Instant Karma Number 1

Instant Karma's gonna get you

Gonna knock you right on the head

You better get yourself together

Pretty soon you're gonna be dead

              John Lennon

I had originally planned to start off Observations from 5,000 feet with a few blog posts on taxes.  But as I tossed and turned last night I decided to kick off my blog with a divergent little stroll down memory lane.  I just thought this would be a better way to introduce my “Blog” and what it hopes to convey.

I believe that our lives are uniquely molded by the decisions that we as individuals make every day.  Those decisions add up and that when combined with circumstances that are often well beyond our control we likely end up in places that just may surprise us.  One way to explore this view is to look back at your “economic life” and ponder the events and decisions that brought you to where you are today.  One can easily speculate various “what ifs” as you do this exercise.  I hope that by sharing my own stroll down memory lane that it may help to explain (in later posts) how my life experiences have likely influenced my own thinking.  It also sets up nicely with some of Haidt’s ideas (remember him?). 

To that end before the “stroll” I will share a piece of the Time article on Jonathan Haidt that kind of frames what I just said. Lifted directly from the Time piece:

“What’s going on here? A useful way to summarize today’s left-right economic divide is that it’s a battle between the law of karma and the principle of compassion.  Conservatives generally want to live in a world governed by karma—the ancient Hindu idea that people reap the fruits of their actions, both good and bad.” Karma was usually thought of as a law of the universe, like the law of gravity. Part of the reason conservatives have historically opposed the growth of the welfare state is the belief that it grants people a sort of karmic exemption, allowing those who are lazy or irresponsible to draw resources from those who are more industrious (see Mitt Romney’s “47%” comment). Hence conservatives agree that the world would be a better place if we “let unsuccessful people fail.” That also includes unsuccessful countries (like Greece) and companies (like the GM of 2009).

Liberals, by contrast, would prefer to live in a world governed by compassion. They are more likely to give people second and third chances.  For example, they are more likely to endorse this statement: “It is generally better to show mercy than to take revenge.”

Now I can think of many ways that I “disagree” with how Time summarized Haidt, it was after all a look at Haidt with a “liberal bent” and it was way too simplistic.  He actually finds much good in both world views.  In my first post I acknowledged my generally conservative thinking.  Not surprisingly then I find much of this “Karmic” principle has merit.  So let me give you some examples from my own life.  (I must admit that I have some apprehensions about sharing some of this personal data and I hope you all read this in the spirit intended)

I imagine all of you have seen (at one time or another) you’re annual Statement from Social Security.  Heck several of my readers are likely collecting Social Security.  I was looking at mine the other day as I started some financial planning for the next several years.

I found it fascinating to trace my earnings history through time and I even went so far as to download the information and graph it (I promised that bits of personal information will likely be the inspiration for my posts.  It might also give you all some great ideas of things to do when you retire, or have time on your hands).  I then started down a personal “economic memory” lane by reflecting on a three specific years that stood out (there were other years to reflect on, perhaps in  some later post).  The first two were “drops in annual income” a relatively small one of about 12% in 1975 and a second, much more significant drop of 40% which happened in 1987.  The third event was a steeply upward curve in income for 10 years from 1998 through 2007 (my 2007 income was about 350% higher than it was in 1998).

A “probably not brief enough” summary of Events 1 and 2 (3 will be next post):

·       Event Number 1-Playing Poker with one’s life

The first example of a “Karmic” event took place in the summer of 1974 at my first job out of college.  I was a junior Life Insurance Underwriter at Prudential, having completed a one year “training program”. The night before this “specific event” I had been up late drinking and playing poker with friends.  Upon arriving back at our apartment (no not with Barbara, but with my college friend “Whitey” with who I shared a basement 1 bedroom apartment) I neglected to set my alarm that night and as a result for the first time in my professional career I was late getting into work (about a half an hour).  To my surprise and chagrin I was immediately given a “tardy” slip to complete documenting the reason for my lateness. I said to my supervisor “you are kidding, right?” My supervisor said “no I must provide an explanation for being late”.  While I did refrain from profanity I simply wrote “failed to set my alarm”.  I figured telling him I was hungover from a late night of poker was probably not a good idea. However, I was really pissed off.  You see for 13 months I got into work early every day and now one just one late morning “tarnished” my record.   At that moment I decided that  this organization was not a place for me!   By October I landed a job at the Life Assurance Company of Pennsylvania as a Life Underwriter.  Unfortunately they went bankrupt 12/31/74 (interesting I never researched the companies solvency who thinks of insurance companies going broke?  We shall see.).  Anyway my resulting unemployment reduced my 1975 earnings by about a month and a half, until I found a job with Reliance Insurance Company as a life underwriter.  This caused that first “Blip” on my earnings record.  Two years later I posted for a job in the Reliance Property Casualty Division, a change that rippled all the way to my retirement. 

Was all this due to forgetting to set my alarm or the late poker game?  Who knows?  I do know that I discovered in all this that a job is not the only thing in life, and that working in a place where your work is not recognized and appreciated is not worth it. I also learned that unexpectedly losing a job is not something to live in fear of.

