“The power of accurate observation is commonly called cynicism by those who have not got it.” - George Bernard Shaw
“The most essential gift for a good writer is a built-in, shockproof s*** detector.”
- Ernest Hemingway
Readers often ask me what I think of a particular guru’s seminar or home-study course. In many cases, I don’t know the work of the guru in question. But I can make general observations about the B.S. artists which you can use to spot them.This is from two articles which were published in the January 1990 and July 1998 issues of John T. Reed’s Real Estate Investor’s Monthly newsletter. I have also added additional points since 1998. Copyright by John T. Reed. All rights reserved.
1. Emphasis on luxurious lifestyle. Gurus I respect, like Bill Tappan (author of Real Estate Exchange and Acquisition Techniques) and the late Bob Bruss (nationally syndicated real estate columnist) rarely mention the life-style you will enjoy if you buy their products or follow their advice. Although they are successful real-estate people, they see no need to write about being rich or to wear their affluence on their sleeve (or around their neck or pinky). On the other hand, the B.S. artists feature the imagined lifestyle of the rich in their TV ads, come-on speeches, and “how-to” materials. They also accessorize themselves with flash like ostentatious jewelry and rented limousines or rented private jets.
2. Subjective self description. The “about-the-authors” of the gurus I respect are generally written in Jack Webb style: “Just the facts, Ma’am.” Leigh Robinson, for example, describes himself in one sentence: “Leigh Robinson is landlord to 360 tenants and lectures in Landlording for University of California Extension.” Bill Tappan’s bio contains not a single laudatory adjective. Just a handful of relevant facts about his exchanging experience and the first edition of his book.
In contrast, the B.S. artists tend to have book jacket or ad copy which describes them as the “leading real estate expert in the United States today” or the “Number One, most-sought-after...” Their bios are full of baseless, subjective adjectives and nouns, like “innovative...... famous, spectacularly successful,” “authority,” etc. B.S. artists often use photographs or videotape of themselves hanging around executive jets, limos, yachts, mansions, five-star hotels, exotic resorts, or expensive cars to imply that they have achieved great financial success.
3. No pitfalls or corrections. There are dangers in everything. But you rarely read about danger in a book by a real estate B.S. artist—or hear about it in one of his CDs or TV infomercials. Everybody makes mistakes. But you rarely read about a guru’s mistake or see a correction in a B.S. artist’s newsletter. The B.S. artists are self-proclaimedly big on being “positive.” And one of the things they’re positive about is that the dream world they depict will not be marred by unpleasant reality. Some of my books that tell of the real estate mistakes I or others made are:
- Distressed Real Estate Times
- Aggressive Tax Avoidance for Real Estate Investors
- Single-Family Lease-Options
- How to Structure Your Mortgage
- How to Get Started in Real Estate Investment
- How to Buy Real Estate For Little or No Money Down
- Checklists for Buying Rental Houses and Apartment Buildings
- How to Increase the Value of Real Estate
- How to Manage Residential Property For Maximum Cash Flow and Resale Value
It’s better for you to learn from the mistakes of others than to reinvent the wheel and lose your money in the process.
On the other hand, worthwhile gurus are as likely to write about mistakes made (often by the guru himself/herself) and dangers overlooked as about spectacular profits achieved. And all ethical periodicals writers run corrections when they make a mistake.
4. No bad news. In addition to teaching techniques, real-estate investment gurus have to respond to news like court decisions, legislation, economic trends, and so forth. Of course, some of the news is bad. But the B.S. artists invariably respond to bad news in Pollyanna fashion. They always see “opportunity.” The closest they come to acknowledging the unhappy truth is to describe a situation as a “challenge.”
The Tax Reform Act of 1986 was a good litmus test. Any investor whose IQ exceeds his body temperature knows that was the worst tax law for real-estate investors since the income tax was invented. But when it passed, the B.S. artists called it “the best thing that ever happened to real estate”...or words to that effect. They are saying the same thing in 2008 about the sub-prime mortgage crisis which has lowered property values widely.
Why do they do that? For one thing, they fear bad news will depress sales. With good reason apparently. A bunch of real estate newsletters have gone out of business since the late ’80s real estate depressions hit many markets and the Tax Reform Act of ’86 passed. Another reason B.S. artists don’t acknowledge bad news is that they simply cannot shut off their slinging mechanism. They are B.S. kinda guys. There’s nothing wrong with looking for opportunity in ostensibly bad situations. Many of my articles have done just that. You only become a B.S. artist when you look for it, can’t find it, but claim it’s there anyway.
5. Universally-applicable techniques. The various techniques one can use in real estate investment are like mechanic’s tools. The one you use depends on the situation and your goal. Just as no tool is appropriate for every mechanical job, neither is any real-estate-investment technique appropriate for every situation. Each has advantages and disadvantages and most are only useful in a narrow range of circumstances. The B.S. artists trot out one obscure technique after another in an effort to impress the customer with all the “new” material they are getting. But rarely is a word spoken about when the technique is appropriate. The reader or listener is left with the impression that the technique is appropriate for any and all acquisitions.
6. Emphasis on motivational material. Every successful person I know has benefited from motivational books like The Power of Positive Thinking. Many of us have had life experiences like emotional high-school football pep talks which gave dramatic evidence of the power of focused motivation. I would not diminish the role of motivation in success in real estate or any other field. However, motivational material ought to be packaged as such.
When books or CDs are described as containing how-to information on real-estate investment, they ought to contain little or no motivational material. The protest that the customer “needs” to be motivated is beside the point. It is dishonest to promise how-to information, then deliver a bunch of “You-can-do-it” platitudes instead. The motivational business, like patriotism in Samuel Johnson’s memorable phrase, is one of the last refuges of scoundrels. Although there are many who approach the field of motivation with rigorous scientific discipline, there are more for whom the motivation business is merely a con —a chance to sell yet another cure-all “elixir” without having to get FDA approval.
7. Claim to do lots of deals. Virtually all the B.S. artists say, “I don’t just teach these techniques. I use them every day in my own investment program.” Baloney. There aren’t enough hours in the day.My Succeeding book admonishes you not to underestimate yourself. For example, it says, “Reject Little Old Me-ism. Substitute All they can say is no’ism instead.” In other words, don’t assume that you cannot do something because you’re not good enough. Give it a shot. But it also tells you to be realistic about goals that require talent or which do not fit you. No “rah rah you can do anything” nonsense.
