Rich Dad Education–Dream or Scam?

A few years ago I listened to Robert Kiyosaki’s Rich Dad, Poor Dad audiobook. I found it inspiring, and bought the Cashflow Game, which is a great mind-shifter.

I got some notice that Rich Dad Education was holding a free two-hour session in Madison, and I went last night. I was talking with Josh just before I went in, and we were joking about brainwashing, etc. I told him if I had a glazed look later, he should take me out to the woods and deprogram me.

From start the finish the entire event is carefully scripted and choreographed. While it started at 6, we were not allowed to go in ahead of time; everyone had to wait in the hall until they opened the doors. One of the “Success Team” (sigh) members had us gather ’round in the hall, welcomed us, and gave instructions on how to file in and fill every seat, starting with the first row. Another of the STM herded us to ensure we followed these instructions. One woman wanted to wait for her daughter and was a bit concerned she hadn’t come in yet, and this guy said something close to “this is Wisconsin–what could happen?” Wow, way to win friends and influence people.

Don, the presenter, was pretty good at what he did. Good presence, and he announced from the beginning the fact that the “English Teachers” present might not find his presentation perfect, especially that he might say things that were not politically correct (what that has to do with English teachers, I’m not quite sure…). At least I was less annoyed after that with his pronunciation of “realitor” and “entrepreneur” (which I can’t even remember now).

I found myself operating on two levels during the presentation: as a participant who is interested in learning about alternate sources of income, and as a presenter critiquing another’s presentation.

They use pretty much every trick in the book during the presentation. It was interesting to watch the interplay within myself: being aware of the technique being used, and perceiving the level of effectiveness on me. Sometimes the former happened first, sometimes the latter. Here is a list of the techniques they used:

  • Fear – security: Social Security will fail by 2016, and you can’t retire on that anyway.
  • Fear – scarcity: our events have been so popular that we don’t have enough bonus packages for everyone in the room. He urged people to get up at any time and go to the back of the room to sign up and take advantage of the special package.
  • YES: getting people to say yes to obvious questions (“would you like to replace your current income working 5 hours a month?”).
  • Hand-raising: another form of YES
  • Greed: giving examples of those who have succeeded wildly with the system. Paint a picture of having more free time, ensured financial security, stop working for the man, etc.
  • Condescension: As is true of Kiyosaki himself, Don disdained higher education, saying it wasn’t an asset if it didn’t create positive cashflow. Proof: how many people are still working in the field they studied in school? Specious logic.
  • Time sensitivity: Act quickly or lose it. Take the 3-day course for $495 if you sign up tonight. After tonight, it’s $995.
  • Gratitude: This one surprised me. Near the end he talked about how grateful he was for Kiyosaki’s gifts.
  • God and Family: He talked about his own faith for the last quarter hour, and how grateful he was for his adopted son and family.
  • Your “In:” Don shared things during the presentation that had the effect of sharing a secret or being a bit conspiratorial. We were going to be able to do something that “all those other schmucks” wouldn’t or couldn’t. They’d miss out; we’d make it big.
  • Targeting: He used many people as examples during the evening: “let’s say Jay is buying a house…” He used probably 20 people in that way during the evening.
  • Humor: lots of it, none of it above a 4/10 in my book.
  • Admonition: He was clearly being a bit chiding of people not taking advantages of opportunities.
  • Sexism: This housewife stuck it to her husband by doing better at it than he did–and she wasn’t even interested in it!

I must admit that I’m human and many of these things had an effect on me, although I at least had awareness of the effect and its cause. And I will admit that I considered signing up for the course, and Josh could attend for free. However, there were too many factors that stopped me:

  • I decided before I walked in the room I wouldn’t buy anything under time pressure.
  • I didn’t know my schedule, so I couldn’t plan to attend. 😉
  • Not enough information: the tone of the presentation was: hey, don’t be a schmuck by missing this great opportunity! However, I used something from Don’s own presentation to offset that. He stated that it was important when finding these great real estate deals to identify the good ones and avoid the bad ones. Thus, have enough information on risk to avoid the bad ones. What information was Don sharing about the risk of this program? None. hey, it’s only $.63/day for a year for this great deal!, etc.
  • In small print on one of the first slides that played automatically before the presentation began, there was a disclaimer that examples shared during the presentation were not representative of average gains from use of the program. Don gave no information about how many people did not succeed who put best effort in, and he certainly didn’t share information about those who failed and lost big.
  • If this was such a great deal and folks were so successful doing it, why the pressure? Sure some pressure is needed to break people out of their comfort zone (I know that from teaching Taking It Lightly), yet this was too much. He asked rhetorically why everyone didn’t take advantage of this, and his response was that he didn’t know…

