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Month: April 2019

The 6 Biggest Factors Affecting Credit Score Right Now

Posted on by yfpadmin

The 6 Biggest Factors Affecting Credit Score Right Now

You often hear how important your credit score is especially leading up to a large purchase. Mom taught me it is important to pay my credit card balance each month, but I never really understood why except for the fact that I didn’t want to pay interest on an outstanding balance.

Yet this little number can have far reaching effects, such as the ability to even get credit or how much you’ll have to pay back based on the interest rate you’re afforded. The latter can move the needle tens of thousands of dollars, if not more. If I asked you what the biggest factors affecting credit score are, you might look at me like this:

It’s important to understand what goes into this score, so you can improve it if need be. Before we get into the six different factors, let me drop a little background knowledge on the subject. In 2003, Congress passed legislation called the Fair and Accurate Credit Transaction (FACT) Act that affords U.S. residents to receive one free credit report every 12 months for each of the three major credit reporting companies, which include Equifax, Experian and TransUnion.

These credit reports, populated by all those lenders/creditors out there, determine your credit score. One misnomer is that the law does NOT require these companies to give you your credit score for free (just the credit report).

Let’s first breakdown what your credit score is and why it matters. Your credit score is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time. So, for those of you that have a less than perfect score, fret not! There are things you can do immediately that can have a positive impact on your score.

Your credit score tells creditors how able you are to pay back your debt over the next 2-3 years. Credit scores are like batting averages, not golf scores, so the higher the better. Higher credit scores equate to the best credit approval rates (so you don’t get denied to finance that new whip), the best interest rates and the possibility of being extending unsecured credit (meaning there’s no collateral like the aforementioned whip that the lender can take back).

It is worth noting that there are different types of credit scores out there with FICO® being the most common. Others include the VantageScore or PLUS Score®. Typical credit scores range from 300 to 850 with 850 being the best. Okay, now that we have a little background information, let’s dive in to see what factors determine your credit score.

1. Credit Card Utilization (High Impact)

This is a high impact factor, which means it’s very important to your credit score! The lower the utilization, the better. Lenders like to see that you’re not using too much of the credit available to you. The tip here is to keep your balances low. Another trick is to ask for a credit limit increase, which will help keep your utilization low.

Use caution though! Don’t think that an increase to your credit limit is an invitation to spend more. A general rule of thumb is to keep your utilization under 30% for good credit and under 10% for excellent credit. This means that if you have a total $10,000 credit card limit, you should carry no more than a $1,000 balance to have excellent credit card utilization. See below for the utilization percentages.

2. Payment History (High Impact)

This is also a high impact factor. Lenders look at this factor to determine how likely you will make future payments on time. A payment that is more than thirty days late constitutes a late payment and, believe it or not, one late payment could hurt your credit score. Also, the credit report keeps track of payments that are 30, 60, 90 and 120 days late, so if you go beyond thirty days, go ahead and get a payment in so you don’t get hit for a sixty-day lateness. A tip here is to set up automatic bill pay so you’re never late.

biggest factors affecting credit store

3. Derogatory Marks (High Impact)

This is the last high impact factor with less derogatory marks being better. A derogatory mark on your credit report could include something like the aforementioned late payment, repossession, a debt going into collections or even bankruptcy. The general rule of thumb is that these derogatory marks can camp out on your report for up to seven years, so do what you can to avoid them. Again, establishing automatic bill pay or setting reminders in your calendar to make a payment are crucial to avoid these on your credit report.

biggest factors affecting credit store

4. Age of Credit History

The higher (or longer) credit history, the better. Lenders like to see that you have experience using credit. This isn’t always fair to the young consumer out there but look at it from the lender perspective. Would you be more comfortable lending to someone approaching retirement that has an expansive credit history or someone who just graduated high school?

It’s a no brainer. One thing consumers often do is close paid off cards or zero balance lines of credit. This isn’t always the best method with regard to your credit score. You can actually improve your age of credit history over time by keeping your accounts open and in good standing. After all, it takes nearly a decade of history to be considered excellent in this regard!

biggest factors affecting credit store

5. Total Accounts

The total accounts are also important to lenders. This factor suggests that other lenders have trusted you before. When I first learned about this, my thinking was backward. I thought lenders would like to see fewer accounts, not more. However, lenders like to see several varying accounts, such as revolving, installment and open accounts because of the behaviors that are associated with them.

Revolving credit accounts (like a credit card) have varying payments and anything you don’t pay is carried over to the following month with an agreed-upon interest charge. Installment credit accounts (like an auto loan or home mortgage) are accounts that typically have fixed payments with balances that amortize on a fixed schedule over time. Open credit accounts (like utility payments or cell phone bills) are paid in full each month and don’t carry over.

These particular types of accounts rarely show up on a credit report unless you decide against paying the water bill or Verizon for all that data you mistakenly used last month. You can improve your credit score by adding another type of account, however, use caution. Think twice before adding an account just to improve your overall number of accounts. Sometimes it isn’t worth the additional risk of taking on more debt.

biggest factors affecting credit store

6. Hard Inquiries

The last factor is hard inquiries with less inquiries being better for your overall credit score. Hard inquiries hit your credit report when you apply for credit. Although they are unavoidable, try to avoid unnecessary hard inquiries because they stay on your credit report for 2 years.

