Managing future income risk

Though I was undecided of my career path during my first two and a half years here at the University of Illinois, I did take proactive steps towards the future by being active with the school and community. My intentions as a freshman were to major in Math due to the high demand for STEM graduates in the job industry and due to my enjoyment with working with numbers. Since math is such a broad subject, I believed finding a job with a major in mathematics would be relative easy and to further emphasize my pre-degree I began to join organizations that focused on numbers. I first joined the “Matrix” club, a club focused around mathematics that introduced students to higher-level math classes, possible career options and offered networking events in order to further student’s knowledge of the subject. Joining “Matrix” did indeed prove to be very helpful; I learned of the existence of various jobs were mathematics is applicable, which would have made my job search easier had I stuck with a mathematics major. Unfortunately, once I began to take higher-level math classes I realized that I did not enjoy pure math as much as I though I did and I dropped out of the major and as a result I dropped out of “Matrix”.

            Once completely undeclared, I was unsure on what steps to take to assure a better future for myself since I had no idea what I was doing, but I quickly realized that there are many organizations that apply to any major/career path. For example, I joined Alpha Phi Omega during my sophomore year, a service fraternity that focuses around mutual assistance, friendship, and developing leadership. APO, as it is often called, allowed me to develop my communications skills, work ethic, and time management skills all which area applicable to the work force after graduation. APO also served a motivator mainly due to the fact that so many great and well-rounded individuals were a part of it; individuals whom I credit for opening my eyes on how much one can accomplish with the right mindset. Though I do consider APO fun, I do think that APO was a move towards to later rather than the now based on the amount of time commitment it required; it required a minimum of twenty five hours of community service, five hours worth of leader ship classes, seven hours of required brotherhood events and so on, time I could have spent on leisure, but the lessons I learned were priceless. I also consider APO a step towards reducing income risk because the skills I developed are essential in finding and keeping a job. Jobs demand their employees to be organized, hard working and dedicated. Keeping a job is dependent on those factors, and being able to keep a job is the best way to reduce income risk.

            Halfway through Junior year I realized how applicable math was to other majors, since I disliked the theory behind math, I decided to give other such majors a try which eventually led me to econ and statistics; Both subjects, like math, are quite broad and applicable to many fields, and in particular to actuarial science, my desired career path. Actuarial science applies high-level math and it is a career with essentially zero unemployment, making it a perfect fit to my skills and to my future. In order to pursue a career in the actuarial world, one needs to complete a set of difficult preliminary exams. Workbooks to practice for those exams usually range from 150-200 dollars, the exam prices are usually about 225 to take, and it is a common trend that one must study approximately 300 hours for each exam, meaning that one must invest both money and time to pursue such a career path. It is sometimes hard to pursue such a career, I could be using the money for the work books to go out and socialize and the time needed to study to hang out or pursue an easier career, but even though it is demanding, such career path is worthwhile; actuaries get paid a high salary, they have good job security, and it is a calm job, all factors that reduce income risk for my future.

            One of my cousins attended college, graduated, got a job, got laid off and then went back and received his MBA. My cousin attended Northwestern University and majored as an electrical engineer and received a job upon graduation. He’s job paid fairly well and he seemed to enjoy it, but once the U.S economy took a slight decline he was laid off. Not knowing what to do, he took the GMAT and applied to Northwestern’s Kellog school of management to which he received admission. To make the story short, my cousin was successful during his graduate career and got a job with American Airline’s marketing department. He’s salary is amazing and he loves his job, and to top things off he has his office located within the Willis Tower. In my opinion he did everything right, he studied hard during he’s undergrad and got a job even though he was unluckily laid of due to external factors, yet he handled the situation amazingly well by furthering he’s education in order to reduce his own income risk for the future. What I take from his experience is that hard work doesn’t always pay of right away, for example, though he worked hard during his undergrad career he ended up getting laid off after a couple of years of working. On the other hand, I did learn that perseverance pays of; he went back to school and excelled more than he ever thought possible.

Return to transfer pricing

If used properly, Illinibucks would be convenient for students attending this university. For example, if these Illinibucks were pre-specified and added to a students i-card, certain inconveniences such as having to withdraw or add money to one’s account would be avoided. If administered as such, Illinibucks would also make it easier for students to keep track of their budgets, especially if these Illinibucks were refreshed, lets say, every week. Having a specified budget of Illinibucks for each week would prevent students from going over the limit while allowing left over Illinibucks to accumulate for future purposes.

