Home—Blog—Britain’s new cult: wealth creation seminars
Nov 30, 2011, 10:35
Posted byMerryn Somerset Webb
Comments (31)
I don’t watch television very often on the basis that it usually either shocks or depresses me. Last night I watched BBC2’s Money. It was no exception. The programme followed the fortunes of a few of the thousands of people who regularly buy the books and attend the seminars of the world’s wealth creation coaches.
They pay thousands and thousands of pounds to buy products from and listen to highly skilled presenters explaining to them how they can make themselves “financially free”. The answer? It usually involves some very odd exercises (standing in front of a mirror repeating core phrases such as “I am a good money manager” over and over again for example) in a process called wealth conditioning and then using the “skills” learnt from the conditioning to create “multiple streams of income”.
What kind of streams? Mostly the answers as far as I can figure come down to buy-to-let property. “Wealth creation” is simply the US name for borrowing a whole pile of money and using it to buy houses you can let out to other people. And wealth creation seminars are buy-to-let seminars, just with a bit more glitz and finesse than you used to get from the scamsters the UK was plagued with during the property bubble.
Sign up for a 3-week FREE trial of MoneyWeek
FREE! - our award-winning weekly magazine, delivered to your door for the next 3 weeks.
FREE! - access to the entire website, including the very latest MoneyWeek articles.
FREE! - our punchy daily investment email, 'Money Morning', with our insights and commentary on the day's financial news.
The problems with all this are obvious. Most people never go into buy-to-let. They just go to a lot of seminars and end up deeply in debt (as was the case with most of the participants in the programme). And of course, most wealth coaches don’t make their money from property themselves. No. Their own multiple streams of income come from seminars, DVDs, books and for those just starting out in the confidence business, one-to-one coaching sessions.
But there is one more problem. In times of recession, the vulnerable are even more open to this kind of thing than usual. Add that to the cult-like atmosphere of the events and wealth creation is on the way to creating a new world of misery. The BBC programme followed one woman who had spent £50,000 on seminars and so on. Has it made her rich? It has not.
Instead it has taken her to the verge of bankruptcy. The same goes for Janice Geddes, one of the sweetest women I have ever seen on TV. She has spent all she has and owes £4000 on her credit card. Indeed, so infatuated is she with the wealth management gurus that at one point, we even saw her volunteering to work free at one of Robert Kiyosaki’s seminars (Kiyosaki is the author of the Rich Dad Poor Dad series). Her money is gone but she is so drawn in that she’s now willing to hand over her time as well. So much for her millions.
We saw Kiyosaki speaking towards the end of the programme. He told his audience that he knew this crisis was coming but that it made no difference to him – he could make money on the way up and money on the way down. I very much doubt the first bit. I interviewed him in the spring of 2007 and I don’t remember him mentioning either his forecast of a crisis or even his recognition that one was kicking off. I asked him if he really thought that people buying a whole load of property right then could really get rich. “Absolutely,” he said. I can’t imagine that worked out too well.
However I am certain he is right on the second bit. Why? In the good times people think they can make it on their own. In the bad they’ll throw all they have at buying hope. That’s why Kiyosaki is having a great crisis and why UK-based wealth creation coaches are now popping up all over the place. It isn’t a good thing. At all. I have never quite understood why most forms of financial advice are somehow regulated while property advice of this kind is not. I still don’t.
• If you want to talk about this or anything else with me, why don't we do it over lunch? Bid here
Published in Blog More articles by Merryn Somerset Webb
May 18, 2012
By David Stevenson, May 16, 2012
By Merryn Somerset Webb, May 10, 2012
By John Stepek, May 03, 2012
Leave a comment
(30 November 2011, 02:42PM) Complain about this comment
I caught this programme too and simply couldn't believe what I was witnessing. You know that feeling when you want to somehow leap into the action and save the protagonists. it's also beyond me that this stuff is allowed. These so-called gurus even had seminars and books on playing stock markets! I dread to think how many times over their poor victims may have been wiped out in today's manic stock markets.
(30 November 2011, 04:40PM) Complain about this comment
One of the triumphs of hope over reason. Gambling is regulated in that you have to be 18 to buy a lottery ticket or take a trip to the bookmakers. The promise of easy money always attracts easy targets especially in tough times and yes, they should be regulated. But I suspect they may fall into the same vague category of alternative medicine where they offer promise without responsibility.
(30 November 2011, 05:45PM) Complain about this comment
The other reason these confidence tricksters are doing well is that as the economy contracts and people are made reduntant they will often receive a few thousand quid redundancy money. For some people this is an amount which they have never dreamed of having and if the shysters can get to them before they spend it on electronic goods then they are easy prey. The financially unsophistocated with a pocketfull of cash are easy pickings. I saw the same when miners were made redundant or got compensation payments in the 1980s- shockingly ripped off by so called professionals in many cases.
