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Month: March 2019

YFP 093: Highlights from APhA Annual Meeting

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Highlights from APhA Annual Meeting

Tim and Tim interview several APhA conference attendees on the floor of the exhibit hall about their personal finance journey and the highlights of this year’s annual meeting.

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Summary

On this week’s podcast episode, Tim Ulbrich and Tim Baker interview several APhA 2019 conference attendees on the floor of the exhibit hall about their personal finance journey, as well as learning about their highlights and takeaways from this year’s meeting. Christina Slavonik, the newest YFP team member, shares some of her background and path leading her to become a certified financial planner. Brianne Porter talks about how Eileen McDarg, APhA 2019 keynote speaker, shared ways to practice and build resiliency and how to take care of your mental health as a pharmacist. Brianne also gives an update on her personal finance journey since her podcast appearance on Episode 60. She and her husband purchased YNAB, paid off $12,000 of debt, and began saving for an emergency fund which has brought her peace of mind. Gina, P2 at Virginia Commonwealth College of Pharmacy, joins the podcast after purchasing 7 Figure Pharmacist by Tim Church and Tim Baker. Gina discusses how financial skills aren’t focused on in pharmacy school and is taking personal finance into her own hands. At this year’s conference, Gina mainly attended info sessions and the Rutgers fellowship program roundtables. Kara, P3 at Florida A&M, speaks about how she experienced firsthand the importance of personal finance and of keeping track of money while growing up. Tim, P3 at USC, shares how he’s realized the importance of budgeting and minimizing loans while still in school. Tim and Tim close the episode with a reflection on the conference. Over the last couple of years, they have witnessed personal finance becoming more of an interest for pharmacists and have seen pharmacists increase their knowledge by utilizing resources like YFP.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Tim Ulbrich here with Your Financial Pharmacist, live from APhA with the one and only Tim Baker. Tim, how you doing?

Tim Baker: I’m doing well. How are you, Tim?

Tim Ulbrich: Good. Excited to be here in Seattle. We’re live at the booth.

Tim Baker: Yeah, this is crazy.

Tim Ulbrich: Yeah.

Tim Baker: This is the first time we’ve done something like this, and I feel like we want to soak up the ambiance that is APhA here in Seattle. Unfortunately, Tim Church is unable to join us, but we have a crack team that’s going to be helping in our booth, Cristina, our new associate planner is here. We’ll probably have her on the podcast a little bit later. But yeah, I’m excited. It’s a lot of buzz in the air, and we had a good opening night last night, lot of people stopping by the YFP booth. So yeah, it’s been good so far.

Tim Ulbrich: Yeah. It’s going to be a great meeting. We’re excited for not only the exhibit hall, we’re going to be doing some financial roundtables this afternoon with students and new practitioners, talking about budgeting, investing, home buying, student loans. And then we’re going to do a workshop tomorrow afternoon.

Tim Baker: Yep.

Tim Ulbrich: All about goal-setting, finding your why, and budgeting. So all things personal finance and pharmacy, that’s what we do at Your Financial Pharmacist. That’s what we’re doing here at APhA. And a shout out to the partnership that we have with APhA.

Tim Baker: Yeah, absolutely.

Tim Ulbrich: They’ve been a great partner and friend and really helping us spread our mission and message to help pharmacists achieve financial freedom.

Tim Baker: Yeah, and I’m really looking forward to — you know, we’re not quite sure what this episode’s going to look like, but I think we’ll splice together some conversations that we have with other APhA conference goers and just get a flavor of what they’re looking for in terms of the conference, maybe some of the things that, you know, are concerns of theirs for their finances. And yeah. I’m just kind of excited about this new format with the conference today.

Tim Ulbrich: So we’re signing off for now, and we’ll be back here live at APhA 2019 in Seattle, Washington.

–

Tim Baker: What’s up, everybody? Welcome back to APhA 2019 in Seattle. I am with Cristina Slavonik (?), who is the newest member of our YFP team. Cristina joined us about a month ago. She is our new associate financial planner, so she is working with me day in and day out, helping clients with their financial plan. So Cristina, welcome.

Cristina Slavonik: Thank you so much, Tim. So glad to be here.

Tim Baker: So why don’t you tell us a little bit about yourself and how you kind of came to be that newest member of YFP?

Cristina Slavonik: Sure. Well, I do have an extensive background in the financial services industry. Just kind of a brief background, I had training as a bank teller starting out like Tim 15 years ago. Kind of worked my way up through the ranks, worked in the private side where we did wealth management for high net worth clients. And then just recently, you know, got my CFP certification, Certified Financial Planner certification, and was looking to branch out. And one thing I liked about Your Financial Pharmacist is rather than catering to a broad market of people, you guys just focus on the pharmacy niche and what you can do for pharmacy students and those in all the various transitions of that career path with them.

Tim Baker: Well, yeah, and it kind of goes back to that whole idea of, you know, I feel like in a lot of financial planning firms, it’s a master of none, you know, kind of the jack of all trades. If you have a pulse, you can be a client. And for us, you know, we really want to focus in on what are the needs of the pharmacist community? And you know, typically, it’s centered around, you know, just being overwhelmed with the student debt and confused on how to properly budget and save and invest and the whole pain point around I feel like we’re just not progressing financially. So I think like keying in on that and really beyond the foundation of building out the financial plan. So Cristina, what have been your impressions of kind of the conference so far? And what’s that been like for you?

Cristina Slavonik: It’s been real exciting. This is my first conference. And just to see the energy and the inquisitiveness of everyone here, it’s really been quite an educational experience for me just to hear what is really on people’s minds, especially with some of the breakout sessions. We’ve had some really good, thoughtful questions and how people, they’re really trying to get on the right path and, you know, start out on the right foundation with their finances.

Tim Baker: Yeah, and I think it’s one of those things that a lot of pharmacy grads, you know, PharmDs, I think there’s a thirst for that, you know, in terms of like, OK, you know, what the heck do we do now? You know? Especially if we’re staring at some debt and, you know, really getting the foundation of a plan going. So I think, you know, what we’re really trying to do is bring some obviously products, you know, services, whether it’s the blog, the book, the podcast, that type of thing, financial planning, to the table and, you know, really assist those on their path to financial freedom. So Cristina, in terms of like, you know, the work that you’re doing with clients kind of day in and day out, you know, what are some of the things that you’re kind of helping us, YFP Planning, what does that look like?

Cristina Slavonik: Sure, yeah. I mainly help with the onboarding process, just making sure that any accounts that are transitioning over, that we have the proper paperwork in place and helping them through that process and also working with their financial behaviors. We do have some surveys that we put out just to kind of educate them on things they can improve on like maybe frugality or their confidence level. And just kind of helping them be better versions of themselves.

Tim Baker: Well, and I think client service is so important. And I love having you as part of the team and really kind of being, you know, another set of eyes and hands to really help clients through the process. And I think, you know, bringing you on as another Certified Financial Planner, another, you know, viewpoint on things, I think it will really grow out our service offering. And I’m really excited to have you on and really, we need to get you more on the podcast.

Cristina Slavonik: Yes.

Tim Baker: And doing your thing. I know you helped Tim Church on the Roth.

Cristina Slavonik: The back door Roth.

Tim Baker: The back door Roth conversion post. So we’re going to be featuring you more and getting your voice heard, so I think people are kind of sick of the Tim, Tim and Tim. So —

Cristina Slavonik: Well, now, we’ve got a female voice.

Tim Baker: We’ve got a female voice, and I did — when I interviewed Cristina, I said, can you change your name to Tim? And that was shot down. So you know, we had to break the mold. And I think it’s all positive going forward. So Cristina, thanks for coming on the podcast, more obviously in the future. And yeah, we’re just signing off for now at APhA 2019 in Seattle, Washington.

–

Tim Ulbrich: Tim Ulbrich here, back live from APhA. Day No. 3 of the APhA annual meeting here in Seattle, Washington. And lucky enough here to have one of our — well, one of my colleagues at The Ohio State University College of Pharmacy and a guest from Episode 060 of the Your Financial Pharmacist podcast, Dr. Breanne Porter. We had her on talking about one new practitioner’s lessons learned accruing $224,000 of debt in seven years and lucky to have her here alongside of me at the APhA meeting. How’s the meeting going so far?

Breanne Porter: Hi, Tim. It’s going well. Thanks for having me.

Tim Ulbrich: Yeah.

Breanne Porter: It’s very exciting.

Tim Ulbrich: Thanks for stopping by. You did an episode, Episode 060, that I have referenced often and I would highly encourage our listeners, go back there, check that out. It’s very inspiring.

Breanne Porter: OK.

Tim Ulbrich: I think you were very raw and genuine in the journey you’ve gone through and the lessons that you’ve learned. And I know you’re passionate about this topic and making sure others are on the track to financial success, right?

Breanne Porter: Yeah, that is correct. Yes.

Tim Ulbrich: So talk me through, you just came out of the main session this morning at APhA, all about resilience. So talk to me about what that session was about and the author of the book and the person facilitating that.

Breanne Porter: Yeah, so the keynote this morning was on resilience, and they had Eileen McDargh I think is how she says her last name. And she was really inspiring because she came in basically and, you know, we were talking a lot about mental health and some of these topics can be a little heavy. But really, what she shared with us were some basic practices and things that we can do on a daily basis to really help build that resilience. She talked about how it, in some ways, people may be more genetically predisposed. But it really is a practice that we can all work on to sort of build in our day-to-day and really become a little more resilient in the day-to-day. So it was very helpful.

Tim Ulbrich: And we got to kick the negativity out of our lives. Right?
Breanne Porter: Yes, yes. One of her practices is no red ants. So the people that suck the negative — that have the negative energy and suck it out of you, suck out your energy, basically. You’re not allowed to have them in your life. So no red ants.

Tim Ulbrich: I love that because I think that we all know just from being in the workplace, no matter where you are, I mean, that is such a factor of the culture of a workplace. And I think we underestimate the attitude and what we bring into the office each and every day impacts everybody around us. And that’s true at home, I mean, that’s true with family and so many other things. This topic of resilience, to me, is such an important one. We often talked about it on an admissions standpoint when we were admitting pharmacy students. You know, how do we assess resilience? Because we know in the students we work with, those that have it, and wherever it comes from and however you can find it, they’re going to be able to fight through, they’re going to be able to self-assess, figure out where they’re struggling, improve upon. We see in residency all the time, and I think it’s also true with personal finance. I mean, when people are coming out of school and you’re struggling with student loan debt and all these competing priorities, there’s a lot to work through. And so I think that topic of resilience is a good one. So again, that is Eileen McDargh, right?

Breanne Porter: Yes, McDargh. Yes.

Tim Ulbrich: And the book is called, “Your Resiliency GPS” if anyone wants to check it out. We would highly encourage you to do so. I’m going to be reading it soon, so I’m excited about that. So since we had you on in Episode 060, you shared that journey. And as I mentioned, we’ve highlighted that story. So what are some of the things that you’re working on right now in your own financial journey?

Breanne Porter: That’s a great question, actually. I feel like I’ve made a lot of strides. I’m very proud and excited. So I’m happy to share with the group. But we recently purchased YNAB, my husband and I recently purchased YNAB.

Tim Ulbrich: Love YNAB, by the way.

Breanne Porter: It stands for You Need a Budget, so as straightforward as it can be. We purchased that about six months ago, I think. And since then, we’ve paid off almost $12,000 in debt.

Tim Ulbrich: Wow, congratulations.

Breanne Porter: Yep. Thank you. We’re very proud of that. We started saving towards some goals. We have a huge emergency fund, which is great because I’m pretty sure I’m going to be paying out taxes now, as soon as I file with Tim Baker and his company. But yeah, basically, we’ve just really been able to I think, you know, become more confident in our financial health and really feel more comfortable. Because, you know, things happen now. I had a dog emergency the other day, my dog consumed 15 ounces of dark chocolate and had to spend a night at MedVet. And you know, a year ago, I would have just been carrying that balance for months, probably. And it felt so good to be able to just hand over the cash and be done with it.

Tim Ulbrich: You can’t put a dollar amount to that peace of mind, right?

Breanne Porter: No. Oh my gosh, no. I sleep so much better every night just knowing that I’ve paid off the debt but also, I have that money aside now too. So.

Tim Ulbrich: Yeah, I’m with you. And that’s a hard thing. We talk so much about the numbers, but when you talk about peace of mind, you talk about being on the same page with your spouse, when you talk about defining your goals and knowing you’re working toward achieving them, like that’s the stuff that really matters. And what I love about your journey and thinking about where you kind of came in a very passive participant in your financial journey to a very excited, motivated participant in your own journey. I mean, that’s really what it’s all about. You caught fire with it, and we often at Ohio State, we end up in financial discussions. People have to hear us talking about budgeting and other stuff. So thank you so much for sharing that update. And again, for those that didn’t listen, go back and check out Episode 060 of the podcast where Breanne shares a lot of her story. So have a great rest of your meeting.

Breanne Porter: Thanks, Tim. You too.

–

Tim Ulbrich: I’m here with Gina, who is a P2 at Virginia Commonwealth University College of Pharmacy, VCU School of Pharmacy, and here back at the APhA meeting, excited to have you stop alongside the booth. You just purchased a copy of “Seven Figure Pharmacist,” grateful for that, so thank you.

Gina: Yep.

Tim Ulbrich: So tell us a little bit about yourself, where you’re at obviously in your journey of pharmacy school and how the meeting’s going so far here at APhA.

Gina: Yeah. As Tim said, I am a P2. I’m currently looking to pursue a professional residency or a fellowship.

Tim Ulbrich: OK.

Gina: I’m not too sure yet. But definitely I’m also interested in compounding as well. I picked up the “Seven Figure Pharmacist” book because I was interested in — well first off, schools don’t really touch upon financial skills. We do host occasional lectures and talks, but I feel like this is definitely an essential skill. It’s important to have a job, but it’s rather how to utilize that such as like investing and all. And I figure I don’t have much background on that personally, so that’s kind of what I’m hoping to get out of that book.

Tim Ulbrich: Yeah.

Gina: Especially to prepare myself for graduation.

Tim Ulbrich: Yeah. And I’m so excited to hear you energized about this topic as a P2. You know, as I think back on my journey, part of the pain that I had paying back $200,000 of student loan debt is I wasn’t thinking about it early enough. So you know, the fact that you’re thinking about this early tells me that you’re passionate about learning and that will be everything in terms of your journey. And so establishing that principle of learning early on is so important. So kudos to you for investing in that. It’s an important thing to do.

Gina: Thank you. I mean, especially in this day and age, you know, tuitions are rising with any school, undergrad especially. Yeah, it’s definitely an important skill. It’s the future.

Tim Ulbrich: So here we are at the APhA meeting. So how’s the meeting been going? What’s been your favorite parts of the meeting so far?

Gina: Good. I’m a student, I’ve attended info sessions on — for example, I just came back from the Rutgers Fellowship Program roundtables, and that was pretty informative. Other educational sessions included like dietary supplements, contraceptives, etc. Yeah, it was pretty eye-opening.

Tim Ulbrich: Yeah.

Gina: Yeah.

Tim Ulbrich: Great meeting. It’s been beautiful here out in Seattle. And I know coming from the East Coast, the travel certainly can be exhausting. But it’s a great, great city here in Seattle.

Gina: Oh yeah.

Tim Ulbrich: Thank you so much again for just taking time. Thank you for your support of the work that we’re doing. And best of luck to you going forward.

Gina: Thank you. Thank you for having me.

–

Tim Ulbrich: Back at the exhibit hall here at APhA 2019 in Seattle. Excited to be here with Cara from Florida A&M University. And she stopped by the booth yesterday, had purchased a copy of “Seven Figure Pharmacist,” was so excited about it, we did a little recording. And we found out the audio wasn’t working. So she’s back today. So thank you for joining.

Cara: No problem at all. It’s a pleasure.

Tim Ulbrich: Yeah. So tell me a little about yourself, what year you are in pharmacy school and how your meeting’s going so far.

Cara: So I’m a P3 student from Florida A&M, and my meeting is — the meeting’s going amazing. You really get to network. And that’s so important in this job field right now.

Tim Ulbrich: Absolutely. So this topic of personal finance, I can tell in just my short interactions with you, it’s something you’re very passionate about.

Cara: Yes.

Tim Ulbrich: You told me that you are adamant on not being broke, right?

Cara: Yes.

Tim Ulbrich: We’ve talked about stories of many pharmacists that go through this process, accrue lots of student loans, have a good income but feel like they’re living paycheck to paycheck because of student loans and other competing priorities. So tell me about your desires going forward and why you’re so motivated about this topic.

Cara: So I’m motivated, first of all, my mom was a single mother, and I saw that it seemed like she was working as hard as she could, and she was sacrificing so much and still could barely make ends meet. And there’s no reason for that. She didn’t do as much as she could for me to turn around and do the same thing. It’s always you’re supposed to grow.

Tim Ulbrich: Yes.

Cara: So it’s important to have financial literacy. And she really pushed to me, like hey, you need to count your coins.

Tim Ulbrich: Yeah, absolutely. And I think, you know, what I love in my talking with you just for a short time, you have caught fire on this topic.

Cara: Yes.

Tim Ulbrich: And what I’ve seen is once people have that passion for learning, it’s game on. And a pharmacist’s income alone is good, but it’s not going to equal financial success alone. Or you’ve got to take that income and put it into work. We talk a lot about people that are income affluent but that haven’t turned that into balance sheet affluent. So it’s got to be able to transform that income into wealth. So I’m excited for you and for your journey. And while we’re here, I’m going to do a quick shoutout for Dean Johnnie Early at Florida A&M University, just left us in Toledo, Ohio, and went down there. So thank you so much for your time. And I hope you have a great rest of your meeting.

Cara: Thank you so much.

Tim Ulbrich: Yeah. Thank you.

–

Tim Ulbrich: I’ve got Tim here with me, a P3 from USC College of Pharmacy, and grateful for the opportunity to have you here for a couple minutes. Yesterday, you stopped by the booth. I was trying to talk you into doing some podcasting and you were a little bit nervous, but here we are, back today, and you’ve come back. So I appreciate your time.

Tim: Sure. Thank you for having me here.

Tim Ulbrich: How’s your meeting going?

Tim: It’s pretty great. It’s my third day, and I have met a lot of people and going to different booths here at the exposition as well as go to the research and poster presentations. I think that was cool as well. And being a delegate for Rho Chi and PLS. Also, I have never been a delegate before, so that’s also a new experience for me.

Tim Ulbrich: So it’s been a busy meeting. And I just found out that you are flying home very early morning tomorrow, getting into the LAX airport, and driving to USC to take a final exam. So it’s dedication for you to be here at APhA, investing in your professional development, which I’m excited to hear. And I can tell you’re excited about this topic of personal finance as well. So tell me what’s top of mind for you when it comes to personal finance as a current student and thinking ahead to making that transition into new practitioner life.

Tim: I think it’s very important to start early. As you know, currently interest, they may accrue, they don’t charge it. I don’t like making more interest.

Tim Ulbrich: Yes, baby interest. Capitalization.

Tim: Yes, they’re not being capitalized.

Tim Ulbrich: We call it baby interest.

Tim: Oh, OK. Then I’m making baby interest, but it’s just accruing. So I think it’s important now to start budgeting, see where I’m spending my money and try to minimize all the expenses that I don’t need so that I can minimize my loans and hopefully have not too much loans, especially attending university, so.

Tim Ulbrich: Yeah, try to minimize some of that stress later on.

Tim: Yes.

Tim Ulbrich: I’m glad to hear you say, we talk a lot about that while somebody’s in school, it can very much feel like Monopoly money. And you don’t realize the impact of how that interest is growing.

Tim: Right.

Tim Ulbrich: And then to your point, once you get into active repayment, that interest grows on the principal, and that starts growing interest, which is that process of capitalization.

Tim: Yes, exactly.

Tim Ulbrich: So for the students that are listening to this, anything you can do, Tim’s got good advice here. Minimize the amount that you’re borrowing, of course sometimes it’s easier said than done.

Tim: Right.

Tim Ulbrich: Ultimately, you’re trying to minimize that principal balance as well as the interest that’s accruing to minimize what you’re going to have to pay in active repayment. So USC College of Pharmacy, one of the top programs in the country. Tim Baker and I actually had a chance to come out there last year, talk with students, very impressed with the campus, top notch students — and I’m not just saying that to say that. We left that weekend just very impressed with the USC brand, the level of students, the caliber of the students, so I wish you the best of luck. And thank you for coming onto the show.

Tim: Of course. Thank you for having me, and thank you for coming last year. We really enjoyed you being there and teach us about finance.

Tim Ulbrich: Absolutely. Thank you.

Tim: Thank you.