One trick to practice is to take advantage of pre-approved credit card offers instead of applying for them. Pre-approval means the credit company doesn’t need to check your credit so you can avoid the hit. Buying a car or some household furniture and need financing? It’s still okay to shop around for the best deal because multiple inquiries in a short period of time are grouped together and viewed on the credit report as one incident.

biggest factors affecting credit store

A few more things to note about the credit score. Often times you will see that there are differences in your credit score among the credit reporting companies. It is worth noting that each of the reporting companies uses its own proprietary formula for calculating credit scores that are not available for public view (or scrutiny).

This means that the way Equifax calculates your credit score will be different than how TransUnion does it. Another variable to consider is that creditors do not always report to every credit reporting company, which could alter a score for a particular reporting company. Oftentimes, scores are fairly close, but if your scores have a wide range, you may want to research why (that means digging into your credit report for some answers!).

Now if you’re a big Dave Ramsey fan, you know that he advocates striving for a zero or indeterminable credit score. This is because he strongly recommends paying off all of your debt and never using a credit card, ultimately leading to that situation.

While the intention is good in that it promotes reduced reliance on debt utilization, the reality today is that many organizations and financial institutions strongly consider credit score, regardless of your net worth and the rest of your financial picture. Therefore, it can be more difficult to get approved for a mortgage, investment properties, a lower rate for refinancing student loans, and sometimes even rent if you have a low or no credit score.

Conclusion

I’ve outlined the six factors that determine your credit score, coupled with a few nuggets that are hopefully useful to your own situation. Your credit score is a glimpse into your financial life and your ability to make good on your debts. Know your credit score, know your shortcomings with regard to your credit score and take the necessary steps to fix them to get that score as high as possible!

Need help navigating your credit or finances?

Figuring out how to navigate your finances and improve your credit can be tough if you have student loans and a lot of other competing financial priorities. If you need help improving your financial health, you can book a free call with one of our CERTIFIED FINANCIAL PLANNERSTM.

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YFP 097: Growing a Brand Through Memes, Products, and a Podcast

Posted on by yfpadmin

Growing a Brand Through Memes, Products, and a Podcast

Richard Waithe, PharmD, joins Tim Church on this episode to take a deep dive into discussing his unique career path, his non-traditional pharmacist role and how he’s helping improve patient adherence and health literacy, and some of his side hustles to create multiple streams of income.

About Today’s Guest

Richard Waithe, PharmD, is passionate about patient engagement and advancements in technology that improve adherence and health literacy to ultimately improve outcomes. With years of experience on the front lines in community Pharmacy, Richard is committed to helping individuals better manage their health and medications.

He is currently the President of VUCA Health, a company that has the largest library of medication education videos that serves to enhance patient engagement and provide an on-demand extension of pharmacists and other healthcare providers. He is also the host of the Rx Radio podcast where he interviews Pharmacists practicing in a vast variety of fields and discusses the future of our profession. Richard is the author of the book First Time Pharmacist: Everything you didn’t learn in school or on-the-job training.

Summary

Richard Waithe, PharmD, joins Tim Church in Miami to discuss how to grow your brand with memes, products and a podcast.

Richard graduated from the University of Florida with his PharmD in 2014. He worked at Target pharmacy first as an intern and then a pharmacist. When Target was bought out by CVS, Richard learned the importance of branding and saw first-hand how branding changed behavior through patients reactions to the buy out.

During his P4 year, Richard felt the desire to become an entrepreneur. While on rotations, Richard saw that it was a mess and needed to be better, and knew that he could do more beyond his current role. He began a MTM practice, MedVise. His journey starting and running MedVise taught him a lot as he had to learn about website building, marketing, and branding.

He also created the RxRadio podcast which targets all pharmacists. The podcast discusses themes of exploring different ways pharmacists can have an impact through various careers and paths. His biggest challenge in getting the podcast running was the editing, recording, and building a listenership.

Richard has been able to monetize the podcast through merchandise like mugs, t-shirts and onesies and the book he wrote, First Time Pharmacist: Everything you didn’t learn in school or on-the-job training. Richard built his a social media following around memes that were created out of his experiences in community pharmacy.

Richard took on the position of President at VUCA Health in 2018 which focuses on medication education and providing content to healthcare providers and health plans. When Richard was a P3 student, he volunteered for VUCA Health when the company was a start-up.

Getting to this point with his brand was not easy. For two years, Richard dedicated time everyday from 10 pm to 2 am, while working as a community pharmacist full-time, to work on what he was passionate about.

Mentioned on the Show

Episode Transcript

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

Richard Waithe: Thanks for having me, I’m excited to be here.

Tim Church: Well, I’m excited to be here because I’m hanging out with you in Miami in your house, where we’re recording this episode, which is pretty cool.

Richard Waithe: Yeah, yeah. The weather, luckily, played out to be a really nice day.

Tim Church: Yeah. I didn’t know for the longest time that we were actually neighbors, you know, which I call us south Florida neighbors because it’s really not that far down the road, which is cool.

Richard Waithe: Yeah, there’s not a lot of pharmacists kind of building a lot of brand down here and kind of vocally. Most of the time, I’m connecting with people that are doing similar things to us, they’re like living out in Pittsburgh, California, and all these different states.

Tim Church: Shout out to your friend Adam Martin.

Richard Waithe: Yeah, Adam Martin, there you go. And it’s cool to know that someone’s kind of in the backyard that we can kind of chop it up with.

