by Luke Setzer
The complex world of personal finance can often overwhelm the average person. Mortgages, insurance, taxes, investments, real estate, employment, and business carry with them a host of rules, regulations, and pitfalls that seem designed to transfer wealth from the ignorant to the informed. A variety of magazines and books have offered instructions on how to control expenditures and build personal wealth. Some of the all-time best-selling books on personal finance have come from one man: Charles J. Givens. The story of his rise to fame, fall from grace, and final demise provide lessons for all of us.
Charles J. Givens was born in 1941 and raised in Decatur, Illinois. He began his business career in the music world, forming a band called "Chuck Givens and the Quintones" as a young man and making more money during weekend gigs than he did during his normal day job at the local foundry. He later bought the rights to call as "his" song the famous single, "Hang On Sloopy." He briefly pursued his own recording business, but lost it all in an uninsured fire.
As Givens' business savvy matured, he formed his own company to teach his hard-learned success strategies to others. The focus of his efforts shifted primarily to readily usable financial strategies accessible by common people. The stated mission of his company, the Charles J. Givens Organization (CJGO), was to "stamp out financial ignorance in America". In a pioneering effort, Givens' company offered one-stop shopping for a variety of low-cost financial services along with a readily available financial hotline to get fast answers to tough questions. His company policy offered a money-back guarantee to new members: If they attempted to use the strategies within 30 days of purchase and failed to save the cost of their initial membership fee, then they could obtain a refund of that fee. At the peak of his career, the cost of joining the CJGO was roughly $400 per family.
Givens personally spent 40 weeks per year touring the U.S. to sell membership in his organization. During his sales pitch, the flamboyant Givens introduced himself as someone who had "made and lost a million dollars" three times as a young man before finally learning how to build wealth. His story consisted of:
An agent with the book publishing company Simon and Schuster attended one of Givens' personal finance seminars and commissioned him to publish a series of books on wealth and success. Wealth Without Risk, the first in that series, quickly became a top seller across the U.S., and Givens embarked on a whirlwind tour of talk shows around the country to promote his message. Givens followed up his first best seller over the next few years with Financial Self-Defense, More Wealth Without Risk, Wealth Without Risk For Canadians, and SuperSelf. The success and persuasive message of his books led many people to join the CJGO.
All of Givens' effectiveness as a personal financial planner served him well in the years following his rise to fame. The United States is among the few nations in the world not to practice the tort law of "loser pays". The laws of many other nations quite rightly demand that any plaintiff who drags a defendant into court and loses his case pay restitution to that defendant for his defense costs. Understandably, the number of lawsuits filed per capita in other countries is considerably lower than those filed in this nation.
In the U.S., wealthy people provide easy targets for the poor, stupid, unscrupulous, and envious persons who wish to file frivolous lawsuits to gain easy money. They can do so by hiring lawyers who operate on contingency--if the plaintiff wins, the lawyer wins, but if the plaintiff loses, the lawyer's only losses are time and effort. Meanwhile, the defendant must pay to defend himself whether he wins or loses. In this kind of legal environment, it should come as no surprise that a recent survey of Americans found many of them believing that the most effective way to become wealthy is through the winning of lawsuits.
Charles J. Givens and his company began to fall victim to the "sue-happy" mentality of numerous Americans in the early 1990s. The first blow came from a woman whose husband failed to follow Givens' insurance advice properly. One of Givens' more effective strategies for personal cost-control came in the area of life insurance. He offered conclusive explanations for why term life insurance is always a better buy than whole life insurance, and explained step-by-step how to move safely from whole life insurance coverage to term life insurance coverage. Givens clearly stated in his books to secure the new term life insurance policy before dropping the old whole life insurance policy. The man in question dropped his whole life policy and waited nine months without obtaining replacement term insurance. Before he got around to purchasing a new policy, he died in a car accident, leaving his wife and children broke. The woman filed suit against Givens, claiming that he offered faulty advice.