–

Tim Ulbrich: Tim Ulbrich here, back on the floor of APhA in the exhibit hall with Tim Baker. We are wrapping APhA Annual 2019. Wow.

Tim Baker: Already.

Tim Ulbrich: Already, right? It’s been a great meeting.

Tim Baker: It went by really quickly. Yeah, it just seems like so much buzz this year around our booth and I think the topic of personal finance. APhA, like I said, puts on a good show here. Yeah, it’s been great. I don’t know, Tim, I feel like coming out of these conferences, I just get so charged up even not being a pharmacist myself but just, you know, about — I know there’s going to be some negativity at times about the profession of pharmacy, but I just get super jacked up coming from these types of meetings and going forward. And you know, for us, trying to find better ways to do what we do in terms of providing product and service for pharmacists with regard to their personal finance needs.

Tim Ulbrich: Absolutely. And there’s been a ton of energy around the topic of personal finance. And you know, I feel like thinking back to 2015 when we kind of started the journey, like one of the things we kept saying is we want to move the needle on this conversation.

Tim Baker: Yeah.

Tim Ulbrich: About personal finance. And I feel like, you know, we’re of course biased, right? We love this. But I feel like the awareness and knowledge of students and new practitioners — and we’ve talked with faculty members, and we’ve talked with others — the terminology, I mean, things I hear students talking about.

Tim Baker: It’s unbelievable.

Tim Ulbrich: Understanding refinance and budgeting, loan forgiveness. Like, we didn’t hear that 3-4 years ago. And I think we’re seeing that needle shift a little bit.

Tim Baker: You know, it’s funny. I was talking to a pharmacist today, and she came up and actually she’s right behind us in our booth here. She works for the FDA, and she’s like, “Hey, what do you think about like that married filing separately if I’m going for PSLF and my spouse isn’t?” And I’m like, wow. Before it was, what’s an income-driven plan. And now, we’re talking about oh yeah, I’m optimizing my PSLF strategy here. I’m doing this or that or refi or — it’s unbelievable. And you know, I don’t know if we can take full credit for that, but I think, you know, I think the fact of the matter is that there is absolutely more of an awareness than it was a couple years ago. And I think it’s a credit to our listenership and really, the students and the new practitioners out there that are really being intentional and looking at this stuff. And it’s super easy, as you can attest to, to not be.

Tim Ulbrich: Yeah, absolutely.

Tim Baker: And to kind of wander off or stick your head in the sand. So you know, that just jacks me up. And I love that, and I think, you know, I’m looking forward to next year’s conference in D.C. because I want to see even more of like the evolution from where we’re at today.

Tim Ulbrich: I couldn’t agree more. And I think the excitement and the energy around, you know, caring about this topic and, you know, we help pharmacists achieve financial freedom. That’s what we do. And we’re missing Tim Church out here.

Tim Baker: We are.

Tim Ulbrich: Because you know, we’re feeling this energy and this vision and what we’re doing is just as much a part of him as it is us and his contribution to that. So Tim Church, shoutout to you.

Tim Baker: He’ll probably be ready to run through a wall there, you know.

Tim Ulbrich: You’re right, he would. What you said to me that really resonated that I’m feeling is intentionality. I mean, we did some roundtables yesterday, and we talked about budgeting and, you know, finding your why and thinking about goals and all these other things. And I felt like the context of budgeting and seeing a group excited about, you know what, a budget doesn’t have to restrictive. A budget doesn’t have to be something that holds you back. A budget is about putting you in a position to achieve the goals that you really want to achieve, like that really is what this whole thing is all about. And that’s exciting.

Tim Baker: Yeah, and I think when you can reframe the mindset of like, you know, thinking of a budget as like, ‘oh, I don’t want to, it’s restrictive,’ to a budget allows you to really achieve the why and you know, to take the trips that you want to and to achieve financial independence when you want and that type of thing. It’s like, when you back it in, when you look at it that way, it becomes dare I say fun. It becomes more — you get more and more momentum when you’re working towards those goals and the budget really is the means to the end of that. And I think just there’s a — it’s almost like the “b” word is a dirty word. But I think it can be a very positive thing, you know, if you really ask those reflective questions of what is the point of all of this? Like what is the point of making this income of paying down these debts? You know? When I talk with clients and I ask those questions, it’s typically not like, oh, I wish I would have funded my Roth IRA. You know, looking back, it’s more like, I wish I would have done these things with my family or I wish I would have ventured out on my own and did something in business or whatever. And I think like, get excited about that. That, to me, is that encouraging thing. Like build a life plan and have the financial plan really support it.

Tim Ulbrich: Yeah, we preach, obviously, principles to build wealth. But our goal is to equally preach what leads to a wealthy life.

Tim Baker: Right.

Tim Ulbrich: And I think that’s so important for us and at least from my viewpoint, that’s what’s so incredible about being a part of this journey is to be able to see people unlock what matters most to them. And we’re getting ready to head into our last session here this afternoon where we’re going to talk with new practitioners all about that concept of, here you are as a new practitioner, you just graduated, you’ve got all these competing priorities. So what? What is this all about? And can we define that so that when we get into the nitty gritty of the financial plan and the budget and all of that, that we’ve got purpose, we’ve got direction, and we know why we’re being intentional. So as we wrap up APhA 2019 here in Seattle, Washington, just another shout out to the American Pharmacists Association, we appreciate their partnership. You know, it’s been so fun seeing the energy of students and new practitioners and others here at the meeting, looking at how can we better the profession, how can we evolve the profession? And we’re excited for what lies ahead in this partnership. We’ve got a webinar coming up in the month of April around home buying. We’ve got new content coming throughout the rest of the year. We’re going to do some more live events, the Day of New Practitioner Life this summer in Washington in July. So for those that are not familiar with the work we’re already doing, Pharmacists.com/YFP. For those that are APhA members, you can log in, access the catalog of webinars and other content that we’ve done. For those that are not a member, you can use the coupon code AYFP19, AYFP19, to get 20% off your membership. So Tim, it’s been a lot of fun.

Tim Baker: Yeah, same. Looking forward to next year.

Tim Ulbrich: Absolutely.

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19 Ways to Make Extra Money as a Pharmacist in 2020

Posted on by yfpadmin

19 ways to make extra money as a pharmacist in 2020

Updated 2/2020

The following post contains affiliate links through which YFP or its team members may receive compensation.

Within the past couple years, many pharmacists have unfortunately experienced pay cuts as multiple community pharmacy chains reduced weekly hours to be considered full-time (such as 32 hours). With this example, considering median pharmacist pay, it would result in about a $25,000 loss per year or more. That’s a big deal for anyone but especially those struggling to pay back pharmacy school loans and other debt.

Not only that, some pharmacists have experienced a job loss because of stores closing or companies downsizing.

Even if you’re fortunate and haven’t had a pay cut or lost a position, you still may be looking for ways to accelerate your financial goals, fund vacations, or just upgrade your lifestyle, etc. Obviously, you can cut and minimize your expenses up to a point, but eventually, you’ll reach a limit. This, combined with the pharmacist salary being relatively fixed in many settings, can lead you to find ways to make extra money as a pharmacist.

While there are a plethora of options to make extra money and many side jobs for pharmacists, some are not practical. Your time is important, right? With a median hourly pay around $60, doing something for less where you trade your time for money may not be the best use of your efforts unless it’s something you’re really passionate about. Other ideas such as starting a blog or podcast with the goal of eventually monetizing can work but they can take years to reach that point and take up a ton of time.

For this post, we are going to focus on some practical ways to earn some extra cash not in a year or five years from now, but this year. While most of these are focused on a pharmacy background, I have included some others as well that are relatively easy to get started and won’t necessarily take a lot of time to execute.

1. Take Extra Shifts

This is probably one of the easiest ways to earn extra money as a pharmacist if it’s available. While not likely for those working in community pharmacy, there may be some opportunities in hospitals and health systems especially when there is a temporary shortage.

One of my friends who recently switched from a community chain to a mail order specialty pharmacy was really concerned about the pay cut he was going to initially experience. However, even though the base salary was lower, he actually made more because of the ample opportunities for overtime.

2. Look for Additional Projects / Assignments

Throughout my pharmacist career, there have been several times when special projects required pharmacist intervention. Typically, these have been large volume medication changes that needed patient education either due to manufacturer backorders or formulary changes secondary to pricing changes. Because of the potential cost savings for these projects, employers can often justify overtime pay.

While these types of opportunities may not be blatantly advertised, I would encourage you to reach out to your supervisor or manager to see if there is anything available.

3. Refinance Student Loans…And Then Do It Again

Save money by paying less in interest each month because of a lower rate. That’s the typical reason why most people with refinance student loans. While saving money is great, why not also get paid. In a single year, my wife and I made $2,700 by refinancing our student loans multiple times. Each time we were able to get a lower interest rate through a different company and each time we were able to get a cash bonus.

Refinance companies will make money from you by the interest you pay each month. Because pharmacists typically carry high debt loads in the six figures, refinance companies will make more money over the course of the loan versus those with much lower student loan balances.

Therefore, as an incentive for you to use a particular company, they will offer a cash bonus or welcome bonus. As mentioned above, you’re not limited to doing this one time. With interest rates always changing, it’s not uncommon for another company to provide a better rate than what you refinanced to the first time.

Now, some big student loan review sites offer nothing to very little to their audience when they refinance in order to take larger commissions. But that’s not our style. We have partnered with several refinance companies that offer bonuses of $300-$800 to you and sometimes higher when they are running promotions. Yes, we receive a commission on each refinanced loan, but we have shifted most of the benefit to you.

If you’re pursuing the Public Service Service Loan Forgiveness (PSLF) program or non-PSLF forgiveness (taxable forgiveness after making income-driven payments for 20-25 years), then refinancing is off the table given it will disqualify you from these programs. If you want to refinance your student loans, check out our current offers below:

Current Student Loan Refinance Offers

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4. Take a Moonlighting Position

A few years ago when I was gung-ho about getting rid of my student loans ASAP I was on a mission to figure out how to bring in extra income. At that time, I was limited to 40 hours per week with my full-time job without any overtime opportunities so I had to look for something else. Eventually, I was hired as a PRN pharmacist at a local hospital where I would work in the evenings and weekends allowing me to bring in anywhere from $500-$2,000 extra per month.

If you’re looking for a moonlighting position, consider inquiring at local hospitals and independent pharmacies. While they may not need a ton of help, even a couple of days a month could bring in a decent side income.

5. Earn another certification/credential

In the world of medicine and particularly pharmacy, there are credentials and certifications for everything now. They can be a great way to promote your additional qualifications and training and could even be required for specific academic and clinical positions. Some employers may actually incentivize you to get these as well either in the form of a one time bonus or even a permanent raise.

For example, federal employees who work for the VA are paid based on their grade and step and will have a GS or General Schedule status. The grade usually pertains to the position and the step is typically determined by initial qualifications at the time employment starts and also the years of service. Therefore the most common way to get to the next level is often just to keep your job.

Depending on the facility, one can also add a step or two by earning a board certification or special credential like a Certified Diabetes Educator (CDE). If your employer will also pay for the prep materials and the exam(s) itself, then that’s a double bonus! This is definitely something you want to ask prospective employers about if you are planning to start your pharmacist career or switching jobs.

Beyond raises, it’s possible that some paid opportunities could come knocking. Since getting his BCOP, my friend and colleague Brandon Dyson, PharmD is semi-regularly called by a consulting firm doing research on a new product to figure out the market and to see if this product would integrate into existing oncology practices.

These are usually a 1-hour consult call, and he usually gets paid $200 or $300 each. Although they are not consistent, he notes that once you get a relationship with a given firm, they start contacting you more.

6. Switch to a Higher Paying Job or One With More Opportunities

Many pharmacists express feeling stuck or burned out in their current job and that there’s no way out. It’s true that it can seem overwhelming to make a transition, especially if you’re someone who doesn’t like to step outside of your comfort zone and feel like you’ve lost some of your clinical skills and knowledge to pursue something else. Although it’s never usually easy, it’s definitely possible and making the move could result in more money or the potential to make more money.

My friend and colleague Alex Barker, PharmD, and the founder of the HappyPharmD, created an entire business around helping pharmacists create inspiring work and lives by primarily assisting them in transitioning to pharmacy and non-pharmacy jobs that they are passionate about. He does this through 1-on-1 coaching and also through his free training.

If you’re someone looking to make a job change, I highly encourage you to check out his free webinar on how to escape burnout, get job offers regularly, and take control of your pharmacist career.

pharmacist salary, side jobs for pharmacists, pharmacist side hustle

7. Start Doing Medical Writing

Brittany Hoffman-Eubanks is a community pharmacist who started her medical writing career about four years ago. Initially, this was a side hustle that brought in a couple thousand dollars per year. It supported her obsession with traveling and need to see everything in the world. Now she is working on making the move to make this her full-time gig.

Medical writing can come in the form of continuing medical education, needs assessments, and research and grant proposals just to name a few.

Although the income from medical writing varies so does the method of compensation. It could be hourly with a huge range of $25-$180/hour, per word typically somewhere around $0.20-0.25 per word, or a flat fee of a couple of hundred dollars to a couple of thousand dollars depending on the scope of the project and writer experience.

If you have stellar writing mechanics and grammar use, and you want to get started with medical writing, Brittany has a few recommendations for you. First, there are several social media groups where you can network and find opportunities and encouragement from other writers. Joining applicable associations such as the American Medical Writers Association is another good idea.

You can also check out episode 126 of the podcast, where Brittany breaks down some other tips for getting started in medical writing.

8. Provide Continuing Education / Other Presentations

If you’re able to deliver an effective message, you could be turning that skill into dollars. Think about how many national, state, and local pharmacy organizations there are. Most of them are paying people to provide CE since it’s something that’s required.

But even beyond pharmacy, many other healthcare providers such as physicians, nurses, physician assistants are also required to maintain their license with ongoing education. Why not reach out and inquire about delivering medication-related programs?

The other great thing is that if you are an expert on a particular topic and have already done the work, you can essentially deliver the same content multiple times across multiple channels enabling you to minimize the time for any prep work.

Beyond continuing education, if you have a great story or possess knowledge on a topic outside of medicine that is needed, people will pay for this as well. Tim Ulbrich, PharmD, the founder of Your Financial Pharmacist, has made around $10,000 in the past two years telling his story about getting out of debt and delivering education on personal finance to pharmacy schools and pharmacy organizations.

9. Start a Consulting Practice

Have you ever thought about starting your own business by providing clinical services? Contrary to what you may have heard, you can get paid for doing MTM and other consulting work. You just have to know the keys to implementing services along with the mechanics of billing and reimbursement. It can be a great opportunity to work more closely with patients and directly impact their health and well-being.

Blair Thielemier, PharmD has set up an entire academy to help pharmacists get their consulting business off the ground. Besides an on-demand online training program, you get access to business coaching and live Q&A calls. You can get $50 off the first month of your membership by using code “YFP50”.

how to make money as a pharmacist

 

10. Complete Comprehensive Medication Reviews (CMRs) through Aspen RxHealth

Aspen RxHealth is a company with an app-based platform that connects pharmacists with patients to perform MTM. The app connects with Medicare plans and identifies patients who are eligible for a Comprehensive Medication Review (CMR).

What’s cool about their technology is you call the patient directly from the app and then perform all of the necessary functions of the CMR directly within the app. There’s no paperwork and once complete, the patient gets a copy of the review and any recommendations you have.

They currently pay $40/CMR and then typically throw in bonuses and incentives to complete a certain amount within a week or particular days. In one recent report, pharmacists were making around $72/hour based on the volume they were able to complete.

I went through the process myself to check it out and see what it was all about. The onboarding process was fairly easy and smooth and my application was approved within a week. They have a Learning Management System with videos to help get you acclimated to the app and the dos and don’ts of performing a CMR.

What I really liked is that you can work whenever you want and complete CMRs when it’s good for you as long as it is within the typical business hours that the company sets. This also includes being able to make calls on Saturdays.

Once I actually got trained and was prepared to make some calls, it was a little disenchanting because I had made about 15 calls and could not get a single person to answer. Apparently, I am not the only one who has had this issue as the last time I checked it takes an average of somewhere around that number before one typically gets a patient on the line. Because this took me about an hour or more just to make calls without any success, I decided not to continue.

However, I have heard from other pharmacists, that they have someone who makes calls for them to either transfer or set up a time to discuss their medications which could reduce a lot of the wasted time for a pharmacist just making calls.

At one time they were only accepting pharmacists registered in Florida, but you can learn more about the platform and opportunities at www.aspenrxhealth.com.

11. Write a book

With the expansion of ebooks and audiobooks and the tools for self-publishing, it has never been easier to write and publish your own book. While the thought of taking something like this on could seem grueling and years to accomplish, the reality is that it doesn’t have to be dissertation and you could take an idea to finished product in a matter of weeks to months.

When I wrote my first book that educates patients about medications for type 2 diabetes, I was able to get the whole project done within 6 months. It was a very short book but this was intentional in order to keep the reader engaged and not overwhelmed with too many details.

While the process for writing and publishing a book is relatively simple, making a meaningful income that not only covers your costs to create but also ongoing is not. Because everyone is doing this now and there are millions of books on Amazon and other marketplaces, the competition is high. Even if you have an awesome idea that is filled with great content, you can’t expect to just release something on Amazon and sit back and watch the royalties come in.

Marketing and the positioning of your book is really the key to actually make it a profitable endeavor. Yes, you need to have great content that people want to read, but you have to have a strategy on how you will get the message out. If you have a big audience through a blog, podcast, social media channel, or another outlet, that really helps and can be a great starting point. If not, you can partner with other influencers and people with large followings.

If the idea of writing a book sounds intriguing but you have no idea what to write about, here are a couple suggestions. For nonfiction, consider medical topics that are important or widespread that would be of value to patients or other medical professionals.

Test prep or study materials for exams and courses are another option. Outside of pharmacy and medicine, consider writing about a very profound story that involved you or someone you know. If you have a very creative and imaginative side, perhaps writing a fictional book could be up your alley. There are many possibilities out there!

Ok, one big tip I have, if you are going to self-publish, is don’t be cheap on creating the cover. People DO judge books by their covers and many people are turned off if they can immediately determine your book is self-published solely based on the cover. Spend good money on a quality cover!

99 Designs has a great service where multiple designers compete to get you the best cover. A couple of great books to help you get started with the writing and publishing process are Authority by Nathan Barry and Book Launch by Chandler Bolt. If you are interested in doing an audiobook, I would recommend reaching out to Tony Guerra, PharmD who has published and helped other pharmacists publish many books.

12. Teach a course / Become an adjunct professor

Brandon Dyson, the co-founder of TL;DR Pharmacy, author of 100 Strong Residency Interview Questions, Answers, and Rationales, and wizard of all things pharmacy, has been teaching a general pharmacology course for the past five years through Georgetown University School of Nursing.

Currently, the course is offered three times a year and he gets paid for each one, bringing in $4,000 each or $12,000 per year. Not bad for a side hustle, right? The best part is the course is online so he doesn’t have to worry about traveling and does all the teaching and mentoring from home.

If you enjoy teaching and are able to deliver great content in an engaging and professional way, there may be some great opportunities for you. Besides checking out the major pharmacy and non-pharmacy job sites, you could consider reaching out to a local pharmacy school.

Offering to do a free lecture or learning session can be a great way to show off your skills and could result in future paid opportunities. Also, don’t restrict yourself to just pharmacy school. Like Brandon, you should also consider other healthcare professionals like nurses, physicians, and physician assistants who are required to learn pharmacy topics.

13. Serve on an advisory board

An advisory board provides strategic advice to a company or organization and unlike a board of directors, they typically do not have any voting rights or decision-making powers.

Pharmaceutical companies and other healthcare organizations often have advisory boards and there are typically opportunities for pharmacists to get a spot. You often need to be an expert in a particular area or have the experience that can demonstrate your value.

Diana Isaacs is a pharmacist who is an expert in the diabetes arena and has often been asked to serve on advisory boards to provide her knowledge and insight. While the compensation varies, she has typically earned a couple of hundred dollars/hour in exchange for her time. You can learn more about her experience with this in episode 137 of the podcast.

14. Become an Expert Witness

In episode 112 of the podcast, Brent Rollins shared his story about becoming a pharmacist expert witness for law firms primarily focusing on marketing cases in addition to standards of care cases. He was able to get some experience while he was in school when his professor asked for assistance on a big case, he got his start and continued to receive casework.

Many criminal and civil cases involve medications and toxicology and quality of care/negligence where pharmacists can be positioned well to provide their expertise and testimony. While reports vary on compensation, according to a report by SEAK, an expert witness directory company, medical experts earn on average $350/hour.

You can serve as a witness by providing documentation or reports, answering questions by attorneys, depositions, and expert testimony.

