Russ Whitney is a fierce guardian of his good name. As chairman, CEO, and founder of Whitney Information Network, Inc. (ticker symbol: RUSS), which grossed about $200 million last year, it is his smiling face and shiny crew cut that adorn the placards at the Building Wealth real estate investing seminars held in hotel conference rooms each week throughout the United States, Canada, and the UK.
These free seminars, billed as informational workshops, function as sales pitches for Whitney's follow-up courses and materials, which quickly run into the thousands of dollars. In 2001, this last point, along with a few swipes at Whitney's business, was made in a Web forum at Creative Real Estate Online. In response, Whitney sent one of the site's owners the following e-mail:
Terry, I have been gentlemanly and patient with you. You obviously are "not" a man of your word. If that is not true then I will see ALL POSTS regarding me and my company immediately removed from your site AND YOUR ARCHIVES. Terry, if that is not done immediately, starting TODAY, prepare to spend some money. I will institute a lawsuit against Creonline, you and all Creonline employees. I will also sue every poster on your board that has slandered my good name, in FEDERAL COURT on Monday morning. Count on it! Monday morning. Federal Court. Win or lose, you WILL be spend [sic] money from here on out for the illegal and slanderous use of my name.
Soon thereafter, all Whitney-related posts were removed. In their place was the above e-mail, accompanied by the following response:
Our attorneys have advised us that truth is an "absolute" defense to a defammation [sic] lawsuit, the Courts are not very fond of "prior restraints," and that it is highly unlikely that a "public figure" like Russ Whitney would prevail in such a lawsuit. However, we are a small company, and we simply cannot afford a protracted legal battle with a big, powerful organization like the Russ Whitney Company. Please respect our wishes and refrain from discussing Russ Whitney here. Thank you.
Terry and J.P. Vaughan
Around the time of this exchange, Whitney made the same demand of John Reed, an East Bay resident whose Web site also contained unflattering comments about Whitney and his operation.
The real estate guru had no idea who he was messing with.
John Reed is a wiry, bespectacled former Army lieutenant with thinning blond hair who spends most days at home. Specifically, in the large, blue-carpeted office on the second floor of his Greek-revival-style house in Alamo. This is where the sixty-year-old writes the books 26 in total and newsletter that have been his primary source of income for more than twenty years.
Most of Reed's books are about real estate investing, and unlike much of the material available on the subject, they are as titles like How to Do a Delayed Exchange and Single Family Lease Options suggest nuts-and-bolts guides devoid of motivational or promotional filler. Reed, who charges between $30 and $40 a copy for the roughly fifteen thousand books he self-publishes and ships from his house each year, bristles when his competitors sell what he considers to be useless, incorrect, or grossly overpriced information. And he has been outspoken in his belief that many of his rivals do exactly that. "People have told me that I am becoming something of a curmudgeon," he concedes.
Shortly after launching his Web site ten years ago as a way to sell his books, Reed began to build what quickly became its most popular feature. In a section titled "John T. Reed's views of various real estate investment gurus," he unsparingly appraises, at last count, 168 of his competitors in the real estate advice industry.
Reed's critical musings constitute a sort of investigative Web log in which he engages with and solicits information from readers who provide tips. Perhaps his highest-profile critique is an ongoing 26,000-word analysis of Robert Kiyosaki, author of Rich Dad, Poor Dad, whose get-rich books have sold more than 27 million copies. Among other things, Reed argues that the author, who is also a Yahoo financial columnist and a regular on public television fund-raising drives, implicitly encourages students to drop out of school, advises his readers to engage in insider trading, and, in all likelihood, dreamed up his financially sage "rich dad," the central figure in his book. Reed challenges his readers to tell him the point of Kiyosaki's best-known tome. "When I write something, I want to make sure everyone gets the point the same point," Reed writes (his emphasis). "Here is the point of this analysis: Rich Dad, Poor Dad contains much wrong advice, much bad advice, some dangerous advice, and virtually no good advice."
Kiyosaki may be far more prominent than John Reed, but Reed's site comes up second in a Google search of Kiyosaki's name, a fact that gives the East Bay guru debunker considerable clout in the marketplace of ideas.
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