What Is An Actuary?

For all of you who have been keeping up, you know that I currently work as an actuary.  And that deep down I am not an actuary.  At least I don’t feel like one.

Now I am not saying in the least that being an actuary sucks.  It’s just that it doesn’t fit me.  It fits lots of people very well and there are a couple of cool perks about the career.  Heck, it might be just the thing for you.  So I think it would be informative to give an overview of the career just in case you are unfamiliar with what an actuary is.

One of the views from my desk at work.  My friend, the hoodie.

 In the most vanilla of terms, an actuary is an insurance mathematician.  Ever wonder how they figure how much to charge for auto insurance?  Well, that’s thanks to an actuary.  Who is on the front line in calculating how long until Social Security runs out of money?  An actuary.  There are lots of “cool” projects that utilize actuaries besides just insurance.  There is a growing field called Enterprise Risk Management ERM where actuaries are often found.  And ERM is used in almost all of the Fortune 500 companies in some degree, not just insurance.

Considering that actuaries do things like calculating insurance rates, you have to have a good mathematics background to be an actuary, but nothing more than an undergrad degree.  All of the mathematics I ever had to use I learned in the first couple of semesters in college.  Some actuaries come from business and economics backgrounds without the mathematical rigor of a pure math degree.  Some actuaries come from fields that aren’t even related (like English), but that really doesn’t matter in the end.  In order to become a credentialed actuary, you have to prove yourself through the exam process.

The actuarial exam process is one of the last holdouts of the old apprentice system.  In order to work as an actuary, you don’t have to be credentialed.  You can actually do actuarial work without having a designation.  You can’t issue actuarial opinions and other work that requires a credentialed actuary.  But, you can still work as one while you take exams.

The actuarial exam process is rather straightforward.  You have to pass exams in order to attain your designation.  Depending on the actuarial organization that you test under, it will be somewhere around 6 to 10 exams.  The first couple of exams are offered a couple times a year, but the later ones are only offered once or twice.  But the real kicker is that these exams are hard.  Like, crazy hard.  I did not study a lick in high school and college and made out with a B+ average.  And my course load wasn’t easy.  But actuarial exams are different – they kicked my butt.  Over my actuarial exam career, I had an overall 50% passing rate.  So that is the drawback to the exams.  Add on top of it that you are probably working, your really just trading graduate school for these exams.  But hey – if it was easy, everyone would be doing it, right?

Which brings me to the next point: the actuarial career has some pretty good publicity on the job polls.  I mean, you just need an undergrad degree and the chutzpah to persevere through the exams and you could be earning six figures.  Doing what?  Making up numbers and persuading people that your numbers are the right ones.  I sit on my duff and play with numbers all day.  That is my job in a nutshell.  And by doing that, I pull a decent paycheck.

And if you think that it is all just dry calculating of numbers, you are wrong.  You have actuaries confused with accountants.  Being an actuary requires a level of creativity at times to come up with unique and applicable solutions to problems that are always coming up.  You have to be on your toes.  Well, not always, but from time to time.  And there is some dry calculating, but it can’t all be sunshine and rainbows, right?

So, have I whetted your appetite to be an actuary?  If you are interested you can check out some of these sites that I share with naïve undergrads that want to be an actuary:

Be an actuary

Casualty Actuarial Society

Society of Actuaries

The real reason for this post is to set up the coupe de grace that I have wanted to write for years now:  What I have learned from actuarial exams.

Until next time…

God bless,

Sven

Doodles from the Cube

We had a blizzard over the weekend.  When I heard that one of my co-workers actually planned a bike ride during the blizzard, I imagined what the contraption he was riding must have looked like.

Do You Play the Lottery?

I am writing this when the Powerball is at its highest jackpot ever.  Now when this post gets published, we probably will already have a winner.   But this brings me to one of my favorite fantasies:  I could shrink down and play in a Lego Castle!  Oh wait, not that one…

To win the lottery!  Yes – win the lottery.  It is an astronomically ridiculous bet that is almost guaranteed to lose the dollar (or is it two now?) on a chance to get a fortune.  For many of us, we could hardly imagine spending millions of dollars.