Having a colleague as Brent did, to get an in is certainly a good way to get started but also consider your network of friends and family if they are attorneys or know attorneys who frequently take on cases that use pharmacists or other medical experts.

You can also check out some of the big expert witness directory companies/sites such as SEAK , The Expert Insitute, HGExperts. You can also get plugged in with the American Society for Pharmacy Law. which is a nonprofit organization that organizations of attorneys, pharmacists, pharmacist-attorneys and students of pharmacy or law who are interested in the law.

15. Monetize a non-pharmacy skill

In 2019, I made about $3,000 from building websites. Through my experience at Your Financial Pharmacist, I picked up the skill of basic web design and although I’m not an expert by any means, knowledge of the foundation has allowed me to monetize it. Plus, it’s really fun and something I truly enjoy so it doesn’t even feel like real work to me.

Through my podcast interviews with pharmacists who have unique side hustles, it’s evident how talented and creative those in our profession are. What skill or knowledge outside of pharmacy do you have? Is there something you are passionate about that can either help solve other people’s problems or bring incredible value?

Some ideas include photography and video editing, graphic design, IT, translation, voice production, social media management, and marketing. You can check out sites like www.upwork.com and see if there are any freelancing jobs where you have the skills to jump in.

In 2020 I interviewed a pharmacist named Stephanie Roberts (episode coming soon) who had a passion for creating art and did this just as a hobby for a while until one day she had the idea of possibly selling some of her pieces. To her surprise, her pill petri dishes and trays using epoxy resin have been a huge hit and continue to sell out all the time.

She has become so successful that she now makes over six figures with her art alone and pharmacy has become her side hustle! You can see some of her work below.

pharmacist side job, pharmacist career, how to make more money as a pharmacist

16. Switch to a high yield savings account or money market account

When you consider inflation, money sitting in regular checking or savings accounts can lose a lot of purchasing power over time given most interest rates are essentially next to nothing.

Sure you avoid market risk or the risk of keeping cash in other investments but there are other options that are less risky and can yield at least some return. These include high yield savings accounts and money market accounts.

If you are sitting on a bunch of cash that’s for an emergency or you are saving for a big purchase, these can be good options can earn a little extra money. Now if your savings amount is relatively low and you aren’t adding anything to it then it may not be anything substantial, but remember it’s better than 0.001%.

I recently did a review of my experience with CIT Bank which offers competitive interest rates from 0.85-1.40% for their high yield savings and money market accounts.

17. Become an Airbnb host

Tim Baker CFP®, team member on the Your Financial Pharmacist team loves to take his family on vacations around the country and the world. But frequent trips can get expensive. That’s one of the reasons why he and his wife became an Airbnb host. In just 1.5 years they have made $10,000!

Hilary Blackburn is a pharmacist in the Nashville area who rents out her primary residence about 14 times per year and has been able to earn about $8,000 per year or more. You can learn more about how she’s making it happen on episode 121 of the podcast.

If you’re not familiar with Airbnb, essentially it is an alternative way to lodge instead of the traditional hotel. As an Airbnb host, you list a property you own or rent on their platform for guests to book and stay. Airbnb only takes 3% of the total reservation so you keep most of the booking fee.

Some people host their primary residence when they are out of town or have additional rental property or space that they list. For some, the thought of having strangers stay in your house even if you’re not there may seem pretty overwhelming and concerning.

Sure there are some potential issues that could occur such as theft or vandalism but you have control over who is able to stay based on reviews and other factors on the Airbnb platform. Plus, as a host, you get access to up to $1 million of property damage protection if you ever need it.

If you want to find out how much you could earn by listing your space, you can check out the Airbnb estimator below.

18. Buy a rental property / House Hack

Many people have built entire businesses around managing rental property. On one of our most popular podcast episodes, Carrie Calton, PharmD discussed how she achieved financial freedom by acquiring 18 rental properties! You don’t need a ton of cash in order to purchase a property as you can typically get approved with even a low down payment. However, that amount will be dependent on your risk tolerance and the equity you want to start with.

It may seem enticing to simply look at the potential mortgage payments vs. how much rent you could collect for a particular property. However, when you are doing an analysis to determine if the property would be cash flow positive and provide another stream of income, you have to consider ALL of the costs and maintenance involved such as insurance, HOA, taxes, repairs, capital expenditures, etc.

Along the lines of buying a rental property is house hacking. This usually involves buying a property with a low percentage down (generally 1, 3 or 5%), living there for a year (required), and renting out the other units or rooms. For example, if you purchase a single-family home, then you would rent out the other bedrooms.

Or if you owned a duplex or condo with multiple units, you can live in one and rent the others. Depending on the cash flow, you may be able to cover the mortgage payment and even make a profit. Check out episode 130 for more information on this.

Bigger Pockets is a great resource to get started and learn more about real estate and rental properties. Besides their podcast and online resources, they also have an awesome book: The Book on Rental Property Investing by Brandon Turner.

19. List your car on Turo

What happens to your car when you go on trips or the days when you don’t need it? It probably just sits in your garage or driveaway right? But what if your car could make you money? With Turo, you can!

Often referred to as the Airbnb of vehicles Turo is an alternative to a traditional car rental service. From the user standpoint, through their platform, you enter the date and location you are looking to use a vehicle, choose what you want, and book. You can pick it up or even have it delivered to you.

turo

So how much can you earn? It varies from $40/day up to several hundred dollars per day depending on if you are handing the keys over to a Toyota Corolla or Mercedes E-class. Here’s an example based on Turo’s calculator. If you have 2018 Tesla Model X and live in the Miami area, you could earn approximately $1,724 or $180/day if your car was booked an average of 9.6 days per month. Not bad right?

You’ll earn 65% to 85% of the trip price, depending on the vehicle protection package you choose but you can also choose to just use your own commercial insurance which could get you a bigger cut.

Conclusion – How to Make More Money as a Pharmacist

There are many practical ways to make extra money as a pharmacist. Some are directly related to the profession while other opportunities exist by capitalizing on other skills and interests you have. Some need relatively little time and effort (i.e. refinance student loans) whereas others may require additional training and several hours of work.

With the pharmacist salary being relatively fixed, having a side hustle and earning additional streams of income can help you reach your financial goals faster and help pay back pharmacy school loans. It can also give you an added layer of protection from relying on one source of income, which is important as the profession continues to undergo changes and technology and innovation are disrupting traditional roles and positions.

Another Way to Find Side Jobs for Pharmacists or a Pharmacist Side Hustle

If you want some additional inspiration I would recommend checking out the side hustle series where I interview pharmacists who have businesses and gigs that bring in additional monthly income.

refinance student loans, earnest student loan refinance bonus, credible student loan refinance bonus, student loan refinance bonus, student loan refinance offers

 

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YFP 092: Creating an Indispensable Pharmacy Career

Posted on by yfpadmin

Becoming an Indispensable Pharmacist

On this episode of the Your Financial Pharmacist podcast, Tim Church welcomes Alex Barker back to the show to share some of the highlights of his recent career transition out of pharmacy practice, some tips for pharmacists who are struggling in their careers, and how to become an indispensable pharmacist. Alex also discusses the release of his new book Indispensable: The Prescription for a Fulfilling Pharmacy Career.

About Today’s Guest

Alex Barker is a pharmacist, entrepreneur, author, and creator of thehappypharmd.com and the Happy PharmD Summit.

Summary

On this episode, Alex Barker dives into how and why he transitioned from a full-time pharmacy career to a full-time hustle and about his passion in helping pharmacists be happy in their careers.

After a one year residency, Alex got a job in an ambulatory care setting. He liked his work but wasn’t fulfilled, so he started doing different jobs on the side. Eventually, these different side hustles led him to launching The Happy PharmD in 2017. The Happy PharmD helps pharmacists start businesses or find and transition into a new career.

In December 2016, Alex had been working in his side hustles for 3 or 4 years and felt like he should’ve been farther along with his earnings. He realized he was unhappy with his full-time work. He decided he was going to focus all of his energy on the Happy PharmD after his wife asked him if he was going to regret spending more time in his full-time pharmacy career in the future. In October 2017, Alex went all in and made the Happy PharmD his main gig.

Alex recently published a book Indispensable: The Prescription for a Fulfilling Pharmacy Career. Indispensable is a guide that is meant to help pharmacists if they are feeling burned out or lost in their careers. The book is broken into four sections which cover the current reality of the pharmacy profession, options of other careers, strategizing your career transition, and indispensable career choices. The book is geared to help pharmacists who want more from their career or lives.

Mentioned on the Show

Episode Transcript

Tim Church: Alex, thank you so much for being on the show again.

Alex Barker: Hey, you know I love being here.

Tim Church: I think you’re creating the record for most times on the YFP show with this being No. 3 as you were back on Episode 038 and all the way back in Episode 007. But a lot has changed since those episodes, and just the other day, I was looking at my Skype contacts at work, and it said, “Alex Barker, offline for 194 days.” And I thought to myself, offline as clinical pharmacy specialist, online as entrepreneur.

Alex Barker: Yeah, that’s a good assessment. By the way, call Guinness Book of World Records ‘cause I want to hold that record down, baby.

Tim Church: I don’t know. We might have had a couple people that have been on twice, but I guess I don’t really count since I’m on the team. So I’ve just kind of made appearances here and there. But anyway, for those who don’t know your full career story, can you just talk a little bit about your career path and really how you turned your side hustle into your full hustle?

Alex Barker: Sure. So the very short story is I started off my career, I did a one-year residency, got a job in an am-care setting. And I liked my work, but I wasn’t fully fulfilled by my work and the creativity that I wanted to see happen in my work. So I started things on the side. I sold everything from baby strollers on eBay to making stickers to building websites, doing marketing for small businesses, and lots of other failed projects. And that all culminated into the Happy PharmD, which I launched in January of 2017, where I made it my mission to help pharmacists either start businesses or get into new careers. And now, it is at this recording, Feb. 2019, I’ve been doing that now for two years. And recently left my job as a clinical pharmacy specialist to do that work full-time. So that’s kind of the very short version of it all.

Tim Church: Yeah, so I want to dig into that a little bit, Alex, because for everybody listening, you leaving your full-time, secure, clinical pharmacy specialist job into something in the entrepreneurial space and really taking ownership over your income and providing for your family, I mean, that’s not a small decision to make.

Alex Barker: No, it’s terrifying. I’m still scared.

Tim Church: But I want you to talk about that a little bit. How did you come to that decision to where you say, “You know what? I’m going to do this full-time. I’m going to leave that security blanket that I have in place, even though I have those great benefits, the insurance, the steady, predictable income, and I’m really going to go after the Happy PharmD full-time” in addition to your other projects that you have?

Alex Barker: You know, I think it’s all psychological and fear-based. I don’t think anyone makes a decision until the pain of not making a decision is greater than the reward of just not making the decision or being lazy like I am so often at times. I would say in December of 2016, I had been hustling for about 3-4 years, and I loved it. But I felt like I should have been farther. I felt like I should be doing this kind of stuff all the time, either in a full-time career in academia or I should be a full-time entrepreneur. I was just very unhappy with work, my conditions, I wasn’t doing everything that I wanted to do, I struggled with my teammates. And so I made a very difficult decision, one which I talk about in my book, “Indispensable,” and it was to just focus on one thing – to put everything else aside and say, “OK. I’m going to focus all of my attention and effort on the Happy PharmD and focus on helping as many people as I can.” And that really helped me put all of my energy into one basket to make it so that this thing could be successful and that I could grow a team, and I could hire people who could help me do the same work that I’m doing and kind of multiply myself. And probably the thing that really scared me the most was when I started seeing success with this business, and I said to my wife, “OK, it’s do or die. I think we need to decide, is this what the future of my career is? Or should we — I don’t know — choose something else? Or should I be like full-time worker for the next 10 years, and go with a FIRE path, a Financially Independent Retire Early? Or should I put everything I have into the business?” And she asked me a powerful question. I don’t think I’ve ever shared this story, but she asked me, “Are you going to regret spending more time in the job where you don’t feel really fulfilled or happy at the end of the day with what you do?” And that really stuck with me, and it made me think about where I wanted to go with career and what I wanted to do and the impact. And I thought about academia, I thought about this business. And I finally made the decision to pretend as if my business was my full-time job. Pretend as if it was supplying all of our income needs, and so in like October of 2017, I decided to pretend as if my day job and income did not exist, and we were just pretending as if to live off of our business. That really helped quench my fear because I was paralyzed by the idea of moving full-time into a business. The idea of living off of my business was terrifying to me because, you know, my efforts yielded results. And it was no longer just come to work and get paid, do your job and get money. This business was more like, hey, you’ve got to show up, you have to help people, you have to hustle. And only then will you get paid. Only then will you see results. That was really scary.

Tim Church: So what was the hardest part of the transition? Do you think it was the financial aspects or was it a combination of a couple things?

Alex Barker: Yeah, definitely a combination. But I would say the fear of losing out on money is the greatest thing. Personally, I believe most pharmacists, when thinking about their careers, thinking about transitioning, I think we all struggle with our golden handcuff syndrome. We all feel like we can’t take a pay cut or we can’t, you know, get into something that may be less money in order to feel happier with a job. But I found that when people actually transition into something they enjoy doing, they usually have more freedom, more drive, more desire. And for those that are entrepreneurial, they find that pathway to ultimately create extra income. For me, I was very scared to put myself in a no-way-of-escape situation. You know? Putting myself in the corner and saying, “OK, Alex, hey, listen up. You better hustle. You better perform because if you don’t, you can’t blame yourself or other people” — I’m sorry — “you can’t blame other people for what ends up happening, whatever it is.” I think we as pharmacists, we don’t want things to fail. I think it’s in our blood. We’re trained from the very beginning that if we fail, patients die, someone gets hurt. And if that’s the case, well then that applies to all sorts of other things in our lives. And we, when we try something, we don’t want it to fail. I didn’t want my things to fail because if it failed, that means I am a failure. And so I found myself in years prior like focusing my energy on multiple different projects, different side hustles, different things, different ideas. And because I did that, I ultimately didn’t see a lot of success in one single area or one thing. And I told myself, “Well, you know what, I’m going to try this other thing. I’m going to try this other project or other idea.” Instead of giving it my all, my everything, and giving myself a deadline of if I don’t perform, if I don’t meet this end goal by this deadline, then I will give up. I will try something else because what I did didn’t work. And putting myself on the ropes like that was a lot of pressure, but it definitely helped me overcome fears of failure and fears about money that I had.

Tim Church: How much has failure played a role in your entrepreneurial journey?

Alex Barker: It’s probably part of the job description. If you want to say like “role.” I’m constantly failing. I’m constantly trying new ideas and finding out that they don’t always work. I hire people, and I find out that, hey, they’re not showing up, they’re not doing what I’m asking them to do. And that’s a struggle. I’m also finding out that I suck at a lot of different things. As you know, Tim. You know that I’m not good at my website. I’m not good at marketing or designing things. And relying on other people sometimes is tough because — actually, you and I, Tim, have talked about this with my book. I wanted my book to come out like the summer of last year.

Tim Church: Yeah, I’ve been waiting on that.

Alex Barker: And I haven’t let it come out because I wanted to do a very good job with launching it, with producing it, making sure it’s very high quality, great content, research-based information. And I found that that takes time. I can’t do a crappy job with it, and be proud of what I would create. And so it’s taken time. And that’s — I considered that for awhile a failure, you know? But it’s really just a part of the job, unfortunately. Like you just try things, and if it doesn’t work out, you keep moving.

Tim Church: Yeah, I love the book by John Maxwell called “Failing Forward.” And he has a really powerful quote in there, but he basically says that the difference between average people and achieving people is their perception of and response to failure. And I’ve always kind of gone forward with that in mind that that is part of the job. And in order to excel and to get to the next level, you have to almost expect that it’s going to happen. But it’s really about that response and how you’re going to take that in order to move forward, basically.

Alex Barker: Imagine if they taught that in like the pharmacy curriculum. Like.

Tim Church: It’s the antithesis of the pharmacy curriculum, right?

Alex Barker: It has to be somehow included, I suppose in like an entrepreneurial thing. But I’m sure at the time, most students are not interested in that because all they think of entrepreneurism is dependence. But yeah, it’s scary, right? I’m pretty sure he talks about Colonel Sanders in that book, right?

Tim Church: He does. Yeah, it’s a great story because it wasn’t until I think his mid- or late 60’s when he actually got a deal and started becoming big because he kept getting rejection, rejection, rejection.

Alex Barker: Yeah, I think the actual story is he was rejected 1,000 times by people. There may be an additional zero on there, but I think it’s 1,000 times.

Tim Church: Yeah. It’s something like that. It’s a really cool story, so if you haven’t read that book, “Failing Forward,” by John Maxwell, I highly recommend it. One more question for you in terms of your journey, and then I want to talk a little bit about the profession and your book. But how much has being debt-free allowed you and enabled you to make this transition?

Alex Barker: Oh, it’s huge.

Tim Church: I guess the better question is how important has that been?

Alex Barker: Oh, it’s been the thing to set us free. You could argue that — I guess it would just have slowed me down if I did have debt, right? Because our debt payments, my student loans and my house, the major debts we had, you know, it’s a big chunk of money every month, right? So I think by not having them, I could probably predict that we got away from my job earlier than what we did. But because of it, we are immensely free. We own our house, we have no college loans. We can — this summer, Tim, I’m visiting you this summer in a camper van. We’re going around the entire summer and living the van life.

Tim Church: At Disney, right?

Alex Barker: Yeah, actually, we are going to Disney. Yeah. And if it weren’t for being debt-free, I don’t believe we could really do that this soon. So it’s allowing us to live a lot freer with our lifestyle and our money choices.

Tim Church: That’s so cool. And I love your story. You know, and I know you talk about that in the book too is, you know, a lot of people have different mentalities around debt, and it has to do with basically where you see yourself and where you want to position yourself. And you basically came out and said that, you know, you would rather be debt-free now to give yourself more options and opportunities versus staying in a position you didn’t necessarily like but able to maybe retire a little bit earlier than you would otherwise. So that was a pretty cool story that you talked about. And I think that’s what’s so important is it’s not always black-and-white, and it really has to do with your goals and your aspirations and where you’re trying to get to.

Alex Barker: Totally. Yeah. I cannot argue with that.

Tim Church: Well, let’s switch gears a little bit. It’s basically an understatement that there’s a lot of negativity in our profession. Right?

Alex Barker: Yeah.

Tim Church: There’s many pharmacists out there feeling trapped, burned out, stressed out, unfulfilled. What are your thoughts on this in 2019?

Alex Barker: Oh, man. Well…

Tim Church: Keep in mind we only have like 20 or 30 minutes.

Alex Barker: I’ll try to be as brief as I can then. I’ve made it our company’s mission this year to help 500 pharmacists transition into new jobs. And the reason for it is because I’m very passionate about helping pharmacists figure out what they’re great at, where are our — healthcare’s greatest needs, where do we need to put people to fix these problems that we have and people who are curious and are passionate about it? And to put all of this in perspective, I recently wrote an article about I believe it was like four or five things that are stressing pharmacists out or burning them out. And I received an email from a widow of a pharmacist, and I actually put her story in my book. And she shares that unfortunately, her husband died early, I believe in his young 50’s, if I recall correctly. And she was told by another pharmacist that you cannot convince me that work did not kill him. And that has — when she sent that to me, that’s really stuck with me. It kind of emotionally moves me. When I get some hater email or I get discouraged about my work, I often look at this email and think about the people out there who are just like him, who are struggling in their jobs, they’re really not loving it, but they convince themselves to be forced to work in these conditions. And that gets me excited to help them, it gets me a little bit scared about the challenges that are ahead of me to face that problem, but I don’t think anyone should be making six figures and be miserable. I think that’s ridiculous. I really think it’s with the way things are in the market, with the way things are in this world today, I don’t believe there’s any reason why we should be miserable in our jobs. But I think we lie to ourselves often and convince ourselves that no one wants us, I don’t have enough experience, I don’t have any desirable traits or qualities or values, and so because of that, I’m not going to try and I’m just going to be burnt out. I’m going to be miserable in my job, I’m going to go to work, get my paycheck, go home and try to be happy the rest of the time during my life. And I want to fix that. So that’s what I think about burnout and all of that nastiness in our profession.

Tim Church: So over the past year and a half, you’ve been working on your book that’s finally out. And I’m really excited because I was privy to some of the initial work and behind-the-scenes work and got the audio author’s cut early. So big announcement: It’s finally out. “Indispensable: The Prescription for a Fulfilling Pharmacy Career.” Alex, how does it feel to be done with this?

