An Insider's Guide Explaining What to Watch Out for When Working with a Money Coach
- Why a huge media following doesn't mean an expert is credible.
- How beginner investors are perfect prey for illegitimate coaching companies.
- The danger in associating a luxurious, “successful” lifestyle with expertise.
I have an axe to grind.
There are a few bad apples in the money coaching and mentoring business that use greedy, aggressive, and misleading sales tactics to promote over-priced, low-value programs.
It's just not right.
These businesses are primarily marketing companies – not coaching companies – where they sell dreams instead of breakthrough coaching. These distinctions are important.
“I wish I would have started financial coaching with Todd two years earlier – before I lost $50,000 following the advice of the “do it my way” gurus. Not only is he helping me create a tailor fit wealth building strategy that suits me, but he also taught me exactly how I went wrong, and why I made those mistakes to begin with – something you don't get anywhere else. Todd's wealth building approach is so fundamentally sound that you begin applying it to every area of your life and you are left wondering why none of the gurus are telling you this stuff. His approach is truly refreshing, motivating and empowering. Thanks, Todd.”– Jeff Adams, Investor; Denver, CO
Marketing companies that deliver poor value to the consumer are a disservice to the entire financial education industry and give legitimate coaching companies a bad name.
This guide is my attempt to clean up this industry by revealing the red flags that can alert smart consumers to a potential bad apple.
We're not alarmists here at Financial Mentor. A great marketing company can still provide great coaching services. The two activities are not necessarily mutually exclusive. They can co-exist… in theory.
Unfortunately, they usually don’t in practice – and that's important for the consumer to understand and beware of.
For that reason, none of the following 12 symptoms qualify a coaching program as a rip-off on their own. It's the weight of the evidence that you want to pay attention to and use as motivation for greater due diligence.
Below is a checklist of characteristics that should serve as warning signs that you may be dealing with a dream merchant instead of a legitimate money coach.
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1. Checkered History
You usually don’t have to dig real deep to find relevant dirt on some big name gurus playing the dream merchant game. Top internet search engines provide an excellent due diligence tool. For example, according to John T. Reed:
- Charles Givens, author of “Wealth Without Risk,” was successfully sued by a former customer for faulty financial advice and filed for Chapter 7 bankruptcy in 1995.
- Robert Allen, the author of “Nothing Down” and “Creating Wealth,” declared Chapter 7 bankruptcy in May 1996 after publishing several bestselling books.
- Ed Beckley, author of “Million Dollar Secrets,” declared bankruptcy in 1987 and was sentenced to federal prison for wire fraud.
- Dave Del Dotto, author of “Cash Flow System,” was charged by the FTC with misrepresenting products in 1993 and filed for Chapter 7 bankruptcy in 1995.
- Wade Cook, author of a long list of financial best sellers, declared Chapter 7 bankruptcy twice – both in 1987 and 2003.
This list is by no means complete. It's just a tiny excerpt of the research compiled by Reed showing the sordid financial history of a surprisingly large number of supposed money experts. All this information is free for the asking with a simple online search.
Just imagine… if these dream merchants' personal financial practices land them in bankruptcy, what does that indicate about the credibility of their financial advice? It's certainly not encouraging.
Keep in mind these guys were all big names in their day and received tremendous media exposure which created the appearance of legitimacy.
My suggestion is to look into the legal history of your financial expert before purchasing his advice. Each of the experts cited above were successful marketers as proven by their bestselling books, but they were also financial failures as proven by their bankruptcy filings.
The unexpected realization is how the implied endorsement built into massive media exposure created through marketing campaigns means little in terms of actual credibility and safety to the consumer.
You must still research the legal history of your prospective guru and pay attention to factual evidence indicating potential problems – even if he’s famous.
2. Conventional Information Repackaged At A High Price
Many “boot camp” and coaching programs charge thousands of dollars for information you could buy at a bookstore for less than $100.
This is particularly true for the big name gurus because their marketing prowess and media exposure creates an implied endorsement and high perceived value for their services. This lowers the natural skepticism of buyers, which can be very dangerous.
A simple step to prevent being taken in is to always check the bookstores and internet to see if you can find a more affordable way to learn the same information – regardless of how famous the person is standing behind the product.
Make sure that what they're teaching you is sufficiently unique and valuable to justify the price.
3. High-Pressure Sales Tactics
It's relatively simple to distinguish legitimate coaches from marketing organizations by their sales practices. Legitimate coaches offer free sample sessions with the actual coach you'll work with so you can test-drive their services first-hand and determine if the fit is right.
Marketing organizations show their true colors by employing professional sales people that use high-pressure marketing tactics in an effort to close a sale for a “coaching package”.
If anyone from a coaching company ever pressures you into buying, they've clearly demonstrated their focus is marketing and sales – not coaching.
