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May 12, 2022

5 Actuarial Lessons From Carving Wood

My biggest goal in life right now is bringing my 3 kids up to be well rounded, healthy and happy adults.

It's the most important responsibility I'll ever have. 

As a parent, I want them to take onboard some hard earned wisdom and lessons from my 44 years of experience and to learn from my many mistakes.

Of course they will have to eventually find their own way, but I still think it's important for me to, where possible, soften the road ahead.

One of my greatest joys is family time spent together down in what we now call "ProActuary HQ."

It's a little secluded cabin set deep in the Northern Irish countryside. 

actuarial lessons - path

We go there to generally chill out.

To get away from the hustle and bustle and to spend lots of time outside, away from digital distractions (unless I'm there to work on ProActuary!).

This means doing random things. A stochastic approach to life. No set agenda. No timescales. No goals. Just whatever takes our fancy.

Usually this involves activities such as building huts, a stone BBQ or forest paths. Another day it could be painting rocks, planting trees or tending to our vegetable patch. 

The common theme is doing physical stuff that makes us feel grounded again. A perfect antidote to too many hours during the week spent indoors and staring at screens.

There’s something very satisfying about making physical things.

I think we don't do enough of it these days.

Wood is my favourite material.

Chopping, sawing and carving.

It’s very therapeutic.

Instead, most of us nowadays move numbers and words around on a screen, pressing buttons on a keyboard and solving problems using binary bits and pixels.

As actuaries, we are so used to computers, smartphones, technology and working with these tools day in day out. I sometimes wonder what the blacksmith, carpenter, or weaver from 200 years ago would think if they time travelled forward to 2022.

actuarial lessons - wood carving

It seems we increasingly live in a life of crazy technology and immediate everything - always being on, with an expected tempo of doing things as fast as possible.

I find doing real physical things like building and carving with wood, with slowness and deliberation, brings me balance.

Last weekend we opted to do some more wood carving.

Crafting a wooden spoon was the challenge of the day.

My son, Joshua, was keen to see the spoon making process from start to finish. This wasn't just an opportunity for some quality father-son bonding. It was also a chance for some of that 'fatherly wisdom' to be passed along! It turns out the lessons we learnt in our little afternoon of spoon carving, were applicable to life in general.

And even pertinent to actuaries....

Actuarial Lesson #1: Start With a Clear Vision

actuarial lessons - log split

Wooden spoon carving, step 1: Selecting your piece of wood. 

It's important to get this right.

Poisonous is clearly not good. Neither is too soft, too hard, too long or short.

As I explained to little Josh, you need to see the finished spoon in the branch before you even begin. It's all about being able to envision in your mind what you cannot yet see with your eyes.

There's magic in carving wood. I've found it calms the 'monkey mind' and enriches the soul through mindfulness, creativity and connection.

In fact carving wood is a lot like sculpting stone.

I saw the angel in the marble and carved until I set him free."

- Michelangelo

But, how does all this apply to actuaries?

Well, let's consider the actuarial student embarking on actuarial exams with an end goal of becoming a qualified actuary.

The trainee actuary is starting a long difficult journey that will likely test his/her mental fortitude to the extreme.

Beginning with the end in mind (passing all actuarial exams to become a qualified actuary), with a clear vision at the outset, is like creating a mental map to follow in the same way a builder follows a blueprint.

I like how Dr Stephen R. Covey thinks about this.

Things tend to go through two stages of creation. 

First there is the mental creation, then there is the second creation - the physical one. 

Having a clear vision puts the goal into focus and smoothens the road towards the physical creation through motivation, resilience and setting a strong foundation to begin with.

People are working harder than ever, but because they lack clarity and vision, they aren't getting very far. They, in essence, are pushing a rope with all their might."

- Dr Stephen R. Covey

Actuarial Lesson #2: Leverage

Give me a lever long enough and I shall move the world"

- Archimedes

Leverage is all about achieving more with less. We all have limited time and resources, so generally the more we can apply leverage to help us in our life, the better.

Tools are one of the best leverages available to us and, as I explained to my son, it was important that we began our little project with the right tools at hand. 

For us, this included a saw, an axe, a straight knife, a hook knife and some sand paper to finish off the spoon.

In the actuarial world we tend to think of leverage in terms of financial borrowing or gearing. But there are many different ways for actuaries to achieve leverage in life besides increased debt (which of course also increases risk).

Some leverages available to actuarial students include things such as:

  • Study tools such as a study calendar and the pomodoro technique.
  • Study techniques such as mind mapping and spaced repetition.
  • Technology to help (e.g. apps or software for mind mapping and flashcards).
  • The best actuarial study books and tutorials.
  • A supportive family, friends and employer.
  • A mentor to go to for advice.
  • A clear vision for motivation and focus.

At the very start of your actuarial study, or other actuarial and non-actuarial endeavours, I truly recommend you ask yourself what ways you can work smarter and achieve large impacts via small focused changes.

As a famous insurance tycoon once said:

Big doors swing on little hinges"

- Clement Stone

Actuarial Lesson #3: Learning Through Failure

Things were going well.