Alex Barker: Hot dog. It feels good. Some crazy stats on this that a close friend of mine let me know. 81% of people, Americans, want to write a book. Less than 1% actually do. And of the 1% that do, 30% actually publish it. So it’s crazy hard. It is not easy to write and publish a book. I did not think it would take me like 17 months to do this, but we’re finally here. It’s ready, I put a lot of time, energy, tears — no blood, but plenty of sweat, and I’m very excited to get this in the hands of people.

Tim Church: I’m really excited for you because it definitely packs a ton of value. And I’m not just saying that because I’m an Alex Barker fan or we’re friends or colleagues. But it actually is just jam-packed with so much great content. So besides drones delivering pad thai, becoming a guitar master, your poor Jenga skills in Dungeons and Dragons, what is this book all about?

Alex Barker: You’ve read the book. I love pad thai. This book is something that I wish I had when I was first entering the profession. It’s a book, it’s a guide, meant to help you if you feel like you’re burned out, to help you understand what your problem is with your career and how to fix it, how to solve it, to go about it in a sustainable way that leads you towards an indispensable career. Most pharmacists that I’ve spoken to in the last two years feel dispensable. No one’s ever said that to me, but that’s how they feel. They’re worried about being let go. They’re not fulfilled by their work. They feel like a new grad could come in and replace them totally, and they wouldn’t care. And that, to me, is a crime that I guess no real one person is guilty of. But in order to create something that’s fulfilling, you’ve got to find out what makes you indispensable. And I guess you’ve got to read the book to find out what that is. Wow, I didn’t think that would come out of me.

Tim Church: Yeah, yeah. Wow. Well, it’s broken down into four different sections, right?

Alex Barker: Mhm.

Tim Church: So can you just briefly break those down in terms of what you have in those different sections?

Alex Barker: Yes. I totally can, Tim. Perfect memory. Tell you all of the parts of my book. So Part One is all about looking at your current reality in the pharmacy career and seeing the different problems that we’re facing, whether it’s the current job market, whether you’re struggling with burnout and what your options are. And Part Two dives more into that, into your options and discovering the where and how you can make the change, whether it’s a new field in pharmacy or even out of the profession. On a side note, we work with a lot of different pharmacists. The vast majority of them, we help move into just a new field of pharmacy. But some do transition completely out of pharmacy. We’ve helped people get into real estate, financing, insurance, financial advising, internet marketing, all sorts of stuff. So it doesn’t, you know, it doesn’t have to be pharmacy, if that’s where you think you’re at. Part Three dives into the messy middle and strategizing your way into your career transition. And finally, Part Four is all about making indispensable choices with your career, choosing to focus on relationships and creating value.

Tim Church: There it is. All the sections. I want to talk a little bit about one of those where you discuss this idea of passion and work and a lot of the misconceptions behind that. Could you give the audience just a little sample?

Alex Barker: So I think a lot of people feel like they like their job, they want to help people, but they just don’t know what their passion is or what they’re passionate about. I, when I was a little kid, I was passionate about Legos and WE wrestling, and I was into comedy and making videos. But the thing that’s always been true about passions is that passions change. And I think I share a story about a fellow podcaster, Seth DePascal, and his journey about getting into retail and hospital and eventually, finding his passion in compounding. And he never knew he was passionate about compounding. He never thought a day in his life about compounding as a career path. But really, what he found is that following his passion first would have never come for him should he choose that path. And I think I also reference a story about Steve Jobs, founder of Apple, if he would have followed his passion, he would be like a Zen master out in China. He wouldn’t be leading Apple. He would be teaching people how to achieve Zen. So following passion isn’t exactly the thing to do first when figuring out your career. Passion is a good thing, but it’s usually developed over time. You get more interested in it. For example, I’ll give you a great example. So in my own pursuit of choosing the Happy PharmD, I’ve become crazy interested in labor economics. Sounds super boring, right, Tim?
Tim Church: It does.

Alex Barker: Yeah. You don’t have to lie. It is super boring to anyone else, but I’m amazingly interested in it because it’s revealing all sorts of economical truths about our job market. It’s really opened my eyes to things that most people aren’t talking about. And I’m able to on my blog. In the same way, what I propose we do is follow our curiosities and interests in pharmacy. And if you don’t know what those are, well, it’s time to ask yourself some questions and force yourself to get re-interested into pharmacy. Can I share a quick story?

Tim Church: Yeah, go for it.

Alex Barker: So I’m working with this guy named James. He’s out of St. Louis. And he was struggling in his career. He wasn’t enjoying his work, he was working in an institution, hospital pharmacy, and we were working together, trying to figure out, OK, well, what is next? And we ruled out all of the things that he was good at and different career paths. And then we came on an interesting idea. And he said, “You know, if I could quit my job and didn’t have to work at all, I would probably go volunteer for some sort of opioid treatment center or something that deals with the opioid crisis.” And that has led him down a very interesting path where he’s now very involved in different opioid committees in the local region. But he’s also now more involved in his work doing opioid-type work and committee work and different processes and creating policies. And his work now has become a lot more interesting to him, and he’s actually getting — well, depending on when this is released, I would be able to say, you know, I think he’s actually in talks with other people now to join either a new company or new projects or new things that involve straight-up opioids. So the point is sometimes, we just have to get curious or go back to when we were first in pharmacy school and think about, well, what were the things that really made me curious or I wanted to learn more about to inform a decision now about where you want to take your career next.

Tim Church: Yeah, I really like that concept because I think that’s probably where a lot of people even will transition out of pharmacy because that curiosity they have into even other types of work that provides value in the marketplace. And you talk a lot about that in that particular section, which is really cool. So Alex, who do you think this book is meant for? Is it for everybody in the pharmacy profession? Specific groups?

Alex Barker: Not at all. No. This is definitely not for everyone because some people have great, indispensable careers. They’re already probably doing many of the things that I recommend. I’m sure that the book would be a great supplement, maybe some new ideas about how they could achieve more with what they want with their career, but this book is really for the pharmacist who wants more from their career or their lives. It’s for the person who says, “You know, this job is OK. But I’m not doing everything that I think I was meant to do with my career or my job. It’s for the pharmacist who says things like, you know, it’s just a j-o-b. It’s just a job. Or if they feel burnt out. I didn’t write it for the elite. I didn’t want to write it to them. I wanted to write it to, truthfully, me when I was burnt out, when I was feeling stressed out about my job. And I was worried about what I was doing with my career and where I would end up. I was very scared a long time ago. And I wrote it to me and to the same people who are struggling with that same dilemma with their career and wondering, did I make a right choice pursuing this? Those are scary thoughts that you can’t really voice online. Like you can’t post something like that on LinkedIn or on Facebook and say, I don’t know what I’m doing. You can really only say it to maybe your close colleagues that you work with because everyone else feels the same way. Or you can say it to someone in passing at a party and just say, “I just don’t like what I do. I do not –” and you hear this all the time. And when I tell people what I do outside of pharmacy circles, they usually tell me, “Oh yeah, I know a pharmacist. They don’t seem happy.” Which is not good. I mean, that’s not good that that’s the default for our profession, right? Not at all. Yeah, I think we have a branding problem honestly. I mean, everyone that — the face of pharmacy right now is retail and community. And you know, if you — I challenge anyone to like go into a random retail store and just look at the faces of people. I do this often, actually. I’ll just go in and check things out and see how people are doing behind the counter. And they look stressed. They look rushed. Every once in awhile, I’ll see a smile, which is encouraging to me. You know? And I don’t want to make it seem like certain fields of pharmacy are always bad. It’s totally not true. There’s lots of happy people with fulfilling careers in every practice, I think, even retail, even corporate.And that’s great. They should be there. We need those people there. But a lot of people are mismatched. They’re not placed in the right position to really thrive, and their lives and their stress are usually evidence of that.

Tim Church: So what would you say, Alex, what’s the one thing that you want people to walk away with after they’ve read the book?

Alex Barker: Oh, man. Take action, baby. Hot dog. If you read this book, and you don’t take any different action, then like I would feel bad. I would want to refund you if you bought the book. You’ve got to take a different action. Everyone’s heard this now, but the definition of insanity is doing the same thing over and over and expecting different results. It’s time to do things differently. It’s time to not just be applying to jobs on job boards because you’re competing with dozens of other pharmacists who likely look better than you on paper. It’s time to do something different, get more involved with your associations to take action to do something different because — what’s the phrase? What got you here won’t get you there. So even if, you know, you don’t read my book, that’s fine. What I want you to come away with, even from this podcast, is that, you know, you’ve got to create value for others. You’ve got to build relationships. And to create an indispensable career, that means you’ve got to take some proactive action, my friend.

Tim Church: So Alex, where did the inspiration come from to write this book?

Alex Barker: The pharmacists I work with. The people, when we first talk like over the phone and we’re trying to figure out their careers, a thing I often hear all the time is that I’ve got too many negatives going for me. I don’t have a PharmD. I don’t have any experience outside of community. I haven’t done anything great with my career. And they have all these excuses, and I’ve worked with people who have thought that they would never be hired by the companies that they were hired by. And seeing that transformation, seeing people go through that process and being confident in their ability to really perform at the highest level of pharmacy, that has been my inspiration for writing the book, for doing a lot of the work with clients, and truthfully, hiring more people to help with this process because if I’m going to help 500 people, I can’t do it alone. I’ve got to get other people on this train.

Tim Church: That’s awesome. I know that you’ve shared a lot of these stories within the book, which are really cool to see how you’ve helped with those transformations of people who are really struggling, really feeling that stress that you were once in. So I think that’s a really cool story. Another cool story is the charity aspect behind the book. And I was hoping that you would share a little bit about that.

Alex Barker: Yeah. So one of the things I decided about halfway through this process is that I wanted to use 100% of the profits of this book to go straight to charity. And there’s one charity that I’m very passionate about, and it’s helping families fund adoptions. I’m wanting to raise hopefully $30,000 this year, 2019, to give to a family to afford adoption. I share a little bit of my own story in the book, but I’ve been profoundly affected by adoption. My dad, the man who I call Dad is not really my true father. He’s my stepdad. But because of him, him coming into my life and taking me as my own son, has — I wouldn’t be on this podcast if it wasn’t for him, for him showing me what it means to be a man, what it means to be a loving husband and a great father. And that really moves me to want to help other families afford adoption, which is stupid how much it costs. $30,000, are you kidding me? No one can afford something like that. And so I want to help families be able to do that because the average adoption right now costs $30,000. And so all of the proceeds of this book are going to go straight to this fund. And from actually here on forward, every year, I plan on donating continuously to families to adopt children who are not wanted. And that, to me, like that’s the legacy, I hope, of this business is to bring families whole. That’s something I’m very proud about.

Tim Church: Such a cool story, Alex. And I appreciate you sharing that. So I highly recommend that you go out there and you get the book, “Indispensable: The Prescription for a Fulfilling Pharmacy Career,” especially if you’re someone that feels stressed or burned out and want to explore other strategies and opportunities. You can get the book on Amazon as an audiobook, paperback or a hard cover. Alex, what’s the best way for someone to reach out to you if they want to learn more about you and what you do?

Alex Barker: Best place is The Happy PharmD, that’s my home base, where I live. We’ve got lots of great information on there about career development, how to grow your career, how to get into a new job, job transitions. And we have lots of resources and some other courses on there. We also have a free training webinar on there about how pharmacists can transition into a new career path. So I highly recommend you check it out. And alternatively, you can also shoot me a message on LinkedIn.

Tim Church: Alex, thanks again for coming on the show, talking about your book and sharing your story.

Alex Barker: Thanks for having me, Tim. I had a blast.

Tim Church: Hey guys, just a reminder: If you want to get your free copy of “Indispensable,” just write us an honest review in iTunes for the Your Financial Pharmacist podcast. And then send us a screenshot to [email protected]. And do that by Sunday, March 24 for your chance to win.

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Why Most Pharmacists Should Do a Backdoor Roth IRA

Posted on by yfpadmin

Why Most Pharmacists Should Do a Backdoor Roth IRA

*Disclaimer – The following post is not tax or investment advice. It is meant to provide education on the subject matter covered and the ultimate decision to make any changes should be determined only by you and your designated financial professional(s).

Invest for retirement in tax-favored accounts. It’s one of the core financial recommendations you’re probably familiar with. While the 401(k), 403(b), or TSP is one of the best ways to do this, your contributions are limited to $19,500/year (for 2020). And if you’re someone looking to build a stellar retirement portfolio, that may not be enough to hit your goals.

As a pharmacist, you may have been told you make too much money to contribute to one of the best retirement accounts available, the Roth IRA. While that may be true, you may not have to settle for a traditional IRA or park your cash in a taxable brokerage account just yet.

That’s because there’s a legit strategy to work around this known as the “backdoor Roth IRA.”

While this retirement saving strategy does require a few extra steps, the ability to invest thousands of dollars with tax-free withdrawals can be well worth the effort. Plus, Roth IRAs have some other awesome benefits that are not available with traditional contributions.

When you’re eligible to take distributions at age 59 ½, you won’t owe any taxes on that growth.

Also, unlike a traditional IRA, there is no required minimum distribution and at any point you can withdraw any of your contributions you’ve made if needed tax free. Plus, if you have held a Roth IRA for at least 5 years, you can make early withdrawals on the earnings without penalty for a first time home purchase up to $10,000.

*Please note that the 5 year rule is different for a Roth conversion which allows you to move funds from your traditional IRA and place them in your Roth IRA. The 5 year holding period restarts for each conversion and any withdrawals during this time frame will result in a 10% early withdrawal penalty if you are under 59 ½.

Let’s go through why backdoor Roth IRA can be a great option and then how to actually do it.

backdoor roth ira, roth ira

The Issue with a Traditional IRA

IRAs or Individual Retirement Arrangements, are retirement accounts available to anyone who earns an income in addition to non-working spouses (covered later). No matter what company you work for or retirement plan they offer, you have the opportunity to contribute to an IRA. This is something you set up completely outside of work and can be done in addition to your 401(k).

Like your 401(k), IRAs also come in two flavors: traditional and Roth.

Contributions to traditional IRAs can lower your taxable income today with the amount growing tax-deferred resulting in you paying taxes at the time of withdrawal. However, because of the income limits to get the deduction, most pharmacists will never get this benefit.

Now the rules get a little tricky here because these limits are determined by whether you and your spouse have access to a retirement plan at work. But assuming you do, the ability to deduct traditional IRA contributions phases out completely at $75,000 if you file single and $124,000 if married filing jointly for 2020, hence excluding most pharmacists working full-time.

With this in mind, there is really is no question on whether a traditional or Roth IRA is better since there won’t be any benefit with the former. Therefore, either contributing directly to a Roth IRA or using the backdoor strategy will be your best move.

Roth IRA or Backdoor Roth IRA?

With the median pharmacist salary around $126,120, it’s very close to the income limits before you’re restricted from making standard Roth IRA contributions.

But rather than an all or nothing situation, the IRS begins phasing out your contribution limit once your modified adjusted gross income (MAGI) exceeds a certain threshold. These thresholds are listed below and depend on your filing status (single or married) and the tax year (2020 or 2019) you’re submitting your return for.

Single Taxpayers and Heads of Household

Single filers can make regular Roth IRA contributions when their income falls within these ranges for tax years 2020 and 2019.

One perk of being married is higher income limits to contribute. If your household income is below the amounts listed below, you can make Roth IRA contributions for tax years 2020 and 2019.

Married, Filing Jointly and Qualified Widows or Widowers

Before you think the backdoor Roth is your only option, glance at the income limits to see if you qualify to contribute directly to a Roth IRA first. No need to put in the extra work if it’s not necessary!

Even if your annual income falls within the IRS income phaseout range, you can still make partial backdoor Roth contributions. For example, if you’re a single taxpayer with a MAGI of $125,000, your maximum Roth contribution is $5,600 in 2020 and $4,800 in 2019.

This means you can contribute $5,600 directly to your Roth for tax year 2020 and the remaining $400 with the backdoor method to still contribute $6,000 annually. If you are able to make partial contributions and want to determine your limit, check out the IRS guidance for 2020.

Roth IRA Contribution Limits

The amount you can contribute to backdoor Roth is the same as the standard Roth IRA before the IRS phaseouts start applying.

You and your spouse can contribute up to the following amount to your Roth IRA:

  • Tax Year 2020: $6,000 ($7,000 if you’re 50 years or older)
  • Tax Year 2019: $6,000 ($7,000 if you’re 50 years or older)

To maximize your peak earning years, the IRS lets you contribute an extra $1,000 annually once you turn 50, something known as a catch-up contribution.

These are also the same contribution limits if you fund a pre-tax traditional IRA. Keep this in mind as you will need a traditional IRA to make valid backdoor Roth IRA contributions.

Make sure you only contribute up to the annual limit to your Roth IRA. In 2020, that’s either $6,000 or $7,000 per person. For non-backdoor Roth contributions, you can request a refund to correct the problem. If you don’t correct the excess contribution, you will pay a 6% penalty on the excess amount.

Open a Spousal IRA

If you file your taxes under married filing jointly (MFJ) and your wife or husband either earns a small income or doesn’t work, you can consider opening a spousal IRA to double your annual contributions. As long as your earned income is equal to the amount you contribute to your IRA and your spouse’s IRA (at least $12,000 if you each contribute $6,000), the spousal IRA contribution is valid.

In 2020, having a spousal IRA lets you and your spouse both contribute $6,000 ($7,000 if you’re 50 or older). That’s up to $14,000 of cash that grows tax-free until you withdraw it. Pretty cool right?

In order to take advantage of the spousal IRA option you will need to open up both a traditional IRA and and a Roth IRA in the spouse’s name. After contributing the annual contribution to the spouse’s traditional IRA you will then convert the balance to the spouse’s Roth IRA.

A Step-by-Step Guide to Making a Backdoor Roth IRA Conversion

Ok. We’ve gone through the benefits of a backdoor Roth IRA, why it’s a great move, and the contribution limits. Now let’s go through how to make this happen step-by-step:

via GIPHY

 

1. Make Nondeductible Traditional IRA Contributions

The first step is funding your traditional IRA with nondeductible income. If you’re making this contribution before April 15, you can either date it for last year (2019) or the current year (2020).

After the federal tax filing deadline (April 15 for most years), your only tax year option is the current year.

You’ll be completing an extra form, but this step is like making regular post-tax Roth IRA contribution. These contributions don’t reduce your taxable income for the current tax year.

The best way to fund your IRA contributions is from the checking account you use to deposit your paycheck. You must then decide if you want to make a lump sum conversion or dollar cost average as money becomes available.

Lump Sum Contributions

If you have $6,000 in idle cash and are close to the deadline for making your contributions, lump sum is the best option. With this strategy, you only have to make one contribution each year and your tax implications will be minimal if you make the conversion relatively quickly.

Dollar Cost Averaging

If you can’t max out your IRA at once or prefer to take advantages of changes in the market, you can also considering dollar cost averaging. With a $6,000 annual contribution limit, you can contribute $500 a month if you want 12 equal monthly payments but you could also come up with some other schedule.

Besides doing this out of necessity, there are other benefits with this technique. By contributing an equal amount over a period of time, you will naturally avoid trying to time the market. You will buy more shares when the market is down and fewer shares when the market is up.

Where to Set Up Your IRA

You have a lot of options on where to fund your IRA including banks, brokerage firms, and mutual fund companies. Companies such as Vanguard, T. Rowe Price, or Fidelity allow you to open accounts without any fees or commissions but there may be a minimum initial amount depending on the investment you choose.

Now, when you make your contributions, you will have to decide how you actually invest the money. Remember, the IRA is not the actual investment but rather a tax-advantaged vehicle or shield for your money.

You will have thousands of options here and how you invest will depend on your goals and your risk tolerance.The one point to keep in mind will be to minimize the fees. Many index funds and ETFs exist with expenses ratios as low as 0.03-0.08.

However, keep in mind that by subjecting your contributions to market fluctuation, you could actually lose money prior to making your conversion. Therefore, the conservative approach would be to keep contributions in a money market account or other low-risk investment with little to no volatility.

2. Make a Roth IRA Conversion

Your next step is to convert your contribution amount into a Roth IRA. It can take several days for your traditional contributions to settle before you are able to convert them but by having your Roth IRA with the same broker, you should be able to easily schedule the conversion.

When making the backdoor Roth IRA conversion, your broker will ask if you want to withhold any income for taxes. Since you made a nondeductible contribution in the first step, don’t have your broker withhold anything.

Potential Tax Implications for Lump Sum Contributions

You will be responsible for any taxes when you file your return, but the amount should be minimal if the cash doesn’t sit in your traditional IRA long enough to significantly appreciate in value. This is your most likely tax situation when you make lump sum contributions and you don’t have an existing balance in your traditional IRA that converts first.

