The strategy

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An almost-30 with fifty thousand in the orange guy’s shorts and a GF “with a ticking clock.” “She grew up in one house and that’s what she wants now,” he said, “and babies.” He puts on a brave face.

A father of three, 55, with a company, “in the yellow zone thanks to this economy.” Two hundred left on a four hundred house, $85,000 in a GIC, no pension, nice suit. Have you told your wife yet, I ask, if she knows you’re going to run out?

A retiring 60ish civil servant with a pension of thirty thousand and less than $8,000 in liquid assets. Two kids, 22 and 26, back home after losing their jobs. Paid-for house, but he’s convinced he can’t pay the electric bill.

Rural boomers with an acreage near town they always planned on as their retirement strategy. So they worked hard to pay it off, and neglected investing. Now the farm’s in an environmental protection zone, and illiquid. “These days,” she says, “I don’t sleep anymore.”

Just four I spent time with over the last few days. Looked into their troubled eyes. They asked me for advice and I gave it. Asked for help, but there was little. Stories like these underscore two realities of our time. A majority of people – despite the veneer of middle classness, and the nice car which just pulled up beside you – are disasters in the making. Second, real estate’s as much a destroyer of financial security as it is a builder of it.

It wasn’t supposed to be this way, as you know. If you got married, had kids, bought a house and threw at it what was left after everyday living, you’d be fine. Pension, maybe. Lots of equity, for sure. Inflation, wage gains, a swelling economy and constantly rising asset values would paper over neglect, ignorance or foot-dragging. It was a formula that worked just fine for about half a century. Until two years ago.

So this week, the Koreans started a pissing contest. Could soon be a war. Ireland crapped out, with Portugal and Spain now on bond vigilantes’ hit list. The US real estate market took another bullet, as new home sales dropped and the shadow inventory of resales – foreclosed homes not yet for sale – ballooned to over 2.1 million. This could keep American staggering for three more years. President Palin?

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