Gurus get the same 24-hour days as you. Being an expert takes time. We have to read many trade journals, loose-leaf services, and books to keep up to date. We have to spend hours on the phone interviewing sources for articles and books —and hours in the library researching legal cases and other relevant facts. As experts, gurus get interviewed by the media on the phone and in radio and TV studios and they make speeches to investors. Finally, we have to manage the guru business itself. That means designing brochures, responding to customer-service problems, checking proofs from the printer, indexing books, negotiating with printers and recording studios, going over the income and expenses of the guru business, and so forth.
Obviously, we do not, after all that, have as much time as non-gurus do for investing. But in the financial guru business, the question, “Are you using these techniques yourself or just teaching them?” is ubiquitous. And any answer but, “Oh, yes,” seems devastating to the credibility of the guru. In fact, real-estate gurus (other than those who just dabble in guruing) who do a deal a month or more are extremely rare. Or they are buying garbage properties by the dozen—with little or no analysis or due diligence—mainly so that they can claim they do lots of deals and be technically accurate.
You can smoke out such gurus by simply asking them for the addresses of some of the properties they have owned. I put the addresses of all the properties I ever owned at my Web site. I have asked a number of other real estate gurus to give me one or more of the addresses of properties they have owned. I got zero response. Either they are lying or their deals are illegal and they cannot stand any scrutiny.
8. Offer to invest in your deals. The bad real-estate gurus are really just salesmen. As such, one of their main problems is how to overcome the objections of prospective customers. They target the poor and they are selling investment advice, so one of the most common objections they get is, “I don’t want to buy your course because I have no money to invest.” To overcome that objection, some dishonest real-estate gurus have been saying that they will invest in deals that you bring them.
It’s a lie. They may have invested in one or two just so they could say they did, but no more. Paying such finders fees violates brokerage laws in some states like New Jersey. Securities and brokerage laws may be triggered in other states. The quality of the deals submitted by their armies of novices must be fall-down-laughing abysmal.
Joe Kaiser told me he invested in some of his student’s deals, but refused to give me any of the addresses of the deals in question so I or my readers could confirm them. The real-estate world is full of investors and developers who provide the addresses of their properties in brochures, annual reports, directories, on the walls of their offices, in magazine ads, and in news releases. I put the addresses of every property I ever owned at my Web site. But no other guru will provide a single address. Ya gotta wonder why.
This is a variation on the classic advance-fee-loan scam. One of the classic frauds that con men perpetrate is called the “advance-fee-loan” scam. In it, a con man finds a person who is having trouble getting a loan and offers them a loan. Often, there is some bogus explanation, like “It’s offshore money,” to explain why the con man can get you a loan when no one else can. When you accept, the con man tells you there is a small fee for the paperwork or some such. In fact, the con man is purely in the business of collecting the fees and running. There is no loan.
The real-estate-investment variation on this is to tell you that the guru will help you buy property by putting up the down payment or by advising you or by teaching you how to buy for nothing down. The nothing-down con involves various approaches from “motivated”-seller financing to government loans to lease options to flipping to finding partners to “bring me the deal and I will put up the money to buy it and split the profits with you.” In fact, the con man is purely in the business of taking your “advance fee” in the form of a retainer or the cost of “training” or “mentoring” or high-priced book-and-tape courses. They have no interest in investing in deals you bring them. It is a lie to get you to part with the advance fee. Their various techniques bad gurus teach for buying nothing down do not work in the real world. They just lie to you to get the advance fee. My book How to Buy Real Estate for Little or No Money Down tells you the nothing down techniques that actually work and do not break the law or ethics but that book does not tell you it’s as easy as the other nothing down books do.
I got an email from a reader who told me there was a story in the Pittsburgh Post Gazette newspaper about a real estate investment guru who was in trouble with the law. The story is at http://www.post-gazette.com/neigh_city/20020808cburbs9.asp. According to the article, 61-year old Michael Enelow was indicted on 29 counts of wire and mail fraud by a grand jury in connection with a real estate investment scam. He reportedly ran ads in periodicals around the U.S. from 1995 through 2000 offering money to people who would refer real estate deals to him. The indictment said he lied about how much money he had and how many deals he did. He charged $1,500 to sign up and got over a thousand people to send him that much. (1,000 x $1,500 = $1,500,000) The FBI said Enelow lived off the $1,500 charges and that his real estate dealings were insignificant.
9. Current copyrights. I am a full-time writer. I have about three dozen books. Only a couple have current-year copyright dates. Contrast that with Carleton Sheets. He says he is a full-time investor. He has 32 book or CD programs. In 1998, he sent me a bunch of them. At that time, every single one was copyright 1998! Sheets says of his Creative Tax Strategies book, which was “Copyright 1998,” when I received it in 1998, that it is “Continually revised to include the latest changes in tax law.” It still described the two-year rollover and over-55, $125,000 exclusion for home sales. Both of those laws were repealed by the Taxpayer Relief Act of 1997. He puts a loose sheet containing a brief list of Taxpayer Relief Act of 1997 changes in the package. But that does not explain how the bound book got a 1998 copyright date without mentioning a law that took effect the previous May.
See my How to Write, Publish, and Sell Your Own How-To Book for details on writing books and copyright dates.
10. Emphasis on no-down, low-down techniques. Another way to overcome the “I have no money to invest” objection is to push techniques that seem to enable investing with little or no money down. These include nothing-down, “creative finance,” lease-option acquisitions, flipping, and various “partner” techniques.
Fundamentally, these are unsound. Lending more than 80% of the value of an owner-occupied home or about 70% of the value of a rental property is generally imprudent because experience shows that the equity above those loan-to-value ratios disappears in foreclosure. Accordingly, such loans can generally be arranged only by bamboozling an unsophisticated seller or lying to an institutional lender or when the borrower’s income and other assets warrant an extension of unsecured credit for the amount above 80% of value.
Furthermore, it is almost impossible for the property’s net income to cover the increased mortgage payments on a high-leverage deal. Lease options have numerous other ethical and legal problems. See my article on the subject. Partnerships make sense only when each party brings something which the other must have, other than money. In the guru-style partnership, the guru’s novice follower brings nothing but a need for money and the other brings only money. What a team!
The typical real-estate millionaire did not get where he is by using nothing-down, lease-option (for acquisitions), or partner techniques. But the typical real-estate guru did get where he is by persuading low-net-worth individuals to believe that they can get rich making no-cash-down, real-estate acquisitions. Nothing-down acquisitions can be done both ethically and profitably. I told how in my books How to Use Leverage to Maximize Your Real Estate Investment Return, How to Buy Real Estate for Little or No Money Down, Single-Family Lease Options, and How to Buy Real Estate for at Least 20% Below Market Value. But this is a difficult, advanced route to take.
Basically, the nothing-down movement is just a variation on the classic advance-fee-loan scam as I described above. It is a way to part fools from their money, not a way to invest in real estate.
