Saturday, December 6, 2014

Final Post !

I signed up for the economics of organizations because I wanted to understand how businesses are structured as I am going to be working in a firm after this year and thought that this could only be helpful. Every excel homework presented a new concept that correlated with what we learned in class. Each excel homework was different and I enjoyed working through all of them. There were a couple assignments that I didn’t get a score because I didn’t understand one of the questions, but I am thankful for the help that the Professor was able to offer and help from the comments section for the excel homework.

Furthermore, with regards to the homework, I was thankful that I was able to choose the topic I would be writing about concerning a certain section of the class that we were lectured upon. I was able to write about my internship at Northwestern Mutual and how that organization was structured, how I was opportunistic when I attended a Cubs game, a piece on my baseball knowledge and how a team is built, one of my favorite posts about how I would use Illini Bucks, how I have been managing future income risk, how my sister and I will participate in cooperative investing, a post on my favorite show 24, another piece about Northwestern Mutual and the principal agent model, and my personal reputation in my fraternity. I enjoyed the pedagogic approach, which correlated the lecture with this online blogging.

I always did the excel homework after my class ended on Wednesday at 4PM, and gave myself a window from 4PM-11PM to turn in the homework. The excel homework takes me around an hour total of searching for the correct answers, but sometimes longer if I had to communicate with the professor to find the answer. The blogging usually takes me awhile, since I try brainstorming an idea and then once I have the topic I want to write about, I make an outline and make sure that it will suffice. After I finish the outline, I type up the paper and read over it once to edit it, and finally post the paper.

This class was structured differently than most. I believe that this is a good thing because different managers in the real world take different approaches to solving problems and we must adapt to find the answer to the problem per the manager’s rules. Just like a manager has rules, the professor’s rules include that 40% of our grade is homework and 60% of this class is exams. I really enjoyed most of the lectures, some I liked more than others. Overall, I am very glad that I took this class, and hope to finish with a B.

Sunday, November 23, 2014

Personal Reputation - Fraternity

I mentioned in class while Professor Arvan was discussing cooperation among individuals that I was the social chair of my fraternity during my first three years of school. I have not written a blogpost about my experiences within the fraternity even though I have seen a lot of blog posts regarding Registered Student Organization; therefore, I want to elaborate upon how my personal reputation grew internally and externally among the fraternity, the University of Illinois' campus, and campus' around the United States.

As a freshman, I did not think that rushing a fraternity was important at all. However, after casually rushing fraternities and taking advantage of free food and free drinks and socializing around with different people. I learned that there are benefits of joining a fraternity. These benefits include networking for obtainng a job in the future, having close friends who can meet up and work on homework together, meeting up with sororities on campus at a social event, and several other benefits that a fraternity can bring to oneself. So after rushing multiple fraternities, I narrowed my list down to three fraternities. One fraternity said that after my first semester, I would become the head social chair because they saw the potential I had to grow the social side of the fraternity. The reason that I would become the head social chair after my first semester was because the sophomore was going abroad his second semester. Ultimately, I thanked the other fraternities for rushing me but joined the fraternity that offered me this position.

Once I became the head social chair, I took full advantage of the position by contacting all of the bigger social sororities on campus and inviting them over to the fraternity house for some type of an event. During my first semester, I was not able to do this as much because I wanted to be apart of the events but I did not live in the fraternity house so it was more difficult to attend the amount of events that I could have if I lived in the fraternity house. As time went on, I strategically became close friends with the sorority social chairs of sororities like Theta, DG, Gamma Phi, and Tridelt so that my fraternity friends would be able to socialize and become close with the sorority social chair's friends. After a semester of events with about a half dozen of the same sororities, my fraternity became tightly knit with these same six sororities for the remainer of my time in the fraternity, especially the 4 semesters that I was living in the fraternity house.

