Imagine if you are a middle-aged man and you spent the last decade or so working a tedious, low-paying job. It is the kind of place where you can work for decades, get a gold watch, and leave with your coworkers for a steak dinner on your last day.
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It is the 21st century, so you have a computer, an email, and you’ve heard the phrase "401(k)". You are smart, diligent and you spent a few late nights at your computer, looking up investment opportunities. In order to make sure you don't leave your job without something to fall back on, you do some research.
While browsing you find the most promising small start-up with the potential to make big waves. Their business plan looks sound, and their marketing people are excellent. You invest all your life savings, $5,000, in the company.
Then you wait.
You continue going to work, putting one foot in front of the other, after all, your investment is just a tiny bit of white noise at the back of your mind, and it’s something you check from time to time.
After a few months, the price of the company's stock doubled. You are not a genius investor by any means, but even you know this isn't the norm. You start wondering if you should cash out and invest the money elsewhere.
You decide to hold on for a bit longer. You check the stock every couple of days now.
It doubles again.
You could not believe your eyes as the value of the company's stock continues to rise. After a while, you stop checking the market.
One day as you're driving home from work, your cell phone which was clipped to your belt rang, and your best friend speaks at the other end.
He asks you how you've been, you tell him you're doing well and ask him the same.
He says he's doing okay, but he's having a bad week. And when you ask him why, he drops the bomb. It turns out he heard some rumors that the company you invested in is going under. He gave you a name, and it did sound familiar. You haven't heard any news, and it's probably nothing to worry about, you reassur him and yourself. He says he has a cousin who works at the company and went further to ask you how much money you invested in the company.
You gave him the numbers and how long it's been since you started investing in the company. He asks you if you remember his cousin who works at the company. You don't, and you're getting nervous. He says his cousin's name, and you recognize it. He says the last time he saw his cousin was when you went to a funeral together.
Your best friend continues talking. He says his cousin hasn't returned his calls. You tell him you need to go, that the car behind you is tailgating, and that it's dangerous. He asks you how the company has done recently. You tell him the company has been doing very well, and you have no reason to think anything is wrong.
You hang up. The car behind you honks its horn, and you pull over. You take a deep breath and look out the window. The world seems normal. A few days later, the company goes belly-up.
You learn that the company was a giant, elaborate scam. There was never a product, never an IPO, and there certainly wasn't a legitimate stock. It was all a sham. You are one of millions of people who lost their life savings in the scheme.
You lose your life savings.
What do you do?
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