Looking for tidbits of advice to dealing with emotional rollercoaster of financial crisis, not looking for validation or empathy:

Background: 53M, she is 45F. We have 9y.o.boy. Blended family. Her daughter 24, getting married this summer. My sons: 24yo- at home, finished Associates degree, might continue studies on his own. 20yo- away at college, making him take out some portion in loans as he is taking longer than we thought.

Had changed from "safe" investments in 2009 to "risky" investments in 2010. Made a lot of money on paper by November, but paper losses/real losses in Dec/Jan back to break even. End of January I foolishly invested in a well-known company that was being accused of fraud by short sellers. I had been overconfident from "confirmation bias" reading message boards and analyst reports and media articles in Forbes, etc. etc. Kept averaging down until suddenly 7 days before earnings were due, the company's auditor resigned, CFO resigned, and Chairman of BOD resigned. Auditor stated in a letter they wanted a forensic audit to confirm detailed sources of revenue/bank statements/customer payments/etc. at the 11th hour before earnings were due out - responding to pressure from the attack articles by the hedge fund shorts community. Company asked for a trading halt because news of resignations got leaked; however, NASDAQ changed it to a different kind of halt when they didn't release their earnings on time. Supposedly a compliance plan was to be submitted to NASDAQ, but that is not public information and we won't know if it was or if NASDAQ accepted such plan for weeks. The stock might or might not remain on NASDAQ, and it may or may not be involved with fraudulent overstatement of earnings, or misuse of funds, or other shenanigans.

Now investors realize there could be fraud. But it's tough to go through the 5 steps of grieving when you aren't even sure for the next few weeks or months what is going to happen. Trying to have a plan A and plan B, but emotionally I'm in Plan Z - can't reconcile a loss and move forward if I have no idea what is going to take place. Tough because I had to reveal to my significant other that basically 3/4 of our net worth may be invested in fraud. Aside from the stock holdings in my name (which were inheritance 3 years ago), we only have 401K savings of less than 1 year's combined salary at our ages (me 53 her 45). And about 100K equity in the house with a 4 percent 15 year mortgage, and about 9 years till our son starts college.

So she is from a third world country, and has been through times and grown up in times worse than any depression-era child in the USA. So that is good - she doesn't expect anything taken for granted or entitlement. But as for me - I used to think I would have to work forever, until mom passed away leaving investments (cash from her house already went to my older boys' college expenses). Then after her death I thought things would be better. Now it's back to square 1.

93 percent of my net investment worth (outside of 401K) is in a trading halt, accused of fraud, possibly could eventually be delisted from NASDAQ. Preparing for the worst but meanwhile the stock may undergo a forensic audit and the investigation and preparation of an annual report by a new auditor (which we don't even know is hired yet) could take several months. Meanwhile, it's very painful - like a rollercoaster - just keeping an eye on news developments in case trading resumes on the pink sheets, etc. etc.

I have updated my spreadsheets for surviving old age - basically at this point if I lose 75 percent to 90 percent on this investment, then the outcome is I would have to increase from 6 percent to 15 percent contributions on my 401K starting this year (age 53) until at least age 72 just to be able to survive on our social security plus 401Ks at a retirement salary roughly equal to 30 percent to 37 percent of our current earnings.

Some days are good - most days I've been tending to work longer hours (7:30pm to 8pm) to focus harder on job security, which hurts the family. Still running - only 1 or 2 days a week instead of 3 days/week, but I really have to get back to that to keep my stress levels down and my heart strong. In the past I have always been a fighter, not a person to give up. I also don't tend to revert to angry outbursts, withdrawl, or alcohol when the going gets tough. However, at age 53 this stuff is more stressful - I can feel it in my heart, my ability to sleep, my body - moreso than stressful events that occured years ago - up through my early 40s stress was easily handled by my body. At this age I'm not so sure. I also want to make sure the family that spends time together stays together. We need to bond together in this time of crisis, not move to different little shells and worlds separated, as that will cause communication disruption and misinterpretation of feelings during a financial crisis.

Advice welcome. Not really looking for how to manage finances, this is the wrong message board for that. Instead, I'm looking for how to manage the crisis emotionally and within the family relationship/communications and job/home/responsibility balance. Coping mechanism advice welcome too.

About the only thing I can think of is, "I knew there was risk, I was willing to take it, it didn't work out, better luck next time." And, "It's just money. My life is more than money."