11. Blank paper and/or filler. B.S. artists’ books contain much blank space resulting from double-spacing, huge margins, extraordinary numbers of blank pages, large type, and so forth. They also tend to devote many pages to filler like directories of government agencies or blank forms which are repeated over and over with only slight changes on each. They charge hundreds or even thousands of dollars for “programs,” seminars, or “mentoring- services which are nothing more than air-filled little books that would sell for about $9.95 to $12.95 in a book store because of the low page count they would have if they were typeset with normal margins, type size, and space between lines and paragraphs.
13. No indexes. A British Member of Parliament once proposed the death penalty for authors or publishers who left indexes out of nonfiction books. Maybe the B.S. artists would argue that their books aren’t nonfiction.
14. No acknowledgments. Here is an item which is virtually effortless, but the B.S. artists still leave it out. It is traditional, gracious, and appropriate to thank the people who have contributed indirectly to your book in an acknowledgment section in the front. We all have benefited from valuable support, advice, and opportunities provided by others in our careers. Are these guys so lacking in character that they can’t even say, “Thanks?” It certainly wouldn’t cost them anything. They could put it on one of their many blank pages.
15. No bibliography. It is also traditional and helpful to include a bibliography in nonfiction works. In part, it is another type of acknowledgment section where the author reveals his sources. It is also very helpful to the reader who wants to read more about the subject and get other perspectives. Leigh Robinson’s Landlording has 15 pages of “Sources and Resources.” He’s one of the non-B.S. artists. The bad gurus have no bibliographies because they did no research and are scared to death that you will discover the other books on the subject and realize what an overpriced piece of garbage you bought from them. My books almost all have lengthy bibliographies. Those that don’t are on subjects which few books have been written about.
16. High prices. Legit real estate books cost about $20 to $80 depending on whether they sell in book stores or only by mail. Mail-only books cost more because fewer are sold, press runs are shorter, and printing and handling costs per unit are higher. Legit real-estate seminars cost up to $500 per day. B.S. artists charge hundreds for their books and thousands for their “boot camps,” “training,” and “mentoring” services. One would-be guru customer demanded that I explain to him what is wrong with the “mentor concept.” I have no complaint with the “mentoring concept” or the friend concept or the sex concept. But if you pay for any of those, something’s wrong. My book How to Get Started in Real Estate Investment has a chapter on finding a mentor of the no-charge variety which is the only kind I recommend.
17. Bundling a book with CDs. Books are good. So are CDs. I used to sell both. Some people may even want both, and there’s nothing wrong with giving such gluttons both. But there is no legitimate reason to force people to buy both by only selling your product in book-and-CD form. Foreign-language courses may require both the printed word and audio CDs, but not real-estate-investment courses. The B.S. artists bundle CDs and books to make the product bulkier, hoping the customer will be too dumb to realize he is buying two copies of the same material. I sell no CDs and if I do start selling audio products through iTunes or some such, they will not be bundled with books forcing you to buy both.
18. Too-good-to-be-true testimonials. B.S. artists never make absurd claims like, “You will make $400,000 in six months if you buy my course.” They just have Mr. and Mrs. Average go on TV and say it for them. One guru’s (McCorkle) secretary testified at her guru’s trial that employees, friends, actors, and actresses were hired to give their TV testimonials. There is no way a novice nothing-down investor can remotely approach those kinds of profits in such a short period of time. Few millionaire investors with a lifetime of experience could do that. In other words, the real-estate-investment testimonials you see on TV are almost certainly barefaced lies or they are leaving out pertinent facts like that they committed fraud to do the deal in question. Some have asked me why the bad gurus never sue me. I suspect it’s mainly because they know I would subpoena the addresses and other details of their deals and testimonials if they did.
When Russ Whitney sued me, I tried to investigate one of his testimonial givers. I spoke to the wife of the guy who told how many properties he had bought as a result of Whitney’s training. She said they could not remember any of the details, had no documents for me to subpoena, could not remember the addresses of any of the properties he bragged about, or the dates when they bought them or who sold them or brokered the deals. In other words, zilch to support the claims made in the infomercial. See my Reed on Whitney Web page for details about that.
19. White-on-white words at beginning of their Web pages. In the Internet era, one of the things dishonest people do is put white-on-white or color-on-same-color words at the top of their web pages to mislead search engines. I found one the other day that contained Carleton Sheets’ name repeatedly, as well as words and phrases like Wade Cook, “foreclosures,” “nothing down,” and so forth. To find these hidden words, simply place your cursor about two inches below the top right corner of the Web page then hold the mouse button down and drag to the upper left corner of the Web page. You will see the offending words suddenly appear. Any guru who gets you to his Web site by misleading the search engine you use is not trustworthy and does not deserve your business.
Several people have written to me to protest that they do that and they are good guys. Bull! It’s dishonest and maybe illegal.
20. Use of the following words. These words are dishonest because they depict a degree of ease or exclusivity or certainty or absence of risk or amount of profit which does not exist. They are fraud at worst and puffing at best. Puffing is a legal term. Black’s Law Dictionary defines it as “Exaggeration by a salesperson concerning quality of goods.” If the guru you are considering uses any of these words or phrases in his or her presentation, brochures or Web site, he or she is probably a B.S. artist.
- perfect offer
- removes doubts
- secret (if it ever was a secret, it stopped being one when he sold the first copy)
- lazy way
- anyone can make a killing
- removes risk
- easy money
- easily determine market value
- take the fear out
- judgment proof
- removes guesswork
- gold mine
- This is not a get-rich-quick scheme
- dream stealer
The following words seem neutral, but for some reason they are used especially heavily by B.S. artists. Be suspicious of anyone who uses these words a lot or uses one very prominently, like in the name of their company or product.
- nothing down
- cookie cutter
- global (unless they are in the international shipping or moving business)
- money machine
- boot camp
What is the difference between a book and a “course” as the term is used by B.S. artists? Price, mainly. Also packaging. When the word is used by a B.S. artist, a “course” is merely a grossly overpriced book puffed up with blank paper and audio cassettes which duplicate the written words in the “course.”
Two of my three sons are currently students: one in college, one in high school (the other graduated college). They take real “courses.” In those courses they read, listen to lectures, ask questions, watch demonstrations or audio-visual presentations, perform laboratory experiments, go on field trips, complete assigned exercises which are not graded, submit papers and other individual and group projects based on research, and pass oral and written tests.
Here is the definition of a “course” taken from my Webster’s New Universal Unabridged Dictionary: “in education, (a) a complete, progressive series of studies necessary for graduation, for a degree, etc.; (b) any of the studies; a unit of instruction in a subject made up of recitations, lectures, etc.”