It's antithetical to the trust required for a positive coaching relationship to allow high-pressure sales tactics to ever enter the picture.
4. Target Market Is Beginners
Nature demonstrates that predators hunt the sick, injured, and inexperienced because that's the easy kill. Marketers follow the same natural instinct when they promote expensive coaching and mentoring services to beginners.
Beginners lack the experience to separate charlatans from legitimate financial experts. If the marketing emphasizes that “anyone can do it and no starting capital or experience is required,” then you're likely dealing with a predator.
If the coaching is mass marketed rather than targeted to the narrow audience that can truly benefit, then you're likely dealing with a sales organization and not a true coaching company.
“I have come across many roads in my life, business, real estate and investing where I needed guidance in simple terms, FAST. Who do I ALWAYS call? Todd Tresidder! The only coach and mentor I know that gives hard core excellent service based on YOUR values. He always gives more value than you will ever see anywhere else.”– Jeanna Gabellini; Owner, MasterPeaceCoaching.Com; Martinez, CA
As I explain in this article, it's usually a bad value proposition for a beginner to learn the ropes through high ticket coaching services. It's far wiser to build a foundation of financial intelligence on low-priced books while investing the difference.
I make it very clear here that my high-cost coaching services are the correct value proposition only for business owners and active investors – not beginners.
Beware of sales organizations that attempt to mass market high-cost seminars and coaching services to the easiest and largest target market: beginners. They're showing their true colors by hunting for the easy prey and should be avoided.
5. Lump-Sum Fee Paid Up-Front or Contractual Obligation
If a coaching company requires you to pay a large, lump-sum, up-front fee for a service delivered over many months, then be wary. It's likely a marketing gimmick.
Ask yourself: “If the service is so great, then why can’t I pay one month at a time as I consume the service?” The answer is simple. Lump-sum pay structures are designed to extract more money from the buyer than would occur on a pay-as-you-use basis.
After all, if the coaching truly delivers value, then you would gladly continue consuming, so there would be no need to lock you in with an up-front fee. They're clearly telling you they're worried you won't like their service and want to stop paying.
That's why they want your money up front and need to lock you into a contract. Smart consumers should view this practice as a red flag indicating “proceed with caution.”
6. Refund Policy
Is their refund policy clearly spelled out in their marketing materials and reasonably liberal so you can actually get a refund if you want it?
If you search the company or guru’s name on the internet, do you find a lot of complaints about refunds not being honored?
You should be very suspicious of any coaching and mentoring service that does not clearly describe its refund policy and honor it without reservation.
7. Secrets of the Rich
Anybody who claims to teach the supposed “secrets of the rich” is likely a dream merchant. The secret is there are no secrets.
Unfortunately, aggressive marketers seek to exploit the human frailty of wanting to believe there are secrets only the rich understand that explain why they have no money, but the rich do.
The fact is most everything you need to know to build wealth can be learned for little or no money and is already well-documented and proven. The exception to this rule is specialized niche knowledge explaining new developments and strategies within an industry.
Otherwise, anyone claiming they have secret knowledge to riches is probably a dream merchant employing a marketing gimmick that legitimate money coaches normally avoid.
“I initially came to the coaching calls looking for you to tell me what to do because this is what I've done all my life. What I've really learned working with you is how I'm very capable of thinking and making decisions for myself.”– Nahrein David, Consultant; San Francisco CA.
8. Emphasis on Luxurious Lifestyle
Building wealth is hard work, takes time, and requires financial prudence. Dream merchants want you to believe it's quick and easy and requires little or no effort.
Beware of marketers touting private jets and lavish yachts to show the more/better/different lifestyle you can enjoy when you learn their “insider secrets”. This isn’t selling educational information, it's promoting a dream.
The goal of the marketer is to make your greed glands salivate enough to overcome your usual sense of prudence and caution. Legitimate money coaches don’t use these marketing practices
The self-made rich I know don’t wear fancy jewelry or drive in flashy limousines; they lead comfortable, but relatively normal lifestyles, while building portfolios of wealth by consuming less than they can afford.
They work hard to build businesses and invest their savings prudently. The luxury appeal is a marketer’s gimmick designed to prey on your feeling of lack and your desire to have more.
The get-rich-quick appeal is designed to activate your sense of entitlement and laziness. Don’t get suckered in by these dream merchant tactics.
9. Bogus Testimonials
Legitimate testimonials should be written by the actual person and provide their full name and city location. Beware of testimonials that sound like they were written by one (the same) person, or provide outlandish claims of superhuman success.
This includes video and audio testimonials that appear legitimate on the surface, but could easily be faked by professional actors (don’t laugh – it has been done). Dishonest testimonials are another marketer’s gimmick designed to convince you to part with your money.
When you purchase a seminar or coaching program, you should receive a complete package of the guru’s best stuff that's completely actionable as a stand-alone product.