Tim Church: Yeah, it’s great. Well, I want to jump in and kind of learn, have our audience learn more about you and your career path. But one of the things that has been, keeps popping on my social media is all these amazing memes that you create. So talk a little bit about what you’re doing with those and how — what I want to know is how do you have so much time to get these going?

Richard Waithe: Yeah. So it’s funny about memes, and you’re actually the first person to kind of bring this up I guess really vocally, which I’m really excited about. And the reason is because I’ve been able to build a pretty solid community on social media purely off the back of those memes. And the inspiration from them, I think they’re — I mean, not to boast, but the memes are hilarious.

Tim Church: They are.

Richard Waithe: And I’m cracking up. And I make a lot of them. Like, if it says RxRadio on the meme, I made it. But it’s from pure pain. Like it’s from pure struggle of being in the community pharmacy and that like even to this day, I still kind of remember back about like the different interactions. But the great thing about it, though, beyond the fact that it was great I was able to build kind of a community around it, is that it lets us connect a lot. And it lets, like when people are seeing it, they’re seeing that other people across the country are kind of going through the same thing that they are. And then it also allows, it also drives team morale within the pharmacy. Like I have people that are tagging their team members in the pharmacy in these memes. And it’s great to know that they’re able to help get them through their day. People are messaging me saying, “Hey, this is just happened to us in the pharmacy. It would be a really funny meme.” It’s just great to kind of build that sort — I don’t want to say if it’s a coping mechanism but just build that community to help everyone get through their days usually.

Tim Church: So one of the characters that commonly comes up in these memes is Samuel L. Jackson.

Richard Waithe: Yeah.

Tim Church: So my question for you is is that somebody you just like? Or you just feel like he’s pretty easy to put in many different memes?

Richard Waithe: He’s like meme gold, so I just kind of use him for that. I don’t have any particular reason other than that.

Tim Church: Oh, OK. Other than that. I noticed that that was a pretty popular one, along with Bird Box.

Richard Waithe: Yeah, the Bird Box meme killed it. Which, you know, it’s funny because luckily, everything that pops up that’s a meme could be applied to pharmacy, which is great. And so it’s great to kind of keep up with culture that way. But Sandra’s another one that like — I feel bad. So I always reference like Sandra picturing being like a customer that’s just kind of always annoying at the pharmacy, and I feel bad because I have people that are following that their names are Sandra. And they’re like, “Hey, my name’s Sandra. You’re always mad at me,” and stuff. It’s just super funny. But yeah.

Tim Church: So talk a little bit about your career path as a pharmacist.

Richard Waithe: Sure. So I went to University of Florida. I was at the Orlando campus for pharmacy school. And I was pretty involved there on campus. I was in a lot of leadership roles and got my career started actually with Target Pharmacy. I started as an intern in school, and I did that for a couple years when I graduated, went right into a pharmacy position. Did that for a couple years, and we ended up actually getting bought out by CVS. I was there during the time of that transition, which was super interesting. One of the biggest lessons I really learned in that transition, not only just from an operations standpoint and transitioning kind of cultures, but I learned the importance of brand from there because I literally had patients tell me that they’re super sorry, but they’re actually not going to be able to come back to the pharmacy anymore because of that brand that was changing over.

Tim Church: Wow.

Richard Waithe: And I thought that was really powerful because it had nothing to do with the product, which the product essentially was the medications and the service that my team provided to the patients, which was great at the time. It was the branding that really triggered something in their mind for them to change their behavior, and that was such a huge lesson to me in realizing that brand is everything, no matter how good your product is or not — I mean, don’t get me wrong. If you have excellent branding and marketing, but your product is terrible, like obviously, that might show at some point. But just the fact that the importance of branding was a huge lesson there. So after I did that transition for awhile, I went over to Publix Pharmacy, which I was there for a couple years. Also made it to a manager position there as well. And recently, last summer, actually, I fell into a role where I’m now the president of VUCA Health, and we provide medication education content to healthcare providers, health systems, health plans and things like that. Along the way, I’ve picked up a couple side hustles that we might dive into.

Tim Church: Yeah, before you jump into those, can you talk a little bit more about VUCA Health? Because I think this role that you have as a pharmacist is really unique and a really cool and exciting role.

Richard Waithe: Yeah, so we — so the funny thing is a lot of people ask me, how did you get this role? Did you apply? I get all these questions. But the interesting thing is that I actually — the role that I’m in now, while it being six years later almost, was the flower that grew from a seed I had planted when I was a P3, where I had met the founders of the company while they were just a startup, and they just needed students to help them build out some content, like to at least start it. And I was one of those people that volunteered for that. So it was a seed that I had no idea what that was going to potentially turn into, but the fact that I always just liked to take up new opportunities, and I took that, and it led to this, is pretty amazing. But in terms of the role itself, I did step away kind of from patient care, which was definitely a huge change and a huge transition. And I stepped more into kind of the business and business operations sides of things. I was able to also do a lot of the marketing for the company and lead a lot of those fronts. But it’s — the interesting thing is — and we’ve actually kind of talked offline about this — is that technically, a pharmacist doesn’t have to be in the role that I’m in, like anyone could kind of — I don’t want to say anyone could lead a company, but anyone with any sort of degree can essentially lead a particular company. But I think it’s extremely helpful to be having a pharmacist training to be in this particular type of role. One, we’re providing education content to patients, so it’s good to know that my absolute goal being that I was a pharmacist is to make sure that we’re delivering messages in a way that people can understand and actually help them improve outcomes and change their behavior. But it also helps in terms of being able to serve my potential business partners in the sense of being a pharmacist, our whole thing is about empathy. We do a lot of training in empathy. We’re trying to make sure that we’re caring as much for that patient and meeting their needs to help them with their outcomes. And applying that in the business world is actually, I think, imperative to success. And realizing that whether it’s your customer or business partner that you’re potentially working with is being as empathetic as possible to their situation, finding out how you can help them in whatever it is that they’re trying to do with the sets of tools that you have as a business.

