth Intelligence Acadamey’s owner – Russ Whitney – which was far from an unreliable Google search. There was other information and claims that I disproved and/or could not substantiate that I wont waste time on – by now you should get the point.
As I had agreed I walked away at the end of the three days without “investing” in my future – But I did it with no credit card balances and still have my life savings in it’s account where it belongs. The WIA / RDPD crowd may now accuse me of “thinking on the wrong side of the quadrant”… however I was confident that I could afford to pass up their generous opportunity because while I was using the internet to look for unreliable information I found several alternative sources for RE investing classes, mentors, and opportunities with much more realistic price tags. One of these is the Non-Profit organization the NREIA – I am not currently affiliated – but I do recommend one look at the website if they are interested in RE investing in any capacity.
I’ll part by saying that my overall experience was very positive and that I am pleased with the service I received for my 3 day introductory seminar. I came away with a wealth of information about Real Estate and investing that I didn’t know existed, and with the motivation and plan to seek out more training. The experience was life enhancing and horizon expanding.
I have taken Rich Dads lessons to heart and recognize their value in learning how to think progressively about financial security. But I learned some lessons from my Poor Mother that are worth mentioning here – and that is that some elbow grease is what it takes to get things done. AKA – apply yourself. If you can afford to pay premium prices and feel that a few days will get you where you want to be then the Russ Whitney / Kiyosaki team is a good choice. If your realistic, use some sense and shop around for something less manipulative and more reasonable.
Best of luck.
rbt thanks for th einfo, i will be attending the 3 day class next week and i am grateful for your review.
D Hu
March 26th, 2008 at 1:59 pm
“Well that is all I got to say for right now. I will post again how the experience goes during this 3-day seminar this friday and please leave comments for me and questions! Thanks!
D Hu”
So?….I am waiting….so you were scammed too? There is my question…
re: Rbt’s comments
Your review was very timely in the scheme of things for me. Like you, I happened onto the RDPD book and branched out into a few of the other books including the one in collabo w/ Trump. They were inspiring in that they all had slightly contrarian views to money (think: most parents teach their kids to study hard so they can get a good job, but still end up living paycheck to paycheck), and offered a glimpse, albeit rather fuzzy, into a way out.
I was slightly slower in my approach, in that last year, I attended a free seminar, knowing full well that I would hear a sales pitch, but going nonetheless, committed not to be sold. However, the RDPD company stayed in touch with me, and when the seminar came around again last night, I went again still in the minds-set of just refreshing those inspriational ideas. This time, I pulled the trigger. I’m not sure if it was all the gimmicks (think, the “take action” part, where someone runs up to get the dvd, or the heavy dose of contrarian rhetoric, think “how many of you learned to disect a frog in school”?), but, by the time the pitchman, Mr. Paul Figurski, got to the “go sign up for class” part, I was in. Fortunately, this is also when my need for confirmation instinct kicked in, so I straightaway began doing some background checks on both the seminars and the people involved. I tried to keep an open-mind while reading, knowing that different people respond to things differently, yet, repeatedly, the evidence was overwhelming that the material being taught, while potentially useful, was in the wrong hands: teaching folks how to increase their credit limits so they can purchase more classes is not in their best interest. The kicker as you might say, was the NYTimes article that you described, which was easily found when googling Russ Whitney, and cited devastating examples of zombi-behavior in those that attended the classes. That is when I realized that there is a reason, I was immediately uneasy with the whole thing: learning and decision making are naturally events that take time to mature – so, based on the tactics they employed at the seminar, which utilized hyped up emotion/energy and banked on the illusion of scarcity (limited class spots), the instructors were espousing group-think, which actually more frequently leads to being personally lost and not self-digestion, which can lead to intellectual independence.
To conclude, I don’t part with any ill-will towards RDPD, b/c I do believe that their concepts if aptly applied, can lead to succesful results. Where they begin misleading you, is the process. Kiyosaki, I believe is an ideas/dreams peddler. And, like the many who have come before him as well as the others, certain to follow, they prey on the mutually shared dreams as well as areas of discontent (being dis-satisfied with your job, lack of family time, etc) to exploit the natural human desire of wanting to think that one is better than others.
The million dollar question that others have asked and that I will repeat in parting is: how much of their respective fortunes, b/t kiyosaki and whitney have been from real estate and how much of it is from these get rich seminar empires? The answer to that should tell you all you need to know about where you should place your dreams…(you may need to be the next one in line to “teach” others how to get rich)
I tried to get a refund! I had to cancell because of a death of my poor dad.I called the academy,faxed the app.,my statement,and info.I believe I should at lease get an email!I know I got hosed!!
Did the 500 dollar 3 day course. Got my moneys worth with a few nuggets but in all you only learn enought in 3 days (thats 3 very long days) to become dangours. Its a big sales pitch to spend 12-65 thousand more dollars in advanced education.
Your not allowed to ask questions during this 3 day class. you can ask the 2 other teachers in the back of the class before after and during breaks.
but 500 bucks… I made it all back on the nuggets he taught us.
but no way could i spend 12k on more.
Yeah college cost double that to get a “Job” but unless RDPD starts up a student loan program… well you get my point.
I am an investor that started with RDPD. I love his books but I don’t like their education program. I thought they were the only source out there but there are so many other good ones where you can get a better value for your information. The one thing I disliked most about the RDPD 3 day seminar was that the company is like a traveling circus. I couldn’t attend the 3 day seminar the week I signed up and they told me it wouldn’t be a problem for me to attend another session. Well, the next session was a week or month later…but in another city. The next year they came back into my city but once again my schedule didn’t allow me to attend. I kept waiting for the traveling circus to come back into my town to attend. Then once you join…your on your own. Sorry, no one from RDPD is there to hold your hand as you try to educate yourself about investing like they say will.
