en en en en en en en en en en en en ja en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en es en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en es en en
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The billboards and announcements proclaiming that you can get rich in real estate, while distasteful to many (self-included – wondering how people that attend these seminars can be so gullible, but it does make them feel good, I suppose), haven’t created much of a cynical backlash, probably based on the values of most Americans, according to a recent Gallup Poll Most Americans Do Not Have a Strong Desire to Be Rich [link expires tomorrow]. In other words, over half of Americans seek more money as a personal goal but does not think badly about people already with wealth.
Of course, this is only a poll, and I wonder if the results wouldn’t have been reversed about two years ago, when real estate was a different animal.
Look at the game show phenomenon [WSJ].
Recently we had “Who Wants to Be a Millionaire” and now there are others:
Next Tuesday, Walt Disney Co.’s ABC unveils “Show Me the Money,” a splashy series hosted by William Shatner. Contestants win money by answering trivia questions and then choosing among 13 female dancers, who carry scrolls containing secret dollar amounts.
It joins the popular game shows “Deal or No Deal” and “1 vs. 100” on General Electric Co.’s NBC. Meanwhile, News Corp.’s Fox has “The Rich List” and CBS is working to remake “Name That Tune,” a program that first aired in 1953.
Get rich seminars seem to be more about energy and optimism than specific investment techniques. Here’s a seminar recap shared by someone who attended one held here in New York this year. (note: I accurately guessed what was said before they shared the substance of the event) :
You have to love what you do
Be passionate about your efforts
Look for hidden value, think differently
Surround yourself with smart people
Work hard and never give up
Work smart and take calculated risks
Of course, there were also some specifics, primarily dealing with tax implications.
I might have missed a few choice ideas but you get the idea. Of course there are always exceptions and those who succeed are who get included in the advertising campaign. I’d be wary of anyone who teaches get rich in real estate seminars for a living. If they were so successful as real estate investors, then why are they teaching you instead of doing deals? Carlton Sheets on the late night infommercials comes to mind. Here’s a great summary of all the supposed real estate gurus.
Trump is the exception. He made his fortune in real estate and keeps working at it and has greatly expanded his efforts, seemingly everywhere in the US these days. He provides the celebrity factor to the Learning Annex efforts and gets paid a fortune for very little time commitment. Its a smart investment on his part.
I sort of view these seminars like playing the lottery. The demographics of people that play the lottery on a regular basis are least likely to afford playing it.
Ok, back to the poll…
recent Gallup Panel survey asked a nationally representative sample of American adults for their attitudes about money and wealth. The poll finds that most Americans apparently do not have a strong desire to be rich, although half say making more money is a personal goal. The public tends to think that those who make a lot of money deserve it, but not to think that those who are poor deserve their lot in life. A majority also believes that anyone can get rich. Men, especially younger men, tend to desire to be rich more than women do.
The public does not begrudge rich people — a majority of Americans, 54%, say that those who make a lot of money deserve it. They also believe that almost anyone can get rich if they put their mind to it, by a 53% to 46% margin. At the same time, Americans strongly reject the notion that those who are poor merit their situation — only 14% agree and 85% disagree that “people who are poor deserve it.”
42% of lower-income respondents (residing in households in which the annual income is less than $35,000) say they would be happier if they were rich, the same percentage as respondents in higher-income households ($75,000 or more per year). Thirty-three percent of middle-income respondents (incomes between $35,000 and $75,000) say they would be happier if they were rich.
Just 34% of people in upper-income households agree that money is the root of all evil, compared with 48% of those in middle-income households and 52% of those in lower-income households.
23% percent of lower-income respondents say that poor people deserve to be poor, a much higher percentage than found among middle- (12%) or upper-income (5%) respondents.
Of course, with all my cycnism about get rich seminars, I didn’t make a fortune in real estate either.
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4 Responses to “Real Estate “Get Rich” Euphoria May Be Distasteful, But Not The Root Of All Evil”
December 11, 2006 at 10:25 pm
While I agree with the spirit of your message, I disagree with some of the broad brush statements you make about real estate gurus that you make. Carlton Sheets is one in hundreds of teachers of real estate, if thats what you want ot call him. The people that you refer to are actually the minority, but have made it their business to get noticed. These are obviously the people you are going to hear the most about. I have been investing in real estate for 6 years, and consulting others for 2. There reason I “teach” real estate is because I enjoy enpowering people. Real estate is like any other profession and takes hard work and dedication. The rewards are simply higher in signicificantly sooner time frame then most peoples profession. 40 years vs 10. I think you will find that 75% of the people teaching real estate investing are still doing deals on a daily basis, and really have other peoples interest at heart most of the time. Mind we are human and greedy. Thanks for the read, and if you ever want solid investing advice feel free to contact me at [email protected]
Jonathan J. Miller says:
December 11, 2006 at 10:31 pm
True, its always in bad form to broadbrush anything. I guess from personal observation I would have guessed that the majority are not good for the consumer, not just a few bad eggs. Thoughtful consulting is one thing, “get rich” marketing for real estate investors is quite another.
December 12, 2006 at 11:34 am
I think the thing to remember is being in real estate that once you have a closing on a house, you are unemployeed again. You are constantly working. Those who are successful are hard workers and have that trait about them.
But the poll is atrange to me. For those who know, the quote comes from the Bible (1st Timothy 6:10) and says “The love of money is the root of all evil.” It is unfair to take it out of context because of the good that money does. We wouldn’t have the ability to to research of cures of diseases, and so much more.
December 12, 2006 at 7:31 pm
Question for you real estate gurus:
What is “creditor-placed homeowners insurance”? I was doing an online job search, and a firm with an office here in the Twin Cities, Assurant, is hiring. They specialize in “creditor-placed homeowners insurance.” I’m guessing this is coverage that lenders (creditors) buy when a homeowner is delinquent, gives back the keys, etc. I would also guess that the “insurance policy” is basically for the remaining value on the mortgage.
How widespread is this process? Does their business stand to benefit from the housing bubble bursting? More delinquencies and foreclosures means more need for this kind of insurance, right?
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Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts. He holds the Counselors of Real Estate (CRE) and Certified Relocation Professional (CRP) designations. He is an Appraiser “A” Member of the Real Estate Board of New York and a member of Relocation Appraisers and Consultants, Inc.
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