Is Nouveau Riche a Scam?

December 4, 2007

Nouveau Riche Tuition’s – Are They Overpriced?

OverpricedFrom time to time I will hear statements or read comments about the cost of the Nouveau Riche tuitions being too high, for example;

“If only the tuitions didn’t cost so much “Why do they charge $16,000 for their tuition” It’d be a nice concept if, 1. they didn’t charge so much for their classes, and 2. no one made money off your tuition.”

So rather than avoid tough questions like this, let me take some time to directly answer them, and you can be the judge of whether or not the tuition packages at Nouveau Riche are priced right. Well right off the bat, a common misconception is that a tuition package for Nouveau Riche is $16,000.  There are actually 3 tuition packages available ($6,000-$10,000-$16,000) and each package is good for two people, which can cut the investment in half per person.  The reason we always hear about the $16,000 tuition is because it is the most popular one, and well over 95% of students enroll with it.  There are dozens of reasons why, but here are the 5 most logical reasons that I could think of from a student perspective:

  • 2 years at Nouveau Riche with the Regents tuition, only 1 year with other packages.
  • Greater level of access to properties on the Investor Concierge.
  • Tuition partners can repeat each-others classes without using up extra credits.
  • Access to 20+ Video Classroom modules from home (only available with Regents tuition).
  • Get to take 2-4x more classes at Nouveau Riche than with other tuition packages.

Each individual student can choose the tuition package that meets their needs, but let’s use the Regents tuition in this example since it is the most popular.  When a student purchases a Regents Tuition, they get access to 2 years of Nouveau Riche community benefits and classes.  Nouveau Riche currently offers 6 weeks of classes in a typical year, and each week is generally a Monday through Saturday. Here is an example of a typical week at Nouveau Riche:

Now, let’s do some quick math to see what value someone would get from a Regents Tuition Package at Nouveau Riche.

12 weeks of school over a 2 year period.  64 hours per week x 12 weeks = up to 768 hours of potential in-class time x 2 people is 1536 total in-class hours for a Regents Tuition.  $16,000 divided by 1536 = $10.42/hr of class time. So for slightly over $10 per hour, is the quality of education really any good?  Absolutely!  The classes are taught by actual real estate investors who are currently practicing and having success at the topic they are teaching on.  There is no up-selling of any kind allowed at the college so students are able to relax and learn rather than be on the edge of emotion and impulsiveness half the time, and the course curriculum was designed using ISD (Instructional Systems Design) so yes it is very high quality. On top of being able to attend classes, students also have access to several other benefits along with their tuition’s:

  • Access to over 20 Nouveau Riche real estate investing classes that have been recorded and converted into streaming video format for Regent students.  You get unlimited access to these classes for the entire 2 years and they don’t use up any additional credits. 
  • Access to a built-in real estate investing power team (known as the infrastructure of your real estate investing business), which every real estate investor should put together at some point.  This includes an accounting firm, business entity set-up company, credit restoration company, and an investor mortgage company.
  • Access to an exclusive portal (Investor Concierge) that features investment properties for sale, with a team of people to assist in finding tenants, managing the property, taking care of repairs, etc.  This service helps investors that are limited on time and who want to invest in rental properties without the hassle of being a landlord.
  • Access to 3000+ students to network with at every college.  This is where some of the true value is because networking is what real estate is all about, and there are a whole range of investors at each college, so if you are looking for a money partner, or a credit partner, or a wholesaler, or a buyer, etc, they can all be found there.  Pretty cool!

Here is a quick summary of the Value of a Regents Tuition:

  • Access to 1500+ hours of live real estate investing classes between you and a partner.
  • Access to 24/7 unlimited viewing of 20+ classes from home for 2 years using the Nouveau Riche Video Classroom.
  • Access to a built in power team of legal, accounting, credit, and mortgage services.
  • Access to cashflow positive properties using the Investor Concierge website.
  • Networking with 3000+ real estate investor Nouveau Riche students nationwide and an extended community of 10,000+ community members.

So far we were able to cover a lot of value without even getting into the Marketing Opportunity offered by Nouveau Riche.  I think that says a lot because there are many people who feel that Nouveau Riche is all about the marketing and not about the college.  That is simply not the case.  Here is a website that features stories from Nouveau Riche students and what they have been able to accomplish so far by using the education:  Nouveau Riche Testimonials!

Let’s finish this post by addressing some of the skepticism on Nouveau Riche’s choice of commission-based marketing: 

“It’d be a nice concept if, 1. they didn’t charge so much for their classes, and 2. no one made money off your tuition.“”How do I know they aren’t just marking up the price of tuition’s to pay extra money to their sales people, which takes away our value as customers?”

  1. This is tough to achieve, which is why there is such a high failure rate among business start-ups.

We need to understand that Nouveau Riche needs to make a profit otherwise there is no Nouveau Riche! 

Just like any company, they have their base overhead which we can assume includes their home office, employees, college instructors, etc.  The list is probably longer than any one of us could imagine unless we have actually owned and operated a multi-million dollar company.  On top of this base overhead they have to find a way to market their products to the public as well, which creates advertising costs, salesperson overhead, sales training, sales commissions, etc.  Let’s break down 4 common advertising and sales costs…

  1. In this scenario the company also has to take into consideration many of the following expenses as well, which dictate the percentage that they can allocate towards sales commissions.
  2. It is not uncommon to hear of credible, successful large companies and small businesses spending as much as 50% of their revenues on customer acquisition and retention.
  3. Another choice would be to set their sales reps up as independent contractors where they would assume these overhead expenses themselves.

What Nouveau Riche has chosen to do is to set their sales reps up as Independent Contractors (ITA’s – Independent Training Associates).  Nouveau Riche provides online training modules and additional resources to each ITA, and on top of this they are matched up with another sales rep (ISA – Independent Sales Associate) to receive training and support.  Once they have completed some training sales, then they become certified to earn commissions directly from Nouveau Riche.  At this point they earn a 50% commission for every product that they are certified to sell.  The entire 50% commission is paid directly to the referring ISA. Because of this choice of set-up, Nouveau Riche does not need to spend money directly on advertising, sales rep overhead, and sales training.  This frees up more of the company’s revenue to be paid out in commissions and that is how they are able to pay out such high referral fees to their ISA’s.  Think about this for a minute.  They are going to pay out this money either way.  Instead of paying big advertising agencies to put up expensive commercials, radio ads and so forth, they choose to pay their students for word of mouth referrals, which are often quoted as the best form of advertising.  ISA’s are also granted the ability to place their own company-approved advertisements to attract new customers as well. Hopefully this explanation of tuition’s and commissions of Nouveau Riche has been helpful.  I too was skeptical when I first took a look at this opportunity, which is why I am now taking time to help address tough issues and tough questions that others may have.  Feel free to bookmark this site and check back often for new articles and updates.


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