            The university and parents would also be more at peace if there existed a limit to what Illinibucks could acquire. For example, Illinibucks could be made to only purchase school related materials or common necessities, meaning parents won’t have the worry that their kids are buying alcohol or other narcotics with their hard earned money.

            Now, to be more specific, items such as school materials, food, and other common necessities would be good items that could be purchased by Illinibucks, which would make it similar to the café credit system implemented by university housing. Unlike the café credit system, Illinibucks could be distributed to all university students, not just those who live in university housing, but for that to happen, more units that accept Illinibucks would have to become available across campus.  With such system, Illinibucks would make it convenient for students to acquire certain goods, such as a meal, without having to travel too much out of their way. For example, lets say a student hasn’t had a thing to eat all day but the restaurants at the union accept Illinibucks, instead of going out of his way to get food at green street, this student could simply buy a meal with his Illinibucks at the union. Though the variety and quality might not be as good, it is convenient.

            Illinibucks could also be used to “cut the line” as mentioned. For example, some students get priority in registering for classes over others, Illinibucks could be used to give those students who don’t have priority the ability to register at a sooner date. Some classes are also locked for certain majors till a given date; Illinibucks could be used to give students access to this otherwise restricted classes. Though the idea of using Illinibucks to “cut line” seems convenient to the person using them, it might not be convenient for the system overall. For example, many of the restrictions on certain classes are there so that students within that major, or incoming freshman can pick them up. Without those restrictions, certain students might pick up classes just as Gen Eds while other students could taken them to go towards their major. Also, in the name of equity, it wouldn’t be fair for students who get priority for classes based their academics to get “cut” by another student who used these Illinibucks to cut line.

            Personally, I would spend my Illini bucks on food. You need food everyday and it would be a great to have access to healthy food like the ones offered by university housing rather than eating pizza every other day. Having access to food via Illinibucks would also be a huge time saver since I would avoid cooking or having to travel. I would also spend my Illinibucks on common necessities such as toilet paper and such when needed, since it would save time from having to travel to Wal-Mart or Walgreens.

            If the prices were administered to high, then the demand for goods acquirable by Illinibucks would go down. Students would then look for substitutes for these goods and the overall profitability of the system would go down. An example such as this exists on this university. 57 north for example, is a small convenience store located within one of the units of university housing that accepts café credits but it overcharges heavily for these products. Energy drinks tend to be about one dollar (one credit equals one dollar) more expensive then at Walgreens, and mediocre burgers go to about 5 credits apiece, something you can get for a dollar at McDonalds. If 57 north were to set their prices to the market prices their profitability would most likely go up.

            On the other hand, another scenario that could happen but is less likely is that the prices are set to low. In this case, the supplier of this goods would supply less of such goods, the demand would be to high and not every consumer would get what he desires despite having enough Illinibucks. In either case, profitability is lost if prices are set too high or too low.

Organization within a System

            I’ve actually been a member of various successful teams, each with their own unique structures whom have had their own respective success. As I’ve previously mentioned in one of my previous blogs, I’m part of a social fraternity who has a certain organizational structure stemming from a president to seven executive members each who has their own committee. The president has a pretty straightforward job, he oversees that each executive member is doing his job, runs meetings, and attends meetings representing the fraternity as a whole. It could be said that the president implements a centralized system since he decides what needs to be done with little input from the other exec members. The reason why the system is centralized is due to the fact that most social fraternities have the same general structure and since the university has standards set for all fraternities. Executive members’ job varies depending on their role. For example there is an executive member in charge of brotherhood events (events centered around the promotion of members of the fraternity interacting with one another and to meet each other in a more personal level) such as barbeques, paintballing, eating out etc. The executive member in charge of brotherhood events also oversees that every member is doing good academically and is in good emotional health. For example, if a member from the fraternity is depressed and is failing classes, the executive member in charge of brotherhood makes sure that that member gets the proper help from university resources. The executive member in charge of brotherhood implements a decentralized system since he relies on his committee members input. For example, when helping out a member who, as previously mentioned, is in need of help, the brotherhood exec relies on his committees input and when analyzing how to resolve such issues. Like the exec member in charge of brotherhood events, the other exec members implement similar strategies. For example, the exec member in charge of programming also implements a decentralize system, probably the most decentralized of all. His committee members are in charge of coming up with community service events, philanthropy events, and social events. The exec member leaves it up to the committee’s discretion to come up with events but the committee takes input from the rest of the members of the fraternity. For example, the committee member in charge of social events makes polls on Facebook where the rest of the members get to vote on what events they prefer. Same system applies for the community service aspect. The committee member working under the exec member of programming comes up with community service events and then its up to the rest of the fraternity members to choose which events to attend.

