Friday, May 25, 2007

What Atheist Do I Be?

Jim just took this quiz and posted his results, so I figured I'd do it, too.

I take serious issue with scoring "33% theist"!

You scored as Scientific Atheist, These guys rule. I'm not one of them myself, although I play one online. They know the rules of debate, the Laws of Thermodynamics, and can explain evolution in fifty words or less. More concerned with how things ARE than how they should be, these are the people who will bring us into the future.

Scientific Atheist


Angry Atheist


Apathetic Atheist




Militant Atheist




Spiritual Atheist


What kind of atheist are you?
created with

Saturday, May 19, 2007

Nouveau Riche University

Real Estate Investor Seeks StudentsThis morning I attended an introductory meeting (a.k.a., "sales pitch") for the "real estate investment college", Nouveau Riche (NRU). I had stumbled upon the company, quite randomly, a few months ago while perusing some of the local groups at, but until recently I just couldn't bring myself to take the time to check them out in any detail.

The first red flag to jump out about NRU, though, is that its founder, Jim Piccolo, was also the founder of the MLM company TruDynamics (a.k.a., Travel Dynamics). In my book, anyone who starts a network marketing company is not a trustworthy individual.

There's always a chance, though, that a person can reform, and I wasn't really doing much with my Saturday morning anyway, so I figured "what the hell?" and headed to one of their twice-weekly meetings. When I arrived I could tell immediately I was in the right place, since two of the cars parked there had huge wraparound signs on them, asking "Did you make $30K last month?" and, if you didn't, suggesting to call the supplied phone number.

Much of the content of the meeting itself can be found here, including the actual Powerpoint slide show used by the presenter. Several things struck me about the meeting, though. There were roughly 15 people there, including myself, but I'd say 10 or 11 of them had already either purchased the R2E2 or paid the full "Regents" tuition. This struck me as odd, but one thing they did seem to stress - especially when 4 of the attendees stood up to tell their own success stories since joining (one of the 4 strongly implied that her 19-year-old daughter would be skipping "regular" college and just attending NRU - yikes!) - was NRU's "community" aspect. Supposedly you won't ever be left out in the cold if you join up. I'm guessing many of the people there were enjoying the community? (Yes, it's true that at least some of the people were probably there in hopes of earning a commission on a sale.)

Another thing they stressed was the Investor Concierge service, which sounds pretty cool, but, as this website points out, the example property shown in the presentation used suspicious numbers, such as a 5.25% interest-only loan. For reasons I'll get to in a moment, I strongly suspect the Investor Concierge has a chronic shortage of properties - profitable or not (I'd suspect mostly not) - but a look at one of the "Last 20 Sold" houses using the site's guest account revealed something even more suspicious. Here's a screenshot of a Phoenix AZ property listing on the Investor Concierge site (click images for full size):

3302 W Acoma in the Investor Concierge
Here's the same property's details from the records of Transnation Title:

3302 W Acoma in Transnation Title's web site
The discrepancies ought to be patently obvious. The Arizona Regional Multiple Lising Service corroborates Transnation Title's data (big surprise there!). No recent sale of 3302 W Acoma has taken place - at $139K or any other price. I'll let you draw your own conclusions, but I hope you're as disturbed as I am by the implications.

They also highlighted their "business opportunity" aspect - not surprisingly, invoking Kiyosaki's "cashflow quadrant" in the process. While it doesn't technically meet the definition of MLM, the "opportunity" certainly resembles it in many aspects. I'll skip going into any real detail, but the basic idea is that you, as a sales rep for NRU, bring in 2 paying customers, which will result in 50% commissions being paid to your trainer/sponsor/mentor person (the one who introduced the company to you). After that, the first two people those people bring in will result in a 50% commission being paid to you. It's not MLM, exactly, but it does suffer from the serious drawback of quickly creating too many sales people in a given region.

Think about that, for a moment. You might remember that old shampoo commercial: "They'll tell two friends, and they'll tell two friends, and so on, and so on..." That may work great for shampoo, but is such a scenario even remotely workable for real estate investing?

For sake of argument, let's grant that, say, 5 of the people with the big car signs really do, consistently, month in and month out, make $20K-30K selling NRU tuition packages. They claim that 98% of the people who sign up do so at the "Regents" level. That's an $8K commission to the person who signed them up. So, that's roughly 3 new "students" per salesperson signed up every month, or 3x5x12=180 new "real estate investors" recruited in a year by those 5 salespeople. Now, as you know, those 180 people were, in part, enticed to join NRU with the promise that they could each also make approximately $288K in a year. But to do that they'll have to bring in another 6,480 people. And what about those people? How easily do you think they'll each make $20K/month?

