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Have some pity on Ruth Madoff. Really. I'm serious.

Her fate and her wealth are on my mind because of the auction, scheduled for today, at which the U.S. Marshals Service is slated to sell off hundreds of thousands of dollars' worth of property seized from her and her husband, the infamous Bernie. The marshals intend to use that money to help reimburse the victims of Bernie's multi-billion-dollar Ponzi scheme.

Admittedly, looking over a list of Ruth's possessions on the auction block, it is a little tough to feel sorry for her. With her husband's ill-gotten gains -- authorities haven't accused Ruth of participating in Bernie's scheme, or even being aware of it -- Mrs. Madoff certainly lived the high life. Up for sale are such items as a pair of diamond earrings expected to sell for as much as $21,400, a $23,000 bracelet, six furs, and, by my count, 49 different purses and handbags from the likes of Louis Vuitton, Hermes and Chanel. New York hasn't seen such a public display of suspect wealth on the market since the Philippine government auctioned off the contents of Imelda Marcos's Upper East Side townhouse.

But here's where my sympathy comes in: Ruth Madoff has lost it all. (Or nearly all; she's got $2.5 million left, though a court-appointed bankruptcy trustee wants that, too.) She woke up one morning in the same boat as her now-jailed husband's victims: A lot poorer than she used to be. That's a shock to the system no matter who you are. And though she would appear to live on a different planet than most of us, she's going through the same things as a lot of other people have during the economic meltdown, whether victims of a financial crimes or just unlucky.

To get a sense of what might be going on in Ruth Madoff's mind, I spoke earlier this year with a woman named Susan Bradley, the founder of a firm called the Sudden Money Institute. Bradley, who works with both individuals and their financial advisers, helps people who are trying to adjust to financial change -- mostly because they've gained wealth, but sometimes because they've lost it. In fact, Bradley, who lives in the Palm Beach area (not far from one of the Madoffs' homes) says she's done pro bono work for some of the Madoff victims.

One thing that Bradley points out is that you can't easily dismiss Ruth Madoff's plight. Yes, she did end up with $2.5 million, and yes, a lot of Ponzi victims (and the rest of us) would be wildly happy to have that kind of money. But given the Madoffs' previous standard of living, says Bradley, in which the two of them were burning through millions, $2.5 million isn't so much. "She looks at that as, 'I have one year of living left,'" says Bradley. "It's that shift that's very, very difficult for someone like her." Like her husband's victims, she's lost her peer group and her economic security; compounding her problem is the public shame and ostracism she's subjected to because of her closeness to Bernie and the economic rewards she received from him.

Bradley has some useful advice for Ruth -- and for anyone who has undergone such a financial setback:

  1. Address the basics. The first thing Ruth (or someone else in her situation) has to do is figure out the mechanics of her new life -- where she should live, how much she's able to reasonably spend, and how she can protect the money she has left. "It's just like stabilizing an accident in medical triage," says Bradley. The process can be difficult, she acknowledges: The stress of the situation usually translates into a short attention span and terrible follow-through for people who have undergone such financial trauma. "Their decisionmaking," she says, "is erratic." But as is the case with paramedics responding to an emergency, quick action is best. Most people in this situation, she says, live in denial, believing that something will happen that will magically restore their old lives. "The magic solution is to do it fast and make deep cuts," she says.
  2. Mind your health. Remember to exercise, says Bradley. Eat well. Keep a daily routine. Many people in this situation, she says, gain or lose dramatic amounts of weight.
  3. Find a purpose. You need something that makes your days worthwhile, she says. Volunteer. Help someone who is worse off than yourself. Get what Bradley calls a "helper's high."
  4. Feel gratitude. "You've got to switch your attention from what's wrong to what's right," says Bradley. "Even if only ten percent of your life is working well, that's where your attention needs to go." She adds, "It may sound impossible that Ruth Madoff can wake up in the morning and feel grateful, but more extraordinary things have happened in the world."

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