Litigation

Rich Dad Education: Buyer beware

By Tracy Coenen

Robert Kiyosaki is a best-selling author, but his advice is controversial. I’ve always thought he was heavy on hype, light on substance. Nonetheless, Kiyosaki’s “Rich Dad” brand is recognized by many and therefore worth a lot of money.

CBC’s Marketplace did an episode on their investigation of Rich Dad Education. And it’s very interesting, as well as horrifying. Kiyosaki licenses the “Rich Dad” name to a company called Whitney International (also called Whitney Information Network, and most recently “Tigrent“). Whitney has lots of complaints against it related to their “get rich” seminars.

Here’s how it works: You go to a free “seminar” in your area, which is just a sales pitch for the Rich Dad series. At this initial “seminar,” the point is to get you to sign up for a $500 three-day class. According to what I’ve read online, however, that “class” isn’t much more than a sales pitch for even more classes. People attending this “class” report that the entire premise is that you can’t be successful in real estate without the Rich Dad classes.

Participants can end up spending $40,000 to $50,000 on a series of sessions through Rich Dad Education. On the one hand, the workshops do teach some good things to students. On the flip side, however, is the fact that the sessions are far too expensive and some of the advice is sketchy.

One of the big problems with the advice is that the teachers repeatedly instruct participants to increase the limits on their credit cards. This is an expensive way to finance renovations, and very dangerous because of high interest rates. It seems to some that participants are encouraged to increase credit card limits for the purpose of buying tens of thousands of dollars of Rich Dad training. Kiyosaki himself told the Marketplace interviewer that he didn’t think it was good to instruct students to increase credit card limits.

I’ve been to the Asset Protection class with one of my friends. A participant pays for the classes, and then can bring a guest to each class. (Obviously, the hook here is that Rich Dad Education is hoping the guest signs up for classes of their own.)

For the most part, the information and advice given during this class was sound. There were a few questionable points made during the session, but I felt that overall the information was good. I just don’t think the class was worth what my friend paid for it.

Where can you learn about investing in real estate? I’m not sure of the answer to that question. But there has to be a better option than spending $40,000 or $50,000 with Rich Dad. Buyer beware.

Full post as published by The FRAUDfiles Blog on June 13, 2010 (boomark / email).