July 26, 2009

Is An Executive Physical Worth The Bother?

A normal medical examination identifies normal medical issues. Specialized tests may identify other problems while minor and manageable.

Multiphasic Screening
Pretend you're an employer. An employee who goes for a medical test costs your company hours of productive work and you may also pay through group medical benefits. What if that employee needs more tests? The costs add up. And you've got other employees.

Sometimes a medical problem isn't discovered until the condition has progressed. It's now too late for prevention and treatment gets costly (time, money, productivity).

Imagine if a tractor trailer filled equipped for diagnostic medical tests came to your building. Employees could get a battery of tests quickly and inexpensively. They would appreciate your concern for their well-being. Solving medical problems early could save lives and save money too. Right?

During the summer of 1982, I investigated the costs/benefits of onsite medical tests at Crown Life --- my first actuarial job. In those pre-Internet days, gathering information took more than a quick web search. Here's what I discovered. In the United States, group medical insurance cost about $1,000 per employee per year. Would investing another $70 a year in multiphasic testing save employers money?

No. Here's why.
  1. the tests missed low probability/high severity conditions (too expensive or invasive)
  2. if problems were found, employees were reluctant to get treatment (just as we're reluctant to eat better and exercise more)
  3. if employees got treatment, the employer's current medical expenses went up
Medical science keeps improving. To explore the state of diagnostic testing, I went for an executive physical examination. I've wanted to go to a concierge medical clinic for years to detect potential medical issues early.

The Process
After booking an appointment over the phone, I received an email giving the address and instructions to fast for 12 hours. There was a link to an online stress questionnaire which took about 20 minutes to complete. The results print in a miniscule blue font (say 6 pt). Not only do you strain your eyes reading the tiny words, you waste colour ink. If you said you wanted to spend more time with your family, you'd get a recommendation saying you should spend more time with your family. Obvious stuff. I brought the results with me but no one even mentioned them.

The clinic is in a nice office tower in downtown Toronto. After changing into exercise clothing, I signed a disclaimer and authorized the release of results to my own doctor.

Here are the steps.
  1. sign a disclaimer
  2. measure height/weight/waist
  3. collect blood/urine
  4. snack (end of fasting)
  5. test vision, colour blindness and glaucoma
  6. measure lung capacity (you expell air from your lungs through a tube for as long as you can)
  7. discuss results with a doctor
  8. more testing by the doctor (blood pressure, thyroid, etc)
  9. brief discussion with the doctor
  10. measure resting heart rate (you lie down and have probes attached to your arms, chest and legs)
  11. complete feedback form, change and leave
The whole process took 2.5 hours. There's soooo much waiting, which reduces the benefits of having everything-under-one-roof. Maybe waiting leads to better test results. Maybe the length helps you feel like you got value for the money.

To my surprise and dismay, there were no other tests. Not even a treadmill, which is what I wanted most. There wasn't even an option to purchase that test or any other. I also wanted to know how my body's biological age compares with my chronological age. Am I closer to the body of 40 year old or 60 year old?

There was plenty of time to talk to the doctor but not much to discuss. He was pleasant but I had no way of gauging his skills and I doubt we'll ever meet again. Last summer, a common toe ailment caused me months of agony. Treatment took visits to six doctors (including three specialists). That shattered my faith in the medical profession. Best to stay healthy. I listened politely but am more likely to believe a Google search than a doctor. Dilbert fans may in interested in the ordeal Scott Adams endured while struggling to regain his voice.

There was no report or handout of any kind. Maybe that comes later. I didn't think to ask, but no one told me.

No medical problems were found. I was advised to exercise more (aerobic and strength) and consider a personal trainer. My snugger-than-ever pants tell me that already. I've been walking 45-60 minutes most evenings for several weeks and am starting strength training tomorrow.

Worth The Bother?
Visiting the clinic was certainly more pleasant than going to my family doctor with the crowded waiting room and noise. The tests were similar to those your regular doctor performs or orders.

There was no "wow" moment that made the experience memorable. The clinic felt like an expensive hotel. You're well treated and in pleasant surroundings. But you expect that. You paid for that.

Nothing bad happened but not nothing was exceptional either. These days average is not enough. I don't know if I'd bother going back. I prefer my regular doctor over strangers doing similar tests in a fancy clinic.

Podcast (7:21)

July 18, 2009


"I am 19 and good at math. I would like to learn more about the actuarial profession. Could I take a moment of your time to ask a few q?" --- Vicki

Sure. Since there aren't many actuaries around, I get questions regularly. Most come from work-age people who want to know if they should switch to an actuarial career. Generally not. Passing the actuarial exams takes years and few succeed. If you do, you've probably got too little experience for your age and are harder to train. Most actuarial students have the advantage of starting their careers fresh out of university with several exams already passed. They know how to study. They have momentum. They have energy. They appeal to employers.