            The system my fraternity implements works pretty smoothly since it uses a good mixture of system implementations depending on the hierarchy level that certain members hold. The system is pretty centralized from the top, where the president sets out general “to-do list” and then each exec member uses a decentralized system letting their respective committee members handle their respective work area.

            Another team that I’ve worked with that implemented a different system from the one I’ve previously mentioned is working as a project director for AMA (American Marketing Association). AMA is an RSO here at the university, which focuses on developing Marketing experience and knowledge. As the previous example, AMA has a president who then has an executive board working under her. Each exec member then has a committee who handles specific task. For example, I work under the exec member in charge of professional development; the professional development exec member is in charge of working with clients such as banks and provides them with a team that works in providing consulting services. My job is to lead a team of consultants who come up with questions for a client, analyze their needs, and the come up with solutions to their problems. As opposed the previous example where a centralized system is used from top to bottom, AMA has a more decentralized system from the top and a more centralized system at the bottom hierarchies. The president allows her exec members to run things to their discretion and the exec members do the same when it comes their committees. The system changes once it hits committee level and the system becomes more centralized. For example, I run a centralized system as a project director since I only serve as a middleman between the exec member I work under and my team. The professional development exec member sets out a game plan for me and my job is to simply ensure that my team fallows the game plan set.

            An interesting fact about AMA is that it began to use economies of scale to its advantage. They had a huge input of new members this semester, which allowed them to expand and take upon new projects such as working under Vitamin Water, another big company. If you compare AMA to a firm you can say that they over achieved in its core competencies, taking over new projects and still providing excellent service.

            Having experience with different teams shows how different organizations have to modify their structure and organize certain ways to get the best out of their members, and duties.

Opportunism

          Since and early age, my father’s fascination for Trucks has been admirable. Though he was by no means a poor performing student in school, it was evident what he’s career path would be; anything involving trucks and construction. Once my father had finished he’s high school education here in the United States, and my grandfather had saved enough money, they returned to their native land where my grandfather opened up he’s own construction business. He’s business required him to purchase three trucks, a front loader, tools, and to stock up his business with the required inventory and employees. Knowing his son’s fascination for trucks, my grandfather gave him one of he’s three trucks. My father was eager to learn and once he did, he took full advantage and worked long and hard for the family business. He’s fascination for trucks grew so much that he even learned the mechanics behind them; he learned how to fix them, upgrade, and even how to assemble them.

            My grandfather’s business prospered for quite some time, but once he began to make good money his live choices began to take a turn for the worse. He began to drink often and even began to gamble. His choices and his business correlated and he began to loose customers to upcoming similar businesses. My grandfather became so distressed that he decided to take a break from he’s business and knowing my father had come to know the how to run the place he decided to leave him in charge. The business had a quick turn for the best; he increased the inventory and purchased more trucks to accommodate for the recent increase in demand for construction material. Having an expertise in mechanics, my father began to take the lead in fixing the broken down machinery saving the business money. The business was growing prosperous once again and then a golden opportunity for my father arose, my grandfather had decided to return to the United States to work for his friend and he offered my father ownership of his home and the business. It was a perfect gift and a perfect opportunity for a man who just had his first child. Though one would imagine my father’s decision to be obvious, he declined my grandfather’s offer and decided to also leave for the U.S with his family, leaving the business behind.