Potential Tax Implications if You Dollar Cost Average

If you convert money that has appreciated in value, let’s say 30%, you pay taxes on those gains. For example, let’s say for 2020, you contribute $500/month to get up to the max contribution of $6,000. But, because the market was on fire, you actually have $7,800. You would be responsible for paying taxes on the $1,800.

How Long Should You Wait Between Traditional Contributions and Roth Conversions?

One of the questions that commonly comes up when making the Roth conversion is how long to wait. Technically, as soon as your account is funded with your nondeductible traditional contributions, you can make the move.

However, doing this could cause some issues with something called the step transaction doctrine. It has to do with the overall result of a series of transactions where the IRS could essentially penalize you with taxes because you are exploiting a loophole.

There is controversy by financial experts on what the best waiting period is. Some advocate for one month while others recommend waiting a full year before making the conversion.

3. Report Contributions and Conversions on Your Tax Return

When filing your federal return, report the nondeductible contributions and Roth IRA conversions. Your broker will send you the necessary tax forms each year to properly report the information to your accountant or online tax prep software.

Although you’re contributing to a traditional IRA first, you will make nondeductible transactions. You will need to complete IRS Tax Form 8606 to report your total traditional IRA contributions for the current tax year. This lets the IRS know you’re not funding your backdoor Roth with tax-deferred contributions.

4. Repeat as Necessary

Follow the same steps if you have a spouse as you can each do a backdoor Roth IRA every year.

Backdoor Roth IRA Tax Implications

I discussed earlier that you likely won’t have to pay taxes on your traditional IRA contributions when you make the conversion assuming there is no growth during that time frame. However, in that particular case, it assumes this is first time you are doing a backdoor Roth IRA and that you only have other existing Roth IRAs.

It gets a little more complicated if you have existing funds in nondeductible traditional IRAs. Because of the IRS aggregation rules, they look at everything you have contributed in the past, not just what you contributed for the current tax year and it all becomes “aggregated.” Therefore, if you have a large existing traditional IRA balance, it may negate the benefits of the backdoor strategy.

If you are in this situation, you could roll the existing IRA balance into a 401(k)-type account if your employer allows. This can either be your employer 401(k) or a self-employed 401(k). This way you can fund your backdoor Roth with the income you earn in the current tax year and have a starting traditional IRA account balance of $0 and avoid a potentially hefty tax bill

When your current traditional IRA balance is small or doesn’t have large investment gains, it might be better to pay the taxes on the amount you convert instead of rolling it into a 401(k), especially if you have limited investment options or high fees.

Conclusion

The backdoor Roth IRA is a legal and easy way to maximize your retirement savings and can be a great option for pharmacists given many will not be able to directly contribute to a Roth IRA because of the income limits.

If you haven’t filed your 2019 income taxes yet, you have until April 15, 2020 to make IRA contributions. You also have all of 2020 and until April 15, 2019 to make the tax-advantaged contributions we’re discussing today.

If you need help doing your conversion or want some guidance on how to invest the funds within your Roth IRA, you can schedule a free call with our financial planning team to see you’re a good fit.

Also, If you’re looking for other ways to reduce your taxable income when investing, IRAs aren’t your only option. I recommend listening to this podcast episode to help determine your priority of investing.

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YFP 091: How to Become a Fit Pharmacist

Posted on by yfpadmin

Becoming an Entrepreneur: The Fit Pharmacist

On this episode of the Your Financial Pharmacist Podcast, Tim Church interviews Dr. Adam Martin about becoming an entrepreneur for another edition of the side hustle series. Adam has been practicing as a pharmacist in the community practice setting for over 7 years, in addition to being a certified personal trainer, licensed nutrition consultant, author, speaker, and competitive natural bodybuilder.

About Today’s Guest

Graduating from the University of Pittsburgh School of Pharmacy, Dr. Adam Martin has worked as a full-time pharmacist in the community practice setting for over 7 years, in addition to being a certified personal trainer, licensed nutrition consultant, author, speaker, and competitive natural bodybuilder.

His passion and focus is empowering pharmacy students and pharmacists
to overcome the barriers we face in pharmacy to make self-care a reality. He outlines how to do this with practical and realistic tips in this book Rx: YOU! In his book, Dr. Martin dispenses his Rx for success in how to simplify nutrition, fit in fitness, and manage stress so that you can become The FitPharmacist and put the health back into healthcare.

Summary

It’s easy to hear Dr. Adam Martin’s passion for self-care, pharmacy, fitness, and life. While Adam’s mother was sick with cancer, he spent a lot of time with her going to pharmacies and noticed how compassionate pharmacists were in caring for his mother. He wanted to continue that care and empathy for patients as a pharmacist and was driven to become one, despite not being accepted to pharmacy school at first.

Adam’s been a practicing community pharmacist for 7 years and loves his work. He enjoys being able to build a rapport and relationship with patients and feels that every interaction is important and directly impacts someone’s life.

His passion for his pharmacy career floods into every other aspect of his life and is apparent in his entrepreneurial journey. In college, Adam started helping his colleagues with their fitness and health journeys. This ultimately formed a community and inspired him to create an Instagram account (@thefitpharmacist) which currently has almost 30,000 followers.

Now, The Fit Pharmacist business has 3 tiers which include nutrition, health coaching, and physical fitness. In his business, Adam continues to help pharmacists and pharmacy students put the health back in health care and truly take care of themselves so they can better serve their patients.

Adam’s also been in business since 2013 with Dr. Joe Klemczewski and Dr. Kori Propst of The Diet Doc. Adam is also a speaker, author, and coaches other pharmacists and pharmacy students to become health coaches.

Mentioned on the Show

Episode Transcript

Tim Church: Adam, thank you so much for taking time to come on the show and for being a part of this side hustle edition.

Adam Martin: Tim, thanks so much for having me. Been a big fan of you and other Tim, especially since reading the book you guys created, which is phenomenal. “Seven Figure Pharmacist,” so much value in there. It’s just really a masterpiece for the profession. So thank you so much and congratulations on that production.

Tim Church: Oh, thanks, man. We really appreciate that and, you know, that was really the goal in mind is to get that information out there so that people don’t make the same mistakes that we did. So definitely appreciate you for the shoutout on that. Now, being into fitness and weight lifting, I want to know, did you get your workout in today?

Adam Martin: I actually did. You guys can’t see on the video, but I’ve got my “Deadlifts and Chill” shirt on. It’s the same thing as “Netflix and Chill” but “Deadlifts and Chill.” So yes, sir, I worked at Club Pharmacy this morning and then went right to the gym. But yeah, that’s my life is pharmacy and fitness.

Tim Church: Awesome, man, me too. I got mine in, so I felt good going into this podcast, you know, making sure that I was ready. Got my workout in. So before you kind of do your workout, is there anything that you listen to? Any kind of music that gets you pumped up for a workout?

Adam Martin: Oh, absolutely, man. Throughout the whole time, not like a specific song, but a high BPM. If you guys have satellite radio, BPM is an awesome station. You guys can use like Pandora for free, but yeah, any high beat. I actually studied Spanish in addition to pharmacy, so I love like upbeat Da Miel (?), Yummy (?), all the awesome people out there that are doing like mixed reggae type stuff. So any like high beat, high energy. But then I also like some rock. If you guys listen to Disturb, they’re legit for really getting your mind in the game. For sure.

Tim Church: After I read your book, I thought maybe Lil Jon and the East Side Boyz maybe as well.

Adam Martin: Yeah, you got that reference. Well it’s funny, I actually play that song to keep my techs engaged at work. Whenever they say like, we need a mix for reconstituted amoxicillin, every then and now I’ll put “Shake it Like a Salt Shaker.” So yeah, man, you’ve got to bring in the fun. And that’s why I call it Club Pharmacy is because, yes, it’s very serious, we’re taking care of people’s health. We’re literally impacting their lives. But you have to have fun and enjoy that because if you don’t, that stress is going to eat you alive. So finding some sort of way to create that environment or joy, happiness is going to allow you to give to your full potential, and that’s why I do what I do.

Tim Church: Even if it’s with Lil Jon.

Adam Martin: Exactly. And actually, he’s really intelligent. So I know he’s making millions of dollars for saying three words, that being “yeah,” “OK,” and “what,” but this guy, he’s actually pretty intelligent — I don’t know if you’ve ever read up on him or not, but he makes some good mixes.

Tim Church: Yeah, that’s cool. I’ve been into like ‘80s montage music lately. So like all the Jean-Claude Van Damme and the Rocky movies. Those have been kind of my jams lately.

Adam Martin: Nice, man. Yeah, that’s what’s cool is it really depends on each individual, which is the whole approach that I have with health coaching that I do is there’s not a cookie-cutter plan where everyone fits into one category. It’s what are your goals? What do you like? What can you stick with? Because a lot of people fall into that trap of I want extreme results, so I have to make extreme sacrifices. Just like what we’re talking about with working out, like, oh no, I have to suffer. This is not going to be fun. Like this is punishment for the food I wasn’t supposed to eat. No. This is a celebration for what your body can do. Life is meant to be lived. And why walk when you can dance, man? So make it a party. So find that music that you love. I have some friends that really like classical music when they lift. That really juices them up.
Tim Church: That’s interesting.

Adam Martin: I don’t know how the heck they get through their workout, but that’s them, and you know, to each their own.

Tim Church: That’s how they hear it, yeah. Well, I’m really excited to kind of get your entrepreneurial journey and how you’re delivering value to other pharmacists out there. But before we kind of do that, can you talk a little bit about your career path as a pharmacist?

Adam Martin: Absolutely. So my career path as a pharmacist was my — I guess I’ll start with my why. My mom — actually, I love animals. We’ll start there. I love animals, so of course, the clear choice was I’m going to be a vet. Right? I want to take care of the puppies. I want to do all those things. So I very fortunately went and chatted at a vet clinic to kind of see what really went on. And it was not at all what I expected. I hated it, so luckily, that was in high school, so I was able to make a pivot to something else. Unfortunately, around that time, my mom got diagnosed with very aggressive cancer. I didn’t know it at the time, but she was given less than six months to live. And she was very determined, had a very strong mindset and ended up fighting for over five years in that battle. But during that time, we were in the pharmacy most days of the week. I don’t know any pharmacists personally at this time in my life. We don’t have any neighbors or family friends or anything like that, and all I knew was these people were really smart, and they’re crazy busy, like running around, short-staffed, all those things. But amidst that, a total stranger, my mom and our family, they would go above and beyond and really show that care and dedication and just say, like, “You know, can we drop this off for her? How is she doing?” Just genuine questions that just like caught my attention, like this is amazing that a total stranger can care so deeply for a stranger. So that really is what got me looking towards pharmacy in the first place. And then the more I looked into it, the more it was very clear I was meant to do this, like with absolute certainty. So I applied, I went to Pitt undergrad. And I applied to pharmacy school, super excited, and then I got rejected. “Your grades suck, this and that, you don’t” — whatever the reasons were, I didn’t get in. So I could have used that and said, “You know, this is crazy. I wasn’t meant to do this. This is too competitive. Blah blah blah.” But I really had my why. Like I was meant to do this. And instead of being discouraged, I got resourceful, I got involved in organizations, I was in the pharmacy school so much volunteering and learning, people thought I was a student. So I used that as my strength.

Tim Church: Wow.

Adam Martin: And then I actually the next year, applied again. I didn’t get accepted; I got waitlisted. I was the last person to get in my class, in my class of pharmacy. And I was like so excited and blessed. I’m like, oh, this is amazing. At the time, I was like, “Woohoo! This is great.” And we had orientation. And they talked about, don’t do this, don’t get in trouble. If you have a problem, talk to someone. And then the very last thing they said is, “By the way, you need to elect a president for your class.” And dude, it was a moment I’ll never forget. Like I was meant to do this. My parents really pushed leadership skill development. I was an Eagle Scout, all these things. And it was like, everything that I’ve done has now come to this point right now. So I ran for office, and I got elected president of my class. And I was like, you know what, I worked so hard to get in this, it literally took years plus one to get in here. I’m not going to waste this opportunity. So because it took so much, I overcame so much pain and rejection to get in there, I looked at this as such a gift. So I became like, how am I going to maximize this? Around that time, I also got into fitness. I’d been lifting for a few years, but I really got focused in the nutrition aspect. And what I found was if I went out and partied, I wouldn’t be able to concentrate in the classroom, and my workouts would suffer. But if I ate well and rested and did all the good things, I would be really focused in class, I’d make really good conversation, I’d take good notes, and my workouts would be amazing. So it was this dichotomy of fitness and pharmacy that really catapulted my success — not necessarily grade-wise, because I wasn’t a Rho Chi, I was more of a back-Rho Chi or a no-Rho Chi, so the grades weren’t all there. But the relationships, the learning, being involved in the community, volunteering. I went to seven conferences while I was in pharmacy school. So really just putting my energy in learning and connecting and networking and really making the most of all these amazing, brilliant people in pharmacy that I was blessed to have access to as my professors and colleagues. And whenever I graduated, it was right when the market started to shift. So when I was a first-year student, I was in Phi Delta Chi, and the people that were graduating in my fraternity were all talking about, oh, about a sign-on bonus or relo bonus, all those things that, you know, were the glory days of pharmacy. Well, that was literally the last year of that. That was I think 2008. And then it started to shift. Sign-ons were gone, relos were gone. And whenever I graduated, those didn’t exist. And it was really competitive. The job market really got tight. But because I networked and showed value, went to conferences, I ended up getting like six job offers when I graduated. Whereas people that just went through the motions didn’t even have any. Like there were some people that they didn’t know what they wanted to do, which is fine, you’re still looking to figure that out. But they didn’t have any job offers, so even after graduation, they were really struggling because that market shifted. So that really gave me an idea to not only help pharmacy students maximize pharmacy school but to help pharmacists and people in healthcare to live and give to the best potential possible because as you guys know listening, you’re probably in pharmacy, either a student or a pharmacist, there’s a lot of stress. Like a ton of stress. You’re trying to do 30 things at once, you’ve got flu shot quotas, you’re trying to give drugs that are off-market, and people are yelling at you, all these things. But you still want to give. You still have your why for why you got into this. But if you don’t have clear focus on that, it can really wreak havoc. And then you can fall into this trap of I’m here to give and serve, so me taking a lunch is selfish. Me giving up my time to work out instead of working out and taking care of myself, I’m going to give it to my patients. That’s really what it’s about. But short-term, that might work. But over the long term, that’s where it gets us into trouble. We start gaining weight, we start getting really overwhelmed with stress. And then it comes to a point where we’re not able to perform at our highest level. So by “giving our own self-care away,” we’re literally creating a detriment to the service of healthcare we’re providing. So self-care is not selfish at all. It’s the most selfless thing you can do because by investing in yourself, you can give more. And that’s my whole purpose is how to help people give their full potential.

Tim Church: I think you’re story of getting into pharmacy school and that path that you took is such a cool story just of resilience but inspiration on how you got into the field. And then I think you also made just a huge point about healing the healer, and that was always a point that was brought up when I was in school that you really have to take care of yourself. And I want to get into that a little bit more, but talk about what you’re doing as a pharmacist right now in your full-time job at a community pharmacy.

Adam Martin: Sure. So I love community pharmacy because it’s based on relationships and really having that rapport with your patients when they come in, you know them by their name, they know you by their name, you can follow up and say, “Hey, how was your graduation?,” sending them cards, just having genuine conversation and caring about people. That’s why I love going to work, and I can stand for 13 hours without a break and dance out of there like I just got there. So just having that level of impact and the relationships with the people to really just give and help them in their darkest moments because guys, when people come in the pharmacy, they’re most likely not having a good day. So if you can come to that interaction with energy and support and just being there for them, you’re going to impact their lives in so much — like it’s indescribable, the level of impact that you have the potential to make. But if we ourselves are facing issues that are controllable by diet and exercise, we’re doing a disservice. So by investing in ourselves, we can really make each and every interaction high-level. And I know that might sound like ridiculous or unrealistic, but I mean, I’m not at a slow store. We do over 500 a day without overlap. And you know, I go through the same stuff, tech call-offs, all the things. I’ve been doing it since 2012, so living in the trenches to give practical advice that’s realistic to help you with nutrition, fitness, dealing with stress, that’s kind of where that passion came from, unfortunately, through seeing so many other pharmacists succumb to that stress and the pressures that can take ahold of you if you allow it. So that’s where my one book came from, “Rx You: The Pharmacist’s Survival Guide to Managing Stress and Fitting In Fitness,” to take all those best practice tips and help you to overcome that and really invest in yourself.

Tim Church: Wow. I think you hit on so many points there that are just so key because you nailed it that pharmacists are so accessible and have the opportunity to really help people in multiple ways. But just even taking an interest in them when they’re at their worst can make all the difference. And I think sometimes, realistically, like you talked about, it can be difficult when you have all of these other things competing for your time and attention and just your own general energy and exhaustion. And so I think that other people probably listening are thinking, yeah, I get everything Adam is saying, but sometimes, I bet it’s difficult to maintain that same level of service and attention that you can give throughout your entire shift there. So I think that although it’s something that we should all strive for, it’s probably not always easy, right? To do that all the time during your entire shift.

Adam Martin: Oh guys, I’m not perfect. Like I make mistakes. But being able to do that the majority of the time and set yourself up so it’s easier — it’s not that it gets easier, it’s just that you get better. So it’s not that over time, stress goes away. Quite the opposite. You guys know, like they cut hours, more quotas, now there’s Shingrix on top of flu shots, and that’s on back order, so we just can’t wait ‘til that drops back again. But yeah, I mean, it’s not that it gets easier, it’s just that you get better. And you’re going to have days where life happens. If you’ve got kids, they kept you up all night or you’ve got relationship problems or you have a flat tire on your way to work, yeah, life happens. But being able to roll with the punches and bounce back from that, that’s what that practice. So what you practice in private is what you see in real life. So being able to do those rituals and prepare yourself so that when those things come up, you can face that adversity head-on and use it to strengthen you as a kind of overcoming a challenge.

Tim Church: Well, I mean, it’s cool, like I love the energy and the passion that you have just around the profession but your job and how you’re impacting patients every day. And I think that’s awesome, and you know, unfortunately, I don’t think that’s always the case in our profession. And it depends on your own ability to control your emotions and the things that are going on, but also there are some factors within the profession that do make it challenging to kind of come with that same level of passion and intensity. But I want to shift gears a little bit, and I want to know how did you become interested in entrepreneurship and creating this business, The Fit Pharmacist? How did that all come into play?

Adam Martin: That’s an awesome question, man. And I don’t really consider myself an entrepreneur because I have a full-time job, but I guess I’ve got like two jobs, like the entrepreneur gig. But it started out by literally just people coming to me and saying like, “Hey, how can I do this? What tips do you have? What suggestions?” and just helping them. And it literally created a community. What started off as an Instagram handle became a community and then a business, and now like this movement in pharmacy where there’s pharmacy students and pharmacists that share their story every Friday. I’ve been doing it for 2.5 years now for Fit Pharmacist Friday, where that’s a source of inspiration and motivation for others who are exactly what you said, going through these challenges. And we all have our seasons where we feel down or it’s not going to happen or tough times. But having that community, much like what you and Tim have with Your Financial Pharmacist of support and mentorship, is just so phenomenal that it just kept growing and I kept getting more and more people and then the followers started growing, and I just kept creating content because I love it and I’m like, hey, here’s an issue that I see all the time in pharmacy that people complain about. This is something that I’ve used and others find helpful, let me share this. And that’s how it spread is just creating value that works and is practical because you can want to be healthy and talk to a nutritionist, but they don’t really get pharmacy world and how we don’t have a break and we have to do 30 things with the manpower to only do five. So when they tell you to eat a salad for lunch and chew 30 times before you swallow, it’s not practical. So if it’s not practical, and you’re not going to do it, and then you’re going to be right back where you started. So having simple solutions that are actually, you know, going to be effective in your work environment is really where I thrive to cut through the crap. But it’s still using stuff that’s research-based, effective, scientific, but translating that to pharmacy world, whether that’s nutrition, fitting in workouts, mindset mastery through meditation or self-development through reading, seminars, things like that. That’s where my niche came from. Then it just became so many requests for people to do one-on-one coaching. As a competitive bodybuilder, a *drug-free* — pharmacist, but drug-free bodybuilder, yes, that just fueled my passion. And I just created this community, and it turned into a business, and I just started to think, you know, this is something. Like I get messaged every day by people all over the world — literally. In India, Spain, Africa, I write for a magazine in South Africa, like it’s literally a global community. So in order to do that effectively, I need to figure out how business works. Because I wasn’t trained in that, I don’t know what I’m doing. I’m just creating value with stuff that I love. And to answer your question, that’s kind of how the entrepreneurship worked is I just did what I love, did it from good reason, with good intentions to help people to overcome the struggles that I myself went through and see others doing and just kind of extending a helping hand. And that created the book and the community and the business. So that’s what I do now is I help pharmacists and pharmacy students do the same thing in creating their health coaching business. I’ve been in business since 2013 with the godfather of flexible dieting, Dr. Joe Klemczewski, and his partner, Dr. Cory Probst (?), who is literally the best health psychologist in the world. I actually joined them as a client when I first graduated pharmacy school, and I asked them like, “Hey, I have this passion for nutrition. There’s all these certifications. What do I do?” And he said, “We can train you to do what we do.” And that’s what I looked at for awhile just to kind of see time play out, check out was what they’re doing legit, get referrals, just doing all those things to make sure it’s all good because he was an idol in natural bodybuilding world. So I knew he had a huge following, really great integrity, everyone has awesome things to say. But you know, money talks, as they say. So I really wanted to play that out, and it was one of, if not the best investments I’ve ever made in my life. So I’ve been with them since 2013. I’m actually flying to Nashville this Friday to give a talk alongside them. So they started as my mentors, now they’re my colleagues and business partners.