I don’t like being manipulated when the manipulation isn’t helpful or in my best interest (tell me a good joke and I’ll love it!). I went home and researched Kiyosaki and Rich Dad Education. I found enough information that gave me good reason to go no further.

I guess in the end, I’m either a wise man who heeded the warning Caveat Emptor, or a poor schmuck who doesn’t have enough imagination or gumption to grab a dream when he sees it. I benefit, however, from the expanded awareness of better financial planning, and lifting my head above daily life for a bit to get a better perspective on things.

12 thoughts on “Rich Dad Education–Dream or Scam?

  1. Louie

    Scam indeed. In fact I went to a seminar tonight in Waco,Texas. Everything said he said word for word (“there must be thousands of people who just done care enough to be here”)lol. Damn, I actually liked Kiyo but after this I gotta he’s playing us (or at least trying)!!!!!!!!!!

  2. Kittenmancer

    I actually attended the three day course and, despite the numerous rants of people who apparently failed abysmally, am working on lining up my first deal a week after the course ended (I did not sign up for further courses, because I’m broke, but that doesn’t stop a clever fox like myself).
    Many of the people I talked to from the course who said they would take more have since backed out and received their money back, but I honestly doubt any of them simply waltzed out the door and set to work, but rather waltzed to their computers and were told by people what sort of scam they signed up for.
    Admittedly the $500 didn’t hurt me and I feel I learned more than enough to make it back in spades.
    Like my instructor (Who used the same tactics, but what did you expect from a free seminar?) said, “It’s about action.”

  3. Anonymous

    Too funny … it is March 5, 2009 as I type and I just got back from a free 2-hour seminar in Costa Mesa. They pitched the 3-day $995-seminar, but then said that if we signed up tonight, it would only be $495 PLUS, they’d give you $500 worth of free books. After tonight, of course, it would be $995 and there’d be no free books. Too funny….I bet they do that every time. I saw through it and did not sign up as I wanted to do some research first. Glad I didn’t sign up.

  4. Anonymous

    I’ve signed up for a 3-day next weekend in Denver. After reading these and other postings elsewhere and forgetting that ‘hope’ is not a strategy, I am hopeful to come out of this with something that at least pays for the course. Have learned that the traditional work place have been Winston Smith-like experiences for me so need to at least be open for what is there.

  5. Jay Edgar

    I wish you the best of luck, Anonymous. I’d love to hear back after you take the course, to hear how valuable it is for you.

  6. Anonymous

    This company and Robert Kiyosaki is a TOTAL SCAM! I live in Hawaii my whole life and thought I could trust a “local boy”. Robert has zero conscious.
    I too read his books. I went to the free 2-hour seminar and had the exact same experience as you (thank you for clarifying my experience in words….you hit the target). Unfortunately I signed up for the $495 3-day “training” seminar.
    The 3-day training ended up being a hard sell psycho manipulation presentation to get everyone to sign up (and pay for) “more training” at the low on-site costs ranging between $10,000 – $65,000 (which does not include travel cost to out-of-state classes).
    In these vulnerable economic conditions, it’s sad that Robert Kiyosaki and the seminar staff/employees feel it necessary to scam people out of their money. Shame on them!
    I notice they did a great psycho manipulation job on some of the other people that commented on this blog that know how to take “action” and don’t feel this was a scam. You really got your money’s worth. They “fed” you alot of ego-inflating food, which is why you feel satisfied and “got your money’s worth”. Take the $495 next time and spend it on $400 worth of investment books and DVD’s, and $95 on a great meal (treat a friend to come along and have a good time…dessert included) and you would end with the same feelings and more knowledge then you have now….then take “action” on what you learned from those books/DVD’s…

  7. Anonymous

    I had the same negative experience from the 3 day Real Estate training. I almost fell for signing up for the Rich Dad Coaching for Entrepreneurs. But I don’t like being pressured and manipulated. I felt that the sales guy didn’t really care about me, but in making the sale. He would use pressure tactics and try to make me feel like a loser for not “doing what you say you will do”.