My fraternity friends thanked me for taking the lead in creating social bonds with several sororities to make their college experience more exiting and essentially more favorable if I did not go out of my way and take the time to always be in contact with several girls while most of the other fraternity members did not take any lead, even though when given the opportunity, they helped the social aspect of the fraternity by interacting with other sorority members. I could have "cashed-out" after obtaining the title of the social chair of the fraternity by excluding my fraternity members from consorting in the events with sorority members since the sorority members would know who I am from the initial contact I made with the sorority social chairs after explaining that I am the social chair of the fraternity. However, I took it upon myself to include other fraternity members as this would become a domino effect and everyone would benefit more by socializing and interacting with each other. Furthermore, the sorority members were also thankful of my actions to create bonds between my fraternity and other sororities so they can have exciting experiences. Finally, nationwide, our fraternity after three years raised up in the national rankings as a social fraternity, allowing my fraternity to obtain a grant for the future generations of the fraternity, which allowed for the current social chairs to realize that not "cashing-out" is the optimal action to take as the head social chair of the fraternity.

Sunday, November 9, 2014

Financial Representative & The Principal Agent Model

Over the summer, I interned at Northwestern Mutual. Northwestern Mutual has its financial representatives create holistic plans for individuals. This means that the financial representative will obtain clients and have a financial plan be put in place which includes life insurance, disability insurance, health insurance, long term care, mutual funds, stocks, bonds, 529 educational plans, 401K plans, and several other plans that the client feels that will best suit his or her financial plan.

The financial representative has a responsibility of managing and making money for both the company and its clients.  My boss over the summer was Joe Guin, who is one of the top producers in terms of the amount of money he brings in for the company and himself. If he never worked a single day for the rest of his life, he would bring in a million dollars since he has so much money in his assets under management.

He brings out the example of a standard principal agent model, as he found the balance of making money for himself, his clients, and the company. Northwestern Mutual takes in a certain percentage of the money that Joe brings in, and Joe makes the remaining percentage of the money that he brings in for the clients. The clients keep the profit that the whole life insurance policies bring in during the long term, as well as the profits from the bonds and stocks that are in place. Joe found the balance of bringing money in for Northwestern Mutual, himself, and his clients.  He is the perfect example of how to deal with different goals or views and bring them all together: everyone wants more money.

Sunday, November 2, 2014

1 vs. the U.S. Government (Fictional prompt)

In the latest season of 24, a TV show starring Kiefer Sutherland as Jack Bauer, the American Government believes that Jack Bauer has gone rogue. Jack Bauer is a former Counterterrorism Unit special operative, and in the first episode of the 12 episode season, the CIA headquarters in London captures Jack Bauer because there have been suspicion among the U.S. government that Jack is working as a terrorist. There are rumors going around that a terror group will be attacking London on this specific day, so the CIA does not hesitate to bring Bauer in for questioning. However, Jack's plan all along is to help the American government stop these terrorist attacks in his manner, because he does not agree with the way that the American government is carrying out the operation.

When the CIA captures Jack, he gets away since he planned on getting captured so he can release his friend from the CIA to help him stop the terror attacks on his own. Jack's friend knows how to track the hacker who is carrying out the terrorist attacks which are carried out by the terrorist via a hacked American drone which created a scapegoat named Tanner who was in control of the drone. When Jack tracks the hacker, the CIA simultaneously tracks Jack, and the hacker gets away on the run with his girlfriend because the CIA interrupted Jack's mission. The girlfriend kills the hacker because the girlfriend's mom, Margot Al-Harazi is the leader of the drone terror attack operation and wants the hacker's computer. On Jack's pursuit of Margot Al-Harazi, he wants to meet up with Tanner and question him about what his computer was doing when it was being hacked. Once again, the CIA interrupts Jack's mission when he enters the U.S. Embassy when the Marines come after Jack. The U.S. government puts Jack under arrest, and the only person who has a hold on the entire terrorist attack is now unable to perform his duties. The U.S. government, which is in conflict with a superior counterterrorist operative, is holding itself back.

