Putting Yourself in the Driver’s Seat

 

The past couple days have been a nice, yet unexpected, change of pace for me. Because of a work trip being cancelled, I was able to travel with Jess and the boys to Buffalo for a few days to see my family and work remotely. It is rare that I have the chance to see my family during the workweek, which means I get to observe first hand what my brother and dad do each and every day.

 

To sum it up, they are rock stars. They hustle every day, are well respected by the community in Buffalo and are doing work that is making a difference.

 

My dad is the Executive Director of the Center for Entrepreneurial Leadership and Assistant Dean at the University of Buffalo. After leading a successful business of his own, he is using his role at the University of Buffalo to provide hundreds of small business owners with the tools they need to see their dream and vision come true. I am a believer that small business is the lifeblood of our economy and my Dad is making a mega impact for the good in this area.

 

My brother is the President of Buffalo Manufacturing Works, an unbelievable enterprise for innovation that landed a $45 million grant from the Governor of New York as part of the Buffalo Billion initiative. He is playing an important role in rewriting Buffalo’s story of a beat up City that was in its’ prime back in the early 1900s (with a struggling economy that never recovered from the Great Depression) to today where the city is booming with initiatives to grow the economy and bring business and people back into the City. In Buffalo, everything is moving in the right direction except for my beloved Buffalo Bills.

So, this article is about my brother and his journey to his role as President of Buffalo Manufacturing Works. Yesterday, I got to spend some time working in his office. Seeing him in his own element reminded me of his journey and how it can inspire all of us as we work on writing our own story.

 

Hang with me; you will see the financial connection soon.

 

My Brother’s Journey Up the Ladder

 

My brother, Mike, is 33 years old and graduated from Lehigh University with an engineering degree. He quickly landed a job with JP Morgan Chase in New York City and because he hustles like nobody else and has a crazy amount of talent, he worked up the corporate chain in 10 years; faster than most would in their entire career. Before the age of 30, he was in a Vice President role with JP Morgan that took him from New York City to London where he was responsible for bringing on big time (“ultra-high-net-worth”) Nordic clients. He was killing it.

 

Sounds pretty posh, right?

 

Some may have looked at his job from the outside thinking it was a dream. Big title, lots of travel, well respected within the company and well on his way to a crazy successful career.

 

Re-Defining Success

 

I remember coming home for Christmas one year and for the first time Mike hinted that he didn’t love his job. The passion wasn’t there. Yes, he was good at it. Yes, he was making good money. Yes, he could continue on this path and retire by the age of 50, if not earlier, if he wanted to.

 

The hard reality hit him that this wasn’t for him anymore.

 

It wasn’t fulfilling and he didn’t see himself doing this for the rest of his career.

 

Later that year, we met for vacation in the Outer Banks and he started talking about the idea of a career change. We stayed up late one night talking about where and what and how. To be honest, it seemed overwhelming to me but I knew if someone was going to make it happen, it was Mike.

 

Time To Make the Move

 

Mike, being the person he is, decided a month or so after our trip to the Outer Banks that he was going to tell JP Morgan he was leaving. He did it. I’ll never forget when he told us he made that decision and that he and his family were going to be leaving London to head back home to Buffalo without a plan in place. No job lined up.

 

He wanted to take the time to reflect on the next step in his career before jumping into something new.

 

Here he is at the age of 30, married with a baby girl and he is walking away from a career that others would die to have. I respect him for that decision more than he will ever know. That takes guts to recognize and admit to yourself that you aren’t doing the work you dreamed about doing even in the reality where doing nothing is a whole lot easier than doing something. He had the guts to search deep to face that reality.

Being in the Driver’s Seat

 

So what does this have to do with personal finance? Everything.

 

See, achieving financial freedom is about freedom, not about being rich. Getting your finances in order puts you in the driver’s seat to make a decision that is best for you and your family rather than letting your financial situation direct what you are doing.

 

Having your financial house in order put’s you in the driver’s seat.

 

Because my brother had a solid emergency fund in place, was well on his way to saving for retirement and beat down his student loans, he was in a position to make this decision.