Tim Church: And so the main thing that you guys are doing as a business is you’re really looking at pharmacies, organizations, and figuring out how to bring interactive media, video content to them and almost either supplement or replace the traditional monographs for drug information. Is that right?

Richard Waithe: Yes. So we have a couple different deliverables. But from an overarching standpoint, our goal is to help improve health literacy. So you look at the wave of digital media and the way people are consuming media with YouTube and Facebook and videos, Instagram, all this stuff. For the last 30 years, since OBRA ‘90 was enacted, it’s only been required that when a patient goes to the pharmacy, that you have to get counseling from a pharmacist and you had to give them materials about their medication. And those materials usually came in the form of paper. And it usually came in very small print, eight pages potentially, right? And not a lot has changed since that. And our company has been able to augment that in a sense where our videos are usually short, they’re usually two minutes in length. It can’t really essentially replace the monograph, but it can essentially help drive deeper conversations with providers. With our deliverables specifically for independent and community pharmacies is that we are not replacing the monograph but moreso, we’re providing the monograph in a digital way so they can actually get access to that same monograph that they get on paper. They can get it digitally through our platform. That’s platform’s called Meds on Queue, it’s one of our deliverables. But essentially, we also sell to health plans, we sell to health systems, independent providers in terms of like whether you’re at a clinic, we provide also just the medication education videos. Being a pharmacist, I’m not trying to replace provider interaction but moreso to allow providers to become confident after a particular interaction happens or even before the interaction happens that that conversation is going to be valuable, and the patient’s going to go home with the confidence that they can potentially watch a trusted video about their health or medication.

Tim Church: I think that’s so cool. And I just think about my own practice with patients in primary care setting that even though I discuss the information, medication changes, different things like that, I provide written instructions for them, a lot of times, it’s still not getting through. They’re still not understanding as deeply as they should be. So I think what you guys are doing is so cool because it really provides an enhancement for that health literacy and really to help patients use their medications better and understand them more because there’s a lot of statistics out there that, you know, so many patients, they either don’t take their medications because they don’t have all the education or they just have no idea basically what they’re doing or don’t want to take the medications because nobody ever took the time and provided that education. So I think it’s really cool. So you’re doing awesome stuff with VUCA Health, so at one point did you say, I have this entrepreneurial itch or I want to do something in addition to what I’m doing as a pharmacist?

Richard Waithe: Yeah, so that for me, that actually started when I was a P4, that itch, I would say. And it was because when I first went out on rotations, before that, all I knew was theory. All I knew was like, OK, this is how healthcare works, you’re going to be a pharmacist, you’re learning all this stuff. When I got out into rotations, I saw that, like, it was a mess. And I was just like, we need to be better at this. Like we need to do more. And I don’t think I’m going to be able to — while I’m going to have a great impact, I know that I can do more beyond than what I’m probably going to be my real, actual real is going to be where I’m going to make my money to pay my bills. And I actually started, at that time, I actually started kind of like a private MTM practice where I was going to do essentially MTM, but I was calling it “Personal Medication Management.” And it was through that I started realizing that this is how I’m really going to have an impact and do more. And I learned a lot, I got into website building, I got into the basics of what marketing was and marketing services. I learned about, again, kind of driving how to build brand, build a brand as a personal brand and also for the company. But that was where I really got my itch was just like, I know I need to do more and really turn — and I know that that was going to take some time to do that. Like I wasn’t going to be able to do it in my current role as just being a community pharmacist.

Tim Church: So what is the status with that company that you started there? What was the result of that?

Richard Waithe: So I learned a ton in that, obviously, in terms of what it was to get a company going, I had to get like a CLIA waiver and do all these things because I wanted to, you know, provide point-of-care testing and do all kinds of things in there. But that was moving along extremely well, and then the reason I actually stopped that was because of the role with VUCA Health came to be. And I felt that I was going to be able to have a very similar impact just on a bigger scale. And I thought there was more opportunity to grow, and so I ended up taking that role. But within that, during the time that I was doing — it was called Medvise at the time — during the time that I was doing Medvise, I also realized that not only do I need to do more, I need to help also inspire the rest of the industry to do more. And that’s when I kind of started the RxRadio podcast and RxRadio branding. So I started doing that kind of in tandem with being a community pharmacist and trying to build that brand to personal medication management.

Tim Church: So talk a little bit about the podcast, who you’re targeting, what is it all about?