But as I’ve gotten older, that fantasy is losing its appeal.  The glamour of winning that much money is tainted.  Well, it is not so much having that money, but what it represents.  False security.  If I had several tens or even hundreds of millions of dollars, I would not be wanting for anything.  At least materially.  I could have a big house, a nice car, I wouldn’t have to work.  I could live a life without the stresses of being poor.

Then I start to really think.  As you know the real bee in my bonnet is that I really want to work.  There is a purpose to my life (and that means there is a purpose to your life).  To win the lottery could mean that I do not worry about financial security as I find my path.  That does sound nice.

But it feels wrong.

One, for starters, I feel I would be cheating my dream.  Cheating your dream?  You get to live your dream!  Yes and no.  Yes, I could get to working on the purpose of my life right away, but no because that’s cheating.  If I won the lottery, I would be no more than a rich guy trying to make it as an author, or a musician, or a cartoonist.  The drive of my purpose is no longer fueled by hope and faith.  It is now fueled by this false financial security.

Secondly, even though we equate financial stability with security, anyone who was close to the financial collapse of the late 2000s knows that in a flash, money can vanish.  With increased cyber threats lurking, if you have a large bank account, that makes you a bigger target.  How much happier would we be to have never had such a sum of money than to lose all this wealth?  And let's not forget the fact that the vast majority of lottery winners lose their fortune anyway, just by virtue of their own poor financial choices and lack of foresight.

Thirdly, I don’t believe that I deserve it.  I am not in need of anything; I have everything that I need.  I have a home, transportation, food, a family – I have everything that I need and more.  True, it will be nice to change gears and fully unjob, but that is nothing that mere money can help with.

Lastly, it introduces a whole host of distractions.  For the conscientious spender, there are a whole host of questions about how to spend the money.  Or not spend it.  Should you give it away?  If so, to whom?  Oh – and the income tax on that is a pain.  And not to mention on going taxes on things that you buy such as houses and cars.  Then you deal with very awkward situations where people feel entitled to a piece of the action because they are peripheral to you.  You could give to some friends, but how much?  Then the friends on the next circle out might expect something, and those who did receive a cash gift might start grumbling about not getting as much as they believe they deserve.  If you don’t give to your friends, you can effectively isolate yourself socially.  And that is not to even mention family! 

Then the more insidious side of wealth emerges.  It can distract you from being you.  If you allow it, money can transform you into a shadow of yourself.  What good is it to acquire the whole world, but lose your soul?  Why deal with a constant temptation to damnation, when an eternal treasure waits for you if you do without?

And so, I will not play the lottery.  Ever.  Unless God in His ordaining will forces me to play.  I don’t see that happening, so I am just going to keep to never playing.

But it is a fun exercise to think about.  And in the off chance that I do win the lottery, what would I do?  I would deploy it all into some charitable work.  I have a hard time justifying holding onto any of it as a life support until my creative work brings in money.  But worst case scenario, I’d hold onto just what I need and give the rest away.  Because in the end, it just isn’t worth holding.

God bless,
Sven

PS – Just so that you know that I am not infallible (and if you ever had that impression you should be ashamed!), I did play when the jackpot was over a $1 billion.  I had to scrounge around to find the requisite $2 cash for a ticket, but I played it.  And…I didn’t get a single number.  So, just because I talk pie in the sky – I don’t always eat it. :)

If Billy Jumped Off a Cliff

If Billy jumped off a cliff, would you?

I remember when I was a wee lad in school that I thought that I could reduce my culpability by blaming my behavior on someone else’s advice:

TEACHER:  Why’d you do that Sven? [I just ate a booger.]

YOUNG SVEN:  Because Billy told me to.

TEACHER:  If he told you to jump off a cliff, would you?

YOUNG SVEN:  Probably.

Actually at that point I would blush and feel sorry for myself that I didn’t meet my teacher’s standards.  I probably cried.  But it does give us a glimpse into the power of peer pressure.