(30 November 2011, 06:35PM) Complain about this comment
I just love the solution "more regulation" there will always be conmen and fraudsters.
(30 November 2011, 09:48PM) Complain about this comment
"Those who made a fortune after the gold rushes were those selling the picks and spades""When the bandwagon joins the party, get out of there"
(01 December 2011, 09:00AM) Complain about this comment
@Billmac and Ellen. Bill precisely. Ellen......okay so you may be able to attend a seminar under 18, then what? How are you going to get a mortgage......setup a stock broking account etc if you're a minor. There's no point in making it illegal for someone under 18 to go along because they couldn't do anything even if they did. You could potentially have some kind of Moron exclusion law based on IQ or a short form test on the basics of finance, but most of the public have the vote, are morons, and don't like the politicians they elect to tell them so or prove the point to them with a test. What they want is to be able to act like idi0ts, loose their money and then be told it's someone elses fault and that the 'Government' should do something ( unless by some miracle they do get rich in which case it's all down to their amazing skills and forsight in buying 15 flats in Basingstoke ).
(01 December 2011, 08:11PM) Complain about this comment
Kiyosaki is not a conman. If you dig deeper into his work you will understand this. It is up to yourself to make yourself rich. You have to take action at some stage. I myself have the three main types of income he advocates. Passive, portfolio and earned. I know which ones I should focus on to build and increase my positive cashflow while minding my own business.
(01 December 2011, 09:31PM) Complain about this comment
I was aware of the hype and idiotic investment ideas surrounding Rich Dad Poor Dad and finally got around to reading it a few years ago, prompted by a review by someone on Amazon claiming that it was 'dangerous'. As an experienced investor (IRR 13% over 13 years) I was lining it up for a savaging, but instead found it rather harmless. Kiyosaki communicated in the form of a story (aiming at the immature?), saying some common sense things, but as Americans are wont to do, losing them in a mass of repetition and rambling (why use a thousand words when a million will do ?). This led to the conclusion that it was the type of people it was aimed at who had given the book it's controversial reputation. Judging by the copious posts on various message boards during the boom, these people were inexperienced investors who didn't know how to measure the value of investments. Because Kiyosaki had had success buying property, his acolytes all jumped on the bandwagon and got into BTL at a time when
yields were near cash and in no way compensated for the risk. He explicitly said in his book that it didn't have to be property, it was just that, at the time he was considering investments, it was, he perceived, the best value for money investment.
(02 December 2011, 04:08PM) Complain about this comment
I`m waiting for the day when one of these experts who has made many millions of pounds with their system offers their system to the public for NOTHING. I just might begin to believe then.
(03 December 2011, 11:53AM) Complain about this comment
I also watched the programme "money" on BBC2. I think that the techniques and the ideas have great value, but there is no way they work for everyone - or even for a majority of people, and the same goes for investing in the stock market and the many expensive seminars which grew up over the past 10 years on that subject. When Mr. Kiyasaki was giving these seminars in the late 90s people who went to them really did profit. It seems to me that a lot of people who go now are looking for some easy way out, the formula and clutching at straws. Mr. Kiyasaki wrote a book called Rich Dad's Prophecy in 2002. I read it in 2003 and almost everything which he predicted regarding the collapse and the pensions crisis etc has come to pass.
(03 December 2011, 11:55AM) Complain about this comment
I also read an article by John Humphrys in the Sunday Times September 21, 2003 entitled "there is a black hole in the middle of our finances". Anyone who says that this catastrophe was unforeseen simply wasn't paying attention. from the article "maybe it won't go wrong, you say. It already has. Five years ago one of the biggest hedge funds in the US, Long-Term Capital Management, had to be rescued by the banks, which feared that there would be dire consequences for the world financial markets if it were allowed to collapse. We have no way of knowing if there are more LTCMs waiting to happen or how to stop them." And again, remembering that this was written in September 2003, "the most recent value put on outstanding derivatives is $130 trillion. That is four times the annual income of the world. If it all goes wrong, it will make the few billions lost in the dot-com bubble look like a punt on Laughing Boy in the 2.30 at Kempton Park." Hats off to John Humphrys
(03 December 2011, 12:19PM) Complain about this comment
Then there's the other "quick way to riches" scam that's been squarely aimed at those who are vunerable. Franchises.Now I know that a lot of them are god, genuine business opportunities, but there are an awful lot which are a complete rip-off.Why the hell would you buy a window cleaning franchise for instance? Just buy a bucket and sponge and start knocking on doors!