My wife did high school by correspondence course because her father worked for the Agency for International Development and she grew up in underdeveloped countries where there were no acceptable high schools for her to attend. Those courses consisted of reading material, exercises, tests, and other graded papers.
I took a bunch of real-estate courses including the Certified Commercial-Investment Member of the Realtors® National Marketing Institute courses, Appraisal Institute courses, and Institute of Real Estate Management courses. They involved reading material, lectures, questions from the students, exercises, field trips, and written tests. I have also taken other business-related courses like the Dale Carnegie course, which involved reading material, lectures, questions, discussions, homework, and classroom exercises. There are some real “courses” in the B.S. artists’ world. Only in their inflated rhetoric, a book is a “course” and a course is a “boot camp.” And, as you would expect, almost all of the “boot camps” aren’t worth what they cost either.
I offer no courses, seminars, “boot camps,” or “mentoring,” just books and a newsletter. In view of the fact that I am a West Point graduate airborne ranger Vietnam veteran who coached 15 football teams and has written seven books about coaching, you should be grateful that I do not offer a boot camp. If I did, the brochure headline would be something like, “You want a boot camp? I’ll give you a boot camp to end all boot camps. My only guarantee is that after you complete my boot camp you will never want to attend another boot camp as long as you live.”
21. Testimonials with incomplete names. Gurus I do not respect often give testimonials which give less than a full name and city and state or email link to the person. Typical B.S. artist variations are initials only or a first name and initial in place of last name. The basic idea is, does the guru give you enough to get in touch with the person and confirm the testimonial? If not, he or she is probably a B.S. artist. Generally, each of my books has a “reader comments” link that contains statements that readers made to me and gave me permission to quote. In almost every case, their name is linked to an email that is pre-addressed to them.
22. Prohibition against recording at free seminars. Many gurus hold free seminars to encourage prospective students to sign up for their “courses,” “boot camps,” and “mentoring services.” No information is given at those seminars. Therefore there is no legitimate reason to prohibit recording. To do so would be like Coca-Cola prohibiting the New York Times from running one of its ads in their newspaper with no charge to Coca Cola. Legit advertisers want their ads distributed as widely as possible. They normally have to pay. When someone wants to record an advertising presentation to play back for another person, a legitimate guru would say, “Great! The more the merrier.” Gurus who prohibit recording of free promotional seminars are doing so only to prevent you from gathering evidence of the fraud they are perpetrating.
You generally should not buy investment advice sold in TV infomercials. The same applies to the come-on speeches given in hotel room meetings. But if you insist on buying such products, make sure you tape record the entire infomercial or come-on speech before you do. Then you have legal evidence for getting your money back if the product does not live up to the advertising, which it won’t. Suing and actually getting your money back is easier said than done, even when you have evidence, but it is next to impossible if you fail to collect the evidence.
23. Repeated efforts to sell you more and more expensive products and services. Many gurus, including some whose products seem relatively inexpensive, are intending to suck you in, then pressure you to buy ever more expensive products and services. I do not object to a salesperson asking you the publishing equivalent of, “Do you want fries with that?” But a calculated program of trying to move you to significantly more expensive products and services smacks of bait and switch. Legit businesses offer you their entire product line up front and do not use high-pressure tactics. The gurus who follow this approach are using their cheap products to identify vulnerable people so they can then squeeze thousands more dollars out of them. This is akin to bait and switch, which is unethical, if not illegal.
Real-estate-investment products sold by TV infomercials are not profitable per se. Those companies can only make a profit by calling you and selling you more expensive products after you buy the cheap one offered on TV. What they are really doing is offering a relatively cheap product on TV at breakeven or even below cost in order to get your name and phone number to give to their commissioned, boiler-room high-pressure salespeople in Utah. They figure if you are dumb enough to buy the TV-advertised product, you are probably enough of a chump to fall for the high-pressure tactics to follow. They also sell your name and phone number to other high-pressure investment sales operations.
24. Focusing entirely on the acquisition phase of real-estate investment. Legit gurus like William Nickerson (author of How I Turned $1,000 into $5,000,000 in Real Estate in My Spare Time) tell you how to buy, finance, renovate, manage, and sell real estate and how to avoid paying income taxes in the process. B.S. artists only tell you how to buy and finance.
25. No profit formula. Real-estate investing is supposed to be about making money, right? So how do the B.S. artist gurus get away without ever telling their readers how to make money in real estate. All they tell you is how to buy and finance. For example, there is not a word in Robert Allen’s book Nothing Down about making a profit. In his second book, Creating Wealth, he did just one example, in which he assumed 10% annual appreciation in property values for five straight years, to show how you make a profit. But he made no mention of the fact that there have hardly ever been five straight years of 10% appreciation in history. Nor did he mention how to make a profit with normal appreciation. In fact, you cannot make a profit with normal appreciation using the nothing-down approach. It only works during periods of extraordinarily high appreciation rates.
Legit gurus, like Nickerson, gave their readers a profit formula. His was to buy residential rentals that were in need of renovation, renovate them economically, raise their rents, then exchange tax-free to the next property and do it over again. My books, How to Buy Real Estate for at Least 20% Below Market Value, Fixers, Deals That Make Sense, Single-Family Lease Options, How to Manage Residential Property For Maximum Cash Flow and Resale Value, How to Get Started in Real Estate Investment, and How to Increase the Value of Real Estate contain dozens of different profit formulas and hundreds of actual case histories. If you pay attention, you will see that the B.S. artists just figure you are dumb enough to think that merely owning real estate automatically enables you to profit from it. They never explain where the profit comes from.
26. Advocating the use of independent, percentage-of-the-gross property managers. Good property-management companies are virtually nonexistent. Experienced real-estate investors know this. But inexperienced investors do not and are often turned off by the idea of fixing toilets and other property-management chores. So B.S. artist gurus falsely tell these novices that they can eliminate these unpleasant chores by simply hiring a good property-management company. In short, the problem with property-management companies is that they neglect your property and use high-cost suppliers and subcontractors often in order to get kickbacks from them. Property management is too entrepreneurial to farm out. You can hire a custodian to perform some mundane, routine chores, like depositing rent checks in the bank. But you cannot hire an entrepreneur. You must manage property yourself or hire a salaried, in-house person to do it. See my book How to Manage Residential Property For Maximum Cash Flow and Resale Value to learn how.
