Provost pays for charlatan tour on April Fools Day

Apr 7th, 2009 | By | Category: Campus Events, Columns, Opinions

Jason McGill

Assistant Editor

Have you ever had a dream for your future? Do you want security and prosperity for yourself and your family?

Most people will discourage you, because the chance of failure is so great, but you are special. If you have faith in yourself and the commitment to see this journey to the end, you can overcome the odds. Also, I’m selling a book and audio CDs that reveals the secrets of how to get there, so you can have the benefit of overcoming the mistakes that I made.

Sound like a sales pitch? Actually, this is the bulk of the message from the speakers at the Extreme Entrepreneurship Tour, which came to the PSU Theater in the afternoon of April Fool’s Day. The program started off, as many pitches do, with subtle promises. Did you know 80 percent of millionaires are entrepreneurs? That almost sounds like 80 percent of entrepreneurs are millionaires, so you can’t lose! As entrepreneurs, the speakers on the tour only work with people they like. That almost sounds like all entrepreneurs only work with people they like!

Fun, not money, is the driving factor for the entrepreneurs we heard from. They showed a video of a guy playing with a yo-yo who had some kind of online business related to yo-yos. It left the impression that he played with yo-yos all day and money just poured out of the internet. The internet is the new vehicle of get rich quick schemes. I’m surprised one of the speakers wasn’t selling a “Making money on eBay” CD.

The other domain of such schemes is real estate, represented at the tour in the person of Doug Fath, who created and sold two online distribution businesses while in college, and then got into real estate. He’s never worked a salaried job since college, and he can show you how to get rich in real estate, using none of your own money. His system, contained in an 800 page binder and eight audio CDs, is valued at over $2000. This is one of the guys the Provost paid, with our money, to come speak to us.

Fath described his philosophy to the crowd in terms of cultivating assets, like owning rental properties, which generate passive income. It was largely lifted from Rich Dad, Poor Dad, the tremendously popular book by Robert Kiyosaki, with whom Fath said he was friends.

Fath told us to forget about working a job and concentrate on generating wealth. The core problem with that idea is confusing the ability to spend with being wealthy. People create wealth by doing work that adds value to society, such as building a house or caring for the sick. The so called passive income described by Fath actually destroys wealth because it transfers money to owners without adding value. Fath appears wealthy because he has a lot of money to spend, but he gets his money by siphoning it from people that actually work to create wealth.

For example, Fath described a recent property acquisition of his as a “win, win, win” because he was able to pay the scout that found the property, rent the property to someone, and generate $2,200 of passive income for himself each month. He didn’t go into detail about how it’s a “win” for the renter. If he looked at that “win” in any detail, he would find that the renter actually lost. The renter has to pay $2,200 a month extra, above the cost of renovations, for Fath’s “service” of arranging for the renovations and Fath’s risk in buying and marketing the property. Hardly a fair deal.

Nick Friedman, CEO of College Hunks Hauling Junk and another Tour speaker, described taking this extra money from customers as creating added value of the customer service experience. He realized early on in his business that he couldn’t keep charging $600 for junk hauling when his competitors were charging $50. So Friedman created procedures that control every action his employees take. The handbook tells them how to wear the uniform, how to groom themselves, how to address the customer, etc. All this effort enables Friedman to fool his customers into thinking that paying twelve times the price is a good deal for being treated like a human being.
But for an example of adding the value of the experience, the audience didn’t have to look any farther than the stage.

The Office of the Provost didn’t respond to a request to find out how much of our tuition money was paid by the school to bring these charlatans to campus. From looking around myself, I estimated 200 students attended, meaning the price tag was easily in the range of tens of thousands of dollars. Should we be using tuition money to bring people to campus to hock books, CDs and subscriptions to websites, all promising riches for virtually no effort? Is this part of creating well-rounded, educated individuals?

Apparently it is, because several teachers offered extra credit for students to attend. Among the names of instructors I saw as offering extra credit were Lapraza and Haggard. What part of the show on Wednesday was part of a university curriculum? Shameless Exploitation of Desperate People 101?

Finally, one statement by Friedman struck me above all others as being particularly telling and particularly crass. His parting words were, “Those who do nothing, have nothing, and are nothing.” My father was involved in several entrepreneurial ventures in the restaurant industry.  We have been wealthy at times and flat broke at other times.