According to a recent article on, homeowners in the Metro Phoenix area who default on their mortgages get an average of 300 pieces of mail from foreclosure investors. Assuming your typical pre-foreclosure investor sends a "campaign" of 5 letters to one house, that means that there are somewhere around 60 people competing for each potential investment property. The competition has gotten so fierce that now some foreclosure sharks are sending oddly shaped colored envelopes with hand-written addresses - and even including pieces of Jolly Rancher candies inside! All in the hopes that their ad doesn't simply go straight to the trash, ignored. Nouveau Riche University wants to increase that number from 60 to 6,480 competitors, plus! Does that seem even remotely sustainable to you? Are you interested in being one of those 6000+ "investors" competing for investment properties? In what other industry (aside from MLM) are the "sales reps" actively working to undermine their own success by training their own competition?

In spite of the obvious mathmatical unworkability of NRU, their introductory meeting's sales pitch is definitely a slick presentation, and you can't help but get caught up in the warm and friendly atmosphere they, no-doubt, carefully cultivate. At the conclusion of the presentation they instruct you to immediately go and tell your sponsor-person if you're interested in signing up, learning more, or just want to leave. I told my Independent Student Advisor that I was somewhat interested in learning more, but that I still had a number of questions. Foremost in my mind at this point is why this person, who has been with NRU for about a year, doesn't appear to own any investment properties - at least not locally.

It probably goes without saying that I won't be plunking down any money for this "opportunity" any time soon.

A superb, must-read, critique of the whole Nouveau Riche phenomenon can be found at

UPDATE, 7/16/07: I received an email today from my independent student advisor contact, asking me to remove all mention of her from this post and the comments following. The ISA's contention was that the inclusion of this information is "disrespectful" and "unnecessary". I have agreed to remove all mention of her name - to protect against the possibility of unrelated future Google searches by, for example, potential stalkers - but I believe that the links to the public record are necessary. Anyone interested in the truth should be in favor of greater transparency, in my humble opinion. This is why I include links to both the Maricopa County records, and the AZ Corporation Commission records, since she claims not to own any investment properties by name.

As part of this update, I had to delete several of the comments from the comments thread. Those are reproduced here, with the ISA's name replaced by strings of X's.

KIWI said...
And by the way, XXXXXXXXXX DOES own several properties here and in Las Vegas! Please do not make assumptions about things you know nothing about.


Einzige said...

What's with the ALL CAPS? Do you think that by shouting at me you'll win others to your cause?


Quite the contrary, I am more than willing to listen to substantive arguments, consisting of logical analysis and the presentation of empirical evidence in support of your assertions. Unfortunately your comments so far have provided neither of those. Instead, you've simply made a number of bald assertions and insults to my character - while simultaneously ignoring the bulk of my complaints against NRU. Hardly persuasive stuff, I'd say.


I'll skip delving deeply into the details, but each potential loan is going to have its pluses and minuses, and should be evaluated on an individual basis. The main questions with respect to an interest-only loan should be: 1) How long is the interest-only period? and 2) When the reset comes, what are my best- and worst-case monthly payments going to be? I suppose there are situations where an interest-only loan is appropriate, but given the future's uncertainties, I'd prefer knowing what my payments are going to be.

Why don't you explain your thought process, rather than insult me for my apparent ignorance in this area?

And by the way, XXXXXXXX DOES own several properties here and in Las Vegas!

How do you know this? Note I didn't "assume" anything. All I said was that she doesn't seem to own any investment properties locally, based on Maricopa County records associated with her name and the name of the corporate entity I could find associated with her - I even provided a link to the relevant MC records! I didn't claim that this was definitive proof.

On the other hand, if she wants to convince potential recruits that NRU is an effective means of becoming a successful RE investor, she ought to make it easy for folks to find evidence that she actually is one herself. Don't you think?

What about you, Kiwi? Where are your investment properties? I'd like their full addresses, for starters. Maybe some rental agreements, too. Otherwise I think those of us who are incredulous are entitled to remain so.


UPDATE TWO (01/09/08): It seems that all of my ISA's promotional web sites for NRU and real estate investment are now defunct. This is certainly not evidence in favor of NRU.

Tuesday, May 08, 2007

Smith & Merritt: Waffle Your Way To Wealth

I'm beginning to like S&M's slogan. It's such an easy target.

Below is a scan of a refund letter sent to gthomp62, a commenter here on Die Eigenheit, signed by Kathryn Merritt herself. In it, she says that Smith & Merritt are "sorry", "embarassed", and, "most of all, deeply apologetic" about "unforeseen problems and issues" that "took longer to overcome" than they planned. They're also "truly sorry" and sad about the "anxiety, frustration, and inconvenience" they've caused.

