RISCARIO INSIDER

April 14, 2012

THE NEW “BEST/WORST” JOBS LIST AND YOU

CareerCast has released the list of the Best Jobs Of 2012. Actuary is #2 (up from #3 in 2011). Oh no. Studies like this create interest in becoming a actuary, whether as a student or by switching careers. Picking a job based on a ranking may not be the best choice.

The Winners And Losers

Here are the 10 best and 10 worst jobs.

#	The Best	The Worst
1	Software Engineer	Lumberjack
2	Actuary	Dairy Farmer
3	Human Resources Manager	Enlisted Military Soldier
4	Dental Hygienist	Oil Rig Worker
5	Financial Planner	Newspaper Reporter (new)
6	Audiologist	Waiter/Waitress
7	Occupational Therapist	Meter Reader
8	Online Advertising Manager	Dishwasher
9	Computer Systems Analyst	Butcher
10	Mathematician	Broadcaster (new)

You’ll find the full official list here.

Varies

In any job, workers range in skills, with most close to average. You're not a "big fish in a small pond". You're a normal-size, normal-looking fish. What sets you apart? If you're studying or changing careers, years may pass before you're ready to work. There's no guarantee that you'll get a job ... or like the job.

Value comes from demand and demand comes from scarcity. Rather than becoming one-of-the-many, you want to be one-of-the-few. How? Develop portable skills and apply them where they're rare.
For example, an actuary in an insurance company Head Office is a commodity. An actuary outside of Head Office is a rarity. Guess which is worth more?

Where would your skills be valued more highly?

"Best"

What's best for you needn't be best from the perspective of your clients. Financial planners are ranked #5. They're happy but customers have little trust in financial services. Win/lose. Since anyone can label themselves a "financial planner", buyer beware.

Job Security

There is no job security any more. Picking what's "best" today provides little assurance that demand will remain when you're trained to do that job. There are blips.

Y2K created high demand for programmers and that meant good money for them. That didn't mean companies kept them any longer than needed.

Ideal For You

The ideal job is easy to define but hard to find. The ideal job is a hobby for you and valuable for clients. Imagine working at something you'd do for free and getting paid well while you enjoy. How can you have competition when your motivation is the joy of doing and the pleasure of honing your skills.

Strategy

If you're always learning, you're better able to adapt to what's next. Stay alert to what people might want and where they may need help. Be aware of trends.

By 2020, over half the US workforce may be self-employed. That creates opportunities. What will these people need to do to get jobs? Can you help them? If you’ll be competing with them, can you get started now to get ahead of them? Maybe you show your expertise by starting to blog. Stick with it and you'll build a huge lead over the laggards. Your advantage will grow word by word, post by post. Perhaps you start investing in additional learning now.

Case Study

I started as a conventional actuary working in the Head Office roles. By 1993, I saw that actuaries were virtually interchangeable. They thought in similar ways. If you can predict what someone will say, they are easier to ignore and replace.

I started looking for what actuaries would not do at all or could not do well. I saw that technical people are good at knowing how. That makes them easier to replace. I decided to become the one who knew why. That's more valuable. Soon start asking "why not". That's the most valuable if you can explore the opportunities without undue reliance on others.

Science

Actuaries are trained to measure and manage risk using the tools of statistics and probabilities. Those skills are valuable inside multibillion dollar insurance companies. Since risk is everywhere, those skills are even more valuable outside where they're rarely applied.

Few actuaries have this perspective: actuarial science is a true science with hypotheses and results. A lab coat is optional.

In science, you experiment. You build prototypes and analyze. You get comfortable with ambiguity. You learn to separate the trend lines from the random deviations. You develop an intuitive sense of what might work, even if you can't explain why.

These skills are portable. In 2005, I left Head Office to help advisors make more money. In 2009, I left them to help you make better decisions about insurance. That's a nontraditional path.

Your Path

What can you do to build on your unique skills in ways that most others are overlooking?

If you've got one of the "best jobs", congratulate yourself but don't become complacent. If you're thinking about switching to one of these "best jobs", best wishes.

Podcast 164

direct download | Internet Archive page | iTunes

PS Where does your job rank? Do you agree with the positioning?

April 7, 2012

TIPS FOR FIRST-TIME HOMEBUYERS

Buying your first home is such a wrenching experience, especially if you're newly-married or starting a family.

Job 1

The biggest challenge is finding the right real estate agent. This is very difficult. Experienced agents tend to sell more expensive properties and deal with repeat buyers. That means you're stuck with beginners, less successful agents or agents who put volume ahead of service.

1991

We first bought in 1991 during a hot Toronto real estate market. We had difficulty finding a real estate agent who would bother with us. Eventually, we met George (not his real name) at an open house. He committed to finding us a place if we were serious about buying. We were. He understood our needs (safe neighbourhood, spacious, near public transit, near schools, good resale value) and budget (not much but all we had). He concluded our best opportunities were condos near the west-most Kipling subway stop.

George understood our needs well. We bought the first place he showed us --- but not just then. We didn't realize it was right for us until we looked at several other places.

Oops

We were also fooled. George seemed successful but the summer was hot and George's air conditioner didn't work. That we could accept. This is where the trouble started. He took us to a mortgage broker who offered a convoluted blended rate from no-name lenders on terms he was unwilling to explain. Plus the broker wanted to charge us hundreds of dollars for processing. All we had to do was sign here, here, here. And here. Even if we didn’t understand what we were signing.

Since we were confused, we asked questions. Foolish us. Rather than explain, the mortgage broker started shouting at us --- yes, shouting --- for wasting his time. He told us to sign. We declined.
George took us for coffee and berated us. Weren't we serious? Mortgages aren't complicated but George didn't understand what the mortgage broker was doing either. As best I could tell, he was blending a fixed rate mortgage with a pricey second mortgage with rates that increased after six months.

George hadn't understood the mechanics and was also miffed when I explained my interpretation. He arranged cheaper conventional financing through an out-of-town Canada Trust branch. The rate was 13.5% for a six month open mortgage, which was a good rate at the time.

Tough Parts

Buying a house is a time of emotions. It's often difficult to afford what you want (or your parents own). You'll have lots of questions and face self-doubt.

You're dealing with two commissioned salespeople, yours and the seller's. The agents have their own goals. A fascinating section in Freakonomics (original edition) shows how their interests take precedence over getting a better deal for you. Agents encourage clients to buy/sell quickly, rather than wait for a better price. However, agents left their own properties on the market for longer and sold for higher prices.

Forewarned

You're not helpless. Use the Internet to do your own research. You're probably looking for a neighborhood where

where you feel safe
property values are growing
your house isn't the most expensive one

Ask other homeowners, ideally experienced ones.

Compromise

Be willing to compromise. We picked smaller places in better neighborhoods with good schools. You may have other priorities.

Don't stretch too much. Unexpected expenses are likely. Our furnace broke down during the first cold spell when our son was just two weeks old. Luckily, our mortgage came with free home protection insurance that covered most of the replacement costs. That was a welcome surprise.

The Advisor

Selecting the right advisor is essential but difficult. We found their most important skill is negotiation and this is hard to assess.

What they drive is a measure of their success. They might have a nicer car than they warrant but be wary of someone who drives a cheaper car. That may be all they can afford.

Congratulations!
You're making your biggest financial decision (besides marriage and raising children). Be sure that you and your spouse are in harmony.

Podcast 163

direct download | Internet Archive page | iTunes

PS Home inspections don't catch everything.