Richard Waithe: So the podcast is essentially targeting anyone in pharmacy, but in reality, the general theme around it is exploring the different ways that pharmacists can have an impact. So it’s looking at, you know, pharmacists that are working in different avenues in the hospital setting, it’s pharmacists that are going into informatics and working with mobile apps, pharmacists that are at high level leadership positions in community pharmacies and health plans and things like that. So I wanted to really expose all the different ways that pharmacists can practice with their degrees. But in terms of like what the target is, a lot of them, a large part of the audience is community pharmacists. I mean, you just look at the numbers. It’s just kind of what the numbers of pharmacy are, but a lot of students are tuning in. But it really is for that curious pharmacist that’s wondering what else is out there, what are other people doing, what could I potentially find as my own niche, is kind of who the target is for the podcast.

Tim Church: So what challenges did you face with getting it up and running and then just the maintenance of the podcast?

Richard Waithe: So I had zero experience in terms of media before the podcast, and I think the biggest challenge was — so right now, we’re recording on a couple pieces of different technologies, and it was not easy to learn that. And I had to do a lot of YouTube watching, there was a large learning curve in figuring out how to do all these things, how to edit. I think just the details was the biggest challenges of like figuring out how to get things to places. Then it was, OK, how do I get people to listen? That was another thing. Like how do I build a community of people that are wanting to tune into this content and how to market that, and that’s kind of where the memes started coming along, you know, just building the community that way. But learning how to market and distribute media was a fairly, you know, steep learning curve, I would say.

Tim Church: Now, I know you’ve had a ton of episodes actually air over the past couple of years. Has that resulted in any monetization?

Richard Waithe: Yes. So in a couple ways, the podcast has done well in terms of monetization. So I have merchandise that’s on a the website, it’s RxRadio.fm. There’s merchandise there. And then I also have a book that I wrote that I wrote right before I actually transitioned out of pharmacy. The reason I wrote that book was because I knew, I actually at the time of writing it, I knew things were changing. And I had some time before that change was going to happen, and I wanted to get as much experience that I had just learned that were fresh that I was using in my day-to-day, I wanted to get that out there. So I did have that book in play. And the podcast was definitely a driver of the success of the book and drove to sales of the book. But I think the biggest thing that has so far come along with the podcast has been the ores — the ores — the doors that have opened up in business and in networking. I’ve found value that no shop merchandise sales or book sales are ever going to bring by having the value of building my own brand and content. That has been — it wasn’t a direct monetization, but that by far has been the biggest benefit of that. But don’t get me wrong, the side hustle of kind of having some extra income from the book has been helpful. You know, it’s helped offset a lot of different costs, especially whether it be student loans, insurance payments, like all these kinds of things.

Tim Church: Is that where most of the book revenue, where is that going? Is it mostly going to debt payments and savings?

Richard Waithe: It’s mostly going — so the funny thing about running this podcast is that the money that comes from that book is not paying for all the stuff that I’m doing.
Tim Church: OK.

Richard Waithe: So for the most part, like if you looked at where the direct money is going to, I travel to schools, and I go talk to things, I do a lot of different things for free that a lot of it at some point costs money. And I essentially, those funds that I’m using from the book would go toward some of those things, so whether it’s a flight cost or time I’m taking away from not making money somewhere else, I’d be using that as kind of the income there. But yeah, I mean, it could easily pay for my student loans on the month by itself. Like it could easily do that.

Tim Church: Right. That’s cool. So talk a little bit about this book, “First Time Pharmacist.” What’s the big overview and kind of what’s in it?

Richard Waithe: So there’s a lot of different things in it, and it’s funny that we’re on a podcast that’s kind of surrounding around financials. So we do have a very small part in there kind of about, that I didn’t do — I actually got a friend that was a financial planner to kind of come in and talk a little bit about that — but there’s a lot of different parts in there about fitness, diet, because a lot of times, those things kind of get put aside as you graduate. But the bulk of the book is really about things that you don’t learn in pharmacy school. And it’s ways to interact with patients that can really make a difference in your day day-to-day in terms of your quality of life. There’s a lot of little nuggets in there where it’s not filled with fluff. It’s not filled with like, “Just be nice.” It’s filled with tactical ways to build relationships with your patients to be able to make sure that you’re having a great day. For example, one of the nuggets I’ll give to you is the fact that when you’re dealing with customer service, a lot of times, people see you as part of the machine. So let’s say you’re working for like a community pharmacy, let’s say. If a problem happens, they’re going to think it was you that made that problem, right? But a way to combat that is to actually remove yourself from that machine physically. And what I mean by that is going outside of the counter and being on the other side of the register with that patient. That allows you to explain the, hey look, I’m here with you. But that machine really did us a disservice. Like I didn’t do anything to that, but the computer XYZ, whatever the problem was, or the doctor XYZ, whatever the problem was. It’s just a tactic that allows you to be on the — show your patient that you’re on the same side as them, both physically and kind of mentally, emotionally, all that stuff. And by doing that one time for that one patient, you might not ever have to do it again with them, but they’ll always know that you’re not a part of that machine. You’re their healthcare provider, hoping to take care of them as best as you can. And it really allows your day-to-day to go so much better.

Tim Church: I think that’s a great point and a great tip for pharmacists out there. But I agree. It’s filled with a lot of different kinds of nuggets that you’re not necessarily going to get through school or through on your rotations. And you know, you and I have been talking off air that there’s just so many things that experience really brings into play because you can’t teach all of these things until you actually deal with it or have to deal with it.

Richard Waithe: Yeah, exactly.

Tim Church: So you talked about merchandise as a result of the podcast. What are some of the things that you’re selling?

