Back From the Brink

Left with about $40,000 in savings, Jckowski has squirreled away another $110,000 in the years since Simper's death—"I'm a saver," she says—at first putting everything in CDs, one of the safest investment options. But recently she entrusted her money to a financial adviser, being careful this time to lay out certain conditions.

"I told him the story," she recounts. "I said, 'Okay, here is the deal: If I think for one minute you're messing with my mind and my money, I will see to it that you're hung on a nail.'

"He walks lightly around me," she adds. "I get lots of paperwork from him, and I call whenever I damn well want to."

CONNED BY WORLDCOM

Months after WorldCom's collapse had snatched 80 percent of his retirement savings—a loss of about $250,000—Stephen Vivien was still fuming. He had marveled at his employer's growth into the nation's second-largest long-distance phone company, and he proudly used most of his 401(k) plan to buy the firm's shares. "Many WorldCom employees, like me, were in love with our company's stock," says Vivien, who lives in San Carlos, California. "Working there, you got caught up in it."

Devotion turned to outrage when a massive accounting fraud masterminded by WorldCom's executives was discovered in 2002. CEO Bernard Ebbers was sentenced to 25 years in prison. Vivien became the lead plaintiff in a landmark class-action suit against WorldCom that established employees with 401(k) company stock as shareholders (before that, the plan, not the workers, was deemed to hold the stock). "Representing my fellow employees helped me see I was not alone in my investing mistake," he says.

The plaintiffs—comprising the company's 103,000 workers and retirees, who lost $1.1 billion—eventually shared a $50 million settlement, restitution of only about 4 cents on the dollar. So today, at 51, Vivien—an account manager for Verizon, which absorbed WorldCom—has grown used to clipping coupons, buying in bulk, and investing completely differently. Many people still load up their 401(k) accounts with their employer's stock, but not Vivien, whose account is back to about $220,000. "I've been diversifying in cash and bonds, so I didn't get hurt as much last year," he says. "I really learned a lesson."

CRUSHED IN TECH'S FALL

It's hard to resist the Next Big Thing. In 2000, Stuart Millner, an auctioneer of industrial equipment, sold his business to ZoneTrader, a Minneapolis dot-com that figured auctions were a natural for the Web.

"These guys had raised $65 million in financing, and I thought they knew what they were doing," Millner, 69, recalls. "And they wanted me."

ZoneTrader paid him $2.5 million in cash and more than $4 million in stock that, in the euphoric thinking of the day, would surely skyrocket when ZoneTrader inevitably went public.

Months later, the tech bubble burst, and at 62, Millner was jobless. The $2.5 million had gone to pay business debts. ZoneTrader's stock was worthless. Then his wife filed for divorce—and a chunk of his assets. "I sat in my home with no income and no nothing and said to myself, 'Now what?' "

The only option: Start over, by hustling again to find equipment to auction. Today his new company is on solid footing, though only about half the size of the original business.

"This wasn't a very pleasant period for me," says Millner, who remarried five years ago. "But was I desperate? No. I was abandoned at 12 to live in an orphanage—my entire world was in a brown paper bag. I lived in foster homes until I was 18. If you know what zero is, everything is a plus."