But it wasn’t just advice like “eat your boogers,” but also other’s behavior gave license to do stupid stuff as well:

TEACHER:  Why’d you do that Sven?  [I just grabbed my crotch.]

YOUNG SVEN:  I saw Michael Jackson do it.

TEACHER:  If Michael Jackson jumped off a cliff, would you?

YOUNG SVEN:  I dunno – probably.

OK, so now I want to actually dig in and think about that question:  if someone jumped off a cliff, would you?  As kids we found it comical.  Of course no one would jump off a cliff, that’s just silly.  Or if we were more serious-minded, we would determine that it would not be in our best interest to be a blood stain at the bottom of a cliff.  We saw the action for what it was – death.

But, as we get older, I think it is harder for us to see that action.  I think there is a reason that we don’t say that as adults anymore, because I don’t know if we really know what it means to jump off a cliff.  We’ve had years of training to tell us to follow the pack, don’t rock the boat, keep our head down, and do as we are told.  If we dare to have a thought outside of what our superiors tell us, woe be to us.

BOSS:  Why’d you pick that number?  [I just gave my boss an actuarial projection of a “number.”]

SVEN:  Because it makes the most sense in context of [insert mathematical/actuarial mumbo-jumbo here].  I believe that this is the right number because the technique that Bernschweizer showed in his paper accounts for this very problem.

BOSS:  It’s wrong.  Make the answer this number.

SVEN:  *Deep breath*…OK

Notice he didn’t ask me if Bernschweizer jumped off a cliff, would I join him.  The fact is somewhere along the way we lost the real sense of that nonsensical rhetoric.

Consider this picture – you are in a sea of people.  People you like are nearby so that you don’t want to claw your way out of the crowd.  Next, the crowd as a whole starts walking in a direction.  You can look up if you want – can you see anything?  Maybe glimpses of what lies ahead, but not much more.  You really only see the folks around you and the ground you walk.  “Everyone is going this way, so maybe I should too,” you say to yourself.  So, that’s just what you do.

As time passes, that becomes most of what you know.  You wonder whether you should keep walking, but you can’t just stop – the people behind you would get ahead.  Or get annoyed at you.  Or worse – you get trampled because the crowd is now at a light jog.  So you ponder on it, but don’t do anything.  You keep jogging.

After a couple of hours, you start to wonder if there might be something else besides getting to where everyone is going.  At this point you all are running.  You must be getting close to wherever it is.  You still don’t know what it is, but it would be a pity to not reap the rewards of all of this running, all of this hard work.

After a while, twilight falls, and you are deep within the crowd at a full on sprint.  You should be there soon; this has got to be it.  Your legs are tired and you have no other thoughts except for the job at hand.  You push your legs as hard as you can until they miss the ground.  You feel nothing but air.  You now notice that the ground is missing below you and feel weightlessness as you fall over the cliff.  Only then do you begin to wonder - was it worth it?

God bless,

Sven

Do Not Be Afraid

OK, so I admit that I am nervous about starting this journey.  Not just a little, but a lot.  This is like following your dreams, and everyone knows that never happens.  Well, except in the movies.  And Stephen King.  Do you know the percentage of the population that actually lives out their dream?  Do you?  No?  Neither do I.

But I am wondering.  See, I get the distinct impression that the stories of people that achieve their dreams are presented like they won the lottery.  It just took a lot of luck.  In some cases, it took a heck of a lot of work, but also a lot of luck.  I’ve heard many celebrities glibly say how lucky they are to do what they do.  But the premise I want to question is: was it luck?

Luck has that unfortunate connotation that the outcome is in the far end of the statistical distribution of outcomes.  Oh crap, my mathematician is showing…maybe a picture will help:

Now I’m kinda guessing at the relative positions of these things, but I think you get the point.  If it takes luck, it just ain’t happening to normal people.  And if it ain’t happening, why bother?