            Knowing about my father’s fascination for trucks and construction, I was at awe when he told his story, yet his reasoning is somewhat understandable. From his perspective he felt that he would be taking advantage of my grandfather’s situation and he felt that he’s family needed him. Though his decision seemed noble to him at the time, in retrospect, he regrets not giving the idea a chance. For one, it was a passion for him to work with trucks and construction and he had made the business prosper when it was on a decline, everything was already set and it would have been a great opportunity for his new family (me being he’s new child). My father also explained to me that he thought more would come with patience. Since he already had an expertise on how to run a business he thought that with patience he could restart the old family business here in the United States. Some good did come out of my father’s patience since he did end up purchasing three trucks of his own, two of which he rents out to other truck driver’s and he did give his family a good life here in the U.S, a life that might not have been possible at his native land, but who knows, perhaps he did miss out on a more well off life.

            As previously discussed, some people might miss an opportunity due to being a “good citizen” or because being opportunistic might be considered unethical or maybe just because they believe good things come to those that wait like my father did. Though all those reasons might be noble, there might exist other reasons why people fail to be more opportunistic; some people might miss out on an opportunity due to the fear of failure. For example, though my father did explain he’s reasoning for not taking advantage of the opportunity he might not have seized the moment due to the fear of not keeping up the good work, or perhaps he felt that he needed my grandfather’s guidance. Regardless of the reason, missing an opportunity all have the same results in the short run. The respective individual missed a chance to either better him self or perhaps dogged failure, but regardless of the reason behind missing the opportunity the immediate outcome is the same. Thought the immediate outcome is the same, the long term outcome might turn out to be different depending on the reason for not taking advantage of an opportunity. Someone who feared taking risk might fear to take another chance later in the future as well, on the other hand, someone who was being patient and waited for another opportunity might be better of in the long run due to an even better one.

My experience with organizations

            One organization that I’ve been part of in school has been my social fraternity. The situation with my fraternity was unique because the year I joined was the year that the fraternity came back after being booted of campus for several years. At first, one might say that their was no real organization since no one had assigned roles and everything was sort of chaotic whether it was planning social events or planning community service events. Once roles where assigned by the colony coordinator things began to role more smoothly. Seven individuals, excluding the president, were assigned certain roles each with their own sub committee. The colony coordinator in charge of setting up the fraternity “coached” the selected executive board in doing their individual job. For example, a certain individual was in charge of overseeing social and community service events while another members were in charge of overseeing new member education. Members within those departments would then work under their respective “VP”. For example, members in the programming committee were in charge of either coming up with community service events or scheduling places for social events and reporting to their respective “VP”.  Overall the organizational structure was pretty straightforward; the committee members would work on their own specific jobs whether it was by themselves or with a partner then they would report to the VP they worked under. Depending on the VP, he would help out the committee members or just oversee that everything was running smoothly. After committee members reported to their VP, the VP would then update the president on how his department was doing. Depending on the updates the president would then schedule meetings to discuss with the exec board on what changes need to happen or to keep up the good work. One problem that did occur during the first semester that the executive board was in charge was that some exec members didn’t oversee their committees. For example, the VP of programming would tell his committee members what to do and the committee members would not finish the work that needed to be done. When the time to report updates to the president came they would have nothing to show for. On the other extreme of the spectrum, some VPs overstepped their boundaries and would try to run other exec’s committees causing dilemmas within the executive board.

            Being involved while in college is a transaction cost but a transaction cost that should help out in the future. One of the first transaction cost I encountered when I first came to this university as a freshman was spending time in searching organizations to join. Though I did end up joining some worthwhile organizations I could have spent the time looking for this organizations on something else such as studying more for my classes. Another transaction cost I faced was paying to be a member of said organizations. Though I do benefit and learn from these organizations I still had to pay to be part of them. Being in this university overall is in itself a transaction cost. We must pay thousands of dollars to remain in this university but we do so in order to learn the essentials for a given career. Within the given transaction costs we also face certain opportunity costs. We spend time, money, and work hard in school to secure a better future instead of working straight out of high school and earning money. As I mentioned earlier, I also faced opportunity cost when deciding to join organizations instead of using my spare time to study more. For example, my freshman year I was faced with the dilemma of staying in and studying everyday of the week or perhaps joining a social fraternity knowing the distractions and time commitment it came with, or whether I should join a club relating to my major in order to gain experience or just staying concentrated to my school work. Overall, one must think of the transaction cost and opportunity cost in the long run while asking one’s self it certain decisions are worth it.