Like many people interested in broadening their financial perspective, I purchased a copy of (the very popular) “Rich Dad, Poor Dad” by Robert Kiyosaki and Sharon Lechter (I found out later that Ms. Lechter sued Kiyosaki - they're not friends any longer.) I liked the common-sense style of the book and how Kiyosaki talked about controlling greed and fear - and also how important it was to give to others. I thought this "altruistic" and perhaps even "zen" perspective was rare in business books. I found myself trusting in his opinions and advice due to this seemingly-caring perspective for others. When I discovered that “Rich Dad” was having a free seminar in my city I thought I’d check it out to see what it was all about.
The seminar consisted of a slick-talking moderator that played videos of Robert Kiyosaki spouting much of the same info in his books. [continued below]....
..... But then Kiyosaki went further, explaining that Real Estate was how he made his money and he could show us how to do it. So, silly me, I believed him and signed up for the $500 “Rich Dad Learn to Be Rich Seminar.” I only wish I stopped there and just wasted $500. That would be nothing compared to the Nightmare I lived through by following the “Rich Dad's” advice.
This $500 seminar started on a Friday and lasted through the weekend. Although there was a lot of “information” given at the seminar, it was ostensibly presented. The real objective of the event was to up-sell the attendees much more expensive “real estate training courses” ranging in price from roughly $15,000 to $75,000.
The speaker at this seminar, Lee Escobar, was a very talented public speaker, personable and professionally charismatic. He also advertised his background as a minister, informing the attendees that he was under a moral obligation to be completely honest with everyone as to the claims he’d be making.
During the three-day seminar, Mr. Escobar engendered the trust of his audience through his people skills and spiritual innuendo – while continually touting the popularity and “trustworthiness” of Robert Kiyosaki, whose trademark, “Rich Dad,” was used to brand and sell the seminar.
The company Mr. Escobar was actually working for was Wealth Intelligence Academy (WIA) (and now called Tigrent, Inc). Although the attendees were given some “Rich Dad” books and materials, it turns out the “system” Mr. Escobar was selling was actually Tigrent’s system and not “Rich Dad’s.” But students don’t learn this until they actually take a class, however, a careful eye is needed since the licensing partnership between “Rich Dad” and Tigrent is often visually seamless.
Both my wife and I, along with a few other seminar attendees decided to purchase a “real estate training package” based upon the amazing advertised claims presented as well as the assurance that “Rich Dad” a.k.a., Robert Kiyosaki is well known and a trusted person to “do business with.” We paid a total of $26,104.33 upfront for the training (not including the $500 we already slapped down.) After all, they told us that it was better then a college education due to the amazing secrets we'd learn... stuff that college just couldn't teach because it was for the masses.
What we sadly came to realize many months later was that this seminar was filled with so many false advertizing claims that it was clear we were victims of blatant false advertizing (fraud.) Plan and simple, we were “scammed.”
Most of the claims that were made about what we'd learn when we purchased the seminar package were complete lies. I now know why we were not allowed to record the seminar – it would have made a lawsuit against them too easy (as CBC Marketplace has recently revealed with their secret recordings.)
During the sales seminar Mr. Escobar mentioned that we would not find any complaints about the WlA’s real estate education courses on the Internet – but that we’d only find complaints about his class. His point was that the actual course was so good that nobody complains… and sure enough, he was right. At the time I couldn’t find any complaints… after all, I wasn’t a total sucker, I wanted to do some research into the company before taking such a huge financial risk!... But what he didn’t tell us was that the company was formally called Whitney Information Network and “tons” of complaints and charges had been brought against it – and that was the real reason that “no complaints “could be found against WIA… not because they were a good company… but because they changed their name! The company purposefully changed their name to “clear” its reputation… and as I mentioned, they changed their name yet again, now calling themselves, Tigrent, Inc. (This is one of the reasons we created a website for you, called RichDaddyNightmares dot com, so you won't be mislead like we were.)
Here’s an outline of some of the False Claims made during the Rich Dad – Learn to be Rich Seminar:
We were instructed to raise our credit card limits during the class as a homework assignment and were promised that it would not negatively affect our credit.
Wrong. This event alone damaged our credit. It was only later that we learned that this was done so we’d be able to better afford to pay for the course on our credit cards – which we did.
We were encouraged to purchase their course on our credit cards and that it would not negatively affect our credit or negatively affect our ability to get further credit to do the business (after all, credit is extremely helpful in the real estate business.)
Wrong again, after purchasing the course, shortly thereafter we tried to get further credit so we could do the business as they instructed but our credit was terribly damaged by 1) raising our credit limits and 2) purchasing their expensive real estate course. We were forced to liquidate assets in order to do the business we just spent $27K to “learn how to do.” After that my car insurance went up dramatically because it was based on my credit score.
