ORacle
The Secret of Wealth
by Douglas A. Samuelson
The OR/MS analyst was comfortable, but not content. His career seemed to have reached a plateau — or a ceiling, as he saw it. Less talented people he knew had surpassed him in their prestige and standard of living. Frustrated, he decided to consult an oracle. Since he was scientifically trained, the oracle he chose was not a fortune-teller or psychic, but a retired executive he happened to know. This executive had, in fact, devoted a number of years since his corporate days to thinking and contemplating, and at times he made broad pronouncements that seemed somewhat mystical, somewhat vague, but right once you thought about them — in a word, oracular.
The analyst had only to say, "I'd like some advice about my career. I'm doing OK, but I feel I'm missing something. I'm just not getting ahead as I'd expected." The oracle immediately responded, "Ah, do not mince words, my young friend. You seek the secret of wealth, do you not?"
Surprised, the analyst managed to assent, wondering how the oracle knew so much.
"The secret is simple," the oracle pronounced. "It is all in whose work produces your income!" The analyst was baffled, and his expression showed it.
"You see," the oracle explained, "You are in the working class as long as you make all your money from the work you do yourself. As you move up through the middle class, you make more and more of your money from work other people do.
"This is true," the oracle continued, "even if you seem to work by yourself. Many physicians, for example, practice by themselves, but their profession is supported by others. They rely on the work of nurses, hospital administrators, laboratory analysts, office assistants, claims processors — the list goes on and on. Or consider teachers. Primary grade teachers do everything themselves and get paid the least. College professors have the most support and the lightest teaching loads, and they get paid the most. If they have research projects — and of course you know how many people support the principal investigators in research — they get paid much more.
"Analysts like you rely on others to collect and maintain data, to keep computers working, to request and implement your advice. But since you can only enlist this support to a limited degree, your advancement is also limited. As other people caught on to using computers and thinking about processes and systems, you have had to do more of your own work to remain competitive. This includes selling your work, of course. This is why you and others in your profession, while most of you remain comfortable, do not become wealthy."
"Perhaps we are not doing enough to promote our profession," the analyst suggested.
"Merely promoting your profession is not enough," the oracle told him. "Your profession should be doing more to place other professions in your service. The economists, for example, were doing very well when policy-makers not only listened to them, but also insisted that other professions must provide data and analysis to support the economic decisions. The decline of the economists' influence is less because their advice was wrong than because they lost the management commitment that compelled statisticians, engineers and others to provide support for them. The proof of this is that the few economists who still hold that kind of confidence from management are very well-to-do, despite the problems of their profession as a whole — and they are right no more often now than they were thirty years ago."
The oracle paused as the analyst absorbed what he had learned. After a few minutes, the analyst objected, "That still doesn't explain wealth."
"Now we must carry the matter further," the oracle replied. "As you move from the middle class to the upper class, you make more and more of your income by putting your money to work for you."
The analyst quickly thought of the fairly wealthy people he knew. All of them seemed more occupied with their investments than with whatever else they did. The ones who ran companies seemed more interested in finance than in operating their businesses. He had read about people who got rich during the high-tech boom; the most successful ones seemed better at raising capital than at making a profit.
"This is making a lot of sense," the analyst acknowledged. "In fact, it's even true of some nonprofit organizations I know about. Several years ago, their leaders got too optimistic about what could be done and what it would all cost, and these organizations took a financial hit. The ones that are still solid financially are the ones whose stocks and mutual funds did very well during those years. The more I think about this, the more I think you're right!"
"Well, then, you are ready to hear the secret," the oracle smiled. "Think of who the really rich people are. They organize financial deals. They own banks. They act as brokers for others' investments. In short, if you want to be filthy, stinking rich, you make more and more of your income by putting other people's money to work for you!"
The analyst couldn't contain his excitement. "I see what to do now!" he exclaimed.
"And what is that?" the oracle inquired.
"I'm going to hang out around investment brokers and venture capitalists and learn how they put deals together," the analyst said. "Thank you!"
The oracle wished him well.
Doug Samuelson is president of InfoLogix, Inc., a consulting company in Annandale, Va. He is also an adjunct professor at The George Washington University and at the University of Pennsylvania, and an external research professor at the Krasnow Institute, George Mason University.
OR/MS Today copyright © 2003 by the Institute for Operations Research and the Management Sciences. All rights reserved.
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