Unfortunately, marketing companies don’t play fair and use a strategy of “progressive commitment” to separate you from your money. Here’s how it works:
- You're sold on a free or low-cost seminar that's never disclosed as a preview event, but instead is promoted as a complete package of information.
- You attend the free event and are up-sold to an affordable event portrayed as the “whole enchilada,” but it only teaches the basics.
- At the “basics” event, you are up-sold to the big event for big bucks.
Each step in this process is a progressively larger financial commitment designed to extract the most money from the most people.
Aggressive marketers know full well customers are more likely to spend thousands of dollars on a high-priced seminar after several smaller sales have already established a relationship than they would if they asked for the money up front.
Legitimate educational companies (like Universities) show you their entire product line (course curriculum) and don’t hide high-ticket items that are only sold as a bait-and-switch from lower cost products.
Also, beware of pitch-a-thons where a variety of speakers parade across the stage selling you their big-ticket courses.
When you purchase a seminar, you should receive the full education you paid for, not an interim appetizer designed to motivate your hunger for the main meal. The entire educational curriculum should be disclosed up-front and not hidden as a back-end sales marketing gimmick.
11. Best-Seller Status
Beware when buying a coaching or mentoring program from a high profile guru who developed large media exposure and reached the New York Times bestseller list.
Ask yourself, “Who will I be working with?” High profile media personalities achieve their stardom by focusing on their media and marketing – not their coaching.
In fact, you would be wise to look behind-the-scenes because many times, the coaching company isn't even run by the guru. The coaching is just a “private label” service that's sold and packaged to a variety of gurus.
The coaching company produces generic coaching services as a back-end product for their guru clients, and the guru provides the marketing and brand-name recognition that sells the coaching services. It's a match made in heaven for everyone… except the client.
“With Todd's coaching I have been able to really integrate my personal vision and mission with my business objectives. In fact, for the first time in my 25+ year career, my business is truly driven by my deepest values and vision. I now feel that I am doing what I really want to do with my life. My clients sense my enthusiasm and the fire of my mission to be of real service to them. By the way, in the very first quarter of my business, I made more money than I have ever made as an employee, even in a career filled with VP level executive positions. I am thrilled.”– Jerry Llewellyn; President, Amera Consulting Group; Austin, TX
Most people succeed at building wealth by overcoming their personal obstacles to success and applying timeless, proven strategies with sufficient discipline and persistence to actually produce results.
There's nothing trendy, sexy, or cutting edge about this formula. It's a well-known and fully proven process for achieving financial success.
Unfortunately, it doesn’t sell well because it lacks sex appeal. That's why marketing driven companies hop on the latest hot trend (no money down, wraps, Forex, day trading, etc.) with whiz-bang coaching programs designed to capitalize on what's hot and in the news – it sells well.
If you buy the latest, trendy investment seminar instead of focusing on applying timeless wisdom, realize you're likely dealing with a marketing-driven organization rather than a company focused on your long-term education and success.
The choice is yours.
Beware of coaching organizations that use aggressive and misleading marketing.
The difference between a dream merchant focused on maximizing sales versus a legitimate money coach who's focused on your success is important to understand.
They're easily separated by their business tactics and the breadcrumbs of evidence left behind on the marketing trail.
Below are the 12 breadcrumbs left behind by dream merchants that serve as red flags to raise your concern and motivate greater due diligence:
- A checkered legal history indicating past problems.
- Generic content sold for high prices that could be purchased for pennies on the dollar from a bookstore.
- High pressure sales tactics which are antithetical to the trust necessary for a successful coaching relationship.
- Promote high-priced products to the inexperienced beginners market.
- Up-front, lump-sum fees charged for multi-month programs or contractual obligation that limit your ability to quit paying.
“We just hit another break through as our business…(a paragraph long list of business milestones achieved). I hope you see these updates for what they actually are and that is this is happening because of the work we did together years ago. You helped us shift our thoughts and practices which made us look at ourselves and how we do things. This then helped us create the infrastructure and contracts that we have today.”– Dan Cosgrove; President, Mercantile Systems & Surveys; Brentwood CA
- No refund policy or they make it difficult to receive refunds.
- Promotes “secrets of the rich”.
- Sells dreams of a luxurious lifestyle rather than the reality of hard work and financial prudence.
- Uses bogus testimonials.
- Uses a progressive commitment up-sell formula instead of disclosing full educational curriculum up-front.
- Uses bestseller book status to create a large pool of sales leads that are redirected to a coaching company not owned or operated by the guru.
- Promotes seminars and coaching programs based on trendy hot topics rather than teaching timeless principles that work in any market condition.
Remember, none of these characteristics are definitive by themselves, but taken together they can create a compelling case that you may be dealing with a dream merchant instead of a legitimate coaching and mentoring service.
I hope this checklist helps you make the right choice for your needs.
You can learn more about my coaching services here.
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