 

He could afford to resign from JP Morgan and take 6 months off to figure out what he wanted to do next. Taking that time (and having the financial flexibility to do so) allowed him to land the job that he has now. Without that financial plan in place, he would have had two options: (1) stay at JP Morgan and grind it out despite knowing it was time to go, or (2) leave, but rush into a new job because the income was needed.

 

Are you in the Driver’s Seat?

 

I know there are some pharmacists reading this that are not thrilled about the work they are doing. Or maybe there is someone reading that wants to stay home to be with a child or take care of a sick parent but can’t do so because of the financial constraints. Or maybe someone else is reading that has a dream about doing something different altogether whether that be a different part of the profession, starting a business, or going back to school.

 

The reality is that it doesn’t matter why you want to make a change. Rather, what matters is putting yourself in a position to do so in case that day comes.

 

Here is the gut check: If you have ever started having a conversation with yourself about doing something different for whatever reason but have found yourself squelching that internal desire because of financial worries or constraints, you probably aren’t in the driver’s seat financially. Rather, your financial situation may be controlling you more than you realized.

 

I’ve talked a lot on this blog about paying off debt, getting an emergency fund in place and saving for retirement. This story of my brother is an example of why it is important to take the steps to ensure you have a solid financial foundation in place.

 

In my opinion, there are 4 important steps you can take to ensure that you are in the driver’s seat when it comes to your finances.

  1. Get out of debt. The hard reality is that if you are buried in debt, with very little savings and no emergency fund, you are not in the driver’s seat. I get it. Many pharmacists are in that position coming out of graduation. I was. But it doesn’t mean you need to be there long. If you are dragging out student loan payments, it may be time to think about getting rid of those sooner rather than later.
  2. Save up for a rainy day. If you want to have flexibility in making a job move such as Mike did, you may want to save up for a super rainy day (e.g., 6-12 months instead of 3-6 months).
  3. Get serious about saving for retirement. Because so many new pharmacy graduates are swimming in student loan debt, I’m concerned retirement savings are going to be delayed for many pharmacists which means either having to play catch-up or working longer. The earlier you can get out of high-interest debt to save for retirement, the better.
  4. Live off less than you make. This is the key to make the first three items listed above a reality. This is especially important for new graduates to consider before adjusting up the lifestyle (and the expenses that come along with that lifestyle). If you can live off 50-75% of your income, two amazing things will happen. First, you will be able to get out of debt, build an emergency fund and save for retirement at a lot faster rate than if your expenses equaled your income. Second, in the event of a job change, move, period of unemployment, wanting to go part time, or any other situation that requires a big change; your ability to make this change will be a lot better knowing you don’t have to replace your full income.

 

Your Financial Homework

 

So, are you in the driver’s seat or at least working on a plan to get yourself in the driver’s seat? What is one thing that you can do this coming month to put you on the path towards getting in the driver’s seat? Maybe it is continuing to build that emergency fund or pay a little extra on that student loan. Get started today!

 

 

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Give Yourself Some Grace

 

“Experience is making mistakes and learning from them.” –Bill Ackman

When it comes to our finances, we can all relate to the temporary bliss when everything is running smoothly and we feel like we have it under control. Unfortunately, ‘control’ of our finances can leave as quickly as it comes and just when we think we have it all figured out, we look up only to realize we are sucking for air, just trying to keep our head above water.

 

In talking with hundreds of pharmacists about their financial journey over the past year, I have come to realize that many feel as if they are on the brink of losing control. Despite having a single-person income that is more than double the median household income in the US, they are living paycheck to paycheck. I can often hear the angst in their voice and see the concern in their eyes.

 

How do I know what this sounds and looks like?

 

Jess and I were in the thick of this after graduating from pharmacy school when we found ourselves with approximately $200,000 in non-mortgage debt shortly after I completed residency training in 2009. Unfortunately, this number of $200,000 probably doesn’t shock many of you reading, as this is the norm for many new pharmacy graduates. When you consider the average student loan debt upon graduation from pharmacy school now exceeds $150,000 and you tack on a car or two, undergrad student loans, and some credit card debt; you can see that it is not too difficult to be at or above $200,000 in non-mortgage debt.

