Self-help author Geneen Roth got the call on a morning in December of 2008. Her best friend was on the line to say that New York financier Bernie Madoff was in handcuffs, his investment fund exposed as an elaborate fraud.
He had taken all of Ms. Roth's life savings, as well as those of her friend on the phone and a wide circle of others, among tens of thousands of investors worldwide, in what amounted to a $65-billion Ponzi scheme.
"I lost everything in one phone call," she says from her home in California. "It was horrifying and devastating."
Ms. Roth, a teacher and speaker on compulsive eating, learned more in the following days and months about the case as well as her troubled relationship with money. Financial "unconsciousness," she says, had brought her and her husband to lose $1-million of their retirement savings in the Madoff scheme, but equally causes many of us to compulsively spend money as well as to make bad financial planning decisions.
She turned her experience and her conclusions into a book, called Lost and Found, and today lectures and holds workshops telling people to be more aware of their finances and to know "how much is enough." She says that feeling deprived and shameful when it comes to money causes us to act – and even invest – out of fear and anxiety.
"Until you believe you are enough, you'll never believe you have enough," she told a recent conference in New York sponsored by the Omega Institute, a personal development organization. Financial advisers report that people constantly "raise the bar" in terms of how much money they need, she added. "There is a feeling of not-enough-ness that really goes along with being human."
Having spent years counselling women to avoid compulsive eating by paying more attention to the emotional triggers of food binges and splurges, the straight-talking author says that money raises much the same issues.
"Most of us live in a mindset of scarcity and deprivation, and from that mindset there is no such thing as enough, no matter what you have," she says.
Ms. Roth is not new to bad advice and unfortunate financial decisions. She and her husband had one quarter of their money embezzled by a financial adviser and lost a third of their savings in the stock market "during the boom times," she says.
In an article on Salon.com titled "I was fleeced by Madoff," with characteristic humour she wrote: "I'm keeping a list of people who want to be notified of our next investment so they can sprint in the other direction."
She notes that her Madoff loss was extreme – "most people lose money at a slower rate than I did." However, "so many people are experiencing that kind of loss and fear these days," she adds, and we all arrive at that point through much the same route.
"We're walking around in a financial fog," she explains, which leads us to give power to "financial saviours," especially in our belief that the world of money is too complex. Embarrassed by our money, we don't accept responsibility for our own financial futures and where to invest it.
"We are more liable and more vulnerable to listening to people who tell us, 'If you do this, you'll make this amount of money.' 'Here's a sure-fire thing.' 'Here's something you can invest in that you don't have to think about.' Or, 'This will make you a lot of money, invest in this stock,'" she says. "That feeling of not-enough-ness makes us vulnerable to bad investment advice."
For her, Mr. Madoff was "our brilliant financial adviser, our guru." He was recommended by a close friend whose family had invested with him for 30 years, producing consistently good returns.
"I abdicated my own responsibility for it, because [our friend] was somebody who was very smart and savvy, a lawyer and a financial person, so he must know what he was doing," she explains. "I didn't question, 'Wow, is this too good to be true?'"
After the Madoff fund was revealed as a fraud, "there was grief and rage and terror and blame and shame and regret and just feeling so incredibly stupid for having put everything in one place," she says.
Once she got past that – and the couple figured out whether they could afford to keep their house, which was still mortgaged – she began to focus on what she did have, rather than what she didn't. It was a new experience.
"Money is a very difficult thing to talk about. It brings up so much fear and so much lack," she says. "I didn't want to ever think about money. It was scary."
Women particularly are prone to financial unconsciousness, she says. "I notice still my propensity is to think my husband knows more than I do."
Today the two of them are much more careful about how they use their money. While financial investment and planning are not her expertise, "it also doesn't mean that I can't discern inside myself what feels good and what doesn't," she says, adding that she counsels others to do the same.
"I really am encouraging people to … stop saying 'it's too complicated.' It's not," she says. "Sometimes it takes a financial catastrophe to realize that."
She still finds herself occasionally "entranced by the mindset of deprivation and scarcity" since the crisis, but "it takes a lot of effort to develop a different relationship with yourself – and therefore with money."
On the positive side, "I also walk around feeling money-dumb and asking questions I need to ask, even if they are the same questions again and again."
People should invest in a way that reflects their values and get beneath the feeling that they don't have enough, she adds. "Anxiety and panic never lead to good decisions."
Tips to increase your financial consciousness
Geneen Roth, an author and a teacher on compulsive eating and spending, has the following advice.
1. Make money real. Pay in cash one day a week to remind yourself that you are exchanging one kind of energy – your time – for another – dollar bills.
2. Practise generosity. Give money away; there is always someone who has less than you do.
3. Be willing to appear money dumb. Ask endless questions until you understand what you want to know.
4. Question your beliefs about sufficiency, worth and what actually makes you happy. Allow yourself to have what you already have. Take time with the clothes in your closet and the food on your plate.
6. Come out of financial hiding. Tell the truth about your fears, your guilt, your shame or your debt to people you love.
7. Set aside money for beauty and pleasure. Any amount will do. Make sure you spend it.
8. Pay attention to what cannot be measured or counted. Notice how you feel in nature and with people you love. Cultivate gratitude. Do this many times a day. When you think you've reached the end, begin again.