Richard Waithe: So it’s real T-shirts, mugs. A lot of it is not geared towards specifically branding like our logos and stuff like that in terms of RxRadio, but I think the most successful merchandise on there we have is like onesies, like the kids onesies.

Tim Church: I do like the onesies. They say like “I love my pharmacist.” And then it says, “Because she’s my mom,” right?

Richard Waithe: Yeah, exactly. Yeah, yeah. They’re really cute. Obviously, these onesies are for the little kids and toddlers. But we’re getting to a point now where either you’re having a kid potentially or you’re an aunt to someone else. And they’re just really nice gifts. But those have been really, really successful.

Tim Church: How did you — I mean, when I looked at that, I mean, at first, I thought it was kind of an odd mix in terms of things that you had. But in the back of my mind, I’m thinking like, what was the driving force to put that kind of stuff? Not that — I think it’s great. But how did you even come up with that or decide that you wanted to do that?

Richard Waithe: I mean, I just remember being that — the funny thing about RxRadio and like the whole thing, it’s all tests that I’m doing. And I’m all like kind of testing things and seeing what works. Like for example, the book. The book was self-published. I published it. I wanted to test how to publish a book. Like it was basically an experiment, essentially. And the same thing started happening with the merchandise. I wanted to see what works, like what do people like? Like what is something that would be also valuable to them? So now, I’m also thinking about value is like my whole thing and everything I do on the podcast is about how to bring more value. And I just started thinking about the fact that we’re at a point now, if you graduated pharmacy school or you’re about to graduate pharmacy school, there’s likely going to be a lot of children in your life at some point. And I feel like what better way to drive one, a fun interaction that you’re going to have with some family members or yourself and your kids that are involved in pharmacy? Like the fact that you’re wanting to promote your profession, and that just came to me. It was like, how awesome would it be if you can give your little niece a shirt that says, “I love my pharmacist because she’s my aunt.”

Tim Church: No, it’s cool. I like what you’ve done there because I think people are interested in those kind of things to really highlight that they’re in the profession or to share that with their family. So how many hours are you spending on, you know, creating Samuel L. Jackson memes, doing the RxRadio and everything else that you’ve got going on?

Richard Waithe: So when I was — my life now is a little different because of my current role. So I don’t want to give you that example. But I’m going to tell you about how I was doing the exact same thing while I was a community pharmacist because I had like essentially a “normal job” at that time. I had this thing called #10to2, right? And it was essentially to say, OK, I’m currently working at a job that’s taking 40 hours a week of my time. But there’s a lot of other things that I want to do. So I needed to find the time to do that because they were ambitious things I wanted to do. I wanted to run a podcast, write articles, and do all these types of things. So I essentially dedicated every single day, whether I was working that day at the pharmacy from 9-9 or I had a day off, every single day, I made sure that I was working between the hours of 10 p.m. and 2 in the morning. And it was on things that I was passionate about. It was on my brand, whether it be personal brand or whether it be for RxRadio, whether it be memes, so multiply that out, that was the minimum that I was doing, working towards just my personal brand. I don’t do math well. What is that? Is that 4 hours times 7?

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Tim Church: Yeah.

Richard Waithe: That’s 28. So I was doing —

Tim Church: That’s a lot.

Richard Waithe: At least 28 hours. At a minimum.

Tim Church: Wow.

Richard Waithe: And this was not on — and proven in the way — go to Twitter right now, whether you have an account or not. Go look at the #10to2. If you look at the last two years — maybe with the exception of the last six months, only because like I’ve been working but just not on my personal brand, essentially — but the last two years, if you look at the hashtag on Twitter, I’m the only one that was hashtagging that. You can literally look back every single day. And this was like sometime between the hours of 10 and 2, I was talking about it, and I was doing that work and putting it in. So at a minimum, that’s what I was doing to get to that point where I was being, when I was able to run all that same stuff and still work at a regular job.

Tim Church: Wow. Was that hard to do?

Richard Waithe: It was hard, but the crazy thing is is that I would work from 9 — let’s say a Monday that I was working at the pharmacy — I worked from 9 to 9 p.m., right? The normal 12-hour shift at a pharmacy. It would suck to go home and work at 10, right? I would make it home, luckily, my commute wasn’t that bad and I would be able to spend time with my fiance at the time. But the 10-2, it was stuff that I was passionate about. So like that was actually not that hard. That was almost easy because I was excited about it, I really wanted to do things. That wasn’t hard, but it was hard to wake up the next morning and then go to work and do things like that. But that four hours, I loved it. And I’m still doing that today where I’m working like that and working as much as that, it’s just great because now it’s things that I’m all passionate about. If you’re doing something that you don’t like, you’ll easily get burnt out doing that amount of work. But it wasn’t that hard for me, only because I found something that I was really passionate about doing. So it really didn’t feel like work.

Tim Church: Is it hard to manage your personal life on top of everything that you’ve got going on?

Richard Waithe: It depends on how you mean “manage your personal life.” So I think that — and I’m sure that you, being that you’re in finances, when you’re talking to people and giving advice, it’s not a blanket type of advice that you can give. It’s so different between people because they have so much other factors that can play into how they can best manage their finances. And I treat my “personal life” a similar way in terms of my personal life is the happiness — because to me, work-life balance and personal life is like being happy, right? That’s like the ultimate goal of it all. It’s a completely different definition to what someone else’s is. So for my own personal life, it’s actually not that hard. But I feel like if I was someone else that had other types of goals and personal life meant a lot of different things to them, this would be impossible, really, to do.