 

With this type of debt hanging over your head, all of the sudden the dream of enjoying a good income after working so hard to get through pharmacy school is a distant memory. Some choose to embrace this reality and others continue to live on as if this debt didn’t exist. Those that embrace it often make significant sacrifices in the early years after graduating from school and after a few short years of digging deep to live well below their means, they are off to the races with a solid foundation in place to build upon. On the other hand, those that ignore the reality typically have expenses that equal or exceed their income by overbuying on a home, and purchasing cars and other luxuries that leave next to nothing to give, save for a rainy day, build up a nest egg, or just have some breathing room.

 

The Struggle is Real

 

It should be no surprise that we all struggle from time to time with getting this right. We are trying to juggle paying off student loans, buying a home, saving for kids college, making sure there is a rainy day fund in place, saving for retirement, and the list goes on and on. With the reality of trying to balance multiple priorities at once, it shouldn’t surprise us that we as a nation (pharmacists included) aren’t doing this very well. In the US, adults carry more than $890 billion in credit card debt and over $1.3 trillion in student loan debt. Furthermore, a third of all households don’t save towards retirement and the majority of Americans don’t have enough savings to cover an unexpected expense of $500-$1,000.

 

The Mistakes are Inevitable

 

With so many competing priorities, the bad months from time to time and bad financial decisions are inevitable. I’ve certainly made my share of financial mistakes.

Have you made any mistakes with your finances recently? Are you beating yourself up because you feel like things should be more in order? Or how about losing motivation because the debt load seems so big or saving for retirement seems so far off?

It’s time to give yourself some grace, and keep moving forward.

 

Here is the reality. Those that will be successful getting out of debt and building wealth are those that can give themselves some grace in the times where their financial plan gets derailed.

 

Those that win in the long run don’t dwell on the bad. Rather, they learn from the mistakes, identify where things went wrong and make constant adjustments to ensure things are moving in the right direction. Over time, those constant adjustments result in getting closer and closer to achieving financial independence.

 

Achieving financial independence is a marathon, not a sprint and those that win will have the patience to learn from their mistakes and keep going.

 

The Easiest Place to Get Off Track: The Budget

 

If you haven’t already, make sure to read Jess’s article on budgeting. She nailed it. In my opinion, the budget is the key to winning yet the hardest thing to do and the easiest place to get derailed. If you struggle with the purpose of budgeting, I think you will find her insight helpful.

 

Jess and I have had our fair share of months that don’t go as we had planned with the budget. Some of these are out of our control such as an unexpected car repairs that cause us to dip into the emergency fund and put a pause on working towards other financial goals. Other bumps in the road that we encounter are certainly within our control and are often the result of becoming complacent with the progress are making. Jess and I have found that when it comes to the budget (which has been the single most important factor in our success so far), touching base with each other once a week or every other week to reconcile our expenses and see our progress throughout the month allows us to be successful in staying on track. When we don’t do this, we take a step backwards in our financial plan.

 

It is important to identify those areas of your financial plan that you know are critical to do but yet are areas that are vulnerable to falling by the wayside.

 

It doesn’t take much more than a month or two of getting off track with the budget to say ‘forget about it.’ Stay with it. I promise it will be worth it.

 

I don’t know about you but budgeting to achieving my financial goals reminds me of my commitment to exercise to maintain my financial health. There are good weeks and bad weeks. There are times where I’m hitting all cylinders and then bam! A few missed days and the plan falls apart for a while. Soon enough, I’m back on the track and then back off. But over the long haul, I have a commitment to make my physical health a priority. Your financial health is no different.

Your Financial Homework: Were you on track with your financial plan before but may have recently hit a bump in the road? If so, start small and pick one financial goal you will accomplish by the end of September. This might be setting your financial goals, starting (or re-starting) a budget, saving $100 towards an emergency fund, establishing an automatic withdrawal through your employer-sponsored retirement plan, or setting up a plan to pay off student loans ahead of schedule. The goal is not to solve your financial problems in one month but rather to pick O.

 

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