Sorry you're in this bind. A lot of people have been hit hard by fraud, tanking businesses, etc. So you are in no way alone or the only guy on the planet who made a poor investment choice. From what you've said, you appear to be in better shape than a LOT of people today...just your home equity...you do realize that there are people who have that much in NEGATIVE equity. So when you want to wallow in despair, count your blessings.

Sounds trite, I know. Wish I had more to offer.

No, it's not trite. Counting my blessings is indeed a positive coping mechanism. That helps emotional equilibrium.

I am using this thread to develop a list of target behaviors that may help me just to write down and try to apply. The ideas I came up with so far this afternoon are:

1) Stay off the stock message boards for this stock except to check for news events. Use the ignore feature for financial message board posters who always engage in vulgar behavior, name calling, denigrating, and belittling investors who may have been swindled. But read the counterpoint arguments from both sides as long as they are partway respectful. Don't drink the Kool Aid from confirmation bias. Be open minded.

2) Compartmentalize my time. When it's time to focus on family, do that, and when it's time to focus on my job, do that. Don't be distracted by constant worry, it has a negative effect on other aspects of my life and productivity and also tends to create a feeling of emotional helplessness. But when it is time to focus on finances, do so diligently.

3) Develop a list of financial options, which can be modified as more information becomes available. Financial options for the present are a cutback in spending as if the financial losses are worst case. Develop a full range of options for when the stock resumes trading, which could be anything between best possible outcome (maintained NASDAQ listing) to worst case (complete disclosure of fraud and stock re-opens at 1/10 of the former price on the pink sheets). Each outcome has a different trading strategy for damage control.

4) Stay focused on goals at work so I can get home early. It is emotionally damaging to me to work late all alone and to leave my significant other waiting at home with our son all alone after 6pm. Strive to achieve job productivity by focusing and compartmentalizing on the right tasks while at work, not just fretting and spinning wheels doing financial reading online. Spend quality time after work. Stick to a schedule, it will improve my self esteem when I see I am accomplishing what I set out to do, despite the current financial crisis.

I'm so sorry to hear what you've gone through, Challenge.

While I can't offer any financial advice you don't already know, the 2008 crash devestated countless people, homes were foreclosed on, people lost jobs... life for many shifted right out from under them. But let me leave you with one thought:

All our material possessions don't come with us at the end. We leave it all behind. Our value and purpose does not come from what we have but what we do with our time and our lives. At the end of the day, we can live without the house or the luxuries and be fine. Millions do everyday. So what's the absolute worst-case scenario? You sell the house, move into a smaller place, work your job like always, cut back where you can, and enjoy each breath, each moment with your wife and kids, appreciating the sunshine, and taking long walks with your family.

It's not about "coping" but changing perspective. I think your plan above will certainly help you, but I hope that you can find true joy amidst this struggle--a joy you never got a chance to appreciate before.

My prayers are with you!

I agree with the above. My sitch in a nutshell is OW encouraged WH to live his dream of being his own boss in 2003. He drained our line of credit and his 401k (which was already drained from the tech bubble burst) to buy a business after he was laid off from his corporate job. Problem was, the biz was two states over, in the residential construction biz, over paid for it worth $50K he paid $100k.

I stupidly followed him, sold our house and moved, he continued his A which was probably an EA as she was three states over by now. Housing tanked, biz tanked, never made any money just drained us. Ran up the credit cards just to live. Had to file chapter 13 bankruptcy. I took job back in state we moved from, sold house and lost all equity. Had to take money out of my 401k for car loans as no one would give us loans under bankruptcy. Still about 19 months away from finishing the 60 months in Chapter 13. Can't have any savings, can't contribute to 401k, any extra money goes to the creditors. Probably will never again own my own home as you now would have to have at least 20% down and I don't have enough years left of working to accumulate that and be able to get a home mortgage loan. I don't have a pension.

So, yes there are a lot of people suffering. My husband is again out of work since December. He is 51 and it is very difficult to get any job, let alone a good paying job at that age.

So please consider carefully how much you do have. It really is all about the relationships you have and if you make a difference in people's lives, that's what truly matters.

All the best,

ba

Thank you CWMI, Wanthealing, and Beginagain for your well-thought replies. There are many, many others who have fared much worse than I in financial catastrophes. My heart goes out to everyone in these situations. I should be thankful to still own my home, my spouse and I still have full time jobs, and to still have a 401K. I wish good luck to everyone.