27. Novel phraseology. B.S. artists invent new words and phrases for marketing or obfuscating purposes. Creating new words and phrases can be legitimate as a teaching device when the new word or phrase helps the student understand the idea in question. But B.S. artists use novel phraseology to make what they are telling you sound new, unique, and exotic. If you hear an old concept, you feel as though you are not learning anything new. But if a guru disguises his old concept in a new name, he can usually B.S. a novice into thinking he has learned something new.
One key test is whether the word or phrase in question is actually used by professionals in the industry, or just by the guru. For example, the phrase “equity kicker” is cute and really used in the industry. It refers to a loan provision which gives the lender equity in the property or a share of its net operating income in some cases. But no one uses the phrase “second mortgage crank,” which Robert Allen created in his book Nothing Down to describe a new first mortgage combined with a seller second mortgage. B.S. artists also give old words new meanings in another effort to dress up old material as new. Rich Dad Poor Dad author Robert Kiyosaki's twisted definitions of “asset” and “liability” are examples of this technique. Creating useless new words is misleading, but relatively harmless. However giving old words new meanings can hurt people by increasing misunderstanding.
28. Talking like a politician. Politicians use a lot of euphemisms and dysphemisms (the opposite of a euphemism) like “invest” when they mean spend taxpayer money or “loophole” when they are talking about lawful behavior they do not like. They like meaningless slogans. They are fond of dividing the world up into stereotyped groups like “the rich” and “the poor.” They engage in intellectually-dishonest debate tactics like name calling and changing the subject. B.S. gurus do this as well. Robert Kiyosaki speaks of “the rich” as a monolithic group where everyone behaves the same and have many “secrets” that only a few, like Kiyosaki, are willing to share. He also does a lot of sloganeering like, “Don’t work for money. Make money work for you.” That’s a politician’s grandiose way of saying you should save and invest. Like a divisive politician, he stereotypes and puts down entire groups like “the poor,” “the middle class,” “bean counters,” and those who have a university education.
29. Inaccurate book titles. The right book title can sell a lot of books. Nothing Down is one example. Another is Real Men Don’t Eat Quiche. Both books were lousy content-wise, but they sold well. All gurus, myself including, try to use a title which will maximize sales. But the B.S. artists feel no compunction against using a title that does not reflect the content of the book. Using an inaccurate title is dishonest. If the author will not even level with you on the title, how can you trust him about anything else?
30. Focus on the beginner market. In theory, there is nothing wrong with some gurus focusing on the experienced investor market, as I do, and others focusing on the beginner market. The two markets have somewhat different needs. However, it must also be noted that beginners are really ignorant about real estate and it is human nature for unethical, knowledgeable people to take advantage of ignorant people. In fact, the bad gurus do sell only to the beginner market because they would starve to death trying to sell their garbage programs to people who are knowledgeable enough to recognize garbage when they see it.
Gurus who sell to beginners claim they do it to help the little guy. There’s that talking-like-a-politician habit again. In fact, they sell to beginners because they are predators and predators go after the weakest prey. I just looked at the list of gurus I recommend and found that none of them focus on beginner investors. I recommend that beginning investors get their information only from the gurus who focus on experienced investors as a way of insuring that the material is good. The bogus material sold to beginners generally overstates the rewards; understates the effort, risk, and time required; and gives advice which is incorrect, inadequate, or even dangerous.
31. Denounce those who disagree with them as “negative thinkers” or “dream stealers.” Virtually all Communist governments came to power through revolution. Whenever any citizen of a Communist country criticizes the government, they are denounced and prosecuted for being “counterrevolutionary.” The phrase “negative thinker” is to real-estate investment what “counterrevolutionary” is to Communism: a meaningless accusation that can be leveled at anyone who disagrees with the accuser. Pyramid sales scheme pushers prefer the phrase “dream stealer” to put down anyone who tries to talk sense to their “cult members.”
It is one form of an intellectually-dishonest debate tactic known as “name calling.” Intellectually-honest debate tactics involve identifying errors or omissions in facts or logic. The B.S. artists who condemn “negative thinking” cannot define it. It you ask for an example, they will be forced to choose some statement of fact. For example, the statement, “It looks like rain,” might be denounced as negative thinking. But if it really does look like rain, and the group is deciding whether to set up a graduation ceremony in the stadium or the gym, what is the person supposed to say?
The Sunday, 5/23/04 Dilbert comic strip showed a good illustration of this. Dilbert was denounced by the pointy-haired boss for being too negative. He asked when and was reminded that he criticized ideas like “the perpetual motion clothes dryer.” When he protested they were lousy ideas, he was again accused of being “negative.”
Overemphasis on the negative aspects of many different things is a bad habit. But the trick is in defining “overemphasis.” In fact, the typical user of the negative-thinking accusation has a hair trigger and uses it against any critic, not just against the chronically depressed. Underemphasis or ignoring adverse facts or logic is probably a worse bad habit because such persons are more likely to get themselves in trouble. The correct posture is to seek the truth, whether welcome or unwelcome, and to accept that, sometimes, the truth hurts.
32. Real-estate dictionaries that are not in alphabetical order. Many so-called “how-to-invest” books are, in fact, merely investment dictionaries that are not in alphabetical order. All they do is define the terms unique to that investment. They are not in alphabetical order because the author is trying to conceal the fact that he has written nothing but a dictionary. If you watched Wall Street Week on TV you will notice that the panelists were uncomfortable talking about which stocks to buy and what the Dow will be in six months, but they get very comfortable when the viewer Q&A period arrives and they can sit back and just define investment terms or procedures. You do not need more than one real-estate dictionary, and there are several free ones online.
33. Use of handles or screen names on the Internet. Celebrity gurus do not do this, but they are not the only B.S. artists in real estate. The Internet is full of them. One way to spot them is to see if they give their real name or use a handle or screen name instead. At the slashdot.org Web site, you are required to give your real name or describe yourself as an “anonymous coward.” Well put. Obviously, you should not be paying any attention to anonymous cowards.
If you are curious about a particular person who is hiding behind a handle, do a number of searches for his email address on various search engines. I did that for one guy who sent me an antagonistic email and found out his life story, including contradictory postings on various different sites at different times. For example, at one, he said he was “very, very well compensated.” At another, he admitted he made $750 a week as a truck driver. At another, he bragged about having a prostitute masturbate him at a truck stop. At yet another—a Christian Web site—he chewed out another poster for using a profane word. At yet another, where he said he and his wife and child enjoyed their visit to a particular Florida sea food restaurant, he used both the fake handle and his real name and address. Gotcha!
34. Citing meaningless or near meaningless “accomplishments” as evidence of good-guy status. At least one guru Web site says “Registered with the State Secretary of State as a company in good standing.” All corporations and similar entities are required to register with the state, just as all licensed drivers and vehicle owners are. It means nothing. Getting a trademark is no accomplishment either. Owning a trademark on an approach to real estate is the equivalent of having a vanity license plate. All you have to do is be the first to request it. It means almost nothing.