Tim Church: Right.

Richard Waithe: But for me, I definitely had to make sure that I was really over-communicating with the people that meant a lot to me in terms of spending time with them to let them know kind of this is what’s going on and making sure I still put in the time to spend with them, but I also realized that I had specific ambitions that required work. And I love football. Football is my favorite sport. I know it’s dangerous, and there’s all kinds of things that are problems with it. But I love the sport. I grew up playing it, and I love to watch it. Basketball, same thing. I love basketball. I had to cut a lot of that out to make the time to follow my ambitions. But to me, my ambitions and my goals and my career were just more important than sitting and watching games. So that was hard to do, but it was an easy decision because I realized that I need to put my actions where my mouth and my mind was to be able to say like, you have these ambitions and these goals, you have to put in the work to do it. I think — but there was sacrifice involved.

Tim Church: Yeah. Definitely. It sounds like it. I’m just like, I’m sitting here thinking like, OK, well, when did you eat? When did you sleep? But I think it’s what you said is, you know, how passionate are you about what you’re trying to accomplish? And sometimes, in order to get to that next level, you’re going to have to make a ton of tradeoffs and sacrifices to get there. Otherwise, you may just be mediocre in what you’re trying to do.

Richard Waithe: Yeah. And mind you, I think within — I feel like it was an extreme. I’m not going to sit here and say, “Oh, it wasn’t that bad.” I know it was an extreme. But I think that not everyone has the ambitions to need that sort of extreme, right?

Tim Church: Right.

Richard Waithe: So there are some people that can say, call it #10to11. And they just do one hour a day towards something and see some significant results from that. But I think it’s just being able to dedicate a specific time block and a frame that works in your lifestyle to dedicate towards a side hustle, you’ll really see some results.

Tim Church: Definitely. I agree. I think that’s the key is however much time that is, is that consistency in making that happen all the time. And for me, personally, that’s what seemed to work. We’re going to go through different times when you have to shift your focus on your personal life or different things, but showing up and being consistent, even if it’s 30 minutes, I think can go a long way.

Richard Waithe: Yeah.

Tim Church: So Richard, what advice would you give to other pharmacists or students out there who have an interest in becoming an entrepreneur or starting a business? What would you tell them?

Richard Waithe: The first thing I would tell them to do is that like, first of all, it’s hard as crap to start anything on your own. And let alone start it and actually get it going, but to be successful, it is super hard. And because of that, the best advice I would give is to make sure that anything that you want to do as a side hustle or whether it be a side hustle or you’re actually trying to change your whole career, it needs to be rooted in whatever it is that you’re passionate about and not about what’s going to make you money. Because anyone tomorrow can go and study to take — especially if you’re a pharmacist, that means you’re extremely smart. You can study tomorrow and take a real estate exam and become a real estate agent and start selling homes and make a decent amount of money, but you hate it or you’re not passionate about it. And while you can make extra revenue in there, it’s going to be much harder to do if you’re not passionate about it. Now, if you love homes and interior design and all this stuff, you will be an extremely successful real estate agent, you know? Because of the fact that you love it. So I really think that people need to kind of take a step back and realize, do I love baking? Like do I love making cookies? Because there’s people making millions of dollars selling cookies.

Tim Church: There’s a need.

Richard Waithe: Yeah. And I think that you need to just find what it is that you’re passionate about doing. Because of the way that the Internet works now and social media, you can literally build a brand. You can make a cookie business, at some point, make a brand, write a book about it. Like there’s all these — there’s a model that you can follow, and you can apply it to anything. But it really does start with finding out what it is that you’re actually passionate about doing that you can do forever and not get burned out at because you love it, that’s what you should start with and then go from there.

Tim Church: Solid advice. I really appreciate that. And I think you’re right on there. So Richard Waite, master meme creator and entrepreneur, what is the best way for someone to reach out if they want to learn more about what you do but also see this amazing memes?

Richard Waithe: Yeah, so I’m on every single social media platform out there except for tiktok, I’m not on that thing. You might not have even heard of it, but a lot of teenagers love tiktok. But I am on Instagram, LinkedIn, Facebook, Twitter, now on Reddit as well. Any way, however you prefer to consume media, you can DM me on there, and I’ll respond and help in any way that I can. And then I obviously have an email, [email protected], which I’m sure they can probably put in the show notes because it’s hard to spell, but [email protected].

Tim Church: Great, thank you so much for coming on, Richard.

Richard Waithe: It was a pleasure.

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YFP 096: How to Do a Backdoor Roth IRA

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How to Do a Backdoor Roth IRA

On this episode, Tim Baker welcomes Christina Slavonik, CERTIFIED FINANCIAL PLANNER™ and the newest member of the YFP family, to the show. Tim and Christina break down how to do a backdoor Roth IRA conversion, a move that most pharmacists should consider making.

About Today’s Guest

Christina joins us with approximately 15 years of experience in the financial services industry. After serving in various capacities, she attained her Registered Paraplanner℠ designation in 2013 and then her CERTIFIED FINANCIAL PLANNER™ designation in 2017. She currently resides in Ft. Worth, Texas with her husband, Paul, and their two cats.

Summary

Christina Slavonik has been working for YFP for a couple of months as a CERTIFIED FINANCIAL PLANNER™. On this episode, Christina and Tim discuss how to do a backdoor Roth IRA, also known as a Roth IRA conversion.

