Hot Chicken Soup, Part 2. Or...
...why you'd be high-fiving, too.
Fasten your seat belts, folks. It’s gonna be a long ride.
Mark Victor Hansen isn't just about chicken soup (or souls, for that matter). He’s about money—serious ch
unks of it. His marquee partner nowadays is Robert Allen, a real-estate guru in his own right who in 1980 hit real paydirt with Nothing Down, often touted as the best-selling guide to investment property, ever. In 2002, Hansen and Allen collaborated on The One-Minute Millionaire: the Enlightened Way to Wealth. The “enlightened” part refers to the authors’ professed belief that people should do well by doing good. Not to be cynical, but it also makes for a very appealing hook—and attempt at market differentiation—in these touchy-feely, pay-it-forward times. In fact, the book is peppered with the sorts of feel-good stories you might expect from Mr. Chicken Soup. And it brims with insight. Key example from early on: “At this very moment you are standing in the middle of millions.”
Wow…like…heavy, dude.
But they’ve clearly got a handle on this marketing thing, down to the finest details. F’rinstance, both of the “spotlight reviews” for One-Minute Millionaire on Amazon sound more like jacket copy than honest critiques, complete with bulleted sales points. Don’t know how they engineered it, but I can’t deny an ounce or two of envy (especially since both of the spotlight reviews Amazon persists in running for my own book are at least two full stars below its average customer rating… Come to think of it, I wonder if Hansen or one of his comrades-in-SHAM had a hand in those as well). And there’s that ego-stroking, characteristically SHAM-inspired way they use language on their various websites: In the world of Hansen/Allen, people who subscribe to one or more of their programs aren’t mere customers; they’re protégés.
Yes, Hansen/Allen get the most possible mileage out of every word, phrase, or title. Linking like mad to all of their other products (jointly or severally, as one says in legal documents), they offer myriad wealth-building materials, including seminars and tele-coaching and e-conferencing, for those who want to become instant millionaires. (Again, you wonde
r, though: If the transformation is that easy, why is so much support necessary via so many sales channels?) Prominent among these is their new co-authored book, Cracking the Millionaire Code: Your Key to Enlightened Wealth. Order the book and you get an astonishing $4,900 worth of bonuses! Personally, I’m curious about why they capped it at $4,900 and not $5,000-something. But I’m sure there’s a good, focus-group-tested reason having to do with plausibility… Oh wait, I get it... Who’d believe that a $23 book would come with $5,000 worth of freebies? In any case, Be aware that the enticing goodies are “available TODAY ONLY!” [emphasis in original.] Yes indeed. “This offer will EXPIRE AT MIDNIGHT Pacific Time—TONIGHT. So be sure that you don’t miss out.” For the record, the same offer was also available when I checked yesterday, and, I’m betting, will be available in substantially the same form if you click through tomorrow.
Hansen/Allen are also big on getting site visitors to register for things (presumably so that they can compile a juicy, pre-qualified mailing list). One of the more elite of these is their Millionaire Hall of Fame, which supposedly is the honor roll of students who have used Hansen/Allen's methods to accrue that lofty sum. Helpful hint: Make sure you’ve got all your records at hand you when you sign up, because the fine print says that by joining, registrants certify “that the information submitted is ture and correct” [sic, click here, scroll down to the disclaimer, and check out (b)].
OK, time for my own disclaimer. Some of this, by now, may have begun to sound like nitpicking—and maybe vengeful nitpicking at that. Certainly some of what follows is going to sound that way. Just remember two of my key goals for SHAM (the book, not the movement). I wanted to know, Do the gurus deliver on their promises? And, Can they prove it? Nobody told Hansen to start in with this millionaire stuff. He could’ve picked a more realistic hook—“Fix your finances!” “Make more money than you’ve ever made!” But such promises are insufficiently dramatic to capture the popular imagination. Hansen/Allen picked the number they picked because it’s catchy, it’s exciting; it's salable. And that’s my point about the whole of SHAM. It too often sacrifices accuracy (otherwise known as honesty) in the name of marketing. Pointing out such faults is not nitpicking. It is simply holding the gurus’ feet to a fire that they started. I didn’t promise to make you a millionaire, after all. They did.
With that out of the way, what say we take a closer look at the Millionaire Hall of Fame.
