Founder's Friday with Mo

Founder's Friday with Mo

Three Things I Learned From Being an Actuary

I was going to be an FBI agent. I was sure of it.

I was a Junior at Bellmont High School in the bustling metropolis of Decatur, Indiana, looking at the list of people speaking at our first ever career day. FBI Agent. Done. We could sign up for two sessions, and I think I signed up to hear the FBI Agent twice.

Enter my math teacher, Cindy DesJean. She convinced me to go hear the actuary talk. “You’re good at math,” she said. I respected her, and agreed to go. But inside, I knew it didn’t matter. FBI Agent it was.

Career day came and I listened to the FBI Agent first. I loved him. It was a difficult job to be selected for. Check. You had to have a professional designation. Check. You got to carry a gun. Done. I loved everything I heard. Decision made.

Then, with nothing else to do, I went to hear the actuary. Might as well. The problem was, she was brilliant. She was smart. She was articulate. The profession was hard. She closed her session talking about money, the average starting pay of actuaries. Their annual pay started out higher than FBI Agents by five hundred dollars. Reversal. Two points. I was going to be an actuary. I didn’t need to carry a gun anyway.

Fast forward a little more than a decade. I had my BS in Actuarial Science and had passed all the actuarial exams. It was quite an accomplishment. It took tremendous effort.

I learned so much from the actuarial exams. Much more than just math and statistics.

Of course, I learned a lot of jokes about actuaries. My friends still tease me. Extroverted actuaries look at your shoes instead of theirs. Classic!

Seriously, while I haven’t practiced as an actuary in nearly 20 years, I learned three big lessons, lessons I still use today. They shape my life.

Think long term. Learning how to project long-term investments and decrements trains your brain. Instead of “long-term” being 6 or 8 years, you learn to think in 60 to 80 year timeframes. It teaches you that small investments made consistently are the best way to build assets.

That’s impacted the way I invest money, but more importantly, I learned to use this way of thinking with relationships. Treat people right now and that investment will grow. Stay in touch with people often. Always invest more than you receive. Stay on the plus side of the helpfulness ledger – it’ll come back when you least expect it.

Dollar cost averaging is the best way to invest money – investing small amounts, consistently, over your entire life. Turns out it’s the best way to invest in people too.

Build an expertise.

One of the most shocking things about being a young actuary is how much my clients trusted me. Here I was, in my late 20s, guiding decisions on billion dollar health care spends with clients 30 or 40 years older than me. It wasn’t because I was smarter than them – it was because I knew things they didn’t know. I had the letters FSA after my name. I knew methods and techniques few knew.

That feeling has stuck with me my entire life, guiding me to always deepen my expertise, to know things other people don’t. These days, it’s the techniques and the behavioral science around growth: the methods to design an attractive buying process, and how to train people to proactively lead their clients through it. I’ll be digging deeper into this expertise the rest of my life. I love it and I can’t get enough. I want to know more about this domain than anyone else.

Expertise is one of the biggest keys to success in life. Know valuable things no one else knows, and you can’t help but be successful.

Motivate yourself.  The toughest things about becoming an actuary? Passing the exams. When I went through them, I had to pass 24, each with about 2/3 of the test takers failing. Two thirds. It was brutal, driving fear and stress in ways I haven’t experienced since. I had to motivate myself to study for 500 or 600 hours every 6 months to pass.

I had some great mentors that taught me to break down my study goals into a spreadsheet. Every row was a day. I’d map out my study plan, including family and other commitments, to create a road map to get the hours I’d need to pass. On any day, I’d know if I was ahead or behind. That +/- column was motivating. I still use the same techniques today, setting goals every quarter for all the aspects in my life, and summarizing my +/- every Friday before I enter the weekend. It keeps me moving forward, and it I get off track, it’s only for a week, not a month, or a year.

I don’t remember many of the technical things I learned becoming an FSA. I can’t remember how to use the Poisson Distribution for queueing theory, or how to quickly convert an annuity immediate to an annuity due. But, I use the life lessons those exams taught me every day in different ways, and I’m so happy I powered through them.

They gave me three gifts: how to think long term, build an expertise, and motivate myself.

Looking back, I can say this – those three gifts statistically enhanced my odds of long-term success.