35. Citing professed religiousness as a selling point. “Trust me because I say I’m religious,” is an age-old con man’s ploy. Whether a real-estate guru adheres to the teachings of any religion is irrelevant, not to mention unverifiable. Use of professed religiousness as a selling point is improper. There is an old saying something to the effect that, “When a man starts telling me how religious he is, I check to see if I still have my wallet.” That’s good advice. In 1819, William Hazlitt said, “The garb of religion is the best cloak for power.” In the current era, it is also a good cloak for persuading people to give you money.
I do not object to a man making occasional religious references after you have become his customer. For example, Forbes magazine has a biblical quote in every issue. But Forbes does not say subscribe to Forbes because it is a Christian magazine. Nor do I object to someone teaching a Christian or other religion’s approach to investing. For example, in Leviticus 25 to 37 in the Old Testament, there are a number of admonitions about interest and co-signing on loans and such. The Koran prohibits charging interest. If someone wants to preach an approach to investing that adheres to some religion’s teachings on the subject of money, fine. It’s even OK to advertise that because, in that context, religion relates to the content of the course, not the content of the character of the teacher.
In her book Fraud: Schemes, Scams, and Swindles, Marsha Bertrand has a chapter on “affinity fraud.” That’s where someone tells you to trust them because they are a member of the same group as you. More often, the con man makes no claim to be in the same group as you. Rather, he is just claiming to be a member of a trustworthy group—namely, religious people. Good-guy gurus who are religious generally either will not mention their religious beliefs at all to customers, or will mention them only in a non-marketing context, perhaps using their guru podium to mix a little preaching in with their real estate message. Check also http://www.crimes-of-persuasion.com/
One reader told me this item reminded him of Ralph Waldo Emerson’s line, “The louder he proclaimed his honor, the faster we counted the spoons.”36. Excessive quoting of legal citations. My books and articles contain legal citations—unusual for books aimed primarily at laymen. But I think it adds credibility and enables readers either to look up the legal authorities themselves or show the citations to their attorney or accountant. But note the phrase “adds credibility.” Some gurus, who are con men, spout legal citations by the ton. This phenomenon has been seen before, among those who do seminars claiming the federal income tax law is unconstitutional. (It was—before the Sixteenth Amendment.) My statute-and-court-decision-citing books, like Aggressive Tax Avoidance for Real Estate Investors, cite mainstream law, that is, the most frequently cited statutes or cases on the subject in question. In some cases, when I am discussing an aggressive approach, I note that the approach has thin support in the law or that the only legal support that exists is from somewhat different situations than the approach being advocated.
How many citations are excessive? It’s hard to draw a fine line. I would suggest that it’s too many if you are getting citations when you were not wondering, “Does the law really say that?” You should also note that citation spouting does not prove legality. On the contrary, the more citations one spouts, the more you should be suspicious. Shakespeare’s line from Hamlet, “The lady doth protest too much, methinks,” should come to mind when a guru tells you over and over about all the legal backup he has for his approach. Of course, the best way to test whether the citation spouter is a BS artist is to check the cited authority to see if it really supports the guru’s approach or to consult a lawyer to see what he or she thinks (the cite may support the guru, but he probably omitted a crucial contrary cite). Most of the cites given by a cite spouter probably are from situations that are too different from what he is preaching to be relevant to what he is preaching.
37. Riff raff in audience. If you go to a live presentation of some sort, you can see, in-person, the other customers of the guru in question. B.S. artist gurus have audiences that look sleazy, unkempt, the bottom of the socio-economic barrel. The better the audience looks, the better the quality of the guru’s information as a general rule. Think of it this way. Look around the room and ask yourself, “Are these people who I want to be like when I grow up?” If not, leave.
38. Denunciation of traditional education. Who is most likely to fall for a get-rich-quick pitch? People at the bottom of the socio-economic ladder. Who is that? The least educated. So one theme common to a number of get-rich-quick pitches—like Kiyosaki and Whitney—is that traditional education in elementary, high school, and college, at best, failed to teach you how to get rich, and, at worst, taught you things that actually prevent you from getting rich. [Whitney says, “We clearly state in all our presentations and in our materials that real estate is not a ‘get-rich-quick’ proposition; that it takes time and hard work.”]
In fact, every study I have ever heard of says that the more education you get, the more money you make. As we all know, there are exceptions to the rule—the occasional high-school dropout millionaire and financially struggling Ph.D. But, clearly, you handicap yourself if you stop your education short of a college degree. As late as my late thirties, mortgage lenders were still asking me what college education and other training I had that qualified me to be the owner-manager of an apartment complex.
Also, think back to high school and college. Remember who the dropouts were? Generally, they were the laziest, dumbest, most undisciplined kids in your school. No matter what the get-rich-quick gurus tell you, making an extraordinary amount of money takes an extraordinary amount of work. It takes intelligence, diligence, and persistence—precisely the things that the vast majority of dropouts did not have. If a dropout asked me for advice on getting rich, one of the first things I would tell him was that he must abandon the behavior pattern that caused him to drop out. Such folks don’t want to hear that. So the get-rich-quick gurus tell them what they want to hear: that school sucks, that they were right to dropout, and that they can get rich without the hard work that they refused to do in school. This is yet another indication that get-rich-quick gurus have no interest in helping you. They are only interested in helping themselves to what little you have in your bank account.
39. Simple rules covering complex matters. Beginners want simple rules for investing. For many aspects of investing, simple rules can be stated. I have a number of simple rules. For example, one of my Reed’s Rules of Real Estate Finance (contained in my book Fundamentals of Real Estate Finance) is that “Simple is better than complex.” My tax book has Reed’s Rules for Understanding Income Tax.Both my Succeeding and How to Get Started in Real Estate Investment books talk about where to get good information and education to accomplish your goals.
The problem arises when the guru gives you simple rules that govern complex issues. For example, when I was a student at Harvard Business School, we had a project with some older guys who were there for a short “executive” program. When we were deciding how much of some supply our “company” should order, one of the old guys said, “My boss always told me that running out was one of the worst things you could do.” When we heard him say that, we MBA students exchanged glances stifling laughter. In fact, the correct way to analyze such things is a formula which takes into account the cost of overage and the cost of underage. Whether it is bad to run out of something is a function of your profit margin. On high-margin products, running out is bad. But on low-margin products, the cost of carrying excess inventory may make it better to occasionally run out rather than to always have enough to meet peak demand.