Even Warren Buffett thought of becoming an actuary. Without the benefit of my wisdom, he ended up as a billionaire instead. I can't help everyone.

What About Students?
We can do magic in these times.
Be what we want to be.
--- Joe Jackson, Nineteen Forever
Vicki asked seven questions from her perspective as a 19 year old looking for a career choice. You can learn more about actuaries from the links at the bottom of this post. An actuarial career is well worth considering. You do challenging work, get paid well and have many opportunities. However, you are in a narrow field that few outsiders understand.

The careers with a lot of opportunity require a lot of skills.
--- Lawren Shatkin, 200 Best Jobs for College Graduates
Perhaps no job in the top 10 illustrates that fact better than an actuary.
--- Forbes
Here are the top 5 based on starting income in $US:
  1. actuary ($48.8K starting income with only 3,245 annual openings but growing by 23.7% annually)
  2. network systems and data communications analyst ($40.1K)
  3. market research analyst ($33.3K)
  4. sales agent in financial services ($30.9K)
  5. sales agent in securities and commodities ($30.9K)
Actuaries have evolved to remain in demand. Forbes notes "With margins thinner, actuarial accuracy is more necessary than ever to companies and the global economy."

Average people are in the majority but they're not in demand.
--- Seth Godin
The world keeps changing. We're unlikely to work for the same company for our entire career. We must be self-reliant and keep aquiring new portable skills to stay relevant. Do read The Dip by Seth Godin to understand why you need to become the best in the world and how you can. I just re-read The Dip and it's still on my desk. Malcolm Gladwell writes about the 10,000 hour rule in Outliers. Also a must-read book. You might want to read Talent is Overrated by Geoff Colvin, which is still on my to-get list.

How do you answer mainstream questions when you have a nontraditional position and come from an older generation? I started my actuarial career at Metropolitan Life in 1984. That's 25 years ago. Life happens fast. My perspectives may not be meaningful for today's generation.

Let's get to the questions.

Q: What's a marketing actuary?
Me :)

Actuaries get labeled as technicians and aren't an obvious source for marketing expertise. Until mid-2005, I worked as a product actuary with 10 staff, a prime corner office and a gorgeous view. Now I work in the field helping advisors help their clients.

"Marketing" and "sales" get used as synomyns. Let's contrast them with help from Seth. Selling uses techniques to overcome our naturally reluctance to buy. Marketing tells stories that spread. I know didly about selling but have a lifetime of experience in detecting underlying needs and finding simple, elegant solutions.

When people think of life insurance, they think of low cost temporary coverage. They don't ask if Warren Buffett would "buy term and invest the difference". There's little understanding of the unique tax planning opportunities that permanent life insurance provides: tax-sheltered growth, tax-free income and a tax-free death benefit. You can even get tax deductions when borrowing to invest using the market value of the insurance as collateral. I help fill this void with tools such as this blog.

Here's the reality. Advisors are experts in selling. That's not wrong but they face big hurdles. They aren't experts in the inner workings of the complex products they use. They don't know they "why" behind product designs, which insiders rarely disclose. Since advisors get paid commissions, their credibility suffers. They aren't perceived in the same category as professionals such as doctors, lawyers and accountants. For financial advice, the wealthy trust their accountants. However, accountants received limited training about the tax advantages of life insurance and have the usual suspicions about the motives of commission-driven advisors.

Actuaries have deep technical knowledge, credibility, and strict codes of professional conduct. Combine that with clear, accurate, simple explanations. Now you have a marketing actuary who can connect parties that doubt one another. So clients can reduce their financial risks and get peace of mind.

Q: How do you like working at your company?
Lots since that's how I became who I am.

Working for a company has pros and cons (as does working for yourself). You learn the benefits of discipline and even bureaucracy. I've done budgeting, performance appraisals, disaster recovery plans and run projects. This skills help in many ways and I'm thankful that I had the opportunity to acquire them. I'm also thankful for the opportunity to switch from a traditional product actuary to a new role for which I initially lacked the skills. You don't know if you'll sink or swim if the lifeguard won't let you go into the water.

Q: What type of work do you do?
I help people live up to the light inside them. When I had staff, I quickly found that people are where they are because of who they are. Now I accept that and focus on those who want help.

