Now, there's a new way to lose money through real estate seminars: Ponzi schemes. We've seen the late-night infomercials. We've heard the fast-talking, hyper-kinetic sales pitches.
Pitch # 1: "Buy real estate with no money down."
Pitch # 2: "Make bazillions through foreclosure investing."
Pitch # 3: "Are you a couch potato down to your last chip? The only thing separating you from a better life is sloth. That's right, you are a lazy, good-for-nothing slacker. But you can change with just the energy it takes to run your remote. Pull out your credit card. Pick up the phone. And call 1-800-GO-BROKE. Now! We'll include six steak knives if you act in the next forty-five minutes."
Cut to beach front homes, flash cars, and private jets.
For years get-rich-quick seminars have been Weapons of Money Destruction, or "WMD" as I like to call them. In the old days, losses were limited to the costs of books, CDs, or time. All too often, the real estate quicksters were long on claims and short on facts. They stretched the truth to sell whatever.
Now, a $200 million Ponzi scheme unraveled in California. This one used real estate seminars to attract victims and their investment capital. Price of entry: $1 million. The fraudsters preyed on the same mix of hope and credulity that lured victims to Madoff and other scams.
We know get-rich-quick schemes don't work. My favorite line about building wealth comes from a good friend and entrepreneur. He made a legitimate fortune over more than a decade of hard work and long hours. He said:
"It took me fifteen years to get rich overnight."
Norb Vonnegut writes for