(03 December 2011, 04:33PM) Complain about this comment
It's all very well journalists and people having opinions on this, but to me, the only ones that count are those who have been on the courses and experienced it for themselves. I have been on a number of courses, and I have established a very profitable property business and am a successful FX trader all as a result of going on courses. I went with my eyes and mind open, and took action to get results. I have made many times more than I invested in these courses, so I encourage others to make their own minds up rather than rely on the headline grabbing journalistic bias being portrayed here. I thought MoneyWeek was better than this.
(03 December 2011, 05:56PM) Complain about this comment
@James.It's 2011 James. Open your eyes: Occupy London, mass strikes, double-dip recession, student protests, house prices beginning to slip further...If your time to youIs worth savin'Then you better start swimmin'Or you'll sink like a stoneFor the times they are a-changin'
(03 December 2011, 05:58PM) Complain about this comment
Seems to me that it is the politicians and scientists in our society who are making false promises based on false premises. Brave new world and nineteenth century optimism about science solving all our problems are what I call 'false promises' and those responsible are still in control. The answer to the future lies in the past. Nature gives us everything that we need, so let us stop playing God and stop listening to the false Prophets of Progress who promise the earth and can never deliver.
(04 December 2011, 12:42PM) Complain about this comment
"unfortunately, most people do not go into buy-to-let..." Would those who do go into buy-to-let be "fortunate"? Is that the underlying message from Merryn? Does she believe that ther is a future for buy-to-let landlords?I am still expecting a harder landing for the housing market: people will find that the houses they bought is loosing more and more value year by year... Those who decide to go for buy-to-let will suffer just the same (and I'm rather glad about that because buy-to-let is NOT wealth creation but sheer speculation and it affects mostly the poor in a very negative way).Let's be realistic: the time for an easy buck is gone! And good riddance!
(05 December 2011, 07:57AM) Complain about this comment
Merryn, your physical Moneyweek publication is a quality magazine, with excellent round-up of the financial press. However, I have always been disappointed that you ruin this with the non-stop stream of 'seminar' invites - all of them get-rich-quick schemes. I think that on the email distribution list you send out at least one a day.How is it, then, that you can possibly even think about writing the blog above? You are no better than these people yourself. A report telling you how to "Make up to £1770 a week in only 20 mins a day" for £95 (or whatever) is the exact same thing that you are ranting about here.Merryn, people in glasshouses shouldn't throw stones.
(05 December 2011, 10:07AM) Complain about this comment
18. PJ- i agree with what you say, but on the bright side:1. The mag gives us the knowledge to throw away\delete the adverts.2. The adverts help keep the cost of the mag down.3. Those that fall for the adverts can't then afford the mag, so they're helping to filter out the financially illiterate4. It's conning the con artists out of some of their own money,
(05 December 2011, 03:30PM) Complain about this comment
Watched the program as well.Hmm, comes across as a social event for me. I like the way some of the participants said it costs them to go to these events but being cagey about how much there earnings were.Interested in the Cash Flow game, checked with Amazon, £109, wow, now thats the way to make money!!!
(07 December 2011, 10:21AM) Complain about this comment
Good article once more and great films too from Vanessa Engle. Superb second programme last night on money and personal relationships.I like Engle's style. Simply asking questions and letting us (and her victims) reach our own conclusions.On that theme - i have a question for Money Week.If it's wrong to mislead people into dreams of riches at hotel seminars why do you constantly advertise same (your trader’s seminar e-mails) to us?I've attended a couple of these seminars for some fun and found that they are trying to lure the unsuspecting into spread betting - my bete noir.To say they mislead the audience would be an understatement.And as ever it's those who can least afford to get into that activity that get sucked in.Time to walk the talk me thinks.
(08 December 2011, 02:19PM) Complain about this comment
Chapeau Paul!I am very suprised that MONEY WEEK a magazine I have always found worthy of reading is now getting to the mud by critisising others practicians seminars. We are in a free-will society and even schools does not give you a garantie of success so why would a seminar give you the garantie of wealth creation? Did you check whether the strategic columnist of your magazine are making your readers richers? The only way for you to measure your success is by the number of people subscribing to it, so does Robert who sold million copies of a simple common sense book around the world. Would you cross the line of insanity and presume that the one million readers of Robert are dumb stupid? Please do what you do well, writte article about finances and keep your standards by not minding what other respectable people do? And as Paul Claireaux said it so well, stop advertising the insane spread betting brokers in your magazine!
(09 December 2011, 01:35PM) Complain about this comment
Agree about the spread betting brokers, seems to me that the only way to get rich with spread betting is to set up your own company.Or setup a scheme which will make other people earn a 'modest income' with the warning that 'losses may occur but in the end you can make a tidy profit.' Forgetting to mention that the spread better has to sit glued to the screen for most of the day/night waiting for something to happen.