The point here is that bogus gurus love to give simple rules because they know that’s what ignorant novices want. The problem arises when they give simple rules to govern complex situations that do not lend themselves to simple rules.
Einstein reportedly said,
Everything should be made as simple as possible, but not simpler.
The reader who sent me that quote also told me that there is an intellectual discussion of simplicity versus complexity at http://math.ucr.edu/home/baez/physics/General/occam.html.
40. Deliberately making a meeting room look crowded. Russ Whitney tells his students to run sales seminars in some cases and explains both how they should and how he does. He says to set fewer chairs than the number of people you expect to make the room appear packed. Furthermore, he says to keep the meeting room doors closed until you see how many people so you can remove chairs if necessary without people suspecting.
41. Constant warnings that prices will be much higher if you do not buy right now. This is the behavior pattern of a high-pressure sales organization selling overpriced material. They know that if you do not sign up while you are in their presence and under their spell, you will likely sober up and realize what you were about to do was a big mistake. Reputable businesses do not constantly threaten you with greatly increased prices if you do not buy today.
42. Physical presence in Florida or Utah. A very large number of BS gurus are located in Florida or Utah or both or are associated with businesses located in those states. Not all gurus in those states are bad. For example, I recommend John Schaub who is in Florida. But I have never recommended any Utah guru. Utah appears to be almost the only place where high-pressure, real estate investment telephone boiler rooms, “consultants,” and “mentors” operate. I am not sure why. Utah has a lot of Mormons, but I have known many Mormons and they have been more ethical as a group than any other religious group I have come in contact with. It may be that the people running these operations are non-Mormon or that they are uncharacteristic if they are Mormon.
The people of Utah are the ones who need to explain why their state is the real estate phone scam capital of the world. Florida has a long tradition of selling underwater lots and swamp land. They also have a bankruptcy law that allows Floridians to declare bankruptcy yet keep their principal residence regardless of its value! That attracts people who expect they may have to declare bankruptcy in the future. Nothing Down guru Robert Allen went bankrupt in California some years ago. There, a married couple can keep just $75,000 of their home equity. Guess where his principal residence is now? I heard from some readers that it was in the Orlando, FL area. Another reader said they are in Utah. I guess it has to be one of the two.
The 4/19/04 Forbes had an article called “Poison Pills” with the cover subtitle “The men and money pushing dangerous diet supplements.” I was only half surprised when I read the following sentence in the article: “Light regulation is particularly popular in Utah, where dietary supplements—at $3 billion a year—are the state’s third-largest industry.” I often refer to Utah as the Nigeria of the U.S. Nigerian Internet scams are among the top ten. You know the ones. “I am the widow of the minister of transportation who was assassinated and I need to get $10 million out of the country and need your help.” Believe it or not, that is something like the second biggest industry in Nigeria after oil in terms of revenue. I do not know where telemarketing scams rank as a source of income for Utah, but I would not be surprised if it was in the top five.
On 2/22/05, the Federal Trade Commission cracked down on home business scams. Marcos D. Jimenez, the U.S. Attorney (chief federal prosecutor) for the Southern District of Florida was quoted in the FTC story as saying, “South Florida is one of the consumer-fraud capitals of the country, if not the world.”
Forbes magazine published an article about the prevalence of fraud in Utah. You can see the beginning of it at this link: https://www.keepmedia.com/Auth.do?extId=10022&uri=/archive/forbes/1999/0208/6303056a.html. They charge $2 to read the whole article.
One of my readers said in an email to me, “In his book Why People Believe Weird Things, Dr. Michael Shermer discusses the fact that statistically speaking, more fraud is perpetrated per capita in Utah than in any other state.”
An FBI report in 2006 said Florida was the leading state for mortgage fraud. Guess which state was second? Utah.
I have never had a business presence in either Florida or Utah.
43. Automatic debiting of your account. Those who would rip you off were greatly aided by the invention of the credit card. But now they are even happier about a more recent invention: automatic debiting of your credit card or bank account. Legitimate businesses are not afraid to have you reconsider whether you want to pay them monthly or annually. For example, to renew your subscription to my newsletter, you have to send me a check or pay by credit using my Internet shopping cart. I neither offer nor want any automatic debit. Illegitimate businesses fear that if you have time to think about the money you are paying them, you will decide against it. That’s why they are trying to get you to sign non-cancellable leases and “mentoring” contracts that you cannot get out of after you sign on the dotted line. If someone is trying to get you to agree to let them debit your account, run away. If they don’t want you to think about paying them money, don’t agree to pay them money.
44. Saying they only do it for the love of teaching and sharing their secrets. Amazingly, the salesmen who makes hundreds of thousands of dollars per year selling expensive get-rich-quick seminars and mentoring, tell audiences that they do not do it for the money. They claim they just do it out of the goodness of their hearts to help people. Even more amazingly, some audience members believe this. If it were true, they could speak for free or just for enough to cover their out-of-pocket expenses.
45. Saying you have been “selected” to be allowed to take the training. If you apply to Harvard and get accepted, you have been selected. If you apply to become an FBI special agent and are accepted, you have been selected. However, if you are told you have been accepted to be allowed to pay some guru thousands of dollars for “mentoring” or seminars, you have been targeted, not selected. It’s a lie. They never turn away anyone willing to pay them their multi-thousand dollar fee. If they insist they do, ask them to put it in writing that others willing to pay for the training were rejected for lack of the personal qualities required. Also ask them to tell you in writing what their selection criteria are. At that point, you are more likely to be rejected as being too smart to be conned than to get the answers.
46. Use of mass media. Being a landlord is not for anyone any more than careers in oil drilling or cancer surgery are for everyone. You do not see infomercials telling you to become rich by learning how to drill for oil or becoming a cancer surgeon—even though many in those fields have become rich. Do mining and medical schools advertise? Sure. Just not in infomercials or full-page newspaper ads. Why not? It does not make economic sense. Infomercials and full-page ads cost too much. They can only be used cost-effectively for products that are applicable to a wide range of viewers or audience members like Coca Cola or Ford Taureses. To advertise something that would only be applicable to a small market segment, you do targeted cheap advertising, like on the Internet or in college newspapers or trade journals. To make the numbers work in mass media like infomercials and newspaper ads, you have to tell the viewer/reader that being a landlord is for everyone. That’s a lie. Not everyone should try to deal with a 6'5" biker who is living in your building and refusing to pay his rent. Not everyone can avoid being ripped off by air-conditioner repairmen. Etc. So do not buy real estate investment advice from those who advertise through infomercials or newspaper display ads.
