A Cautionary Tale of Trust, Heartbreak, and Starting Over
By Guest Author: Jordon, retired LAUSD teacher
Introduction by Steve Schullo
This story hits me hard.
I had a friend, Dave. We’ve shared vacations, birthdays, long talks, and a trip to Mexico’s Copper Canyon. He’s more than a friend—he’s the father figure I never had after my own dad died when I was 13.
But here’s the line I never crossed:
Dave is NOT my financial adviser.
Jordon’s ripping and true story shows why that line matters.
A Tale of Two Crises by Guest Author Jordan
This is not just a financial story.
It’s a story about trust, health, friendship, and what happens when all three collide at the worst possible time.
I started out like many teachers.
I wanted to do the right thing: save for retirement, protect my future, build a little security. Over the years, I opened several 403(b) tax-sheltered annuities—some fixed, some variable. I owned a home I loved. I invested conservatively in the stock market. I wasn’t trying to get rich; I just wanted stability.
I didn’t understand the stock market or investment strategies in any real depth, and like most teachers, I was exhausted from the daily demands of the classroom. So I relied on professionals—financial advisers—to guide me.
At first, that worked out fine.
Then came the adviser I also called my friend.
When Your Adviser Is Also Your Friend
He didn’t start as my adviser. He started as a friend.
Over time, we grew close. I admired him. He was smart, charismatic, successful. He had his MBA, taught financial planning at a community college, and even served as an SEC judge. That résumé alone felt like armor—surely, someone with those credentials could be trusted.
One day he offered to “take a look” at my investments.
He told me I was doing fine, but he had products that would “greatly increase” my returns. He suggested consolidating my accounts. He sounded confident, generous, caring. I trusted him—both as a professional and as a friend.
There was just one complication:
I had an outstanding loan on one of my annuities, used previously to help buy a house.
He told me:
“The best way is to pay off the loan.”
But I didn’t have the cash.
So he said, “If you move it without paying off the loan, you’ll just owe the taxes—no penalties. And you’ll make more in the new investment anyway.”
No penalty. Just taxes.
I believed him.
I consolidated.
That was the first domino.
Red Flag #1: “Where Is My Money?”
Months went by. I noticed money being taken out of my paycheck—money I had authorized—but it wasn’t showing up in the new plan.
Every month, I asked my friend/adviser, “Where is it?”
Every month, he reassured me: “It’s in the works. I checked with the company. It’ll post soon.”
After six months, I stopped trusting his reassurances and called the company myself.
They had no record of the contributions.
Then I called the old company.
They told me the money was in a suspense account because the old contract had been closed.
I was able to recover the funds, but the emotional damage was done. I was shaken. This wasn’t a minor clerical error. It was my life savings.
He had lied.
And I knew it.
Red Flag #2: Taxes, Penalties, and Another Lie
Then tax season came.
Remember that loan he told me would only trigger taxes, not penalties, if I moved the money? The company sent me a 1099. I reported it. I paid the taxes.
Later, a letter arrived from the IRS.
Because I had effectively done an early withdrawal, there was also a 10% penalty on top of the taxes.
Exactly what my “friend” had told me would not happen.
He was wrong. Again. And this time it wasn’t just an inconvenience—it was expensive.
Red Flag #3: My Account Goes Down While the Market Goes Up
While all this was happening, I started watching my accounts more closely.
The ones he controlled?
They were going down.
At the same time, my other investments—the ones he wasn’t touching—were going up with the market.
When I questioned him, he shrugged and blamed “the market.”
I also learned that a third-party management company was involved—another layer of costs. My account was being charged 2% for this management, in addition to everything else. When I asked why we needed them at all, given that he was supposed to be my adviser, the answer was never clear.
But I knew one thing clearly:
Somebody was getting paid.
And it wasn’t me.
The Commission Fight
Having worked in insurance before teaching, I knew how commissions worked. Clients rarely see them—but they are real, and they are built into the product.
So I asked him directly:
“Did you receive a commission on this?”
He said no.
He said he was “doing me a favor.”
That was the breaking point.
We argued.
I pushed.
Finally, he admitted: yes, he had been paid.
“Oh, that commission,” he said.
My stomach dropped.
I remember thinking: “Damn liar.”
At that point, I called the company directly. They told me that what he had set up with the third-party manager was happening a lot to the extent that they had started offering financial advice internally for free, to help clients avoid those extra fees.
But I was stuck. I had signed a seven-year contract. Moving my money out would trigger large surrender charges.
So I did what I could:
- I fired the third-party manager.
- I fired my adviser—my friend—from any role with my money.
- I let the company manage the account while I waited out the contract.
When the seven years finally ended, I moved the money to Vanguard, where most of my investments sit today. I began learning how to manage my own money.
The cost of that education was enormous.
The Dream: A House in LA, a Place in Palm Springs, and a Future in Florida
Before everything went sideways, my life looked stable.