Tim Church: And so what it sounds like, Adam, is that it took some time to sort of grow that community, put out a lot of great content, and then people were catching on, really seeing that value that you were bringing to the table. And it almost seems like they sort of naturally became something that you could monetize, that you were solving people’s problems that they were having.

Adam Martin: Exactly. And straight up, like I wouldn’t be here if it wasn’t for the awesome people in our community of the Fit Pharmacist movement. Like they’re phenomenal. Literally, you had mentioned earlier that not everyone’s always at the top of their game or so enthusiastic. Yes, that’s true. But I want to come back at that and say, there are so many that are, that they have hard days too. They’ve gone through those things, and that’s why I started that Fit Pharmacist Friday is to let people know that, you know, your colleagues, your students, might be Debbie Downers, I don’t know. But you need to know that there’s a community of people who have gone through some serious crap, whether it’s emotional or abuse or relationships or financial, and they’ve come out being so much stronger, creating strength from their struggle, making their mess their message, leading by example and being just a source of inspiration. So that’s why I do that. And it’s created this awesome community of pharmacists that are all about, you know, helping others. So that’s what it’s about, and I wouldn’t be who I am or where I am without you awesome people. So thank you. Thank everyone who’s listening and been with me on this journey because like you said, it did manifest naturally because — and it’s picked up momentum, so I guess a value point for those listening is very simple: Clarity creates power. So when I started, I had all these passions, you know, nutrition, working out, pharmacy, and it was like all over the place. But then finding my message and tying that all together, being an advocate and really resource to put self-care back into healthcare, particularly in the pharmacy profession, that’s when things really exploded because I got so clear and focused such that every action, every article I wrote, everything was tied to this one mission. And when you get clear on what you’re trying to do and the value and purpose of giving that you’re really on a mission to create and give to others, that’s when you’re going to take off. And I’ve read many books on this, I’ve gone to seminars with Grant Cardone, with Lewis Howes, with Tony Robbins, all this year, and it’s just getting those mentors. And I hear the same message, clarity creates power. Really get connected with your why, and stay true to what you’re looking to accomplish, stay true to that mission, why you’re doing it and the outcome that you want, and that is going to drive so much more success. And if you stay with that and be consistent and put in the work, you’re going to get results beyond what you could ever imagine.

Tim Church: It kind of reminds me of that quote from Zig Ziglar where if you help enough people get what they want, eventually, you’re going to get what you want. And that’s just really what I kind of hear as you’re going through that and talking about that because it’s easy to see that your passion and the power that you’re putting into this movement and parts of your business is really encouraging others but just having such a huge impact, and it’s really cool to see that. And to get a little bit more practical about the business itself, can you break down the different layers on how you’re bringing in additional income?

Adam Martin: Absolutely. The business is the Fit Pharmacist. And I have three main tiers with that. It’s expanding to a fourth right now. That being nutrition and health coaching, really helping people to live their best lives through helping them, specifically through mindset coaching, so how to deal with stress and anxiety, really have that attitude and practice of constant, neverending improvement, to really have those mentors and learn those things. The second being physical fitness, finding something that you enjoy because I love to deadlift, but you might not. Or you might have some physical ailment. So all my clients that I have, not one of them is interested in bodybuilding, and I am 100% OK with that. So just because I am a bodybuilder, that doesn’t mean that I expect you to be. That’s my passion. But you might like Zumba or something else. So it’s finding what you love and enjoy and doing that because it’s different for every person. And then the whole nutrition aspect. I do not believe in supplements or scam shakes or being reliant on a product because what’s going to happen when you go on vacation and don’t have the product or you go to a birthday party, and there’s no product there. It’s not living. It’s relying on an external thing. But when you really focus on education and being able to make those decisions and knowing nutrition, the science behind it, in a simple way. Not like a crazy, you know, professor-type deal, but practical knowledge, that’s going to allow you to become your best nutritionist. And I don’t throw you under the bus; I guide you through the process because everyone is starting from a different point. So that’s why I do very extensive in-taking with each of my clients to figure out what their goals are, what they’ve tried before, where they are right now and then where they’re looking to go so that we can create a realistic action plan.

Tim Church: And so do they pay you, is that like a flat fee for a service that’s over a certain period of time? Or how does that work?

Adam Martin: Sure. So the payment structure is based on time. So it depends on the individual because some people, you know, they’re at their healthy weight, they’re just really looking for more mindset. So I have a three-month program for someone that has that experience and they’re just looking to take that to the next level. I have a six-month program, and then I have a year-long program. So that’s why that intake is so important to really get to know the individual and based on where they are and where they’re looking to go, based on what their goals are, I can really make a recommendation for what would best allow that to practically happen. So that’s how that pricing structure works.

Tim Church: And then, so that’s one aspect of the business is doing basically consulting, helping pharmacists and other people get on a great nutrition plan, a fitness plan, and then what’s the other aspects of the business?

Adam Martin: So there’s a lot of pharmacists that feel like they’re not fulfilled. They feel like they’re just clocking in and just keep dispensing medications. It’s not their jam. They’re looking for another way. They’re really into the nutrition; they see the benefit for themselves, and they want to do that. They want to be the pharmacist that, you know, dispenses fitness to their patients and leading by example. But there’s so many internet programs and things like that, how do they do that? And how do they learn the business side? Because yes, there are pharmacy schools that offer PharmD-MBA programs, but you know, specific for fitness coaching, health coaching, things like that, that’s my other business is helping pharmacy students and pharmacists really do that practically from someone who actually does it. So it’s cool to get the inside business from like you guys do with your finance book, mistakes you made for investing and frivolous spending and so forth, just like me. Like I’ve made mistakes in building my business, spending money where it didn’t need to be, spending too much time doing this where it should have been that, so guiding them through that process with that whole plan and allowing them to do it at a faster rate with more success and I’m with them through that whole time so that, like I said, it’s different for every person, things are going to accelerate at a different pace. So being their coach through that process. I’ve been doing that for two years now, and it’s honestly one of the most rewarding things in my life because once you see someone really realize their potential and say things like, “Wow, I’ve always seen people do this, and I never thought I could do it. But I just did it, and it feels amazing.” I had one of my current clients for the 2018 course just closed his first health coaching client on a six-month program last week. And you should have seen him. Like he was so happy. Like it made everything, like all the work, all the late nights and everything that I had put in, it made it all worth it. That actually leads to the third layer of business, since you might pick up on I can’t shut up, and like I really done that for a long time, and that is speaking. I love to speak. It’s a passion of mine, it’s a natural gift. But really learning that and honing it so it can be effective in helping people to get those simple solutions to really empower themselves, whether that’s a mindset thing, staying in their element and overcoming stress at work, nutrition, social media, all of the things that I do and practice myself in a talk. So I speak at several businesses in the Pittsburgh area and all over. I’m actually flying to Nashville on Friday to talk about social media. But it’s a passion. I love it. And pharmacy schools are my jam. I’ve been working on a book for three years now to help pharmacy students master their whole experience in pharmacy school because I had an amazing education at Pitt, I love that school so, so much. But there’s some things that I wasn’t taught. Maybe I was not paying attention, so it could be my own fault. But there’s some things like building your personal brand, how to network effectively, like the ins and outs: what to do before a conference, after the conference, how to follow up, all of those types of things, I made a book. The first half is those practical skills that looking back as a pharmacist for eight years now, looking back in pharmacy school are my highlights, what were the things I wish I knew, that’s the first half of the book are those skills that will really set you apart and give you a competitive advantage in your career. And then the second part of the book is what took all the time. There are a collection of interviews from the best people in our profession, each chapter being a niche. So I have a chapter on specialty pharmacy with one of the best people in the industry. I have someone in research. I have someone that does PGY1 residencies, and all of those different things, those different avenues you can go, that are literally the top of their game. And I had pharmacy students do the interview so that they could get the experience asking them questions like, “Right now, you’re at the top of your game. If you knew you were going to end up here, and you were on Day 1 at pharmacy school, what things would you have done differently? What resources would you recommend diving into if this is your niche? What connections — where would you spend your time so that you would end up where you are, but at a faster rate so the value of that knowledge is really what took the time?” But then I took it a step further and what I told the dean who is a part of this project, Dr. Kroboth at the University of Pittsburgh School of Pharmacy, a phenomenal individual, so inspiring, I told her, “What I want to do is create this book, sell it. I want it in every pharmacy school in the country. But I don’t want to keep $1 from the sales. I want all of the money from the hard copy book sales to go to an endowment fund for a scholarship for a pharmacy student who is overcoming adversity and looking to make an impact in our profession.” Because I want to give back, I want to pay it forward. So that was my innovative way to create that. And that’s kind of why I’m so juiced about it, why I love going to pharmacy schools and talking, because it was the biggest gift I’ve ever gotten is a chance — a chance to get in and to really put my passion into work to make the most of that time. And I want to help others do the same, so that’s the why behind all my energy and talking and all the stuff that I do.

Tim Church: Wow. That is awesome, Adam. I didn’t know about that book. Is that out already?

Adam Martin: No. That has been in the works.

Tim Church: OK. So that one’s coming.

Adam Martin: That one’s coming in 2019. So it’s funny. I started that book three years ago. But then in the time, I was like, people really want like self-care tips. Like I keep getting messages every day, Instagram, Facebook, so I need to create a resource for that. So that’s where that book came out, and the response was, “Oh dude, you always say like the business is determined” — I forgot how this quote goes, but the market determines your success. That book came out, and 60 copies in 24 hours, it was a bestseller on Amazon, like it was incredible. I had people from Abu Dhabi buy it, Mexico, Canada, China, like amazing. Like literally worldwide reach. And I was blown away. Like I made this, I’m like, this will be like a cool e-book. And one of my mentors was like, no, no, no. You need to make this a hard copy book. I’m like, OK. So I did that, and I was like, I’ll sell like 10 copies. It’ll be cool, you know, to publish a book. But dude, it was amazing. And that just fueled and reinforced like hey man, you have something here. You need to keep going because you’re providing value, and it’s actually effective. And people are messaging me, saying, “This helped me so much.” Tony — Tony Guerra had me on his podcast, like dude, I lost 5 pounds from your one tip. I’m like, cool man.

Tim Church: Which tip was it?

Adam Martin: That was the water test, which I actually —

Tim Church: Oh, I love it. I love it. I do that all the time.

Adam Martin: Dude, I created that at work. So that’s in the trenches tip because I kept getting hungry because I was so busy, I would start feeling hungry. But I knew I wasn’t hungry, but I had this feeling. So I just chugged a bottle of water, and then 5-10 minutes later, the hunger feeling was gone. So I started looking into it, and I come to realize that the brain does not know the difference between hunger and thirst. So literally, if you feel hungry, it could be that you’re just thirsty. So in order to determine that, you’re probably dehydrated running around like a chicken with its head cut off at Club Pharmacy trying to answer all the 50 phones and the people trying to get their script filled ASAP. So chug a water, and it’ll likely go away. And 99%, dude, like I use this every single day. I used it this morning like three times. Almost every time, it goes away from drinking water. So that will save you unnecessary eating, extra calories, so it’s simple math. Like you guys are numbers with finance. It’s simple math. Calories in, calories out. If you can cut that stimulus so you don’t keep putting more calories in you don’t need, you’re going to get to your goal faster and not be walking backwards or not walking at all as we’re talking food.

Tim Church: Yeah, no, I love that tip. And there’s definitely some others that are really key in the book. I really like one of the lines that you put in there, and it was about that a lot of pharmacists, just based on the nature of the jobs, whether it’s community pharmacy or the other type of position, that a lot of times that excuse is, “Well, I don’t have to eat right. I don’t have time to exercise, you know, because of my job and because of my kids and because of all the other things I’ve got going on.” And then what you came back and said is, it’s not that you don’t have time. It’s that you haven’t figured out a system, a routine, the habits that work well with your lifestyle. And when I read that, I thought, wow. That really is the key is you’ve got to find something that works for you. So I think that was such a cool point that you put in there.

Adam Martin: Thank you, man. I appreciate that. It comes to the main concept of how I conduct my life, how I help my clients really find that “Aha!” moment for the system that you just described. It comes to something coined by my mentor, Dr. Joe Klemczewski, and business partner, that being structured flexibility. So you need a plan of what to do, things to cook, workout strategies and whatever, but you don’t want to fall into the psychological trap of black-and-white thinking. Like it’s this way or the highway. You need that flexibility component because as we know, life is not black and white. So if you try to do it in a black-and-white manner, you’re going to give yourself more frustration and anxiety when you’re trying to succumb those at the same time. So it’s going to be counter-productive. So if you have a plan, the structure, but you also have flexibility to kind of roll with the punches when things aren’t exactly as planned because such is life, you’re going to have a much easier and enjoyable time, whether that’s saving for finances with paying off debt, whether that’s mastering your mindset, nailing your nutrition at work and days off, and just like you said, finding the time to work out. I bring that up again in the book for pharmacy school, relating it to Beyonce. Like look what she does, like amazing things. But she has the same amount of time that we do, right? So she has a system to just be efficient, and she’s been doing it for so long, she’s putting in the reps, literally. It’s about reps — being good and building that skill by being consistent and practicing those things. So yeah, it’s not “I don’t have time” but it’s that “I’m not making it a priority to find that time. So and that’s different for every person. So you might have five kids, you might have a job where you have to drive three hours one-way. It’s different for each person, so really looking at your life to see where it can fit, kind of like how you guys do in “Seven Figure Pharmacist.” In the beginning, you talk about having that money checklist of really — the “vitals check,” that’s what it’s called, the “vitals check” of what am I working with? Where is my starting point? And then once you know that and have that awareness, you can know where you want to go and how to get there.

Tim Church: Well, Adam, there’s no question that what you’re doing is delivering a lot of value to people. I mean, I think everybody can hear that in your passion. But one of the questions that I wanted to know is certainly, you’re running a business and you’re monetizing a lot of what you’re doing, which is great because you’re providing good value. But what are you doing with the additional income that you’re earning from the Fit Pharmacist?

Adam Martin: Putting it back. Literally. I have a separate business account where all of my money goes in, and goes back into the business, creating value, creating better content. So now, that’s shifted into upping my podcast. I have a podcast, the Fit Pharmacist healthcare podcast, but I actually just interviewed your colleague, other Tim.

Tim Church: We need to talk, which Tim? Which one?

Adam Martin: Yeah, yeah. Other one. So increasing the quality of that, so the equipment to do that. I’m now getting really into videos, so creating that production. The other thing is I love, like you said, to give and use my passion and skills to make an impact. So I’m going to Panama in February on a medical mission trip with, actually, a girl that I met in the Fit Pharmacist community, who is just — that’s her niche. That’s her passion. She’s on an advisory board for a nationwide mission trip organization. And I had her on the podcast, I think it was like six months ago. And we were talking about how to go on a mission trip, like what to expect, how to get started. And in that interview, she said, “Oh yeah, we’re going to Panama.” And I’m like, “Oh, do you need another pharmacist?” She’s like, “Actually, yeah.” I’m like, hmm. That’s it. So that’s not cheap. You’ve got to fly, investing with travel and all the stuff and vaccines. Plus, it’s the opportunity cost, so as you guys know working at work in chain pharmacy, you don’t really get that much vacation time, but I’m investing my vacation time into that. So that’s literally how I spend. I reinvest it. I put it back into the business, into myself. So that’s going to seminars. Like I literally tried to think, how can I invest $15,000-20,000 in my personal skills this year? What am I passionate about? What am I looking to do?

Tim Church: I think that’s so good, Adam. I love that you’re reinvesting a lot of the money in yourself and in the business just because you believe in it so much. And I think that’s awesome. But I think a lot of people, they’re probably listening and just like on other episodes, that you’re doing a lot in addition to working as a full-time pharmacist. How do you practically manage the Fit Pharmacist with your personal life and your full-time job? And how many hours — what’s a typical week like in terms of how much time you’re spending on it?

Adam Martin: So that’s an excellent question. And there’s a really big dip that you can fall into of not knowing when to say no, not knowing when the cutoff is. So it’s not having a “To Do” list, but it’s having a “Not To Do” list that’s really going to help you in the long term because I see so many times people get into this niche of health coaching, and they go all in for 2-3 months, and then you don’t hear from them again. And they’re like, “Oh, I went through some stuff, blah, blah, blah,” or “Oh, I got too busy,” or “Oh.” But if you pace yourself — so that’s not saying, let off on the gas. But really having time blocking and chunking in your day. So again, it really depends on your schedule, whether you’re married, you have kids, being realistic with that. For me, — so Gary Vee, if you guys listen to him on entrepreneurship, Gary Vee talks about that magic — what is it? 10-2 hour, which my colleague and friend Richard Waithe practices. 10-2, he’s all about that. For me, that doesn’t work for my lifestyle because some days, I work mornings, some days, I work nights, so I kind of sandwich it. So I call it my power hour in the morning, which is really two hours, which is reading, daily devotion, just going on a 20- or 30-minute walk while listening to personal development videos or things like that. And then prepping for the day, setting my goals, setting my intentions, going through my gratitude list. I start every day, two hours, with that routine, and it really fuels me and sets me up. Then it depends on how my days are structured with work because I’m on a rolling two-week schedule. Sometimes, it’s two hours after that. But getting that two- or four-hour window in every day, but knowing when to quit. So it’s so tempting — and I did this for years when I started way back in the day — of I’m going to go to bed at 9, but then you get this idea and you start writing an article, and then it goes into another thing, and it’s 12:30. And you don’t want to “quit” or be lazy, but you have to know when to say no. And you have to really put your priority in real-life relationships. Social media is a huge trap. It’s a great tool, but it can really suck the life out of you.

Tim Church: Definitely. Definitely.

Adam Martin: I’m serious.

Tim Church: No, I know. Yeah.

Adam Martin: So really seeing what it is. It’s a tool, it’s social media, and putting priority on real-life interactions, literally like in person. That’s where it’s at. So being fully present with that person is the best compliment you can give them. So I love my family, I’m very blessed to have an amazing dad. He’s such a role model. Like he’s a missionary, he is building a library in Africa. Just the most giving and loving man of God I’ve known, and I’ve modeled my life after him. So I want to spend time with him. So I do that on a consistent basis. But it’s doing him and me a disservice by being there and being on my phone. So when I’m with him, my phone’s charging in the corner. I don’t see it. Or just having that promise to yourself that this is special time. I am going to be fully present with this person because I don’t know if he or she is going to be here tomorrow. I don’t know what the future’s going to bring. But I know right now, I have the gift of being with them. And I don’t want to waste that on some Instagram post or whatever. So time blocking and chunking is the best advice I can give. Practicing deep work, which I have a whole chapter on that in the pharmacy school book. If you guys ever read “Deep Work” by Cal Newport. He also wrote a book, “So Good They Can’t Ignore You.” Phenomenal author. But really chunking your priorities into times that fit your schedule but knowing when that cutoff is. So again, coming back to what I started with, it’s not making a “To Do” list but a “Not To Do” list. So have those non-negotiables. When 9 p.m. hits, it doesn’t matter what you’re doing, it’s time to stop. It’s time to be with your loved one and spend that hour that, yeah, you could write an article, you could do whatever, but you might not have that tomorrow. So really be present in that moment, and the best investment you can make is in the present with the people that are in your life. So that’s my advice as to how to keep it all together is know where your non-negotiables are, really invest in those that love and support you, and give back. That’s really the key. And it sounds so cliche. And I’ve heard that all my life, but in the past year, I’ve really practiced that, and it’s transformed not only my personal life, but my business life. And it’s been an amazing journey.