  8. Anonymous

    My experience was very emotional. I felt like a loser after the 3 day training. The trainer uses tactics to make you feel that you will never succeed if you don’t buy their training. If you don’t buy their training it means you can’t take action or risks.

    I felt it was morally wrong the way they used sales techniques that played on your deep seated emotions. I observed other people in the room, most appeared to struggle internally with whether they should spend the large sums of money. And the training keeps pressing the entire 3 days. You also find that you need to sign up for even more training which costs much more. I keep thinking that perhaps Robert Kiyosaki didn’t know their sales people used such tactics. I don’t understand why he chooses to use this approach to selling his classes. You may be successful in getting more people to fork over their cash by making emotional decisions, but it is unethical. Instead you should let people decide for themselves in their own time. Why the rush? Do the trainers really care for your financial well-being, or do they just need to fill up the seats in their classroom?

  9. Jay Edgar

    Anonymous, I think you may have more faith in humanity than I do.I would find it rather difficult to believe that many different trainers would use the same pressure tactics without Kiyosake knowing about it. I can only assume that he developed the tactics used in all of these trainings.

  10. Anonymous

    Most defiantly kiyo is a figure head and actually has little to do with these scams. The person who manages got permission from him to develop classes like these to teach what are in his books. This is the real crook.Hired on pressure cooker salesmen to sell bogus classes, kiyo prolly has little to nothing to do with these classes except knows what they are “supposed” to be teaching in them.

  11. Anonymous

    I went to the two hour seminar last year and as it progressed, it was exactly what I thought it was going to be about, it seemed a little more viable and realistic than the AM-Way seminar which I walked out of, shaking my head thinking, these people must must prey on easily manipulated people. I wasn't who they were looking for, not to buy in the pressure situation of saving $500 if you buy now. Last I checked, if I don't by anything, I still have the $500.
    Anyway, the book makes the point of investing in your own knowledge to minimize risk in anything that you do. The book was very inspiring but if you aren't willing to put the time into learn, don't go spending your money. So as suggested above, you are better off to take the advice of the book and go to the book store and educate yourself. Its cheaper. A for people feeling scamed, what did you think a free seminar was going to be about besides selling you to the next step. NOTHING is free.

  12. Anonymous

    Firstly, I recently attended the free 2hour sales pitch, er, workshop in Denver. It is obvious from the start that it is a well choreographed mind-screw. From the way they herd you into the seats to the "no questions" policy (which became clear is due to the fact that the presenter is closely following a script, and is hardly an expert…they cannot answer basic questions thus do not want to be 'exposed'…the 'no questions policy' serves to hide the presenter's lack of knowledge) and to the manufactured urgency of the $499 3 day class (today only!).

    Secondly, it is also apparent that the event employs 'plants' or 'shills'. They run to the back of the room to get a purple bag of freebies the moment the presenter says they're available. One guy in the back of the room enthusiastically agrees with EVERYTHING gurgled by the presenter.

    Lastly, after doing some diligent research, I've learned that the Rich Dad Education entity is NOT OWNED by Kiyosaki…rather, a well-known alleged real estate investment guru hustler from Florida by the name of Russ Whitney actually owns and operate these seminars, and in fact licensed the Kiyosaki and Rich Dad names for their operation. Other sites have referred to Kiyosaki's "selling out"; however, if you're one of those folks who believe RDPD was mostly just motivational BS (and was RD fiction???) then you're likely not surprised that he leased his name for what is likely bigger $$$$ than Kiyosaki ever dreamed of making from real estate investments.

    I truly feel for the people who get sucked into raising their credit card limits at the 3 day event (under the guise of readily available funds for a quick real estate deal) only to be hard hit to sign up for their mentoring program which runs tens of thousands of dollars.

    Caveat Emptor…do yourself a favor and just Google "Russ Whitney scam" and "Rich Dad scams"…more than a 1/4 million websites cannot be all wrong.

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