Once the first bombing from Al-Harazi's hacked drone occurs, the conflict festered up to its breaking point, and the President reinstated Jack Bauer into the U.S. government operations with CIA. Jack Bauer couldn't have acted any differently because of his past which made him seem like a rogue operator from previous seasons in the series even though he is the good guy all along and needs to do things his way or else the government will get in his way; however, this conflict was inevitable because the U.S. government has certain protocols that Jack had to break to counteract the terrorists. Once the president gave Jack full power to do what he wants in counteracting the terrorists, he ends Margot Al-Harazi's attempt to terrorize the United Kingdom and its ally of the United States. Jack exhibits that he was the superior mastermind in counteracting the terrorists, and the conflict was ultimately solved.

Saturday, October 25, 2014

Cooperative Investing

Back in elementary school, teachers taught us how to be fair, share, and cooperate with other children. The article How to Get the Rich to Share the Marbles of the New York Times discusses how when two children cooperate together and are fair in doing so, the marbles that they would collect are more likely to be shared equally among the two children. This is a human response to earning the output from the amount of input work. In the American economy, President Obama wants to instill more taxes on the rich so the poor can save more money because all of the rich people do not need so much money as they will be able to live with a great amount of satisfaction while the poor need every penny that they can get their hands on. However, nobody wants to get taxed more because they worked harder to get to where they are and as a result get punished for being more successful.

My sister and I received an inheritance from my grandparents when they both passed away. Being the economics major and having knowledge of financing, instead of investing the money separately, my sister and I are planning to invest the money together, and put in all of the money in one pot. Having more money means that we will have leverage. Let's say that we wanted to invest in Tesla which closed Friday at 235.24. Assume that I saw that there was a potential growth of the 64.76 in two years down the road and close at the end of the year at $300. If I invested in Tesla by myself and my sister was not confident in making this investment by herself because she didn't know about the potential of Tesla, I would not have double the amount of money to invest into this stock. When I put in $12,500 into Tesla by myself because you never want to invest more than 5% of your money into one investment, then I would make a profit of approximately $3550. On the other hand, when I explained to my sister why the stock will be a good investment based on my analysis and she agrees to invest in Tesla, we would end up making $7100. 

This profit would give us more leverage to invest in other stocks in the same manner. Both of us would only benefit from this strategy since there are two minds being put to use for investing a half-million dollars, as well as having leverage to put more money in a stock, especially the expensive ones. As long as we both were equally analyzing stocks and putting an equal amount of money into the stock, then there should be no discussion on why we would not split the profits or continue to do the same procedure for the rest of our lives. This example seems to correlate with the article How to Get the Rich to Share the Marbles of the New York Times.

Saturday, October 18, 2014

Real World Preparation

Managing future income risk has been a part of my preparation for my future since high school. During high school, I took as many Advanced Placement courses so I can have more flexibility when I came to college. To be exact, I took seven Advanced Placement courses which gave me roughly 30 hours of college credit. Furthermore, I received a 35 on the English part of the ACT exam, which also got me credit for the introductory writing course here at the University of Illinois. When applying to schools, I wanted to go to a school which provided the greatest return on investment and at the same time a top nationally ranked university. There is data that is provided on the internet and in books regarding those two categories of the best ROI and best engineering school, and I went on to apply to the University of Illinois, University of Wisconsin, University of Texas, University of Michigan, and Georgia Tech. I was accepted to all of these schools, but chose to go to the University of Illinois because it is the cheapest out of the schools which fell into the two categories that I mentioned.

Once I arrived here, I chose my engineering major as electrical because it would provide me with the best chance to get a job and the greatest income in the short run. However, as time went on, I realized that I need to enjoy my coursework and the career that lies ahead of me. So I went to the college of business to switch my major to finance, but they said it was too late to switch my major, so I chose economics as my major with minors in mathematics and statistics. The reason I chose economics is because the potential salary is highly competitive in relation to other majors on campus; furthermore, I am interested in economics and applying it into the world of finance after graduating. Clearly I chose economics because it will lessen the risk of future income.

I will continue my education after I complete my economics degree by starting on my Master's in Statistics next semester. Since I want to start working immediately after I graduate, I will finish my M.S. Statistics part time online. This will further help lower the future income risk that every individual endures. Another continuing education route that I have been analyzing is the Certified Financial Analyst, otherwise known as the CFA. I would want to complete the CFA later on in my career when I work as a portfolio manager. Typically, a portfolio manager needs experience in the financial industry, so I will be patient in beginning my studies for this certification.