Tim Church: That’s so good, Adam. Thank you for those tips. I think that’s really great, and it just kind of highlights how important it is that, you know, you don’t have to be going 100 miles an hour in your business to be successful all the time. You know, there’s obviously going to be times, and it’s going to ebb and flow when you’re working hard, but also just making sure that you’re dedicating quality time to the people that matter most to you just because that is such an important thing to keep in mind as you’re going through that. So last question I have for you is, what advice would you give to other pharmacists or even students out there who have an interest in becoming an entrepreneur?

Adam Martin: So consistency is key. So what I mean by that is you’re going to read a book or see a movie or YouTube video or go to a conference or listen to a podcast where you get super inspired and want to go all-in. That’s great. That’s what we call motivation. The difference between people that stay in the game, that make an impact, that turn their passion into a business is shifting that into commitment. So motivation comes and goes. You know, it ebbs and flows with how you’re feeling, your interaction, your environment. It can be totally different from one day to the next. But commitment is you are tied to this goal. You have a why, and you’re tied to it. So you might not feel like going to the gym tomorrow. You might be exhausted or have a list of so many other things that you could do instead. But you’re committed to your fitness. You’ve turned your should into a must, a non-negotiable. This will happen, regardless of how I feel because I owe this to myself. When you make that commitment to yourself and to your goal, that is what is going to set you ahead. They say so often, go the extra mile. It’s not crowded there. Here’s why. That principle. Motivation vs. commitment. Everyone wants to go all-in, they want to grind, and you know, no sleep, like all work, all day, like no play, all work, whatever that is. And in the beginning, you’ll find that. And that only lasts a couple months. But the longer you stay in the game, the less and less people are there. So if you’re in the game for 4-5 years, there’s not going to be much competition there because it gets hard. Guys, it gets hard. Entrepreneurship is a lonely route. It’s not guaranteed. You’re going to eat crap. You’re going to sleep on couches, you’re going to have adversity you never saw coming. But if you are committed to that goal and that why and your reason, then that is how you’re going to succeed. So delayed gratification is another thing with that. It’s kind of a paired relationship. So you might be networking and putting out content for months without many likes or comments or shares. Keep going. Do not quit because everyone quits. But if someone comes on your article, and they see you’ve been consistently writing one a month or whatever, they’re going to be like, “Oh, wow. You’ve been in this a long time. That shows that you’re committed.” It’s looking at your track record. So those two principles, if you can like put those into practice, you’re going to make it. So be consistent. And be patient. They’re very simple but very difficult to put into practice. And I think if you do that, that’s what’s going to keep you in the game, and the longer in the game you are, it’s not a guarantee because you have to adapt and innovate with time and change and so forth. But that is really the secret sauce because so few people do it.

Tim Church: Adam, that was awesome. And thanks for sharing those tips. And I know that your story and what you talked about today is really going to inspire at least somebody out there to kind of go down this journey but just to pursue their passion. And I want to thank you for coming on the podcast. And what’s the best way for someone to reach out for you or to learn more about what you’re doing?

Adam Martin: So the ‘gram is my jam. So if you’re on Instagram, guys, that’s where I’m most active. @thefitpharmacist. DM me, comment on my posts. I get back to every single person. I pride myself on that because I feel like every interaction, there’s a reason behind it, regardless of what that is. I also have my website, TheFitPharmacist.com, where I have all my articles there, resources, that’s where I highlight all of the Fit Pharmacist Friday features that you can get inspired and connect with them.

Tim Church: Adam, thank you again for sharing your story, for coming on the show. It’s just been a real pleasure.

Adam Martin: Thank you, Tim. I appreciate what you and other Tim are doing. The other thing I say is, guys, get their book. It’s incredible. Seriously. Like I love to read, but it’s — I love how the book is structured. It’s just so simple and practical, so I can’t say enough good things about it. I love what you guys are doing with Your Financial Pharmacist, such a valuable asset to our profession. So it’s such a pleasure to finally meet you, meet you and talk to you, Tim, and I just can’t wait for what the future holds.

Tim Church: Thanks, Adam. Really appreciate that.

Adam Martin: Thank you.

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YFP 090: Key Tips For Refinancing Your Student Loans in 2019

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Key Tips For Refinancing Your Student Loans in 2019

On this episode of the Your Financial Pharmacist Podcast, Tim Ulbrich is joined by Tim Church, YFP refinance expert and student loan ninja. In addition to a quick recap of the process of refinancing your student loans, the benefits of refinancing, how to calculate your savings and what to look for in a refinance offer, Tim and Tim give you an update on a new refinance offer available that may save you big.

Summary

On this episode, Tim Ulbrich asks Tim Church about how to refinance student loans, the benefits of refinancing, how to calculate savings on refinancing your student loans and what to look for when analyzing which refinance company to choose.

Refinancing may not be the best option for everyone with student loan debt. First, you have to decide if you are going to pursue student loan forgiveness or not. If you are going to pursue PSLF or if there is a chance you could, then do not refinance as it will make you ineligible for forgiveness. Additionally, mathematically, refinancing may not make sense for some people, especially if they are needing an income driven repayment plan due to having unstable income or upcoming changes in income.

The main reason to refinance is to get a lower interest rate. On average, graduate or unsubsidized student loans have an interest rate of 6-8%. If you refinance with a lower rate, you have the potential to save thousands. When you refinance, it is possible to get out of debt faster as you may be able to pay more money toward your principal balance regardless of how long your term is.

Other benefits of refinancing student loans are that you can potentially remove a cosigner from a loan, lock in a fixed rate, and potentially receive a cash bonus. Refinance companies make money from the interest you pay on your loans. Your Financial Pharmacist has worked with several reputable loan companies to offer cash bonuses when refinancing with their companies.

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Tim Church discusses the newest refinance company partner, First Republic. They are only in select cities, however, can offer (at the time of recording) 1.95% fixed interest rate for a 5 year term and up to 3.95% fixed interest rate for a 15 year term. There are several other requirements that need to be met to be able to refinance with First Republic, however, doing so could save you lots of money over the course of your loan.

If you have any questions regarding student loan refinancing, email the YFP team at [email protected] .

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 090 of the Your Financial Pharmacist podcast. Excited to be back on the mic alongside Tim Church. Tim, how you doing? It’s been awhile.

Tim Church: Yeah. Hey, Tim. I’m glad to be back on and just cool to be closer to that 100 mark.

Tim Ulbrich: So awesome. I was reflecting on that today, Episode 090, we’re 10 away. We’ve got some exciting things planned for Episode 100. And just so you know, Tim Church, while I am freezing here in almost sub-zero temperatures up in Columbus, Ohio, I happened to pull up my weather app today. And I still have Palm Beach Gardens on my phone from last time I visited, and it said it was about 80 degrees when you walked out of work today. So how’s that feel while we’re suffering in 0-degree temperatures?

Tim Church: It feels great. But I’m not looking forward to coming to Columbus in April.

Tim Ulbrich: Hey, hopefully by then, we’ll have turned a corner. So we’ll see what happens. Well, excited to have you on. I certainly, as I alluded to in the intro, you are our student loan expert. And when it comes to refi, you’ve had so much experience in this area, so I want to pick your brain a little bit. We’ll revisit some of what we talked about in episodes 029 and 030 around refinance. So certainly go back and listen to those episodes as well. But things have changed, there’s new offers that are out there. And so we want to make sure we’re revisiting this topic, probably one of the most common questions that we get is around this topic of refinance. Tim, before we jump in though, I want to say side hustle series, the work you’ve been doing with that, I have really been enjoying the episodes that you’ve been recording. So great work with that, looking forward to more of those coming in the future. Alright, here we go. Student loans, always a hot topic. As I mentioned, one of the most common questions we’re getting. Refinance. Should I do it? How should I do it? What companies should be used? So Tim, before we jump into some of these specific questions, let’s discuss specifically who should not be considering a refinance. So walk us through that component of who should not be refinancing.

Tim Church: Definitely. Well, I’ll be the first one to say that I made this huge mistake back a number of years ago. But I think the way that companies are marketing themselves and getting people to want to refinance that you have to really take a step back, and it’s not the best option for everybody. I mean, mathematically, it doesn’t make sense, even if you’re somebody that really wants to get rid of your loans as fast as possible, it may not actually be the best way or the best approach how to do it. So I think the biggest group, where refinancing is completely off the table is that if you’re pursuing the Public Service Loan Forgiveness program or you think you could be or that’s still in the running because if you’ve got typical student loans that pharmacists are facing, you know, $160,000 or more, then mathematically, PSLF is always going to win out just because of some of the strategies you can do to optimize it where you can simultaneously save in your 401k and other retirement vehicles while lowering those student loan payments and then not having to worry about a tax bill. So I think that’s really the biggest group where you’re just going to shut down from refinancing because once you do that, you’re going to make yourself ineligible. I think there’s some other groups too where you have to really look at this before you pull the trigger. And that’s really individuals who need an income-driven repayment plan. And there’s a number of different reasons why that may be. Now, one is obviously for PSLF, but it could be if you’re having an unstable income or you anticipate you’re going to have a change in your income and you really need to make sure that you’re able to cover at least that monthly bill. And you may not be ready to make whatever that payment is when you refinance, whatever that term may be. So I think those are some of the key ones that you really want to look out for.

Tim Ulbrich: Yeah, and I think, Tim, just to elaborate a little bit on your PSLF comments, which I think are spot-on and certainly just to reemphasize that, if you’re even remotely considering Public Service Loan Forgiveness, the way we always teach the loan repayment option is you first have to decide forgiveness or no forgiveness. And if it’s a no forgiveness play, then you evaluate a refinance, among other options. And we talked about PSLF in Episode 018. We also came back and talked about it on Episode 078 after some of the news that recently came out that was really getting to the point that 90+% of people applying for loan forgiveness were not receiving the benefit, and we hopefully broke down some of the confusion around that. Tim, I want to ask, though, we talked about in Episode 062, we talked about non-PSLF, so the other loan forgiveness. So that’s also something that people need to be looking out for, right? Any forgiveness clause they may be pursuing in the federal repayment option, they should not be going through a refinance, right?

Tim Church: Right, because you have to keep your loans in the federal system in order to qualify for any of these programs. So once you make that move, you would make yourself ineligible. And there are people where using the forgiveness that’s not through PSLF, where it’s 20-25 years, depending on the repayment plan that you choose and then having to pay the tax bill on the amount forgiven actually can be a better strategy than refinancing. I know it may seem overwhelming to say, “Hey, I’m going to hold onto my loans for 20-25 years,” but even with having to plan for that tax bill, you could be in a better position, depending on how high your debt-to-income ratio is. So you really have to look at the math behind what your situation is and what the difference would be if you refinance and how much would your monthly payments be and what kind of buffer do you have to even put towards other financial goals? So we talk about sometimes the debt-to-income ratio of 2-to-1, but also some of the things that you’re feeling holding onto loans that long, there’s some other emotional aspects I think behind it as well. But it’s also important that you do the math and see what comes out to be a better option.

Tim Ulbrich: Yeah, just a great example of that, Tim: This past week I was at Ferris State University doing some work with their students, and we were walking through PSLF and non-PSLF forgiveness. And you know, I think we tend to focus on so many of the mathematical components, but when I talked to them about non-PSLF forgiveness, 20-25 years, the tax bill, I got this look on their faces like, “Who in the world would ever consider that?” But I think to your point is that it’s a combination of these variables. And if you’ve got a very high debt-to-income ratio, and you’re working for a non-qualified employer, you’re working for a for-profit employer, then you know, depending on how you feel about it, it’s at least probably an option to evaluate. So again, just to be clear here, anybody who’s considering loan forgiveness through the federal loan repayment options, whether that’s PSLF or non-PSLF, certainly refinance would make you ineligible because you’re pulling yourself out of the federal system into the private system. The other question I get here, Tim, is — and you alluded to this a little bit about income-driven repayment plans and anybody who needs that, but what if I’m anticipating changes in income or I’m unsure about cash flow I’ll have month-to-month? I mean, is this something similar to the federal loan repayment options where I can make extra payments? So I could start with a longer term, say 20 years, and then eventually come down if I have more? Or do you recommend if somebody’s in that period of I’m not exactly sure the stability of my income, I should just stay in the federal system and then wait to do a refi?

Tim Church: Yeah, I mean, I think the conservative play is better in this situation that you want to have stable income and know what’s coming in because you’re not going to get that flexibility with most refinance companies like you get with the federal government. I mean, the option to do income-driven repayment plans and at the very worst, to temporarily stop making payments, whether it’s a qualified deferment or forbearance, you know, that’s something that you have to consider that you’re giving up. Now, some of the companies, they have variable options. I think at least one has an income-driven repayment plan option, and some allow you to make interest-only payments, but I think that you have to be pretty confident in your financial position before you make this switch.

Tim Ulbrich: Yeah, we’ve definitely seen a transition, I would say over the last five years where these plans very much are starting to look and be as competitive as the federal options, just hopefully with a lower rate, which I’ll talk about here in a minute. So I think we’re going to see more of that shift toward offering income-driven repayment plans, especially knowing how popular those are among borrowers when they go into active repayment. So before we transition and talk about the main benefits of refinancing, obviously, there are benefits because you have done this — how many times now have you gone through the refi process?

Tim Church: Um, let me see. I’ve refinanced my loans three times. And I think my wife has also done three times. So like a total of like six times.

Tim Ulbrich: OK. So let’s come back to that because I think that when I mention to people, you can refi more than once, I think there’s some concern about the impact on credit scores and just not being aware that you can do that. So let’s come back to that. But let’s first start with the main benefits of refinancing. So why would somebody pursue this? So they’ve decided, OK, I’m not going to pursue loan forgiveness, so now I’m going to evaluate either staying in the federal loan repayment system, choosing one of those options, or going to a refinance. What would be the benefits of doing a refi?

Tim Church: So I come back to your situation, Tim, because you’re somebody that was not pursuing any of the forgiveness programs.

Tim Ulbrich: Please don’t remind me, Tim.

Tim Church: And stayed in the federal system. And you —

Tim Ulbrich: At 6.8%, yes.

Tim Church: Right, so you had a lot of financial stability. And if you’re somebody in that position, most of the time, you’re going to be able to get a lower interest rate. And obviously, that is the main benefit and the main reason why you should even consider refinancing. So the average interest rates in the federal system are typically from 6-8% for a graduate loans or unsubsidized loans, and so by getting that overall interest rate reduced, you’re going to save a lot of money over the course of the loan. Now, it depends on your balance you start with, the change in the percentage and then obviously how fast you pay it off. But if you consider a pharmacist who has a balance of $160,000, and you plan to pay that off over 10 years, well if you take a rate from a 7% overall to a 4%, you’re going to save about $28,000 over those 10 years. So really, it can have a huge impact on the total amount that you’re going to pay over the life of the loan.

Tim Ulbrich: So what do you say — and I know obviously the news has been over the last year, we’ve seen the fed increase interest rates, which obviously these private loans are going to be tracking with what the fed is doing with their interest rates. So are you seeing these are still a competitive option with those federal loans being 6-8%? Were they more competitive 12 months ago, and they’re less competitive but still competitive? What are you seeing in terms of rates and what people are getting to? Obviously, knowing it’s variable based on debt-to-income ratio, credit score, etc.

Tim Church: Yeah, I mean, I haven’t noticed a huge difference.

Tim Ulbrich: OK.

Tim Church: In 2018, when we did multiple refis, we were able to get the first couple times down to in the 4’s. I know Nate, the Real Estate RPH, he I think was able to get down to like a 3.5% fixed rate with one of the companies. And this was in 2018. So I still think there’s definitely a lot of competition and a lot of room. And obviously, we’ll talk about one of the special partners that we have because they offer kind of a unique situation. So Tim, so we talked about obviously the lowering your rate I think is the biggest reason. That’s the No. 1 reason why you’re going to refinance. You’re going to pay less money in interest over time. So one of the things that’s kind of a cool way to look at it is technically, you will get out of debt faster if you make the same monthly payment that you’re making with a higher rate and switch to a lower rate because more of that payment is going toward the principal. So that’s another kind of a cool way to look at it. So regardless of what term you end up choosing, if you just make the same payment, you know, more of that is going to the principle, and you’re going to get done with it a lot faster.

Tim Ulbrich: So what are you seeing in terms of terms? You know, that’s usually one of the questions that I get of, you know, what is the range here? Is it 5-20 with everything in between? Are these all the same between companies? And then I would assume, in theory, the more aggressive you’re willing to be with payments, making larger payments, the better the interest rate you’re going to get. What are these companies offering?

Tim Church: Yeah, I would say in general, that’s true. So you’re totally right. Most companies, it’s anywhere from 5-20 years. A lot of companies offer a 7-year, a 10-year and a 15. And then a couple companies offer kind of rates a little bit in between there. But yeah, in general, the shorter the term, the more competitive the interest rate that’s being offered. And then also, the other variable that goes into it is whether it’s a fixed rate or whether it’s a variable rate. And that’s the other thing. A lot of times, they’ll put out teaser rates or rates from. Even on our website — which is typically their variable rate that they’re advertising. And sometimes, that’s just a teaser rate just to get you interested. But you always have to look at what the maximum or what the cap is because that can obviously change with the federal reserve and with LIBOR rates, so there’s a lot of different situations where you can end up in a worse situation than what your rate was before you refinanced.

Tim Ulbrich: Well, let’s talk there for a minute about the co-signer issue. That’s often a question I get as well is that, hey, I currently have a loan, I’m in the federal system, I’ve got a co-signer. How does that work when I’m looking to refi my loans and bring them over to the private sector?

Tim Church: So a lot of times, that’s another reason to do the refinance is you can actually get rid of a co-signer. So depending on your credit score, your current income that you have, your debt-to-income ratio, you can actually just put yourself on the loan and remove whoever else was on there. Because I know that that is a concern for some people, especially when the originally took out loans that they have somebody else that potentially is responsible.

Tim Ulbrich: Awesome. So we have talked through several benefits. We obviously talked about the interest rate and the savings, being able to get out of debt faster, the money going to a principle, potentially removing a co-signer, being able to lock in a fixed rate, more aggressive payments, usually the better rate that you’re going to get. What about the cash bonuses? You know, you mentioned the variable rates being kind of a teaser to get people in. The other teaser I see out there is often the cash bonuses, which certainly we have negotiated the best rates for our listeners over at YourFinancialPharmacist.com/refinance. But are those cash bonuses what they seem? Are there any hooks? And then why not refinance multiple times if you’ve got opportunities?

Tim Church: Well, that’s what my wife and I did. We literally did that. And this is no joke, but honestly, we actually made $2,700 last year in 2018, just by refinancing multiple times.

Tim Ulbrich: Time to quit your YFP job, right? Just keep refinancing.

Tim Church: Honestly, I don’t think that’s always going to be the scenario and the situation, especially depending on what competitive rates that you’re able to get. But it was fortunate for us is that every time we checked every couple months is that another company was able to make an offer that was lower at which we currently had. So it obviously made sense. It wasn’t just for the cash bonus that the companies were offering. It was also to get that lower interest rate. But I think it’s kind of important to understand, you know, why they do this and why pharmacists or healthcare professionals are sort of targeted. But obviously, it’s no secret that refinance companies, they’re going to make money from you by the interest that you pay them each month. And pharmacists, they typically carry high debt loads in the six figures, we all know that. They’re actually going to make more money off of pharmacists and other healthcare professionals than other people with just typical undergraduate student loan debt. And so as an incentive for you to use a particular company, they typically will offer a cash bonus or sometimes called a welcome bonus. And as we talked about, you’re not limited to doing this one time. And because the interest rates can always change and sometimes you can get a better rate, then you can obviously do it multiple times. I’ve heard this term before is “serial refinancing” where you can do this. But I mean, it makes sense that they’re able to do that. But I think one of the cool things — and obviously, we’re fully transparent. We do make a commission if you refinance through our links, but a lot of the big players out there, they’ve got student loan review sites and things like that. But they’re either offering nothing if you use their sites or use their links or a very minimum amount of money. But that’s not really our style. And one of the things that we wanted to do even from the get-go is really offer a lot of value and push that number as high as basically we could to offer our audience some really high cash bonuses, which there’s not very many companies and businesses that are basically putting that out there and putting that much money for people to get.

refinance student loans

Tim Ulbrich: I think we need to get you a “Refi King” T-shirt. Right? That would be awesome. It really is incredible. And I think that’s an important piece that people just need to understand, what you just said there about the cash bonuses, the transparency is important. Obviously, that’s taxable income, right? So you need to account accordingly when it comes to tax season and accounting for that money that you’re making on a refi. What about the credit impact? That’s a common question I get that, “Hey, if I go through with these refinance offers, is looking at rates going to impact my credit?” And if not, obviously then when you go through the process, I’m assuming it would, just like you’re buying a car or something else. Talk us through the impact on credit.