·       Event Number 2 “The Great Gamble with my families Life” 

      During my career at Reliance Barbara and I moved to Florida, Michigan and back

      to Pennsylvania.  She was always (and still is) up for a new adventure.  I was promoted to several increasingly responsible middle management positions as an Operations Manager.  In 1983 we moved back to Pennsylvania where I was selected to build a “model” operations center in a major cost cutting move ordered by our owner and infamous financier Saul Steinberg.  The goal was to reduce operating expenses by consolidating operations into 3 or 4 regional mega centers.  In other words it was my job to eliminate about 1/3 of our backroom staff.  Being a good soldier in Steinberg’s army off I went, traveling around the Northeast US, laying people off (we tried to ease our conscience by offering all these people jobs in our consolidated center and we would give them a thousand dollars for moving).  Not many accepted and it was one of the most depressing things I ever did (nor did I ever forget) because I personally wanted to offer each of about 400 people in 7 different offices this “opportunity”.  I felt obligated not to just fly in and blow up jobs without facing each person one by one.  After a depressing 6 months we started operations using a Staff that was inexperienced (as suspected very few people took our offer), technology that was  not ready and a senior management staff sympathetic to our plight but in mortal fear of the Steinberg’s.  I believed the company was heading towards bankruptcy ( who would think an insurance company could go bankrupt?).  I felt the owner was unethically and untrustworthy. Either way I felt my time there was limited one way or the other. However I also felt so dedicated to my “job” that I never took time to look for another. I saw no end in sight to daily crises, poor moral and frustration. These were all affecting not only me but my family.  One early May day in 1987 I Went in to work and just quit (finally remembering a lesson from event 1!) and did not look back. 

Did I do the conventional thinking and follow the conventional advice I got having two young kids and a wife to support, no job and about $15,000 in savings? Did I start desperately to seek another job?    Well not exactly.

First we took our kids to spend a few weeks visiting my Sister and her family in Belgium no doubt spending money we shouldn’t.  When we came back from that trip Barbara and I spent time nurturing our marriage. We even went golfing a few days a week.  After an additional month or so of this I decided to” look “for a new career but after a couple of futile months of chasing some crazy dreams I realized my chances of meaningful employment outside of my industry experience was slim.

In September of 1987 I started interviewing (using old contacts and my social network) with various Property Casualty Companies.  I was offered an opportunity in Charlotte NC with Royal Insurance, and turned it down.  Barbara, previously a willing mover, indicated she did not want to move our kids away from their extended family at this stage of life.  I then interviewed with CNA hoping to get a position in Reading Pa.  Instead I was offered a job at their Chicago Headquarters.  They scheduled a house hunting trip for Barbara and I over Thanksgiving of 1987.  I thought I should take the job as we were down to our last $3,000 in savings.

While this was going on I was invited back for a second interview with a company called “AIG” that was scheduled for the week after Thanksgiving.  Barbara said “Jim, I have a feeling about this and I do not want to go to Chicago I just do not want to move again”.  I called CNA and thanked them but said do not waste your money to fly us to Chicago.  The guy thought I was nuts!  One thing for sure my income for 1987 was looking pretty grim!  Fortunately, the following week I was offered a job starting 1/1 with AIG and the beginning of a very interesting career.

My first year or so at AIG started with a “promotion” (after 6 weeks) to my boss’s job, yes he got fired.  AIG was already the world’s most complicated organization and 6 weeks in I was managing a group of young (right out of school) MBA’s “consulting” worldwide on best organizational practices, most of them made as much or more than me.  Needless to say after 6 months and a few botched assignments our group began to lose its’ luster.  I was given the “opportunity” to help “fix” a data reporting problem we had with our Worker’s Compensation business.  This ended up having ripples up to and including an investigation 15 years later by the New York Attorney General and a most interesting Karmic event in my retirement…a teaser for my next Blog Post)

I am going to end this post here after these two specific “Karmic Events”.  Event Three is a direct sequence to Events One and Two (and hopefully show the crazy “karmic connection of all three) but I fear I have gone on too long already so let me leave you with a couple of my takeaways about Karmic Event 2.

Barbara’s insistence that we should not move away from our family (and her confidence that we would make it through all this) is directly responsible for launching my career at AIG.   It certainly made me realize that choosing a spouse is likely the most critical decision one can make in life (and that was likely my truly first Karmic Event!). So much of society now thinks of marriage in purely romantic terms, important yes but it must be much more than that. 

Second, Families are much more important than careers.  Yes having a great vocation is fulfilling, but as a society (granted maybe not as single “non-childbearing” individuals) all of us making decisions based on just economics is not a great long term strategy for success.  Having family support and love is much more important (for more than just economic reasons obviously)  than how much income you make, and knowing that actually frees you up to take more risks, make better decisions, and be truer to your other values in your economic “life”.

Frankly these are things that I believe No Government Program Can Provide.  However isn’t it ironic that this whole reflection was stimulated by that greatest Government Program, Social Security!

Hope to see you soon!