My boyfriend and I attended two days of the RD seminar on stock trading in NYC Aug 2009. Although we did learn some potentially valuable information it was overpriced and I feel they are con artists and it is a big scam. I will say that it did make me feel motivated to do some of the things that I want to do financially. But I was already at this point when we signed up for the seminar. So this was not a total loss, but only because I recognized that this is a scam and what to learn from it. I’m not advocating going to ANY RD seminars. Hopefully we will be able to figure out what information we learned will be valuable to us.
The course instructor spent much of the time trying to bully, insult and sway us into signing up for and paying ridiculous amounts of money for advanced classes($10,000-70,000). And all of this has to be done on the last day in order to get a better rate… which is already way too much money for a 3 day seminar… !!!! Just a drop in the bucket compared to the money you will make with RD “Education” and mentoring. If they are so sure of this, something they keep disclaiming throughout the course and in their literature… why not defer the tuition until we make the money to pay them????
I googled Kyosaki/scam before we went to the free seminar but found nothing… too bad.
Our seminar instructor, Scott Stewart, claimed to be a *very successful* trader, but I could find nothing about him online. He did share a lot of knowledge about trades and trading strategies, his own and the kyosaki system… as well as about his own finances… but due to the crazy stuff(like telling us to increase our credit limits on credit cards, max out our credit and deduct vacations as board meetings in our proposed private trading corporations) who knows what is sound and what is true…??? He also belittled and insulted people who are nøt financially successful and who have previous trading experience, telling 3 traders who attended that they would never be able to be successful with K’s system because of their preconceived notions. I think that much of the information he shared can be found online for free, such as the turtle traders rules which he said they teach in the advanced courses. He said that if we wouldn’t invest $3000 in our financial future( the “tuition” for one of the advanced courses after tax deductions from our “proposed trading corporations”…I’m not sure how he arrived at this number) then we didn’t deserve to be millionaires… lol !!!!!
And tell me why would a successful trader need or want to teach for RichDad? According to Scott, because he loves to teach and share his knowledge and because RK pays him big bucks. But teaching does not include insults and pressure to shell out your money. This would almost be funny due to Kyosaki’s view on education systems which I agree with in part, if it weren’t so reprehensible. Presumably the credit card limit increase was to help pay for the ridiculous price of these 3 day seminars which would make us into millionaires and more? It is important to note that the course prices and access to courses were determined by the size of your portfolio/mutual fund/pension/bank account.
I spoke with a father and son who lived near us… the father has spent $30,000 on real estate courses… I don’t know if he made any profit yet but he said he was investing with the big wigs now and had met K briefly I think. Another woman had lost her money, paid off her debt and was now recovering… I hope that she doesn’t give RD any more money. We were encouraged to change tables and network, especially if we were doing advanced classes… if we didn’t take the advances classes then we would “NEVER” be traders… lol.
My boyfriend and I never did the encouraged private sessions with the advisors, I suspect these are probably designed to see how much money you have, but we did speak with Jose, who said that he had not made a lot of money trading, and that if he had he would be on an island somewhere not here giving a seminar… lol !!! I overheard Scott telling one of the advisors on day two that someone was causing trouble, maybe one of the traders, by telling everyone what to do and could they figure out how to deal with that…NOT A GOOD SIGN !!!!
From what I’ve now researched, I learned that Kyosaki has apparently never made any money in real estate or trading, but in selling books and ware and promotional talks. I also found that Whitney Information Network Inc., one of the companies associated with RichDad “Education” made, according to their financial statements/reports in 2008 $39 million in gross profits. They advise against buying their stock as RD is having a problem with them and may stop association with them and they’re being investigated by the SEC and DOJ. K is associated in some way with Amway and the Morman Church had a warning article about RichDad Seminars… pot calling the kettle black!!!
Bottom line is… these people want your money, they want lots of it, and they’re using time honored sleezy and ugly tactics such as psychological warfare to try and get it… they don’t give a rats ass about your financial future or welfare. BEWARE !!!!
I paid $495 to go to the RDPD seminar in Ontario, CA from 092209-092409. Is there anyone can give me an idea before i attend this training session on what I should be looking for or looking out for. Is this just another real estate sales gimnick or is there a true opportunity to make some good honest money without ripping people off? I do have a conscience and I would never want to take advantage of anyone trying to make an honest living or seeking knowledge and understanding.
Thank You!!
i went to that free seminar and that is was a total scam, things paul said he would cover he never did and then when he pitched the 3 day school he some how just disapeared out the back door never to come back and go over some material he said he would,,
Thanks for the infor, I’m takeing the 3 day
class next weekend
http://www.cbc.ca/marketplace/2010/road_to_rich_dad/main.html
This report says it all
Although I do not agree with all you’re saying, I must confess I do enjoy your method of writing.
Hi all, I have read rdpd books which I have to admit they are inspring, which is a great thing. I too paid the 500 for the 3 day seminar there were four of us total. so we spent $1000.00.
I have no real estate background so i feel the money i personally paid 250 cause we all split the cost. i think it was worth it.
The turn off for us was when tehy spent from 3 in the afternoon till 7pm trying to sell you the 12k to 67k plans was discouraging. We felt that they took too long to some how convinse us about it. Was a dead giveaway for me and my guest.
another turn off was today toward the end of the day while we got to play cash flow when the speaker came up to us and asked why we hadnt gone up and we said we didnt have that kind of money how in less than a second he left our table without looking back and when leaving shaking his hand trying to say that i enjoyed what i learned he didnt even to bother looking me in the face when he said great. I guess i should of committed. NOT.
I wish everyone luck and wealth for any to pursue their hopes and dreams. for i will try to do it myself. Peace out to all…
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