So I am beginning to think that the real reason that so few people (relatively speaking) achieve their dreams is that few people are trying.  As much as we think that the dream achievers are just lucky, for many of them it took persistence, patience, and skill to get to the point that luck took over.  And if luck didn’t shine on them at that point, eventually it would.  So I really think in the grand scheme of things, luck isn’t a factor to consider.  I believe that you have to be fearless.

But my goodness, who am I to say anything about being fearless and achieving dreams?  After all I still work in a cube.  Well, I may not have a story akin to being discovered as an artistic talent, but I do have two short personal stories about how being fearless helped a dream come true.  Or at least to get a good outcome.

The first is a rather recent occurrence.  Earlier this year, the company I work for replaced the manual paper towel dispensers in the bathroom with automatic towel dispensers that operate when you wave your hand in front of a scanner.  More hygienic I believe.  I didn’t really mind the change but there was a little bit of a learning curve.  Something like, “Where’s the scanner?”

However, recently I noticed the dispenser getting a little sluggish.  No, not just a little – a lot sluggish.  Like it was slowly going to sleep.  Or very bored.  I concluded that the thing must be battery powered because if it had direct electricity, I am sure that it would not be as sluggish.  In any event, I figured it needed batteries.  So I thought of speaking up for the little guy since he has no voice.

I was a little nervous, which might seem silly to you.  See I’m scared of what people might say or think about my ideas.  The idea that I had was very simple: a sticky note on the dispenser that read as follows:

“Feed me batteries, please.”

I thought that it would be a good laugh for anyone annoyed with the sluggish machine and, maybe, the janitor would get a clue that the batteries needed to be changed.  But I felt a little scared to do something outside of the box.  So after a quick pep talk with myself, I put the sticky note on the towel dispenser.

Later that day, after the janitor came by to clean the bathrooms, nature called.  When I visited the bathroom, to my amusement, my sticky note was gone.  Either the janitor tossed it away with little regard to its contents or the machine was fixed.  And to my further amusement, it was the latter!  The paper towels came out with extreme vigor just like when it was first installed.

I have to admit that this story is trivial.  But for me, it was a little scary.  And by being fearless, I got a good outcome.  One other quick story:

There was a boy who stood in front of his exhibit at a science fair.  He was bored out of his mind.  Set up next to him, there was a girl who sat in front of her exhibit.  She was bored out of her mind as well, but he didn’t know it.  Eventually they found out that they were both bored, so they chatted and kept each other company.  It was getting towards the end of the day, and most of the judges were gone.  But they had to stay stationed in front of their exhibits in the off chance some judge would show up.  At this particular fair there were students from elementary school through high school.  The boy thought of an idea that would be a laugh.

“Hey why don’t we go pretend to be judges, you know, for the little kids,” he suggested.

Without hesitation, “Sure!” was his new comrade’s reply.  This took the boy by surprise, because he would often come up with ideas but never follow through with them.  He would think it an idea, play with it a little and then let it die.

“Really?” he said trying to find his way out of the skit.

“Sure!”  So with a little hesitation and really poorly honed thespian skills, the boy and girl spooked a couple of kids by pretending to be judges.  They probably didn’t really fool anyone, but it was fun nonetheless.  And thus began a beautiful friendship.  In fact, that is exactly how I met my future wife.  And I bet that if I, Sven Edsson, did not rise up to the challenge of being a science fair judge, I probably would not be married right now to this wonderful woman.

Until next time, I hope everyone has a lot of luck and wins the lottery every time.  As for me, I’m going to work on not being scared.

“Fear not, for I am with thee: turn not aside, for I am thy God: I have strengthened thee, and have helped thee, and the right hand of my just one hath upheld thee.”  Isaiah 41:10 (Douay-Rheims)

God bless,

Sven

P.S.  Anyone know Wade from “Garfield and Friends?”  Yeah, that’s me.

Everything You Know Is Wrong

Everything you know is wrong

Black is white, up is down and short is long
And everything you thought was just so
Important doesn't matter

Everything you know is wrong
Just forget the words and sing along
All you need to understand is
Everything you know is wrong

 - Weird Al from “Everything You Know is Wrong”

Welcome to “Everything You Know is Wrong” or EYKIW for short.  You can say I-Q in your head – that jumble of letters looks menacing.  And as you can tell from the top – it was indeed named after a Weird Al song.  The runner up name was “White and Nerdy."