The reason the refunds are late? The acquisition of S&M by College Partnership, which has a board of directors who are now in charge of managing and approving "the funds to be allocated and released to Smith and Merritt for past client services and refunds." I might be naïve about such things, but that sounds like bullshit to me. When one company acquires another it does so with the full knowledge and understanding that it has existing assets and liabilities, as well as pending agreements and obligations. Those things don't suddenly become null and void or change their terms just because their ownership has changed!

Oh, I love this quote (my emphasis):

We have begun putting a comprehensive plan in place to provide better and timelier information to you regarding refunds...As this is decided and we receive the information, we will be able to give you a better idea of the timing on your refund and when you can expect to receive it.
Not just the timing, you see, but also when you're going to get it, since "Nothing is more important than providing [the refund] you expect."

Whew! I'm sure everyone who got a copy of this letter feels better already.

Click for full size

Friday, May 04, 2007

Smith & Merritt: Scam Your Way To Wealth?

I called it.

I don't mean to toot my own horn, here, but back almost a year ago, when Smith & Merritt were endlessly assaulting my ears with their inane slogan, “Spend your way to wealth”, on the Howard Stern Show, I said this:

They don’t seem to have any “products” for sale—except a “Free Report and Consultation,” which has to be some sort of loss-leader designed to get you to buy the “real” (and no doubt “real expensive”) stuff, whatever that is.
Shortly after I wrote that and the post following it, the Smith & Merritt advertising contract with the Stern Show ended, and they promptly dropped off my radar screen.

I gave them no more thought, until recently, when the number of hits to my blog via Google searches for “Smith and Merritt” started spiking. Then the comments started trickling in. Most painting an incomplete picture of some sort of high-pressure sales scam designed to bilk people out of $9,995 (or $3,895... I'm not sure which) with the promise of “materials” and/or coaching sessions.

Now, think about this for a second. People are coming to S&M for some sort of financial education, which, presumably, they need because they aren't doing so well, financially, right? So what's the likelihood that these people are going to have $9,995 in ready cash to spend on the S&M program? Undoubtedly, “But I don't have that kind of money” is a common objection, and it seems S&M have a ready “solution” - something that, based on the comments in this post, they dubbed a “student loan”. Apparently they counsel their clients to do a balance transfer from their credit cards to their checking accounts, after which S&M withdraws the money from checking. I may be wrong about this, but I believe that such a setup makes it more difficult to dispute the charge if you feel you've been ripped off - otherwise why would S&M go through the trouble?

A check at the BBB website for S&M or the deceptively named “College Partnership” (their other company?), reveals a number of unresolved complaints that seem similar to the ones people have been leaving on Die Eigenheit. I'd like to quote at length from a very detailed comment left today:

When we signed up for this program, we understood that we would get sound financial advice. Being this was our first experience with financial coaching & the cost of the program, we had no other reason to assume we weren't going to get financial advice. The salesman used high-pressure sales tactics & a needless sense of urgency in selling us the program stating that even if we wanted coaching there was a chance we wouldn't get "accepted". From the sales call (we have detailed notes of the call) he stated we'd have "unlimited access" from the best people in the business which implied financial advisors, yet he NEVER told us that we would NOT get coaching from financial advisors or planners. Had we known this, we wouldn't have signed up for the program. We purchased on Aug 7, 2006 for $3895 for 3 months of coaching. Even though we had 72 hrs to cancel after purchasing we hadn't started any coaching to determine that our coaching was just a professional form of cheering rather than financial advising. The first two sessions focused on our abundance statement and not finances! We realized especially after the 3rd session (around the beginning of September 2006) that this was not the service we expected. Besides calling us late, our coach hadn't even reviewed our financial reports we had emailed to her & after talking with our coach on the phone she informed us that she was not LICENSED to give us financial advice & we discovered that she didn't have a strong financial background! We were then assigned another coach because he used to sell insurance & had a "strong" financial background, yet after tolerating 2 sessions with him, we made the decision to seek a refund. We contacted the head of coaching and explained our concern & over the course of a few weeks or so she kept meeting with a "committee" giving us the impression that a decision would be made as to our refund. However, we eventually received a letter from a "customer care" lady stating that we should continue coaching & later another letter that we were to continue with 6 more sessions due to "contractual responsibilities" (whatever that means) & then they would reevaluate our complaint. Knowing that the coaching does not advise like we originally understood, this is an unreasonable request. She mentioned in the letter that we needed to file an "official withdrawal" from the coaching program & other pertinent information, yet when we have called the SLC office to receive further instruction to get the form or other information, we have had no response. We have made numerous attempts to talk the salesman regarding the sale & others regarding a refund & neither has returned our calls. We filed a complaint with the BBB on March 1, 2007 & the information was sent apparently to California & was returned with a correspondence stating that he wasn't in charge of refunds. We filed a complaint with the SLC office. That BBB complaint came back unanswered.
If it wasn't clear before that Smith & Merritt is a company to avoid, it seems quite clear now.