If you're flexible, you can acquire valuable new skills. I watched what others wouldn't do or didn't like to do. Then I learned to fill those gaps. This creates better teams, keeps your mind fresh, and increases your value. I've built up diverse skills over the years by doing the new.

You'll go far by building skills in communication (written, verbal), time management and getting along with others. People will like you and like working with you.

Q: What's a typical day like?
I plan by the week. A typical week consists of
  • occasional presentations to groups of advisors (generally in the mornings)
  • meeting advisors individually (may include lunch)
  • preparing proposals for specific cases (generally in the afternoons)
  • accompanying advisors to meetings with accountants and clients
  • answering emails and phone calls
  • developing or improving marketing material
I spend hours of personal time in self-development: reading, reflecting and writing.

Q: What's the organizational structure like?
Layers and layers. As a product actuary, I reported to a Senior Vice President who reported to the President. I learned plenty about how senior executives think and act.

Now, I'm layers down in a larger organization and rarely see the President (though we are on a first name basis from my previous role). If I cared about titles, you could say I've been demoted. I'm actually happier, though. I no longer have staff to manage or regular meetings to attend or budgets to prepare. I have considerable control over my schedule, what I do and who I help. With fewer distractions, I focus much better.

Q: What do you enjoy most about your work?
Meeting clients and advisors. Working in a head office, your main face-to-face contact is with colleagues. While that is comforting, you get into routines. Working outside, you dont know who you'll meet or how you can help them. You get to exercise more creativity. Your actions matter. If you can quickly build rapport with strangers, your life will be good. As an introvert, I did not know if I could until I tried.

Q: What do you dislike most about your work?
Clerical tasks like filling out expense reports. Overnight travel means time away from my family. Eating with advisors means eating more and exercising less.


July 12, 2009

Buying A Video Camera: Can We Trust The Experts? (Sanyo Xacti FH1 vs Canon Vixia HF series)

How do you make the right decision about a product you know little about?
Would you rather have Hyundai or Honda, Magasonic or Panasonic, Samsung or Sony? These days, brands mean less because so much manufacturing is outsourced. Think of electronics and clothing. You’ll find many internal similarities among products. The Innovator's Dilemma describes four stages in product evolution: our focus shifts from functionality to reliability to convenience to price.

We've been looking for a video camera. We don't know much about them and wanted to make the “right” choice. We got our last one 15 years ago ─ a $1,300 Sony Hi-8mm that broke down within two years. Do video cameras now work well enough that brands are interchangeable? And do they work sell enough that they don’t break down as quickly?
Online reviews gush over the Sanyo Xacti VPC-FH1 for true high definition (1080p at 60 frames per second vs 1080i at 30 fps), eight megapixel stills, great lowlight resolution, and a reasonable price.
You’ll find plenty of information online but the choices get confusing when looking for a compact, convenient video camera. For under $300 dollars, you can get a Flip Minio or Ultra with HD. For $600, you can get better quality and more capabilities. For $900, you get even more. How much is enough?

The Camera Store
I rarely go to stores but I wanted to see the video camera before buying. I checked online and found a retail store to visit. It took 10 minutes before a sales rep was available. I asked to see the Sanyo FH1, which was hidden away, not on display. The rep recommended Canon: better optics, longer history, optical image stabilization and a 24 Mbps capture rate (Sony and Panasonic max out at 17 Mbps). Apparently, a higher capture rate means smoother recordings.

The rep implied that Sanyo warranted no further discussion. Surprisingly, he couldn't answer basic questions about the Canon
  • what resolution are still photographs? (a mere 3 megapixels ─ worse than a cheap digital camera)
  • can the output be saved directly to MP4 H.264? (I was told yes but the answer is no)
  • how do you edit AVCHD the format Canon uses? (Not easily ... time-consuming ... benefits from specialized commercial software)
The rep didn't know about a special Canon bundle with a battery and case until I showed him the store flyer he gave me. Strangely, this case has no room for the battery. Style over substance. The case for our ancient Sony kept falling over, whether empty of full. Can a company that can’t make a good case really make a good camera?

Let’s look at prices. The Sanyo FH1 costs $630 Canadian. The Canon Vixia HF200 costs $750. The rep recommended the $900 Canon Vixia HF20 which includes 32 GB of memory. The other models came without memory. Naturally, I was encouraged to get a pricey extended warranty. The costs kept adding up.

I left the store more confused than when I entered. Canon seemed choice but I didn’t want to spend that much.

More Research
I did more research online and found the Sanyo FH1 even performed better than Canon’s 2009 top-of-line Vixia HF10. Reviews identified two main drawbacks in the FH1: electronic image stabilization (which is less apparently less effective than optical image stabilization) and the lens cap is not built-in. There was excellent information at camcorderinfo.com and thoughtful comments ─ 53 pages worth.