I loved my teaching job.
I had my dream home in Los Angeles.
I felt reasonably secure.
Then my adviser/friend suggested diversifying into property.
I already owned my LA home and a portfolio of investments. He convinced me to tap my home equity and “put my money to work” buying more real estate.
We went to Palm Springs to look at condos—part vacation, part business trip. We found a condo in a country club on a golf course. Not exactly my style, but it seemed like a solid rental and a future retirement spot. I paid cash. No mortgage.
It worked, for a while.
I broke even. I got some tax benefits. It seemed okay.
Then came the next step: Florida.
He owned six properties around Fort Lauderdale and convinced me to do the same kind of thing: take money from my Palm Springs equity and buy two more condos in Florida.
I was seduced by the vision:
- A home in LA
- A condo in Palm Springs
- A place in Florida
- Rental income
- A comfortable retirement
Looking back now, with my salary as a teacher, I should never have taken on that much real estate. But back then, I believed the story:
“Real estate always goes up.”
“You can’t lose on property.”
“It’s tax-efficient and smart.”
It felt like a plan.
It felt like a future.
Then My Heart Literally Broke
Out of nowhere, I had a massive heart attack.
Then more cardiac events.
I was in and out of the hospital.
Back and forth to the ER, sometimes once a month.
I developed congestive heart failure. I now have five stents, multiple angiograms, and several EPS studies behind me. Teaching, something I loved deeply, became physically impossible.
I tried to go back. I negotiated part-time work with my principal. But I found myself putting my head on the desk in front of my students, wondering if I needed to call 911.
That’s not teaching.
That’s surviving.
I wasn’t ready emotionally or financially to retire. But my body made the decision for me. I applied for disability retirement.
At the same time, the financial crisis of 2008 was unfolding.
Two crises.
One body.
One portfolio.
Both under attack.
Losing the Dream Home and Becoming “Homeless” With Three Condos
With my health wrecked and my income reduced, the numbers no longer worked.
To survive, I had to:
- Sell my beloved LA dream home.
- Move into the Palm Springs condo.
- Plan to eventually sell the Florida properties.
Selling my LA house hurt deeply. I had poured myself into that place. It was my sanctuary.
But with the bigger mortgage and multiple properties, I had no choice.
When the LA house sold, it closed fast. Too fast.
My Palm Springs condo was rented out for high-season tenants. I still owned three condos—but I had nowhere to live.
So there I was:
Three condos.
No home.
I stayed with my sister in Florida for a month. Then I rented a room in Palm Springs—ironically, from the same friend who had advised me into this mess—until I could move into my own condo in May.
It would be funny if it weren’t so heartbreaking.
The Most Absurd Recommendation of All: Racehorses
When my LA house sold, I walked away with a decent chunk of cash. A fragile second chance.
My adviser friend had a “great idea”:
Racehorses.
He wanted me to invest all my proceeds into racehorses for a “guaranteed” 25% return.
I had just survived a massive heart attack.
I was forced into disability retirement.
The housing market was crashing.
And he wanted my entire nest egg in racehorses.
That was the moment I finally, fully woke up.
I said absolutely not.
I took that money elsewhere, briefly worked with another adviser who eventually agreed it made more sense for me to move everything to Vanguard and manage it myself—especially given the 2% annual fee.
There are good advisers out there. I’ve had some. But by then, I knew one thing:
No one would ever care about my money as much as I had to.
The Collapse: Florida Condos and a Financial Freefall
As I settled in Palm Springs, the 2008 financial collapse hit full force.
Florida property values tanked. The condos I had purchased for around $200,000 were suddenly worth $30,000.
In California, you can walk away from a mortgage and the bank takes the property. In Florida, it’s different. It’s a recourse state. If you walk away, they sell the property—and then come after you for the difference.
On my condos, that meant potentially over $100,000 per unit.
Bankruptcy was one option many chose, but because I had investments, it wasn’t a simple path. I was stuck.
Rents fell. Expenses didn’t. I was bleeding money every month just to hold onto properties I could no longer afford and that were worth a fraction of their purchase price.
Slowly, painfully, I managed to:
- Short-sell one condo (thanks to an excellent local agent) and secure a non-recourse agreement, though the IRS still treated $100,000 of forgiven debt as taxable income.
- Keep the other condo, which now at least breaks even.
I joke sometimes:
“Help! I’m trapped living in a country club in Palm Springs.”
But behind the joke is a deep, raw truth:
I’ve been financially stuck for almost ten years. This is not the retirement I imagined.
What I Lost—and What I Learned
I don’t blame my adviser for the 2008 financial collapse or my heart attack.
But I do hold him responsible for:
- Pushing me into overleveraged real estate far beyond what my teacher’s salary could support.
- Moving my retirement money in ways that triggered taxes and penalties.
- Lying about commissions.