A Flash page from the overview titled Millionaire Hall of Fame Data, says, in consecutive lines: “The data for the millionaire hall of fame is voluntarily reported by students. The data represent only a portion of all students. The data have not been verified. The data is [sic] deemed reliable but is not guaranteed.” As I write this, according to a banner atop the page, the 3,080 success stories submitted to Hansen have generated $837,583,808 in revenue and $18,374,128 in charitable giving. That averages out to $271,942.79 in income and $5,965.62 in charitable giving per success story. There’s nothing wrong with that kind of money. A lot of us—me included—wouldn’t mind having an extra $271,942.79 on hand this holiday season, and I would gladly donate $5,965.62 of it. Actually, I’d donate more. Suffice it to say I am underwhelmed by these people’s notions of charitable giving, considering their windfalls of about $272,000 apiece. But $272,000 is not a million dollars. And depending on the time it took each person to accumulate his individual $272,000 (we don’t really know the answer to that), it might not be an especially remarkable feat.
But it gets worse. Remember Hansen’s own caveat on the data? They represent “only a portion of all students.” I could be wrong, but I suspect that the folks who enroll themselves in the Hall of Fame are the ones who’ve gotten significant results—results they’re proud of. Now, I could really go for the jugular here and bring up the time-honored 80/20 rule, which tells us that in any given endeavor, 20% of the people create 80% of the positive results. It’s just a rule of thumb, of course, but it often proves to be an accurate barometer of the performance skew in any one environment where productivity is measured. It’s hardly outside the realm of possibility that Hansen’s figures, as quoted on his site, represent just one-fifth of his students—to wit, the one-fifth, or 20%, who are generating virtually all of the money. So, if we multiply the 3,080 success stories by five we get 15,400. If we give the additional students credit for coming up with 20% of the total pie, that ups the pot from $837,583,808 to $1,046,979,760. Divide that sum by 15,400 and you end up with $67,985.69 as an average yield per participant. Assuming the 80/20 rule applies. I don't think that's what most protégés had in mind when they bought the book(s) or registered for the course(s).
But let’s be more fair than that to Hansen/Allen. Forget 80/20. Let’s simply assume that there are at least another 3,080 not-as-successful stories—students we haven’t heard from. And even though this new body of 3,080 students hasn’t reported a dime in incremental earnings, let’s assume that they’ve generated, collectively, a quarter of what their more successful peers have made. (Keep in mind that almost certainly, some reasonable percentage of students didn’t make squat.) That’s an additional $209,395,952. Add that to the aforementioned total of $837,583,808, divide by the new total pool of 6,160 (3,080 times 2) case histories, and we have a new average payday of $169,964. Again, not bad. But nowhere near a million now. And in fact, not that far outside the realm of what an awful lot of reasonably successful people are already pulling down these days in their day jobs.
Is this whole argument supposition on my part? Sure. But it’s no less flimsy than the rest of Hansen’s data, which—remember—have not been audited, and rest upon voluntary reporting. Hansen himself tells us that his data, though “deemed reliable,” are “not guaranteed.” Duh.
What’s more, I’ve got evidence. In a fascinating piece for MSN Money, reporter M.P. Dunleavey followed a number of hapless folks who thought they were going to become millionaires using Robert Allen’s system. (He also works as a solo act.) She points out that in one recent year, after pledging to create “1000 new millionaires!” through his seminars and support materials, Allen fell short by only, oh, 950 or so. And even in the case of the 50 who qualified, an Allen spokesman conceded that “not all of them exclusively used the Allen method of real estate investing.” Dunleavey also notes that the level of commitment required to follow most of these “get rich quick” schemes is such that people would almost have to quit their regular jobs and devote their entire lives to scanning the classifieds, driving around neighborhoods, attending foreclosure sales, filling out papers, juggling money between accounts, and so forth.
Another pertinent question (though I’m sure Hansen/Allen would consider it impertinent): How much does it cost people to not become millionaires? How many books and seminars and other items of reinforcement do they need to buy, over and over, in order to keep getting their $4,900 worth of free stuff? One is reminded of that classic Honeymooners episode where Kramden is out to recruit Norton for his latest money-making scheme. “We’ll get rich!” he exhorts. And Norton’s forlorn reply? “Ralphie-boy, I can’t afford to get rich with you anymore…”
So what do we have at the end of the day? The typical SHAM house of cards: one uncertainty piled atop another, in a nice, gift-wrapped package.
Wanna know how to really build wealth through real estate? Sell books on how to build wealth through real estate. Better still, hold seminars. As Dunleavey points out in her piece, if Allen averages two or three such seminars a week, thereby attracting a total of maybe 1200 protégés per month, at $2,495 per—that’s a fast $2.9 million, folks. Month after month after month…. And he never has to fill out a single one of those pesky, time-consuming mortgage apps he’d have you filling out, day after day…



