Or take another of McFadden’s clients, 73-year old Pat Salatich, a nurse for 25 years at Exxon. She deposited $565,383 with McFadden in 2001, and after only withdrawing $189,000, she learned there was only $73,000 in the account before she stopped the bleeding. She now lives on about $1,500 a month in social security.

Ron and Pam Yandell of Mansfield, Texas, turned over their $1.4 million retirement fund to a stockbroker who invested in risky tech stocks without their approval. They lost $230,000 in the tech crash. After a five year legal battle and lots of costs and stress, they won an award of $990,000 against their stockbroker, but no one can find him to collect it. He’s disappeared. [2]

Real estate prices may go up and down, but over the long run real estate has been a reliable investment, and real estate doesn’t go “poof.”

To be fair, I do know an asset manager who has a remarkable and consistent record of steady gains and no losses for his clients over many years, but he is the exception rather than the rule. Real estate is a good long term investment, and in times of uncertainty with a real estate market that slows down as it has in Sequim and Port Angeles, cash is king. Investors or home buyers who have cash and good credit will be the big winners.

[1] A Star Broker, “Virtually Unsupervised,” Puts Ameriprise Arm Under Scrutiny, The Wall Street Journal, August 29, 2006, page C1

[2] A Word of Warning, The Seattle Times, September 3, 2006, page F1.