Author Overcomes Money Fears In 'Bag Lady Papers' Alexandra Penney's longtime nightmare of being broke and dependent on others for help almost overwhelmed her when Bernard Madoff was arrested and her life savings disappeared.
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Author Overcomes Money Fears In 'Bag Lady Papers'

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Author Overcomes Money Fears In 'Bag Lady Papers'

Author Overcomes Money Fears In 'Bag Lady Papers'

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B: spend full time on her art without worrying about money. But what Madoff really took from Alexandra Penney was the cash that stood between her and a lifelong fear that she would end up a bag lady. Alexandra Penney has had a successful career as a painter, photographer, editor, bestselling author. But still, she says, losing her life savings brought back that old nightmare.

ALEXANDRA PENNEY: I received a phone call from my best friend and she said, Bernard Madoff's just been arrested, isn't your money with him? The phone then rang again and it was my son and he said, Mom, Madoff's been arrested. You can come live with us. So he knew that I had lost all of my savings.

: Where were you when that started? I mean, did you feel that you were in a comfortable, happy place until this happened?

PENNEY: I had saved all my money that I could save since I was 16. And I had worked since I was 16. And I had a nest egg, but I was using a little bit of Madoff money to balance out what I was not earning with my art. But then the art market tanked too and nothing was selling. So my savings were gone and not having a nest egg absolutely galvanized my fears of being a bag lady.

: Of course we're all wondering how much you actually lost. You don't mention the amount in the book.

PENNEY: That's the first question that people ask me.

: Yeah.

PENNEY: And first of all, in a relative sphere, it wasn't that much. But there are still lawsuits pending. So the lawyers have said you just can't talk about figures.

: Now, do you have the book with you, I hope?


: On page 43, you describe what you're afraid of. Can I just ask you to read that little passage?

PENNEY: Ah. You're going to lose your edge, I think. You will be walking around with swollen ankles. You'll be holding your moth-eaten layers of old clothes together with rusted safety pins. Your hair will be grayish yellow and dirty and stringy and you'll be cold and lonely and alone.

: But you also write in the book that you have around you lots of souvenirs of richer days. You have very nice clothes, a very nice apartment with a lot of beautiful light, and still you write about being genuinely terrified and I believe you.

PENNEY: I still have some remnants of my past life, but I have this visual image. I've had it since I was very young and I grew up in comfortable circumstances of being alone with nowhere to live. This is a fear that many women have. I was a journalist, so I have talked to many women about this. It's a fear really of dependence, abandonment and to have loss of control of one's life.

: Now, the book began as a blog on the Daily Beast site and I am sure you're aware, although there were hundreds of people who sympathized with you, there were also posts that attacked you.


: Sort of poor little Alexandra Penney. One woman said: You have to sell the West Palm Beach House and let you maid go - wow, get over yourself.

PENNEY: I completely understand where that is coming from, but the vitriol was so extensive, people wanted me to get cancer, people wanted even worse for me, and the avalanche of anger, I think, reflected the anger that's going on in America. So I can understand how somebody who has a house who's foreclosed, who doesn't have a housekeeper two or three hours a week, which I had, would say I don't feel sorry for you. There is far worse things that happen.

: I wonder if you feel at all responsible for what happened to you. You put money with Bernie Madoff and you felt lucky to be able to do so. You kept carefully filed all the statements that showed impossibly high returns from bad markets. Did you ever think this is hinky, this can't be real?

PENNEY: Well, you know, I did not pay much attention to the statements. It was steady. It was like nine percent, and I had talked to people that had gone to Harvard Business School. I asked, oh, 10, 12, 15 people about Madoff. One person said we don't know how he does it. The rest of them said, you're perfectly safe and you're lucky to be there.

: You described being wiped out and feeling that you have been wiped out, but in fact you were not. You had a cottage in Florida.

PENNEY: Exactly.

: A piece of property in the Hamptons, which is a place where a lots of wealthy New Yorkers go in the summer, and you had considerable personal resources. The numbers of times you gathered up your talents and did amazing things - you invented the Pink Ribbon Campaign for breast cancer. You wrote best selling books. I mean, I get it that you were scared to death. I don't get why.

PENNEY: Well, first of all, I had no money left. How was I going to pay the bills? I had maybe all of $4,000 in the bank when this happened. I had mortgages on those houses. One sold, so the mortgage is paid back. One is now rented, that's for sale, obviously. And the book deal helped tremendously to keep me stabilized on a day to day basis.

: You talk about the priceless experience of losing it all - that's your sub-title - what does that mean?

PENNEY: First of all, I surprised myself. I had an amazing year of, for the first time in my life, asking people if, for instance, I could barter. One of things I really like, need, depend on is having my hair looking good and being blonde. I couldn't afford it. So I very luckily said if I take a portrait of you or trade art with you, will you help me out? So I learned to ask for things. I had a year of saying, I can't believe I am going through this and I'm really doing OK. And that was like, now I can get through anything. I really believe I can.


: Alexandra Penney. She is the author of the "The Bag Lady Papers: The Priceless Experience of Losing It All," a true story. You can read an excerpt at

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