The information in the real estate training course was advertized to be completely “up to date” because it is “constantly being updated by active real estate investors” and thus completely worth the large cost (“unlike less-expensive courses which don’t update their information.”) In fact, they said it was "a better investment than a college education."
Wrong. The exorbitant price we paid for the course did not represent a superior, up-to-date informational course in any way. This selling point alone is outrageous because the course is so expensive; the only reason people are convinced to out-lay this amount of money is due to the superior claims (and the Rich Dad / Robert Kiyosaki name.) $27,000 is a lot of money to risk… and we put it on our credit cards because we trusted in their claims and the well publicized Kiyosaki / Rich Dad name. I now know that the “good” information they teach (I say good, because a lot of the information was dangerous!) can be purchased at Barnes and Noble for $50 in the Real Estate Section!
Here’s an example of some dangerous and “old information” they gave in the course that cost a fortune: Their “wholesale buying class” taught a method of “dry closing” which had become illegal for most all real estate transactions and for transactions it was not actually illegal, no lawyer or title company would do it because it was viewed as a very unethical shady practice and “essentially illegal”. The significance of this is huge because their “secret dry closing method” is one of the main selling points of the whole course – the whole “no money down” concept.
Another example of bad information was found in the Short Sales Class. The Short Sales class we took (online) was absolutely worthless as well as extremely dangerous. The information was completely out of date, didn’t provide all the detailed steps needed to do short sales and of what it did cover, we found out later was completely out of date – but only after we spent over ten thousand dollars (of money we liquated from investments) attempting to do what we learned. The “Short Sales business” had completely changed from what they taught and we later learned that anyone that actually knew what was going on was getting out of it – a fact we found out only after trying to do the business ourselves by following their instructions.
The short sales class and the ability to buy foreclosed properties for cheap to make big profits was a huge selling point of the seminar… to learn that this wasn’t true after taking the class and investing thousands of dollars in Tigrent’s methods in the real world was incredibly damaging to my wife and I, both financially as well as emotionally… and when you broke down the price of that “class” it was around $5000 bucks… this is just insane!... $5000 for outdated (incorrect) info that’s sold as “superior” and “updated by active real estate investors.”
They tell you to “Purchase billboards and heavily advertize and you will be flooded with opportunities. This business is all about advertizing. Big advertizing means big money.”
Wrong. We invested in 6 billboard signs for a year contract, put signs all over our city and the out skirts, put many ads in the paper, on the internet, gave out cards, put car magnets on several vehicles, networked with other investors, etc. etc…. and only received a handful of calls, all of which were not viable leads.
They claimed that “Wholesaling houses” only takes 4 to 6 hours per project and makes you on the average of $5000 profit for that time investment.
Wrong. We spent dozens upon dozens of hours and countless gallons of gasoline and were never able to even complete one sale.
They told us that our city was “a huge market and ripe for the picking. Now is the time! You must buy the course now!”
Wrong. Firstly, see what I wrote above about how much advertising I did (and did it just like the told me)… then after networking with other real estate professionals that had been doing business in my city for years, I discovered Tigrent’s claim was a total lie. They didn’t know anything about our city and the particulars of our market. It was just a sales line to get me give them nearly thirty thousand dollars.
They claimed that “Foreclosure deals through short sales take about 15 hours of work to generate approximately $30,000 in profit.”
Wrong. See my explanation above regarding the short sales class. We worked on about a dozen deals and they all fell through after months of work, and countless hours of labor. We even hired staff to help… thousands of dollars gone.
--One of the reasons I believe that Tigrent / Rich Dad has been able to “get away” with this fraud is because it is not until a student actually starts taking the courses months later and starts practicing the prescribed advice in the real world that they discover they’ve been scammed. Unfortunately by this time, many months have gone by which make it far more difficult to do something about it. Many students even give favorable reviews immediately after the courses because they're "pumped" with hype by Tigrent's talented motivational speakers... only later to discover that Tigrent uses those "good reviews" - written in a brief moment of euphoria - against you after you realize you've been suckered.
On a more personal note, I will tell you that I have three small children – so I am a “Dad”. But I’m not just a Dad, I am now a “Poor Dad” because I’m now paying hundreds of dollars every month in credit card interest because I believed in the false advertizing claims of “Rich Dad.” My “Poor Children” are now part of the ever-growing “Rich Dad Nightmare“ that has swept this country – as well as other countries.
If you are an attorney wishing to get involved, please contact his website and ask for my contact info. Or you can visit RichDaddyNightmares dot com and enter your info there.
If you are a victim of the predatory and false advertizing tactics of “Rich Dad” / Robert Kiyosaki, Tigrent, (or by their older names: Wealth Intelligence Academy and Whitney Information Network) then please share your Nightmare so others won't be duped.