Aside from my education, I have put my economics and quantitative background to work during the past two summers. I interned with my father's company as a data analyst. I used a lot of statistics, particularly creating regression models based on consumer data. I enjoyed working there and it made me realize that I will want to use number everyday throughout my career. Last summer, I interned with Northwestern Mutual because I wanted to understand finances more. I also enjoyed this internship, and they both help me lower my future income risk because having internships help obtain an entry level job. Finally, my grandmother gave my sister and I an inheritance. My sister used some of it for her year long internship program in Boston and just obtained a full-time job but hasn't started working yet. She paid for the internship program and housing at Beth Israel Medical Hospital which is associated with Harvard Medical School, which tells me that her future income risk has been lowered because she can write that she is associated with Harvard. I have put my inheritance towards middle term and long term investments,  like mutual funds, stocks, bonds, my children's education, life insurance, and a retirement fund. It is always good to start early!

Saturday, October 4, 2014

Illini Bucks

Using Illini Bucks as a method of transfer pricing would drastically change the economics at the University of Illinois. Timing is everything, and using Illini Bucks to save time for an individual’s priorities would benefit every student. This would benefit every student as different people set priorities differently. Currently, I am a senior with 12 hours of class. Consequently, I would use weigh the use of my Illini Bucks on recreational activities more than on educational activities. However, I could imagine that a majority of students would use their Illini Bucks on educational activities more than on recreational activities, as the purpose of college is to obtain a diploma or diplomas.

The pricing of the Illini Bucks would have to be priced just like a store prices their inventory, or like a restaurant prices the items on their menu. Every item would have to be analyzed by data analysts. The data analysts would look at trends regarding how many students are interested in a particular use of Illini Bucks. The Illini Bucks would be able to fluctuate just like interest and inflation rates fluctuate in the economy based on the current state of the economy.

With an easier schedule, I do not have to focus my time on education, especially when this is my final year in college and I will never have the opportunity to work less than the standard 40 hours per week. When I graduate, I hope to get into an investing career, and investors work long, hard hours. In conclusion, I would allocate 60% of my Illini Bucks towards recreational activities and 40% towards educational activities.

Furthermore, the 40% of the educational activities would be geared towards obtaining a full-time job. In using my Illini Bucks towards getting a full-time job, I would use them to cut the line at career fairs. Career fairs are the best way to obtain a job with iLink being next in line. Typically, a career fair will be run between the hours of 12-5. When at the career fair, the bigger and well-known companies will have long lines that may take a student 30 minutes to finally talk to the company; hence, the student will lose the opportunity to talk to all of the companies at the career fair. By using Illini Bucks, I would be able to talk to all of the corporations that I need to talk to, which is an insurmountable investment. I would also use the Illini Bucks to get my resume looked at first on iLink. By doing this, I would have the greatest opportunity to have a few options to choose from when graduating.

I am not concerned with using my Illini Bucks towards my schooling. I do not need to get priority for signing up for classes since I am a senior and am taking two different economics seminar classes that were not full, and I have hundreds of options in choosing my free electives. Apart from signing up for classes, there is no need to use my Illini Bucks on getting a good studying spot since I study in my room.

Finally, the other 60% of my Illini Bucks would be allocated towards recreational activities. This would include cutting the lines at the bar called Red Lion. Red Lion has very long lines, especially on Tuesday because of senior night, Thursday, and the weekend, since there are no classes on the weekend. Other students may use their Illini Bucks at different bars, but I prefer to go to Red Lion.  Also, when at the bar, I would use my Illini Bucks to be the first person to obtain a drink, since many times, it takes a few minutes to order drink. Aside from the bar scene, I would use my Illini Bucks at restaurants with long lines or restaurants that take awhile to serve. Everyone knows how long the line at Chipotle gets, so being able to get to the front of the line at Chipotle would benefit my craving for Chipotle.