During the rough parts, the whole family pulled together, and we worked our fingers to the bone for what little we had. To see a 25- year-old like Friedman, standing up there and implying that the billions of people in the world who work very hard for the little they have are ‘doing nothing,’ and as a result, ‘are nothing,’ was sickening. It highlights the undercurrent of arrogance running through the entire Extreme Entrepreneurship Tour.

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  1. Looks like you will spend the rest of your life working your fingers to the bone and remain flat broke. You missed the message of the presentations entirely.

  2. WOW…i usually NEVER say anything on these random blogs, but you my friend are a completely oblivious to everything you just experienced. You will be miserable at your job and broke for as long as you maintain that mind state!

  3. I hate to inform you that wealth is not having some money one day, broke the next, working your fingers to the bone, having some money, broke again…that is not wealth. Maybe you should listen to these successful individuals as closely as you listen to your “teachers” at “school” that “teach” you how to memorize text out of a book to pass a test for information that 1. You will never remember because you never “learned” anything in the first place, just memorized for the sake of taking tests and 2. Will never use to increase to make money.

  4. I love how easily people are roped into what motivational speakers have to say, and how quick they are to defend those ideas. At my junior college, we had a similar situation, where the school paid a good deal of money to bring a speaker in, who basically hocked his own product at the student body. Maybe this is a great case for communication and rhetoric studies. Think about it, with a little time and effort, you can get nameless hordes to defend your bad ideas!

  5. Who cares about hard work and smart investments when it is so much easier to get rich quick!?

  6. Great post Nate. I attended a small portion of the event myself, out of curiosity and a desperate need for extra credit. A few of the things said were actually helpful, like the mission and goals stuff. However, I deeply agree with you on the fact that the entire undercurrent of the event was disturbing to me.

    The message being pressed on the listeners was one of “you can easily become rich as long as you have a desire to”. This nation seems to have developed an undeserved sense of entitlement in this area. Hard work? Nah, you just have to believe in yourself and you’ll be the next millionaire. If you can’t make it after all, you can always resort to unethical or illegal behaviour. Then, if that too fails, blame the government and draw welfare.

    Besides all that, I think it’s very disconcerting that our school would bring in scam artists like this on our tab. There needs to be some accountability in this. Maybe we need to start a petition or something.

  7. @David Nichols
    Jason deserves the credit for calling them out for what it is, I’m just baffled that there’s a backlash against meaningful criticism. The whole issues shows how there’s definitely a need for accountability, especially when our student body is so easily deluded.

  8. @Nate
    My apologies, I misread the contributor note at the top of the page, that’s what happens when you don’t get enough sleep. You are right though, it’s amazing the kind of pointless backlash that this received.

  9. much money do either of you guys make? You guys are just students you dont yet understand how to make real money, you are conditioning yourselves at school to be employees, I am extremely successful in all aspects of my life, not only financially, but also with my health, religion and other areas, and I can attribute this to the personal development. I never went to school, I believe in education, but not the school system, self education. You guys do what you want, teachers are broke and know nothing about making money, if that’s where you want to be, follow that path. Follow people that have demonstrated results. Anyway, its your choice.

  10. @Stanley
    Don’t get me wrong Stanley. I’m starting my own business right now. I have nothing against entrepreneurs at all, and I think the other guys feel the same way. The point being made had little to do with entrepreneurship itself.

    Number one, I think we’ve started to veer from the original focus of the article which was the fact that the school spent many thousands of dollars on such an event with little accountability.

    Number two, the event was being used as more of a promotion for overpriced “entrepreneurship” books and services than for actual practical advise for young entrepreneurs.

    Number three, the talks tended to leave students with the impression that it was easy to be an entrepreneur and that you were simply a worthless loser if you weren’t. There are two problems with that idea. One, being an entrepreneur takes a lot of hard work, long hours, and determination if you want to be successful. As I’m sure you realize. Two, not everyone is best suited for the life of an entrepreneur. Some personalities are better suited for work at an established organization where they have stability and more time to spend with their families. These people can be just as successful as an entrepreneur, just in a different vein. As I mentioned in my previous comment, people today feel entitled to the rewards of entrepreneurship without having to put in the hard work.

    As a side note, read Nate’s recent article, College – the glorified trade school. While the system as a whole has issues, I know for a fact that not all teachers can be described as “know(ing) nothing about making money”. My Web Application Development professor, Shannon McMurtrey, co-founded McMurtrey/Whitaker & Associates. So don’t bash them all.