Tim Church: Yeah, so when you do a rate check, they often do a soft credit check. So you’re just trying to see what kind of rate you’re eligible for. You’re not going to have any ding or any hit on your credit score. But you may experience a very minimal change when you do refinance, when you use — basically, when you fill out the entire application process, they’re doing a hard credit pull. So it is possible you might see a small reduction in your credit score. Personally, my wife and I didn’t really see that big of a difference, to be honest.

Tim Ulbrich: Which is just all the more reason, you know, to be aware of it, check your credit, annualcreditreport.com. You can do that once a year from three different companies. It’s something you should just be doing anyways, but obviously, be aware of the impact that this may have in that process and weigh that benefit as you’re going along and the risk, if any, associated with doing that. So Tim, second most common question I get outside of, “Hey, should I refinance or not?” is “I’ve got all these options, I’ve got all these choices. You guys have some on your site, I’m getting these fliers in the mail, I’m getting emails, I’m getting things from my national association. What company should I choose? And then what are some things that I should look for in choosing a company?”

Tim Church: Yeah, I mean, you definitely have to make sure they’re reputable. Unfortunately, there are so many scams out there with companies claiming to have these special forgiveness programs or special refinancing programs, and oftentimes, there’s — one of the ways you can tell they’re not reputable or they’re kind of scammy is that they want to pay them a fee. So that’s really a big red flag is that if they’re asking for some kind of origination fee in order to do the refinance, I mean, that’s a huge red flag. I mean, we just talked about that they want to pay you money in order to refinance with them. So definitely want to watch out for that. But there’s two places that I really like if you’re really concerned or you want to check it out. The first one is the Better Business Bureau. So you can go there and check out and see what kind of ratings they have and also some of the customer complaints, if they have any. And then NerdWallet actually has another cool resource called the Watch List. And we have that link on our website. We’ll put it in the notes. But what they did was is they’re basically identifying and targeting any businesses with unethical practices or fraudulent practices or have like severe debt or liens against them. So I think that’s another cool place to look for to make sure that whoever you’re using is a very, you know, safe company to use.

Tim Ulbrich: So obviously, they need to be reputable. You know, no origination fee, I agree that ultimately, you’re giving them business, and they’re going to make money off of that. We talked about the cash bonuses, you can obviously compare those. What about the forgiveness on death and disability? We know that if somebody only has federal loans, their loans would be forgiven in the event of death or disability. But that’s a question mark in the private sector. I know we’ve seen this move where it seems like most of all, these companies are offering that but not everyone. So what is your advice as you’re talking with fellow pharmacists and peers about how to evaluate that benefit of loan forgiveness on death and disability?

Tim Church: I mean, it’s definitely something you have to consider. I don’t think it’s an absolute must, but if you are going to decide to go with a company that doesn’t offer that benefit because they’re rates are much better, that you want to make sure you have those policies in place. I mean, for everybody pretty much, disability insurance or some kind of coverage is going to be warranted. Life insurance, that could be debatable on terms of whether you absolutely need it. But yeah, I mean, I think it’s something to keep in mind because that is one of the protections that you may lose when you switch your loans out of the federal system to a private lender. Three of the companies that we have on our site, so Common Bond, Earnest and SoFi, they will actually forgive the balance on death or disability. So that is one of the perks of those companies that we partnered with.

Tim Ulbrich: Awesome. So let me just point our listeners to — I think that’s a great point that it’s not an absolute, but if you’re going to work with a company that does not offer that because they’ve got a better rate and you’re weighing the risk and benefit, make sure to figure out that you have the life and disability insurance coverage that you need. We talked about that in Episode 044, How to Determine Your Life Insurance Needs, and Episode 045, How to Determine Your Disability Insurance Needs. So Tim, we talked through the benefits in terms of what somebody should look for in a company: they’re reputable, no origination fees, the cash bonuses, the loan forgiveness on death and disability. Now, obviously add making sure there’s no prepayment penalty. So just like in the federal system, if you want to make extra payments, maybe you’re on a 15-year fixed repayment plan, and you want to expedite that if for whatever reason you don’t refinance down to a shorter term, you can of course make extra payments along the way.

Tim Church: Yeah, and I’ve seen many people where, you know, they’ll say something like, “You know what? I could refinance to a five-year. I could make that monthly payment.” Or “I could make that seven-year payment. But you know what? I want to give myself a little bit more flexibility, and I’m going to set it up as a seven.” Or “I’m going to set it up as a 10. But I’m going to throw extra money at it.” So most of the companies, most of the main companies out there, I haven’t seen this be an issue of making additional payments and paying it off faster than what the term that you signed up for.

Tim Ulbrich: Yeah, I think especially as these companies have become so competitive at getting your business, they’re obviously wanting to offer everything they can to be able to secure that business. So Tim, one of our newest partners that we wanted to talk about on this show and make sure people are aware for those that are able to access this company and the benefits is First Republic. And I have to be honest, when you came to me with what First Republic was and told me about the rates, and I heard you talking about rates below 2% and I’m thinking of most people at 6-8%, I was like, “I don’t think I’m buying it.” But certainly, it’s legit. You’ve gone down this path. We’ve had several others that have. So talk to us about this opportunity, who qualifies, and what are they offering that’s unique compared to the other companies that we’ve been working with?

Tim Church: Yeah, they’re definitely a very unique bank. And it’s funny because of how this bank is described out there. Like a lot of blogs and websites, they talk about it as a secret or a mythical bank. Like, you know, like it’s hidden in the valley, like only certain people have the map to find it.

Tim Ulbrich: To find it, yeah.

Tim Church: But one of the main reasons why it’s kind of had that reputation is that unlike some of the megabanks out there, they’re only in select states and cities. So the state that they have the most locations in is California. And we have a link to the post that I wrote. It has all the specific locations there. But they’re in Portland, Oregon; they’re in Greenwich, Connecticut; and then they’re in Palm Beach County. They happened to be in Palm Beach County, Florida, which is where I live. And that’s why I was able to refinance with them. And then they’re also in Boston and New York City and also Jackson Hole, Wyoming. But why that’s important is that —

Tim Ulbrich: Jackson’s so random. Jackson Hole, Wyoming, right?

Tim Church: I don’t know, I don’t know. It would be interesting to see how their team, how did they decide how to select like what cities they’re going to have. But why that’s so important is that one of the requirements to actually refinance with them is that you have to live within a 20-mile radius of a physical location. I don’t know exactly why they mandate that, but that is one of their requirements. And obviously, that’s going to disqualify a number of people out there that don’t live in one of those locations.

Tim Ulbrich: Yeah, and depending on somebody’s student loan balance, it may be worth picking up and moving. I’m half kidding. But you know, it could when we look at these rates. But I think too, what I’m assuming they’re trying to do, which other companies are interested in doing as well is, you know, the refi here may be the gateway to get in the door as a long-term customer, to purchase a home, to eventually get a HELOC, to do real estate, other things that you do at their banking. But nonetheless, I mean, their rate is like no other what we’ve seen. So talk us through what they’re offering.

Tim Church: Right. You can’t beat it.

Tim Ulbrich: Yeah.

Tim Church: Yeah. I mean, there’s no one else that I’ve ever seen that has these kind of rates. But they still have, even as of the time of this recording, they have a five-year term. And this is the other thing is these are all fixed rates. None of these are variable rate offers. They’re all fixed rates. But they’re offering 1.95% for a five-year term.

Tim Ulbrich: Crazy.

Tim Church: And then it’s up to a 3.95% up through a 15-year term. And one of the things is that, you know, unlike some lenders where they’ll take all of your financial information and then they use their magic algorithm and spit you out a specific rate, it’s kind of — it’s an all-or-nothing. Basically, you either qualify or you don’t.

Tim Ulbrich: OK, so you mentioned them offering rates that are fixed, less than 2%, 1.95% up to 15-year terms at 3.95%. I was actually just coming back and looking using our refinance calculator, which we have available over at YourFinancialPharmacist.com/refinance, where you can run your numbers to say, “Hey, if I were to keep my loans in the federal system versus if I were to refinance, what exactly would be the savings?” So you know, looking at my total indebtedness, roughly around 6.8%, which is hard to think about when you’re talking about rates at 1.95%. So for me, it would have been about $30,000 of savings through a refinance like this. And I think that’s what we’ve seen on average for somebody who’s looking at the average indebtedness and saving a couple percentage points on a refi. Obviously, a rate like this is going to bring that down even a little bit further. Now, I know, Tim, you had to jump through a couple hoops that were not necessarily insurmountable but that were different from other refi companies out there to be able to work with them. So talk us through those just so people that are listening who are going to be evaluating this option among others, what are the things that they can expect in terms of meeting the requirements to be able to refi with First Republic?

Tim Church: Yeah, that is one of the big differences is that it’s pretty challenging to actually qualify and meet all of their requirements, much more stringent than the other major players out there. But we already talked about the 20-mile radius of a physical location. But one of the things that you have to have and what they’re looking for is about 10-15% of the loan balance in liquid savings. And depending on how high your loan balance is, I mean, that can be a pretty substantial amount. And if I recall, that’s not in retirement accounts or anything but actually liquid cash in savings, checking, something that’s able to be accessed pretty easily. So I think that’s one of the requirements that’s pretty tough. And then the other one that I think is pretty tough as well is they’re looking for a debt-to-income ratio of 40% or less. You know, we talked about earlier that it’s sometimes the opposite for people where they have a 2-to-1 debt-to-income ratio. So you know, much higher than that ratio. So I think those are probably the toughest requirements to meet. And sometimes, it may be something where you don’t meet it initially, but eventually kind of once you build your savings up, pay down your debt a little bit, that eventually you’re going to kind of meet those cutoffs. And what they’ve told me, what some of the reps is that these are not all, you know, you have to meet these exactly to the exact T. They kind of look at the whole picture, but this is kind of their basic guidance for when they’re looking at who to approve. And then some of the other ones that you have to have — so you have to have a loan balance of $25,000-300,000. Probably no big deal for most pharmacists who are graduating today. And then a credit score of 750 or higher. And those are really the main things. But then to kind of take it a step further, and this was something that for my wife at first was a little bit — caused a little bit of anxiety.

Tim Ulbrich: You convinced her, though.

Tim Church: I did. I used my amazing persuasive skills to show her all these benefits. But you actually have to bank with them. So basically, wherever you’re banking currently, you have to switch everything over. And that is to keep your rates at the level of where they are, you have to make direct deposits into one of their checking accounts. And then technically, you also have to keep I believe it’s 10-15% of the loan balance in there to keep that rate or it goes up — it goes up by a very small percentage, it’s not anything substantial. But the biggest ones to keep the rates down are making direct deposits, keeping a checking account open, not basically closing all your accounts before the loan’s paid off. So there’s definitely a number of hoops to get it to happen, but I will say that I am impressed overall with their customer service. You know, one of the things they do is they assign you a relationship manager, which you know, I kind of joke with people, I’m like, yeah, it’s VIP access, like your 1-800 number, like you’re calling like somebody’s cell phone, you know, in case you have any issues. But one of the other cool things they do is because they recognize that they’re only in select cities, if you have to use any ATM, it doesn’t matter what other bank or what other company, they’ll actually reimburse for any ATM fees that you incur, which is a pretty cool feature that they have.

Tim Ulbrich: I like that. I mean, I feel like the idea of ATM charges seems ancient in 2019. So glad to see that they’re on board with that.

Tim Church: Right.

Tim Ulbrich: You know, it’s interesting, even though you described those hoops, Tim, to me, as I hear you say all of those, they all make sense to me, right? So for them to be able to offer a very competitive rate, you know, they want to probably have somebody that they’re going to retain long-term business and get Return on Investment elsewhere, which makes sense in terms of banking with them, direct deposit so you have a higher likelihood of future business, and then they want to make sure that you’re a qualified applicant who’s going to be likely to pay on your debt and not be somebody who ends up going into default on these. So having liquid cash, having a favorable debt-to-income ratio, having a positive credit score, I think that all makes sense. And I think the thing I would consider for our listeners to evaluate if First Republic is an option for them to consider is maybe there’s a refinance play that you can do right now and take advantage of some of the savings, a cash bonus, and this is something you’re working towards as the next refinance, maybe in a 3-6 month period as you’re getting these things saved up. And I think you certainly can have your emergency fund in with them, which would help the 10-15% loan balance. So just some strategy, but when it’s all said and done, you’ve been there. It’s actually happened, right? And you’ve gotten good customer service, as you mentioned. So you can learn more about that on our website, YourFinancialPharmacist.com/refinance. We’ve got them listed alongside other partners. And then you wrote an awesome blog post on this topic and specifically, more about that offering that we’ll make sure to link to in the show notes.

Tim Church: Yeah, one of the other things that’s really cool — and this is the feature where I said, I don’t understand this offering that you have. But if you — once you refinance with them, if you pay off the loan balance within four years, they’ll actually give you up to 2% of the interest paid, 2% of the total loan balance. They actually give that and credit it back to you. And that’s one of the things where I said, “Well, like I don’t understand because you guys aren’t making much money, you know, off of this.” But again, it’s kind of what you said is this is one of their moves to get some of the younger generations into their banks to provide them and offer them other services.

Tim Ulbrich: Yeah. I mean, when the Churches end up being in the multi-millionaire status, they’re going to have your business, right? So that’s a good play on them in the future. So those that are listening to this that, you know, heard, OK, who should consider this, who should not? I know that I’m not going to pursue forgiveness, so now I’m going to evaluate a refinance. We talked about the benefits, we talked about the features of what somebody should look for in a company. So the question is, what’s the next step? Where do I go if I’m listening and I want to learn more about this? I want to check rates, I want to see my potential savings. What would you recommend?

Tim Church: Yeah, so I think going to our website, to YourFinancialPharmacist.com/refinance. And I think the first step is is just get some rates and see what you’re even eligible for. And then kind of once you look at the rates you can get and go ahead and use our calculator and see what that savings would be like. You know, some of the sites, they have it kind of baked in, so they’ll let you know and tell you what your potential savings are, but I think that’s kind of important moving forward. And then, you know, obviously if all the rates are the same and all of the perks and things that you like about the companies, then definitely go where the money is. Go for the cash bonus.

Tim Ulbrich: Awesome. And as always, if you have any questions as you’re going through this process, shoot us an email at [email protected]. And a couple last reminders as we wrap up this week’s episode of the Your Financial Pharmacist podcast, we mentioned at the beginning that 2019 is the year of giveaways over at YFP. And so this month, we’re giving away five Costco gold memberships — I really wish I was in this drawing, to be honest, but I don’t think that would be fair — valued at $60 each. So enter the giveaway today at YourFinancialPharmacist.com/giveaway. Again, that’s YourFinancialPharmacist.com/giveaway. And as always, if you liked what you heard on this week’s episode of the Your Financial Pharmacist podcast, please do us a favor and leave a review in iTunes, Spotify, Stitcher, or wherever you listen to your podcasts each and every week. So Tim, thank you so much for joining and to our listeners, have a great rest of your week.

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How To Prepare Financially When Expecting

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How To Prepare Financially When Expecting

The following is a guest post by Karen Berger, PharmD. Karen is a pharmacist and medical writer in Fair Lawn, NJ. Her husband has been trying unsuccessfully to put her on a budget for many years.

Congratulations – you’re expecting! In just a few short months, your life will change in a way you could never imagine. A precious baby will smile and coo at you all day, as you feel a powerful love like you never imagined. You will also never sleep, you will be up to your elbows in diapers, and you will have tons of new expenses.

If you are like me, you will also use one-click ordering to have Amazon packages delivered to your door daily, and you will have your credit card number memorized for all other websites. Having a baby can be a major life change and a financial wake-up call. Learning how to prepare financially when expecting is essential.

My husband and I had our kids pretty much back to back – 3 kids in 4 years. It all feels like a blur. Having a baby is like having your entire life as you know it turned upside down. At many times, you will feel that you have no control over this baby, who basically rules your life for the next 18 years. Although you cannot control your newborn, you can control your finances and take the steps of getting your finances in order when expecting.

According to Nerdwallet, raising a child costs at a minimum $260,000 from ages 0-18. This price includes basic (less expensive clothes and groceries) needs and does not include extras such as electronics, birthday parties, and vacations. Taking into account more expensive essentials plus all the extras, you are now looking at over $745,000 from birth to 18, and that is per child, and all before college.

When I was in high school, anytime I was asked what I wanted to be when I “grew up,” my answer of “a pharmacist” was frequently met with the same reply. “What a great career for a woman,” people would nod approvingly. At the age of 17, this made absolutely no sense to me. However, it makes a lot of sense now. A stable income with flexible options is a perfect job for a parent. A pharmacist salary puts you in a great place as you take on the task of financial planning for a baby.

Getting Your Finances in Order

When planning for a baby, there is a lot to do – you have to decorate the nursery, pick the perfect stroller – the list is endless. However, the biggest favor you can do for your family is to get your finances in order while expecting.

Knowledge and clarity about your current financial situation are of utmost importance. That means knowing exactly what it costs to run your household and your spending habits on nonessential items.

While the idea of having a monthly budget is not sexy or fun for most people, it’s a great way to help you organize your spending, eliminate or cut unnecessary expenses, and make adjustments to help you pay off debt and reach your other financial goals. You can learn more about budgeting by checking out this post.

Besides budgeting, knowing and tracking your net worth is a great way to get clarity on your current financial status. In short, your net worth is your total assets minus any outstanding debt. Many pharmacists, especially those starting out, will begin pretty far in the negative considering student loans. However, your progress and trajectory of your net worth is what’s really important.

Hopefully, you are making decisions to help grow your net worth in order to secure your financial future and achieve freedom from debt. But if that’s something you are struggling with, going back to the budget and optimizing is a great idea. If you want to determine and track your net worth we have a great tool through Right Capital you can use.

Besides getting clarity on your finances, it is really important to be on the same page as your spouse when it comes to budgeting and spending. There will be enough to argue about, such as who gets up with the baby and who does the laundry and cleaning (spoiler alert: it’s usually mom). If you can figure out money ahead of time, you are winning the game.

Insurance and Benefits

Now is the time to really understand your insurance benefits for your prenatal care, labor, and delivery. What is covered? Is there a maximum? Do you have a deductible or copays? What if your baby ends up in the NICU – how much will you have to pay? One of our children was in the NICU and the hospital billed over $100,000 – fortunately, we only had to pay a few hundred dollars.

It is also important to plan your leave; check with your company’s HR about sick pay and understand your state laws with disability/FMLA. You will want to predict how much money will be coming in while you (and possibly your spouse) are out of work.

Now is a great time to start an emergency fund, if you do not have one yet. You will want to save 3 to 6 months of expenses (not income), in a separate, accessible account such as a money market or savings account.

Once you establish your budget, taking into account newborn expenses, you want to ensure you have enough savings to cover any missing wages, in addition to the emergency fund. Depending on how tight your budget is, you may have to temporarily scale back on making extra debt payments or contributions to savings/investing accounts to build this up.

Take the time to research your benefits online, or call your insurance for more personalized service, and ask all your questions and write down the information because when you have a baby, you won’t even remember your own name.

Trust me. While on the topic of insurance, research pediatricians (and interview them!) and pick one that is in network, if possible. After the baby is born, be sure to call your insurance to notify them of your newest addition, so he/she can be added to your plan as quickly as possible.

Newborn Expenses

Last but certainly not least, you’ll want to have an idea of monthly costs after the baby is born. Diapers, diapers, and more diapers add up quickly. Also: pediatrician copays, formula if you choose to bottle feed, clothing, diaper bags, carriers, carseats, baby monitor, crib, strollers, baby swings, toys, books, and all of the adorable accessories at the baby store that you absolutely must have such as a squeaky giraffe, a pacifier attached to a stuffed animal, and those soft Muslin blankets. You may do a lot more take-out than cooking those first few months, which can really add up.

how to prepare financially when expecting, getting your finances in order when expecting, financial planning for a baby

*These costs do not include insurance or medical expenses.

**Expect to need a new convertible car seat when baby is around one year old at an average cost of $80-$250 per carseat.

Pro Tip: Create a registry so that your friends and family can buy things that you need, rather than guessing what you want!

Childcare is another big cost. How long do you plan to take off? Are you going back to work part-time, full-time, or not quite yet? If you are going to work, do you have family to watch your little one or will you use daycare or a nanny? All have varying costs and they all have their own positives and negatives to explore, and now is a good time to interview possible candidates to care for your little one.

In our next segment, we will tackle some more must-do’s for after baby arrives, such as life and disability insurance, retirement planning, wills, and saving for college.

Financial planning for a baby, and in general, life events, can be overwhelming. Often it is best to bring in an experienced financial planner to help you plan and prepare. If you are looking for some extra help, you can book a free call with the YFP financial planning team.

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