Let me first introduce myself.  I am Sven Edsson, and yes that is a pseudonym.  Although it may not yet be clear why I have a secret identity, you will find out soon enough.  I am married to a beautiful wife and have six kids.  I currently work as an actuary in an insurance company in the US of A.  I currently make a good income doing the actuary thing, which is our sole source of income.  Except for the six kids part, this sounds like the perfect American family with nothing to change.

Well, there is.  That is where this blog comes in.  Since I met my wife, we have slowly disposed of the conventional wisdom that was taught to us by our teachers and the world at large, one pillar at a time.  One by one we’ve knocked down these pillars and found that life without these conventional myths is not only possible, but incredibly rewarding.  And now we are about to embark on one of the last strongholds of conventional wisdom in our lives.

My job.

I have to admit, this is scary.  As I said, I make good money doing what I do, but I have come to a startling realization.  I am not happy doing it.  Not only that, but I really feel that I was built to do other work.  I do fine with actuarial work, but I have this artistic drive that I don’t believe was meant to be the sideshow of my life.  I believe that it was meant to be the driving force of my life’s work.

So,as a family, we are going to embark on what is colloquially known as “unjobbing”.  What is unjobbing?  Now in a literal sense it doesn’t mean much, but in the context of social norms it might mean work that doesn’t look like a job.  It isn’t very popular at the moment, but it is gaining.  Why?  I believe that there exists a growing dissatisfaction among people who’ve accepted a job solely for material security.  In short, even if you pull in a fat paycheck, that doesn’t mean you are happy (and often, you aren’t).

But what about providing for your needs or your family?  Isn’t it selfish to eschew a good income if you can’t provide security for yourself or your family?  Well, that brings about the second necessary part of this plan.  We are taught at a young age to consume and to want to have the nice house and nice car.  A good education for your kids can’t be cheap either.   All of this takes money.  But what if we didn’t need any of those things?  Not just not need, but what if you came out ahead?  I’m not talking about money or wealth, I am talking about quality of life.  What if you needed only a small income to live?  And notice, I said live not survive.  I believe that there is a beautiful and fulfilling life outside of material wealth. 

We are a Catholic family (as if you couldn’t have guessed with the six kids!) and take our faith seriously.  One aspect of the faith that is neglected in most pulpits is the concept of poverty.  “Blessed are the poor…”  Poor in this context is not the amorphous noun of all the destitute beggars and homeless, but the adjective applied to those that forego worldly possessions in order to gain true joy.  I don’t believe that this means living in a cardboard hut, but rather to have what you need to live (not just survive) and give all that you don’t need to those that can use it.  It sounds extreme, but it is only extreme relative to the current standard of wealth in the world today. 

What I have just said is simply a group of my belief statements.  They are not my personal autobiographical experiences, at least not yet.  As of right now, we still live in a standard suburban house that we rent, I still work as an actuary - I do not have any book deals, music contracts, or any other opportunity on the horizon that will make the transition to unjobbing and the simple life easy.  I see nothing at the moment.  The only thing that I have is hope that I will be able to transition to unjobbing in the near future doing work that I find fulfilling while providing for my family.  I believe that God has put this on our hearts, and in Him I put my trust.

Now, I am not going into this completely blind.  In my free time I record music and I have written novels.  But nothing has produced anything that could even be considered an acceptable income (less than $1,000 in total).  I’m going to start my journey there and see if by chance, I can make it as an author or as a musician.  This blog exists to document this “experiment” as we shift from the typical American family existence to a fulfilled simple life.

So, please do check in from time to time.  We’re still figuring this blog thing out, but I am sure we’ll settle into a routine eventually.  We’ll share with you what is happening in our journey as well as what we’ve learned along the way.  And if you are so inclined, feel free to play along at home!  I don’t want to keep any secrets from anyone who wants to learn and seek a truly fulfilled life.

God bless,

Sven