(14 December 2011, 11:14PM) Complain about this comment
As with all things you buy: buyer beware. But this phrase is misleading as it only considers the product being considered for purchase.The buyer should, more importantly, be aware of their own competencies, strengths & weaknesses, as it is all to easy to believe you have more ability then you actually possess. Factors such as motivation, self-discipline etc all play a part in determining whether someone is successful in their money earning capabilities.This is what makes people vulnerable; when their decision making processes are faulty. The product they buy may not be bad.Vulnerable people can rely too much on following the herd, but also following those who claim to be contrarian, and avoid the thinking needed to draw their own conclusions and to test whether they are being sold a pup or a golden egg.
(15 December 2011, 08:23PM) Complain about this comment
Kiyosaki has actually come out with some sensible stuff, and he actually seems to have practiced what he preaches. His Financial IQ book is pretty sensible stuff, although I haven't read Rich Dad Poor Dad. It's all becoming a bit much now though because he seems to be dredging up the same material in new books, but, whatever. Churn and burn. I don't have a problem with it It's still pretty sensible. He doesn't recommend standing in front of a mirror telling yourself that you're a millionaire.The fault here is with these people throwing their cash away I'm afraid. What are they expecting? Are they expecting to simply turn up and make money with no effort whatsoever? These people are simply idiots. It comes to something when they're getting ripped of by someone like Kiyosaki. Imagine if they met a real con artist?
(16 December 2011, 03:05PM) Complain about this comment
The calibre of most of these wealth disciples was so low that it would make even Dell Boy Trotter whince. Basically, con men who prey on the multitude of vulnerable, gullible and poorest . These courses allow them to upsell to its audience, timeshare,health drinks, mortgage products. An example of unethical behaviour was when two 16 year olds paid £1500 and went into £4000 of debt to purchase one to one mentoring from Rohan Weerasinghe. It appeared that he'd taken candy from babies, which felt just short of criminal. Perhaps he gave more valuable mentoring than we saw but who cares, he was up on the transaction, they were in debt. My advice to these unscrupulous disciples is to go earn your money in an honest ethical way. Your actions contradict what you try to preach and most see you as self indulgent charlatans.Overall a great watch but for all the wrong reasons!
(18 December 2011, 06:57PM) Complain about this comment
@MPIt is easy to jump to the wrong conclusion...it could well be the caliber of the buyer that is low (the two boys), not the seller, as you concluded.Just because someone gets into debt for these products does not mean the seller is at fault. Not all buyers are equal. You make your choices in life as a buyer and unless there is fraud, you cannot necessarily blame a seller if the buyer does not benefit from the information.
(20 December 2011, 06:11PM) Complain about this comment
@FansciscoI agree with you to a degree. But these sellers aren't just pedalling a £10 self help bks ans stopping there. “you make your choices in life as a buyer " attitude would appeal to banks, tobacco, pharmaceutical and drink industries. Who've miss sold to the public and caused generations of harm to family’s health and wealth.These wealth creation "sellers" are simply bottom of the food chain exploiters.Companies House show that few have experience or knowledge to try to sell their models for making money to others. Neither are they trained bankers,dieticians or psychologists. These "sellers" shops are empty.Allowing dog to eat the lower "calibre" dog in society, dilutes ethical behaviour and allows con men of the like to continue and multiply. Not a society I want to see perpetuate.
(01 January 2012, 02:29PM) Complain about this comment
My impression of watching Money is that it does appeal to some vulnerable people that are never going make the millions from these schemes. However, you need to be aware that for any scheme where "you have potential to earn an awful lot of money" that doesn't come without a lot of hard work and there are no guarantees.While I have some sympathy with people who have spent money and still believe they can make the millions ... you need to keep a reality check on things. Can you not learn how to buy-to-let with the help of library books, speaking to estate agents, tenants and landlords.Scams all work because the scamee WANTS to believe it's possible.Key to all of this is "do your reasearch, make sure you UNDERSTAND what is being offered to you and don't believe high earnings are easily achieved".
(02 May 2012, 02:01PM) Complain about this comment
Six years ago I read Kiyosaki's book Rich Dad Poor Dad and several other Get Rich Quick books. But unlike a lot of the people in the BBC's Money documentary I did put into practice some of the ideas in the books. I've just written a book about my experiences called The Job Delusion available on Amazon Kindle. Detailing my journey from the day job to financial freedom. Just a regular guys journey from reading these books to actually taking action.Download a free chapter from http://www.TheJobDelusion.com
Name This will be the name displayed with your comment.
Email This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.
Comment Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.
To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.
Enter the text from the box above
Remember my details
By leaving a comment you accept our terms and conditions.
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.Sign up FREE to Money Morning here.
22 May 12
21 May 12
Become a smarter investor in just 3 minutes a day.
MoneyWeek is not responsible for the content of external internet sites.