In the usual style of litigious lawyers, the woman's attorneys exercised great leeway with the facts, making all manners of specious, damaging assertions and then expecting Givens' lawyers to prove that the assertions were not true. These events demonstrate another unfortunate aspect of U.S. civil law: If even a tiny award is presented by a court to a plaintiff in a lawsuit, then all assertions made by the plaintiff's lawyers against a defendant in that lawsuit can be used as legal facts in future lawsuits.
Givens chose to settle out of court rather than risk a "Pandora's Box" of lawsuits opened by a sympathetic jury easily swayed by manipulative barristers. This did not stop the negative publicity, however. Jane Bryant Quinn, a famous financial advisor in her own right, capitalized on Givens' misfortune by publishing at least two articles blasting Givens in a downright libelous fashion. Givens' company retorted by taking out a full-page article in USA Today addressing and correcting every one of her faulty points. They also filed slander suits against her.
None of this seemed to matter. Several other lawsuits against Givens followed. One of the most damaging of these arose from California. A class-action lawsuit filed there by former members of his organization demanded a refund of their initial membership fees and other costs on grounds that Givens had "misled" them with his opening "rags to riches to rags" autobiography.
The lawyers for the plaintiffs contended that Givens' autobiographical statements were false (and therefore misleading), then demanded that Givens prove them true. Considering the circumstances surrounding his early career setbacks, it should come as no surprise that Givens could not prove them true conclusively. As a result, the court ruled in favor of the plaintiffs and demanded millions of dollars in damages from Givens.
Note that this particular suit had nothing to do with whether Givens' advice worked or not. It had entirely to do with whether Givens did indeed make and lose a fortune several times early in his life. Let us assume for a moment that Givens fabricated the entire story of his youthful wins and losses. While I would never excuse outright fraud from even an otherwise moral man, it still would not alter the effectiveness of his financial strategies. As a satisfied member of his organization since 1991, I have personally experienced many benefits from his advice. I have also read countless testimonials from other members who have completely turned their financial lives around as a result of Givens' efforts. Therefore, I remain unmoved by complaints of "misleading statements" when those particular statements are not germane to the value of the membership or the financial strategies.
Smartly and rightly, Givens and his lawyers had already cleverly structured his estate to make his personal fortune almost impossible to touch. Even with the multi-million dollar judgments against him, the plaintiffs had little hope of ever seeing a penny of his wealth transferred to their own coffers. A lengthy article in The Orlando Sentinel in 1997 detailed Givens' own personal "wealth-protecting" strategies that included multiple overseas phantom accounts, joint ownership of property with his wife, and other asset-protection methods. In his usual unfazed brazenness, he reported to the court a personal net worth of less than $800.
In the end, he met the same fate all humans ultimately meet. He died on July 12, 1998, at the age of 57. Death befell him in the form of incurable cancer, and despite all his wealth and knowledge, he never did determine a way either to become immortal or to take any of his wealth with him. Luckily, it appears that no one outside of his final wishes will get his fortune, either.
What lessons can we all learn from these events?
Readers who wish to learn more of Givens and his strategies can visit my books site, where I have a complete listing of his strategies and a link to his company's home page. His company has reorganized under bankruptcy laws to protect itself from the aforementioned lawsuits and now has a new name: International Administrative Services Financial, Inc. It continues to carry on its mission "to stamp out financial ignorance in America". Perhaps now that the company is divorced from the persona of a single celebrity of wealth, it will be less vulnerable to future attacks.
Those of us who supported Givens' efforts certainly hope so. Without a doubt, his influence has reshaped positively how Americans look at money. Givens has moved hundreds of thousands of individuals from financial overwhelm to monetary empowerment through the transmission of specialized, valuable knowledge on a wide scale. To those otherwise average people willing to act thoughtfully, his efforts have offered the capacity to produce outstanding results.