- Suggesting racehorses after all of that—when I was weakest and most vulnerable.
By my estimate, I lost somewhere between $250,000 and $500,000 due to bad products, poor timing, and terrible advice.
Some of that was market risk.
But a significant part was avoidable.
Can a Financial Adviser Also Be Your Friend?
Here’s the strangest part of all:
After everything he did…
We are still friends.
Most of my other friends want nothing to do with him. They’re furious on my behalf. They can’t understand why I still see him socially.
The truth?
I can separate business from friendship.
I would never trust him with a dime of my money again.
But I can still go out to dinner with him.
Maybe I’m too forgiving.
Maybe I just don’t want to carry that much anger.
But here is the lesson I want every educator to hear:
Do not mix your financial life with your emotional life.
Do not give power over your money to someone you feel you “owe” or don’t want to confront.
Friendship can cloud judgment. Objectivity goes out the window.
Steve’s Debrief: Why This Story Matters for ALL Investors
From Steve:
Jordon’s story is the most extreme I’ve ever heard—and I’ve heard a lot of 403(b) horror stories.
It’s not just about one bad annuity. It’s about:
- A non-fiduciary adviser who lied about commissions.
- Overleveraging real estate because “everyone makes money in property.”
- Recommending racehorses to a man who had just nearly died. Racehorses!
- Encouraging a cash-out of a 403(b) before age 59½, triggering taxes and a 10% penalty—rather than a simple transfer to a low-cost stock or bond index fund.
No genuine fiduciary adviser in the 401(k) world could get away with this without risking their license or worse. But in the 403(b) world, under outdated state insurance codes, this kind of behavior is not only legal—it’s protected.
That’s the tragedy.
And that’s why Jordon wanted his story shared.
What You Can Take From Jordon’s Story
- Be skeptical when a friend wants to be your adviser.
- Always ask about fees and commissions—and demand clear answers.
- Avoid early withdrawals from retirement accounts. Penalties hurt.
- Know your limits with real estate and leverage.
- Learn enough to be dangerous—in a good way. Your money, your life.
Jordon survived two crises: a broken heart (literally) and a broken financial 403(b) system.
He’s still standing.
He’s still investing.
He’s still forgiving—maybe more than I could be.
And he’s still willing to share his story so you don’t have to live it.
(Footnote: Jordon passed away this year, 2025. His many friends and acquaintances will miss him. He was there when I lost my husband, Dan, and for that I am grateful to have known him.)
Steve’s Bio
Stephen A. Schullo, Ph.D. didn’t set out to become a retirement-plan advocate. He was just trying to be a good teacher.
Steve taught in the Los Angeles Unified School District for 24 years and, like so many educators, he trusted that the retirement plans offered at work were designed to help him retire with dignity. Instead, he discovered something very different: layers of high fees, sales commissions, confusing products, and a system that seemed to benefit everyone except the teachers it was supposed to serve.
That discovery changed the direction of his professional life.
Working in the classroom by day, Steve began learning everything he could about investing at night, eventually earning a Ph.D. from UCLA in 1996. He started writing retirement articles for the United Teacher newspaper, helping colleagues untangle the maze of Tax-Sheltered Annuities and 403(b) vendors. Over 13 years, his writing reached tens of thousands of educators across the Los Angeles Unified School District.
Along the way, he co-founded 403bAware, a teacher self-help group where colleagues met after school, asked questions, compared statements, and learned how to recognize high-cost products. He became part of an online community of thoughtful investors, contributing more than 7,500 posts since 1997. His advocacy has been featured in the Los Angeles Times, The New York Times, U.S. News & World Report, and he has testified at California legislative hearings. His union honored him with its “Unsung Hero” award for retirement-plan advocacy.
Steve’s personal financial journey is also a love story. Together with his late spouse, Dan Robertson, they wrote the book Late Bloomer Millionaires, a candid account of how two ordinary public educators, after years of being sold high-cost annuities, finally discovered low-cost index investing and built financial independence later in life. The book is part memoir, part roadmap, and fully a testament to partnership, perseverance, learning, and grace. Dan’s optimism, wit, and steady presence remain at the heart of Steve’s work today.
For 19 years, Steve has served as a volunteer “Member-at-Large” (and former co-chair) on LAUSD’s Investment Advisory Committee, which oversees the district’s 403(b) and 457(b) plans for more than 55,000 current and former employees. Today, those plans hold over $3.8 billion in assets, and the committee continues to push for transparency, responsible stewardship, and low-cost investment access for all employees.
Steve launched this blog in 2012 to share what he learned the hard way:
• Teachers are not “bad with money.”
• The system was built to confuse us.
• When educators help educators, we change the outcome.
He is part of a small but spirited national network of teacher advocates who gather at 403bwise.org, where we support one another, share resources, and work toward reform.
Because every educator deserves a retirement plan that honors the work of a lifetime.
