My Mentor is in Prison

By Susan Lassiter-Lyons | Real Estate

I’ve always had a voracious appetite for learning. Back in the early ‘90’s I started researching stock trading and real estate investing. I read everything I could get my hands on and eventually settled on one mentor who taught BOTH real estate investing and stock investing.

At first, stock investing was easier and much more lucrative. I was an executive at Hertz when Ford split us off and took us public. I got a piece of the IPO at the strike price and invested heavily in LEAP’s and companies that announced stock splits. Everything was going great until I filed my taxes that year and realized the full force of short term capital gains. Yikes.

So… real estate investing.

Again, I turned to my mentor for training and advice. I bought books, tape sets (remember cassettes?), videos (remember VHS?) and attended a few live events. I learned a lot about creative investing strategies and asset protection. And now I don’t fear the tax man so much because real estate gives me better protection and deductions than stock investing.

So, fast forward to 2010 and I find myself a bit of a real estate mentor. And as I peruse the real estate forums and blogs online I keep hearing the “scam” word being thrown around. I’ve written about this a few times before because “scam” is a pretty harsh word that I think is misused. And I hate to see it applied to something I do and respect – training, coaching and mentoring.

I was reading a blog where some poor real estate investing trainer was being throttled for not disclosing exactly where he invests. People were saying he must be shady or have something to hide. In fact, one guy went so far as to say that he had bought some of the guys courses and the strategies worked and he was making money but he now thinks he is a fraud because he is “secretive.”

I laughed to myself and thought, “Wow. People would freak if I ever revealed who MY mentor is.”

Because my mentor is in prison.

Behind bars. Locked up. In the slammer for 88 months for tax evasion as a result of an FTC investigation into his marketing practices.

But here’s the real question…

Does that make his investing strategies any less effective?

He never taught me to evade taxes so that’s not an issue. Am I now a failure? Do I not make money? Does this stuff not work after all? Here’s the book that changed my life:



And, yes, Wade Cook is my mentor. Convicted felon. Federal prisoner. Register #36240-086 at the Lompoc Federal Correctional Complex in California.

Now, I’m not defending his tax evasion or any of the underlying reasons why the FTC was targeting him to begin with. If he lied and cheated on his taxes, that’s not cool. But I am defending the fact that his training helped me succeed.

Was it all him? No. I’ve had other excellent mentors to guide me through various aspects of my real estate investing business. But he’s the main one.

Bottom line is Wade Cook was instrumental in my development and success as a real estate investor. And I thank him for that.

Does that make my real estate investing success a fluke? Was his training all a scam? Does that make me a scam?

I think, as I always have, that if you find a mentor you resonate with then learn everything you can and run with it. Your success is your responsibility. So is your lack of success. Which one will you choose?

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(17) comments

Brent Crouch

I’m not sure why I decided to Google Wade Cook after all these years, but found your blog in the process. I started reading Wade’s books right out of high school in the mid 90s. Wade Cook was the beginning of my investment education. Fast forward 20 years later, I own over 2 million dollars in real estate and make a good income from writing covered calls and naked puts. Like you, I’m not defending any actions that sent Wade Cook to jail, but am very grateful for what I learned from the materials he published.

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    Susan Lassiter-Lyons

    Way to go, Brent! Thanks for stopping by the blog.

    Reply

      Wow, he broke the law. Tax evasion is a crime. I believe the underlying factor is sin or greed or pride. I pray he comes to Christ.

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John

Susan, Has it been this long since someone has commented on your thoughts on Wade Cook? I came across him in the 90’s and he opened my thinking on the stock market, and life! He is one of my main mentors. Thanks for reminding me.

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    Susan Lassiter-Lyons

    Yes, it has! Nice to meet another Wade fan.

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Jonny Investor

Susan, you got Wade’s legal problems wrong. Please get your facts straight before you spread what you think you know.
First, it was a 78 month term not 88.
Second, it wasn’t tax evasion dealing with his business or investing. It had to do with a loan his CRT made to him and he didn’t owe taxes on a loan. Well, being successful and a National figure the feds found that he needed to pay personal taxes on the loan (that really wasn’t). He went down fighting the idea of a loan and lost. Frankly an honest mistake hardly worth 78 months, but he did it and he has paid the price. God Bless him and his family for sacrificing 78 months of his life when it should have been a slap on the hand pay the taxes. So much for being a famous person, what a price to pay.
So Susan get your facts and I’m happy you are reaping the benefit of Wade’s knowledge, experience, and logic.

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    Susan Lassiter-Lyons

    Whatever the reason he was convicted of tax evasion, filing false tax returns, obstructing a tax investigation and sentenced to 88 months. I gots my facts. 😉

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    Bon Scott

    All press accounts state 88 months. “The government alleged that the Cooks improperly redirected royalties from Wade Cook’s publications into a trust that, at least on paper, was eventually going to become a gift to the Mormon church. The government alleged the royalties were directed into the trust so that the Cooks would not have to report the money as personal income.

