For those who follow real estate investing gurus, it might be interesting to note that Russ Whitney’s company, through an internal investigation, is calling for the founder’s resignation. Russ Whitney, the founder, chief executive officer, and chairman of the Whitney Information Network has in the past aligned himself with Robert Kiyosaki (of Rich Dad, Poor Dad infamy).
The report said the committee “found that, among other things, before the start of the government investigations, the company’s marketing function — including advertising for company products, solicitation of customers, presentation of live seminars, telemarketing, coaching and mentoring — was characterized by inadequate controls, inadequate training and a failure to devote adequate resources to compliance.
I don’t expect any remuneration for customers who were swayed by the marketing cited in the report, unfortunately.
Here are the basics about Russ Whitney. He is a high school drop-out who built a money-making business. What was that initial business? Well, Whitney doesn’t really explain:
“I ordered a book that had a couple of ideas that made sense. I finally found something that I could do that didn’t require a lot of money to start, and in 3 weeks, I made $11,000…” He and his family celebrated his initial financial success with a commitment to use that money to make more money. He quickly invested it in another money-making vehicle. A little over a year later, at the age of 22, he had racked up $117,000 in profits.
Why no details other than to say his plan “involved real estate?” Well, he wants you to attend his seminars, buy his books, and become part of the program if you want to find out. As any guru, his primary income doesn’t come from these investment opportunities — it comes from the massive “education” program built around his investing ideas. That’s the truer way to wealth, at least for Whitney — become a cult-like motivational leader.
For some interesting reading on Russ Whitney, consider some of these articles. There is enough content here and elsewhere on the Internet to keep you busy for days.
News-Press: Top Whitney Execs Targeted
Rip Off Report: Russ Whitney
Russ Whitney’s Building Wealth and Russ Whitney’s Blog
John T. Reed on Russ Whitney
New York Times: Russ Whitney Wants You to Be Rich
Teach Me To Trade and Rich Dad Academy: both assisted by or partnered with Russ Whitney
Below is a video (part one of two, Adobe Flash required) about suspected rip-offs by Russ Whitney. The source is not identified.
If you’re interested, here is the second part of the video.
Updated August 9, 2011 and originally published November 17, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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{ 9 comments… read them below or add one }
I want a cult-like following that will pay me thousands of dollars for my nuggets of wisdom so that I don’t actually have to succeed at what I’m telling them to do.
Oh, wait. I don’t. I want to be able to sleep at night.
But there are day…………
I’m not sure what you guys are upset about. My husband and I took his course about 5.5 years ago and we now own 14 houses. Yes, the information came at a high price, but so does college and there is no guarantee that you will find a job in the field that you trained for. Guess what you still have to pay off all those student loans. We had zero training in any kind of real estate, but in 2 years we had 14 houses. Its all in what you put into it. That goes for anything in life.
Brandie, I completely agree. I have spent about $80k on my engineering education and about $30 on my real estate education (which began with Russ Whitney). I now have two 3-family houses paying rent, and I have been unemployed from my engineering job for almost 12 months, with no prospects in sight. My cashflow from rents is almost enough to live off of. One more 3-family and it will be. I bought one in 2006 so I am severely underwater, but because of the education I received through RW, I understood I am not interested in what the market does. As long as it cashflows, what does it matter? RW made it easy to figure out what cashflows and what makes sense.
I would never have understood the basic principles of real estate if I had not taken the classes offered by RW. If this lady in the article bought something because someone else encouraged her to instead of looking at sound financials, then she did not understand the material presented.
I’m also wondering how I can get into that racket whilst still maintaining a semblance of ethics. Are we really sure it’s not possible?
We must brainstorm this, plonkee. Anyone else interested? ;)
You got that right! Russ Whitney & his “buddy” companies are bad news. Just look at the facts of recent litigation:
1. His customers are suing him CSK Tel 813-282-6000
2. His stock holders are suing him for defrauding customers, and inflating his stock value.
3. His employees are suing him
4. Several states atty generals have moved against him, like TN, MI, FL etc. FL just settled a multi million dollar suit against Whitney etc. AND are filing another suit. For one proof
Florida Attorney General is filing suit against: Russ Whitney – Gulfstream Developement – United Mortgage Corporation – Douglas Realty
For their fraudulent and illegal practices regarding housing Investor training & Turn-Key new construction houses.
Anyone who has been hurt by these poeple needs to file their complaint with the FL Atty General’s Office (here are step by step instructions)
Go to http://www.myfloridalegal.com
Click on to Consumer Protection-(Left Side Column)
Click on Economic Crimes
Click on Contact Economic Crimes
The Complaint Form will appear. Fill in all sections.
Under Section 2, for Name/Subject list: Russ Whitney/Gulfstream Development/United Mortgage etc.
For Subject/Category dropdown list click on: False or Deceptive Trade Practices
Robert Kiyosoki BUSTED!!!!
http://www.cbc.ca/marketplace/2010/road_to_rich_dad/main.html
His association with Whitney brought him down.
Watch for major developments in these two class action suits this and next week
1. http://www.archive.org/details/3-07Musuit
2. http://www.archive.org/details/NorthPortSuit
I happen to agree with Brandie also. You get from it what you put in. However, having said that, I immediately suspected Russ Whitney and his learning academy of being a scam after I spent a whopping $9k on his seminars and 2 courses, and found that when I requested assistance on a deal, the help was much lacking, and instead, I was advised to join their coaching program, for another $2500.
Russ Whitney is bad news.Don’t believe anything you hear from him. My friend lost lost her ass following his doctrine. Her credit is ruined. the property she paid 200k for sold at sheriff sale for 64,000 .He SHOULD be held accountable!