I decided to buy the FH1. Sanyo Canada sets the list price at $600. The retailer I visited charges $630. Who would pay more than list? Dell charges $600 but had a sale price of $550.

I felt some obligation to reward the personal service at the retailer I visited (not sure why). They have a price match guarantee but exclude Dell. Why? Dell has no physical stores and has a different price structure. This was irrelevant to me. This retailer sells online too and probably sells more cameras than Dell. I ordered from Dell, saved $80 and got free delivery two days later.

Canon, Panasonic and Sony
At this time, neither Canon, Panasonic nor Sony sell a HD video camera with 1080p resolution for under $1,000 (if at all). The best they do is 1080i (which has hard-on-the-eyes interlacing). Remember the flicker you saw on cheap computer monitors with picture tubes years ago? That's interlacing. These companies save files to AVHCD format which is inconvenient for novices and requires additional software to edit.

Better specifications don't translate into better performance. Canon’s 24Mbps capture rate doesn’t lead to better results than the 16-17 Mbps used by Sony and Panasonic. Yet the rep gave that as the reason to pick Canon.

Some specifications mislead and confuse. You’ll find capture rates in Mbps (megabits per second) and the speed of memory cards in MBps (megabytes per second). One byte is eight bits. You’ll see manufacturers claim they have “1920x1080 Full HD Recording” without telling you this resolution uses interlacing and is only 30 frames per second. Sneaky.

Sanyo is hardly perfect. They are delaying sales of the pistol grip Xacti HD2000 in North America until they clear out inventory of the old HD1010. The FH1 deliberately has no jack for an external microphone but costs $100 less.

The Shopping Experience
When buying, consider nontraditional sources like Dell and Amazon ... it's your money. You can buy without going to a store unless you're tactile or have special issues that require a physical inspection (e.g., difficulty moving certain fingers).

Even if you buy in store, you won’t find the perfect product. We’re demanding but we adapt.
Visiting stores chews up time. It's difficult to try products. You're pressured to buy extended warranties. Selection is limited. Items may be out of stock. The service is inconsistent.

Shopping online is different. You can waste lots of time doing research. You can't try the products but you can find out what others think. There’s no pressure to buy extended warranties. You’re more likely to find items in stock and you have access to a much larger selection.

Lessons Learned
The experience of buying a video camera shows that the masses know more than a speciality retailer. I was sceptical before. What’s more, the masses have your best interests at heart. They aren’t taking money out of your pocket. Professional reviews help, but reader comments from around the globe can provide even deeper insights.

Podcast Episode 27 (10:20)

direct download | Internet Archive page

July 4, 2009

Popularity Contest: The “best” Money Blogs

The delicate balance between modesty and conceit is popularity.
--- Max Beerbohm

Anyone who is popular is bound to be disliked.
--- Yogi Berra

The Globe and Mail has been running a contest to pick what they call the best of the money blogs. Selected prominent financial experts (including Canadian Capitalist) picked their favourites. That's great. We save time when people we trust make recommendations for us.

Consensus is difficult to reach. We can't even agree on tea (black or green?) or the way to prepare it (boil the milk and teabag with the water or add them later?).
There are few cases in which mere popularity should be considered a proper test of merit. --- Edgar Allan Poe
What is “best”? Best is subjective. Best is meaning less (meaningless?) since we are so diverse and have access to so much. We’re fickle too. I really like Thicken My Wallet but haven’t read in weeks because I’m not notified of new posts via Twitter. With so many pulls on our attention, we easily forget.

Asking For Votes
Focus on the user and all else will follow
Some Twitter users ask followers to retweet their posts. As if we’re too dumb to realize we can do that. Some non-nominees feel they should have been included in the contest. Some nominees are asking their readers to vote for them. Just like politicians. Surveys of trust, ethics and honesty repeatedly put politicians near the bottom. Why emulate them?

There’s a subtler way: tell readers there’s a great list of blogs for them to sample. This puts your audience's interests in the forefront. When they view the list, they’ll see the option to vote. Without pressure.

Yes, you can ask directly for what you want. That’s not the only way or the best way. Readers are volunteers. They willing volunteer their scarce attention. They’d willingly volunteer their votes. Without being asked directly.

Best In The World
If you want to be the best, why not be the best in the world? You can. Seth Godin describes the why and how in The Dip, which I re-read this week and continue to highly recommend.

Back to the contest. Congratulations to the winners and nominees!
Podcast Episode 26 (3:36)

direct download | Internet Archive page