We were both very happy with the general shape, the handle proportions and how the carving was progressing. 

But then, just like life has a habit of doing to us, disaster struck!

As I carved carefully with my hook knife into the bowl, I didn't realise how deep I had gone and ended up going through the bottom creating a hole.

Owning a spoon with a hole is like having a motorbike with an ashtray - not ideal!

Josh was devastated. His vision of eating his cornflakes later that evening via a proudly carved new utensil had taken a major blow.

"Can't we fix it?" he asked.

"Unfortunately not, son." I replied.

"But it's okay. This spoon, with it's unfortunate hole, can be kept as a constant reminder of a very important lesson for life."

"What's that?" he wanted to know.

"I'm glad you asked"....

...Back to actuaries:

I'd love to say the road to actuarial qualification is paved with gold.

But it's not.

Instead, the road is typically paved with a lot of frustration, tears and probably some failure.

Everyone has a plan until they get punched in the mouth."

- Mike Tyson

But failure is often a gift in disguise. It teaches us lots of valuable lessons.

For example:

  • Failure builds character, particularly resilience.
  • Failure builds creativity. When we fail we intuitively analyse the situation in terms of what went wrong and why. This forces us to creatively evaluate how we can improve and hence builds our creative problem solving abilities. As actuaries are problem solvers at heart, this is an important attribute to develop.
  • Failure makes us wiser and stronger and ready to face the future, often with more compassion.

I also believe that experiencing failure not only reminds us that we are human (despite the actuary robot jokes!), but helps us to be able to take more appropriate risks in our lives and career.

I'm definitely not saying we should be reckless, but thinking about the risk and return relationship, if we are overly cautious, and afraid of risk, we can miss out on some big opportunities in life.

Failing and learning to be okay with it, teaches us to accept risk and failure as part of the journey and to be okay with undertaking "smart risks" where appropriate.

I agree with JK Rowling that one of the greatest risks in life can be not taking any risks at all:

It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default."

- JK Rowling

Actuarial Lesson #4: Margins of Safety

Carving wood, using a hook knife, is quite addictive in a strange way.

It's difficult work, but as you peel away the layers of wood and start to see the mental image emerge into the physical realm, it's difficult to stop.  

I succumbed to this addiction which ultimately led to the aforementioned tragedy of the unintended hole. Basically I wanted to get a nice deep spoon and I erred too close to the bottom edge as I feverishly scraped and carved.

As I explained to Joshua, what I should have done was given myself a better margin of safety.

Actuaries, of course, are well versed in margins. We operate in a world of comparing assets to liabilities and calculating the margin available under different sets of assumptions.

But margins of safety extend to other parts of an actuary's life. We need them to absorb errors and soak up the inevitable strokes of bad luck.

Some more actuarial examples:

  • When quoting a budget for a client, make some allowance for unexpected expenses.
  • When relaying a timescale for a senior actuarial manager, factor in a buffer. It's better to under promise and over deliver than over promising and under delivering.
  • When studying for an actuarial exam, aim to get through your notes a few days in advance.

Actuarial Lesson #5: Don't Forget to Celebrate!

So many people forget this part, but it's super important.

Celebrating and rewarding yourself for all your hard work is not only fun, but also key to building good habits, which are foundational to success in life.

BJ Fogg is a habit expert. Through his book, Tiny Habits, he teaches what he refers to as the ABC of habit formation.

Good habits, Fogg tells us, incorporate 3 important components: Anchor + Behavior + Celebration

He describes these as follows:

1. ANCHOR MOMENT
An existing routine (like brushing your teeth) or an event that happens (like a phone ringing). The Anchor Moment reminds you to do the new Tiny Behavior.

2. NEW TINY BEHAVIOR
A simple version of the new habit you want, such as flossing one tooth or doing two push-ups. You do the Tiny Behavior immediately after the Anchor Moment.

3. INSTANT CELEBRATION
Something you do to create positive emotions, such as saying, ‘I did a good job!’ You celebrate immediately after doing the new Tiny Behavior.”

Fogg goes on to emphasise the importance of the celebration aspect:

Celebration will one day be ranked alongside mindfulness and gratitude as daily practices that contribute most to our overall happiness and well-being. If you learn just one thing from my entire book, I hope it’s this: Celebrate your tiny successes. This one small shift in your life can have a massive impact even when you feel there is no way up or out of your situation. Celebration can be your lifeline.”

So as you move through your actuarial career, passing actuarial exams, qualifying as an actuary or getting an actuarial promotion, make sure to remember the importance of celebration.

For me, that was the satisfaction of seeing the finished (second!) spoon and a cold beer by the evening fire. For Joshua, it was the most satisfying bowl of cornflakes he had ever had! 

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Mark Farrell FIA PhD


I'm a UK qualified Actuary and currently a Senior Lecturer of Actuarial Science at Queen's University Belfast. Prior to academic life, I spent 10 years working as a consulting actuary.

Mark Farrell

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