Yahoo Finance New York nurse drained $18,000 from her 401(k) for life coach lessons — only to get trapped into spending more
Billiejo Mullett says she was growing tired of the corporate grind when she discovered life coaching — a wildly popular trend in the wellness industry that claims it can counsel people through major life and career challenges.
“My friend recommended a podcast, and I immediately felt that this was what I’d been looking for,” she told The New York Times. “The host was talking about how our thoughts impact our emotions and our behaviors. I was hooked.”
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Mullett, a registered nurse based in Minoa, New York, says she shelled out $18,000 from her 401(k) to pay for her first course at a life coach school, hoping to eventually become a coach herself and fulfill her dream of making good money while helping others.
But the schooling wasn’t what she expected — one hour of online learning per week for six months — and despite receiving a certification she was told would give her “everything I needed to make my first $100,000,” she found herself low on cash and clients.
Desperate to make any income, Mullett was encouraged to spend even more on getting coached herself. Unable to let go of her dream, she dropped another $17,000 on coaching classes and business mentoring.
“I wasn’t making money,” she said. “I was spending money.”
The seedy underbelly of the industry
Life coaching is a fast-growing business in the U.S. The world’s largest nonprofit coaching association, the International Coaching Federation (ICF), estimates the global life coaching industry was worth $4.6 billion in 2022, while the number of coaches jumped 54% between 2019 and 2022.
But experts fear a lack of formalized accreditation and regulation could lead to shady business practices and scams.
“A life coach may or may not have a psychology degree, they may or may not have done any official training and they may not have expertise in the thing they're claiming to,” Jane Marie, a journalist who has previously covered life coaching, told BBC. Marie’s podcast, “The Dream,” has dived into various practices and promises within the wellness industry.
“I think any time a business is specifically targeting a customer base that is desperate, a scam can be perpetrated,” she noted. “Nine times out of 10, it isn't, and that's great. But if you're a bad actor, you could easily become a life coach or relationship coach and convince people to spend thousands of dollars to achieve an unattainable goal.”
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Eva Collins, who worked as a life coach for many years, noticed there is a seedy underbelly to the industry as well.
“They bully people for money,” she told The Times. “You’re not allowed to question the main coach. You’re not allowed to dissent.”
Collins now runs an Instagram page that shares anonymous comments about life-coaching offenders. She claims to hear many stories from folks who are drowning in debt, with some even remortgaging their homes to pay for coaching.
How can you verify who’s legit and who isn’t?
Collins says that while there are scammers out there in the wellness industry, she believes many life coaches are genuine and want to help their clients. There are plenty of folks who have sought out life coaching services that attest to this as well.
Tierney Pretzer, who lives in San Francisco, told BBC she felt “stuck” in her career and her life but found support and sustainable advice from a life coach she worked with.
Experts recommend looking into a coach’s credentials and work experience before engaging with them. If possible, reach out to former clients to get their insights. Accreditation within life coaching isn’t regulated, however, different accrediting bodies have different requirements you may want to research.
Carrie Abner, vice president of credentials and standards at the ICF, told the Times there's a code of ethics that life coaches who obtain the organization’s credentials must abide by and there’s a formal process clients can take to hold their coach accountable if they step out of line.
If you’re seeking a coach to help you cope with stress around money, a financial therapist can lend a hand.
Just bear in mind that while financial therapy can help you gain a better understanding of personal finance and your relationship with money, you might turn to a financial adviser for focusing on wealth building and making investments.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
