Dealing with financial grief
Judy, a superannuitant from Whangarei, has no doubts about the impact that investing with Blue Chip has had on her life. "It feels just like it felt when my mother died," she said.
Many might recoil at the comparison how could the loss of mere money be like losing a parent? But they'd be wrong, say grief counsellors and academics.
The physical and emotional responses to both can be identical, says Margaret Agee, from the University of Auckland, an expert in grief counselling.
"We commonly think of grief as being associated with death, the death of people we love, but in fact, grief can be the response to many life experiences that involve loss or extreme change," she said.
The assumed societal hierarchy of grief the death of a family member trumps the death of a pet, for example can result in what Agee calls "disenfranchised griefs", such as the reaction to extreme financial loss. This leaves sufferers confused about whether they are justified in their reactions, and lacking recognition, empathy and understanding.
Judy and her husband Bruce (they asked for their surname not to be used), borrowed heavily against their home to buy an inner-city apartment through collapsed property developer Blue Chip.
The result has been a huge debt, with $5000 a month repayments (they get $400 a week from NZ Super), and the likely loss of their home.
Reactions to the financial pressure have been physical and emotional.
"We almost feel like a child that's being smacked for something they haven't done, and keeps getting smacked with one blow after another."
Judy is plagued by obsessive thoughts, with her mind returning again and again to the financial situation. Such thoughts have changed the way she sees familiar things.
"You walk into your own house and it feels like it has been raped. The feeling of cleanness has gone."
A racing mind has led to sleeplessness, and she now uses sleeping pills. "Your mind is so activated with stress. Some nights I didn't sleep at all before I got the tablets. My mind would go over things. I got really, really tired."
Some physical symptoms are no surprise like the headaches that now plague her more frequently. Others were. "My hair stopped growing. It took three months before I had to have another hair cut."
Bruce reports an extreme loss of appetite. "You sit down to eat, but the food just looks unappetising, and you just don't feel like eating," he says.
Judy thinks men experience grief at financial losses differently to women.
Bruce sought solutions until he was mentally exhausted. Such obsessive thinking is common, but at least showed he was not depressed, according to his doctor.
At 70, he tried going back to work milking a large dairy herd, but broke down physically after a week, arriving home shaking. "It was exhaustion and stress, I guess," Judy said.
Men of a certain generation are also more likely to bottle up their feelings, something Judy has strived to ensure did not happen.
"My husband would have been like that, but I feel we haven't done anything wrong. He feels like he has let me down as a husband because we may lose our house, which is the only thing we have."
Bruce does find it harder to talk about his own feelings. He does feel that he should have been strong enough to say no to the Blue Chip hard-sell, but pities couples where blame poisons what is left of life.
Anita Bocchino, president of the Association of Counsellors, says people suffering a sudden loss can have three levels of reaction. The first relatively mild reaction would generally be for someone who had lost a smaller sum, or portion of their wealth. "They would suffer stress in some form."
The second, moderate level of reaction, would again involve feelings of stress, but reactions associated with larger losses would likely include anxiety and a drop in self-esteem.
The third level would see acute symptoms such as depression, a lack of a sense of purpose in life, and panic attacks, and in the worst cases, thoughts of suicide.
Bocchino has a firm view on how to come to terms with losses: "Do the thing that most people would not do, which is talk about it with someone. Talk to friends or professionals, but people are not likely to want to do that. It is part of our culture to pull your socks up and get on with things."
People need to find ways to "reframe" their loss, she said. "People think they have lost everything, but there will still be things in life left for a person."
They can also learn to deal with symptoms such as panic attacks, or headaches and insomnia.
A common theme among those whose loss has been brought about with the help of an outside agent, is a burning desire for justice, but Bocchino says the idea that seeing "justice done" would bring about any sense of closure is misguided. "Justice done might be nice, but it is not going to deal with the anxiety and stress people are going to be suffering."
Behavioural economists and psychologists say people appear hardwired to experience and anticipate loss, including financial loss, more acutely than they anticipate gains.
Dr Maros Servatka, from the University of Canterbury, says there is evidence people are willing to take greater risks to avoid a loss, compared to the risks they would be willing to take to make a gain of the same size.
The memory of a loss, it is claimed, is also measurably more immediate than the memory of a gain.
Some argue such mental hard-wiring is a sensible survival mechanism for any animal in pursuit of food, but also at risk of falling prey to another food-seeker.
Slick marketing and clever use of language can easily be used to circumvent people's risk radar and lure them into financial schemes and investments that are far riskier than they would be willing to accept.
That only magnifies the shock when things go wrong, because there is no time to prepare for the blow.
One final aspect of coming to terms with financial loss has also remained largely undiscussed: rebuilding investment nerve.
Financial adviser Sheryl Sutherland says those who have lost big but still have savings left tend to suffer "portfolio paralysis", unable to do anything but bank the rest of their money, which can serve to reduce their income and future returns even further.
There has been a collective loss of trust in financial services companies and planners, Sutherland says.
She recommends finding a trusted adviser who can show they had sufficient skills and professionalism to avoid dodgy finance firms and property spruikers, but admits that's easier said than done.
TALK: Don't try to hide what's happened, or keep a stiff upper lip. Talking helps people come to an understanding of what has happened, let out pent-up emotions and come to terms with the new reality.
SEEK MEDICAL HELP: Physical symptoms caused by stress are real. Take them seriously. Seek help for ways to overcome them.
COUNSELLING: Some people would benefit from talking to an expert, particularly in extreme cases.
INVESTING: Don't allow "portfolio paralysis" to set in. Future decisions with money are influenced by past experience. Talking to a professional financial planner (if you can find one you trust), may be useful.
Sunday Star Times