Wisdom of Rich Dad

Rich Dad Education seminars travel to cities around the country with the enticing promise of teaching people how to become rich. But some of its dissatisfied customers say the seminars have done the opposite — and left them in debt.

Sarah Newsome recently graduated from the University of Missouri-Columbia. On top of paying back her student loans, she also now has about $7,250 in credit card debt after signing up for an advanced Rich Dad real estate investment course.

She waited a week to ask for a refund, missing the company’s three-day refund window. Still, she thinks she should get a full refund because she never attended a class. On top of that, when she tried to use the course software that was supposed to identify potential investment opportunities, she said, she didn’t find any local properties in the database.

She had paid $500 to attend an initial three-day Rich Dad seminar last summer. It seemed legitimate enough, she said. After all, it was associated with the best-selling book “Rich Dad, Poor Dad” by Robert Kiyosaki. And on the first day, she did learn some things about real estate.

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Reason #1:

Robert Kiyosaki’s books saved me from a life of struggle during my retirement age. His message was that you have to have passive income from either a business or an investment. I had a business at the time (sole proprietor, not really a business) and thought okay now I need to invest in real estate like Robert Kiyosaki. That was a life changing decision.

Everything he said made sense. Buy property based on cash flow not on appreciation. I started reading everything I could on real estate investing and decided a condo or small single family home make sense as investments.

Reason #2

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In Las Vegas, which has the highest foreclosure rate among large U.S. cities, the wave of defaults that began with subprime borrowers and the unemployed has spread to upscale homeowners who see no point in staying, even if they can afford to. “You feel like a sucker if you’re paying a $5 million mortgage on a house that’s worth $2 million,” says broker Zar Zanganeh.

In the first quarter, 30 homes in Clark County, which encompasses the Las Vegas Strip and surrounding residential areas, with mortgages exceeding $1 million were repossessed by banks or bought by third parties in foreclosure sales. That’s up from 20 homes a year earlier, according to ForeclosureRadar, a company that tracks defaults. Short sales, in which the bank agrees to accept less than the loan balance, and bank-owned properties accounted for about three-quarters of all home sales in the period, according to the Greater Las Vegas Association of Realtors.

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I have to say that this is one of my pet peeves. What the heck is up with real estate gurus hawking tele-seminars, webinars, bootcamps, courses and seminars of other gurus? I mean really – don’t they make enough money selling us their own stuff?

It seems lately that I am getting more and more emails from well known “gurus” that are promoting someone else all together! I have to tell you that since I am in this business and have my own real estate club – I know exactly what they are up to and I think it stinks to high heaven.

It’s only about the money baby. It’s never about them caring about you so much that they “don’t want you to miss this opportunity to see/hear ‘their good friend’…blah blah blah.” That’s just malarkey! The biggest culprits of these shenanigans seem to be those who have the biggest rip-offs to sell. Yes – believe it or not there are gurus out there selling overpriced junk as “educational product”. There I said it! (I hope I don’t wake up with a horse head in my bed tomorrow.)

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When I started investing in real estate in 2001 I had two main objectives: get my money working hard for me so I didn’t always have to work hard for my money AND create multiple streams of passive income.

Holding rental properties seemed like such a simple way to create passive income. Buy a house, put a tenant in there, and collect rent. Easy as making a pie. Or so I thought.

And, you know what? It actually is pretty simple. And it’s definitely enabled myself and my husband Dave to enjoy a lot more freedom than any job ever could. We are making money from our properties each and every month and each property grows our wealth a little (and sometimes a lot) each year. Once upon a time we would have said we are earning thousands of dollars each month in passive income, but we no longer do.

The problem with pursuing “passive income” is that you’re telling yourself you don’t have to do any work to make that money.

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Traveling is sexy, especially if you don’t do it very often. That’s why I was so excited to attend my first real estate investing seminar. I would soon learn everything I needed to know about how to get rich investing in real estate AND fly across country to do it. Okay, Phoenix to Denver isn’t exactly across country but it was still exciting nonetheless. The icing on the cake was I got to stay at a Holiday Inn – can you say free continental breakfast? Yes, I was a real jetsetter.

It was 2001. I’d just finished reading Robert Kiyosaki’s book Rich Dad, Poor Dad. His message was very clear – the only way a regular guy like me could achieve financial freedom was through real estate investing.

So I did what most newbie real estate investors do. I went online and found a weekend seminar. I spent money on airfare, a hotel room, meals and ground transportation. I listened to 8 different speakers in two days. By the end I dropped $600 on a lease/option tape set and another $600 on a foreclosure course.

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