47. Use of the sentence, “Failure is not an option.” Prospective customers of B.S. gurus are scared that they are about to waste their money. (They are.) So they ask if becoming rich in real estate is a sure thing if they buy the seminar or “mentoring” service in question. The con men want to say yes, but it’s sort of illegal. So lately they have taken to saying, “Failure is not an option.” That way they can seem to be saying, “Yes. Success is guaranteed if you buy our seminar,” without actually saying it. If you cite, “Failure is not an option,” as proof that they gave you a guarantee, they will claim it does not mean that. The sentence was coined by an Apollo 13 screenwriter to be spoken by the actor playing Gene Kranz, lead flight director for NASA’s Mission Control during the Apollo 13 mission that almost ended in disaster. It was appropriate in the movie. It is not appropriate or honest for use as an answer to the question, “Is your program guaranteed to make me succeed.”
48. Asking you to sign a contract. Bad real estate gurus ask you to sign a contract for future seminars and/or “mentoring” services. I never did that when I did seminars. Nor did I ever sign a contract when I attended many, many real estate seminars. So why do the bad guys do that? Because it prevents you from disputing the credit card charge for the bad seminar or “mentoring.” Apparently, when there is a signed contract, the credit card company has to tell you that you have to sue to get a refund. If there was no written contract, they could just credit your account. Why do the good guys not demand that you sign a contract? They are not afraid of unhappy customers complaining to their credit card company.
49. Marketing through infomercials. All those who market seminars, “training,” “home-study courses,” or “mentoring” via real-estate-investment-oriented infomercials are rip-off artists. Some may wonder how they all could be bad. They assume at least some must be good. No. Here’s why. Real estate investment is not for everybody. Only a small percentage of the American people should be investing in real estate. But you cannot use TV infomercials to market to that small group. Why not? TV infomercials cost too much. The bad gurus are extremely greedy and unscrupulous. They want to make tens of millions of dollars selling real estate investment information. That would be impossible if they only sold legitimate information to persons who really can make use of the information. So they sell shamelessly expensive, pie-in-the-sky information to hundreds of thousands of people who are unsuited for either full- or part-time real-estate-investment careers. I have never marketed anything through TV or radio.
50. Company names that sound like non-profit or government organizations. Some bad, for-profit gurus try to deceive you into thinking they are non-profit associations, educational institutions, or government organizations. Watch out for the following words in company names:
- co-op or cooperative
- land bank
- U.S. or United States or American
- acronyms that end in MAE or MAC and which are therefore designed to sound like the federally-related mortgage organizations FNMA (called “Fannie Mae”) or FHLMC (called “Freddie Mac”)
I know of many good organizations that use these words in their name, but I also know of bad ones. You need to investigate further when you see such words. Some bogus, for-profit, get-rich-quick schemes even go so far as to give all their con men employees academic institution titles like “chancellor” and “dean.”
51. Awarding oneself a catchy title. Lately, it seems like virtually all the bad gurus have awarded themselves a catchy title like “Mr. Flipper” or “The Millionaire Maker” or the like. This is pure hype. It is a form of item number 2 above: subjective self description, only more hyperbolic. When others who are qualified to award such a title, and who have objective standards, award you a title, like a Nobel Prize or the Greatest Living Baseball Player, you can use it legitimately. But if the title is just something the guru and his PR guy came up with, and offer no proof of its accuracy, steer clear.
52. Pressuring you to get your credit card limit raised. When I first heard that bad gurus did this, I was astonished. I could not believe they would be so blatant and shameless or that people in the audience would be anything other than outraged and tell the speaker that their credit card limit was none of his business. To my additional astonishment, I learned that about 20% of the people in the audience are so dumb that they will raise their limit then immediately turn all that money over to the bad guru’s salespeople. Your credit card limit is no one’s business. Only BS artists will ask you what yours is and urge you to get it raised then ask you to spend all of it on their products, seminars, and/or “mentoring” services.
53. Investment or marketing company? In his excellent book, the Four Pillars of Investing, author William Bernstein has a checklist of ways to tell the difference between an investment company and a marketing company. He credits the checklist to journalist Jason Zweig. An investment company is a company that understands investments and is really trying to help you do as well as possible in them. A marketing company is a fraudulent company that pretends to be be an investment company, but which is really just about telling you what you want to hear so they can part you from your money. Zweig says 90% of mutual funds are marketing companies. 100% of TV infomercial gurus are. Here is a partial paraphrase of his list:
- Advertising the track records of only your most successful mutual funds is marketing-company behavior. Sleazy real estate gurus do this with selective testimonials.
- Creating new products because they can be sold, not because they make sense is marketing-company behavior. Sleazy gurus do this by offering seminars and “mentoring” on the latest fad like pre-construction investing or short sales or sub-prime foreclosures.
- Investment firms continually warn that prices can fall; marketing companies do not. Sleazy real estate gurus throw in a “This is not a get-rich-quick scheme” disclaimer once an infomercial, but otherwise play one “I got rich quick” testimonial after another.
54. Vague university degrees. B.S. Artists often claim they have impressive academic degrees, but refuse to specify the subject matter or source of the degree. Until you know what subject it was in, you cannot evaluate whether it makes the guru qualified to teach you. For example, Dr. Laura does, indeed, have a doctorate, but it is in physiology, not psychology or psychiatry. Physiology is similar to anatomy. Her doctoral dissertation was about insulin effects on fat rats. Others, claim advanced degrees, but refuse to say who awarded the degree. One real estate guru got his much-ballyhooed doctorate investigated by Money magazine and they revealed it was from an little-known, unaccredited university that was later in the news for giving unearned credits to local college basketball players. Some got their advanced degrees from unaccredited diploma mills that give credit for “life experience.”
55. Giving you a fake name. The speaker you heard at an expensive seminar may not have been who he said he was. One seminar attendee said the speaker began by saying, “My name is ________” then started to write a different name on the white board. Ask the speaker to prove his name by showing you his drivers license. Those who told you the truth should have no objection although they may want to cover up their address when they do so. Those who lied to you will indignantly refuse.
One reader thought my BS detection checklist reminded him of Carl Sagan’s Baloney Detection Kit. Here it is:
Baloney Detection Kit
Warning signs that suggest deception. Based on the book by Carl Sagan, The Demon Haunted World. The following are suggested as tools for testing arguments and detecting fallacious or fraudulent arguments:
Wherever possible there must be independent confirmation of the facts.
Encourage substantive debate on the evidence by knowledgeable proponents of all points of view.
Arguments from authority carry little weight (in science there are no "authorities").
Spin more than one hypothesis - don't simply run with the first idea that caught your fancy.
Try not to get overly attached to a hypothesis just because it's yours
John T. Reed
Share this post