    Then, the government said, the Cooks drained the trust and used the money to support a lavish lifestyle.

    Attorneys for the Cooks argued that the money taken from the trust was loans that the Cooks documented and expected to pay back.

    The collapse of the stock market in 2001 and a Seattle earthquake the same year ravaged Wade Cook’s businesses and undermined the Cooks’ ability to repay the loans, their lawyers argued.”

    It all works until it doesn’t.

    And what about the BK of Wade Cook Financial Corporation?

    Hopefully Wade can sue Robert Kiyosaki for stealing his ideas. That would be a good lawsuit.

    Reply
Leslie

My business association with Wade Cook was on a far different level. I was his Interior Designer on Corporate Headquarters and several residences, over the years. I know him as a man who truly believes in the platform he teaches. I was present for many of the sessions Wade taught. All participants were attending knowing they had invested in an opportunity. They all also knew that opportunity would only be as good as their personal follow up.
Wade genuinely loves and cares for people. He worked hard to share his knowledge so that others might prosper as well as he has. His Corporation put a lot of people to work, many of whom have gone on to do great things.
I assure you this time out has been used to take his lessons learned and apply them to a new great venture which will insure a good life for his family and those friends and associates who have been loyal to him. Wade will be back and I for one am looking forward to his upcoming contributions to society.

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Frank

I read the books, listened to the tapes and did the seminars in Seattle. I even met Wade. He seemed like a high roller at a blackjack table. He made a comment that he would not suggest anyone invest in his company? This struck me as strange. He also boasted in front of over one hundred people that he hid money all over and that anyone would have great difficulty finding it-promoting his wealth preservation assistance program. That was when i knew he was going to fall. I said something about it to my sister who was sitting next to me. She agreed. If I were hiding money in shell corporations and other places, I certainly wouldn’t be blabbing it to everyone.

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Ellie

Susan,

I know this is an old thread, but oh well!

It’s funny you bring this up, I’ve read a lot of hateful comments about Russ Whitney in the past,and every time, I thought to myself, I’ve met SO many people who are extremely wealthy, and it’s a common thing for me to hear from them “This all started from my first Russ Whitney seminar back in 1994!”

I find certain “gurus'” attitude towards business more inspiring than anything!

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Terry

Thanks for being honest about your training with Wade Cook. In the mid-90’s I read Wade’s book on options trading. Never paid for the seminar because the book was pretty straight forward. Using call options on stocks that were splitting I made a bundle. In three months on short call option trades I made $40,000 on a $10,000 investment. I thought I found the golden goose. Then the 1997 Asian market crash occurred. The whole market was dragged into the toilet. Before I could get a handle on how Puts worked, I lost most of it. Was that Wade’s fault? No. It was mine. You can take a course on how to swim or read a book about it. But until you actually jump in the water over your head and actually swim you aren’t going to know. IRS aside, I think a lot of people who are mad at Wade got burned because they weren’t ready, there timing was off or whatever and wanted someone to blame instead of taking an honest look at themselves. However, that doesn’t excuse him avoiding paying his taxes. Sorry to hear he and his wife chose that route.

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P. Morratto

When I was starting out in the 90s, I used to watch Wade “religiously” every weekday on TV in LA, and learned a lot from him. I made (and lost) the fastest investment money I ever saw, with Wade. I took a real liking to him and his style, and sure hope Tom is right — that Wade Cook will be back, bigger and better than ever. My best wishes for him.

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David Alexander

Hey Susan,

I also credit Wade for my start.. always have… Wade was able to teach the fundamentals about business, real estate, and stocks better than anyone else…

And since then I still study his ability to build and info company…

I think that had Wade, sold out his company at the peak when his company was worth 100 mil plus… he would wrote the check to the IRS… and been done..

And my point is… that when the government went after him for whatever reason… It’s over…

Once you are in their sights… it’s pretty hard to get out of them and they’ll find something…

For all of us… as a friend of mine
has taught me…. if we knew when to sell
and simply ride out the bad times..

or rather if we knew when the peak was and sold out… it would be easy…

So, many people disregard good information
because someone makes a mistake…

They seem to forget we are all human…

And at some point we’ll all make some pretty sizable mistakes…

count on it..

Great Post… !!

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wade is not my mentor but the origional version of the book you mentioned above was my inspiration to start buying houses with assumeable loans and then wrapping them on the resale for cash and cashflow.
That was 1987 and 23 years later and 300+ houses later Iam still doing “subject to” purchases with an owner financed “wrap” resale. Last month we did 10 and the tax credit made for some substantial downpayments. Sorry to hear about his problems but he’ll be back bigger than ever.

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Susan Lassiter-Lyons

Thanks Darlene!

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Darlene

I respect you for your ethics and what you have taught me. I also respect you for owning up to the fact about Wade Cook. He had been around for many years and he is not the only one to go a foul of the law. The are many BIG name GURU’s that have taught strategies that are less than stellar, but have gotten away with them and others who have not. I applaud you. Thanks for all you do. Darlene

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