First, Tim Baker reminds listeners to follow “Baker’s Buckets”, meaning that you should always start saving for retirement with an employer match when available as this is free money. From there, it might make sense to max out an IRA or HSA. After you’ve maxed out your IRA and HSA, go back to your employer 401(k) or 403(b) plan to add in the $19,000 you can put in every year.

Most pharmacists bring in around $125,000 a year, meaning they cannot deduct their traditional IRA contribution as they are above the income limits. In 2019, single taxpayers with a MAGI of $122,000 and married filing jointly taxpayers with a combined income of $193,000 can’t contribute directly to a Roth IRA.

Christina explains that you can instead do a backdoor Roth IRA. First, open up a traditional IRA if one is not already opened and contribute the first $6,000. Then, you can make the conversion by filling out and submitting the appropriate forms. You are then able to convert the nontraditional money to a Roth IRA.

Christina and Tim discuss how to contribute to these accounts, best practices for waiting periods, steps for filing taxes if you contributed an excess amount to an IRA, and a recap of the Roth IRA conversion process.

Check out this blog post for more information on backdoor Roth IRAs.

Mentioned on the Show

Episode Transcript

Tim Baker: What’s up, everybody? Welcome to Episode 096 of the Your Financial Pharmacist podcast. I am so excited to welcome back Christina Slavonik, our newest member to the YFP family. I know, Christina, we heard a little bit from you at APhA Seattle, so welcome back to the podcast.

Christina Slavonik: Yes, thanks so much, Tim. I’m glad to be back.

Tim Baker: So I guess, you know, Christina, just to put you on the spot here, you know, you’ve been working with us for the last couple of months.

Christina Slavonik: Yes.

Tim Baker: How has it been at YFP? And what’s different about us?

Christina Slavonik: Sure. Yeah, it’s been so refreshing. Just really a breath of fresh air just working with —

Tim Baker: Awh, shucks.

Christina Slavonik: Younger people, you know? And we all have, you know, the same kind of not really have the same backgrounds, but at least we have the same things that we’re all working through and especially when you’re able to narrow down your clientele to one niche, it really helps you focus on what they’re really needing, what they’re really wanting, and then being able to share your own life stories as you go through that path together.

Tim Baker: Yeah, I think it’s one of those things where, you know, in my past life, I would work for firms that was kind of a jack-of-all-trades, kind of master-of-none type of thing. That’s not really our game. You know, we really want to focus in on the big issues that are facing pharmacists out there and really provide good service and solutions to really tackle those issues. So today, we’re going to talk about Roth conversions. Like I mentioned, it can be a little bit of a technical subject, but one of the things that we probably should mention first as we kind of get into our list of steps here is way back when in Episode 073, How to Determine Priority Investing, we kind of talk about what Tim Church has deemed “Baker’s Buckets.” So typically when I sit down with clients, you know, I say, “Hey, client, typically how we like clients, pharmacists to really fill their retirement buckets, you know, you should always start with your employer match. So if your employer match is 3%, 5%, 7%, that’s free money.” And nine times out of 10, that should be what we are trying to get, get at least to the match. But from there, depending on the 401k or the 403b, what that plan looks like, not everyone’s 401k, not everyone’s 403b, is going to be equal. So there are some really great 401k’s and 403b’s out there. There are some that are kind of not so great. So it might make sense to kind of go into the IRA world or the HSA world and really max out that bucket next. So typically, for the IRAs for 2019, you can put in aggregate between the Roth IRA and the traditional IRA, $6,000 per year. So that’s roughly $500 per month. In the HSA world, the Health Savings Account, which we’ve talked about time and time again, it’s the only account out there that has a triple tax benefit. So basically it goes in pre-tax, it grows tax-free, and then it comes out tax-free if it’s used for qualified medical expenses. You typically, for a single individual, it’s $3,500 per year that you can do. Or if you’re a family, $7,000 per year. So once we max those out, then it might make sense to go back into the employer plan, the 401k, the 403b, and get to that $19,000 that you can put in — this is not counting your employer contribution — that you can put in every year into that 401k. So Christina, now that we kind of have “Baker’s Buckets” aside and we’re diligently putting in a contribution into the IRA, what happens next with regard to this whole conversion? And why would I convert I guess to begin with?

Christina Slavonik: Sure. Well, in looking at the typical pharmacist’s salary, which I believe is around — latest stats is around $124,000-125,000. You already know that you cannot contribute directly to a traditional IRA. Well, you can, but you can’t deduct it. So that’s the caveat with that. So where the Roth IRA comes into play is most of the times, you won’t be able to contribute directly to the Roth because of your income limits. So I know for 2019, if you’re single and you make an income, a modified adjusted gross income, of $122,000 or if you’re married filing jointly and you’re making an income of $193,000, then you can’t contribute directly to a Roth. So how you can do that is by doing a backdoor Roth IRA or it’s also known as a Roth conversion. And what you will need to do is open up a traditional IRA, and this is assuming you don’t already have a traditional IRA open. We’ll get into the reason why — what will happen if you do currently have a traditional IRA. But first things first, you open the traditional IRA, you put your — say you’re going to max out your contribution for the year — you’d put your contribution in there first of $6,000. And then you can make what’s called a Roth conversion, and normally your firm, your wealth provider, whoever you have your investments with, they should be able to walk you through what forms are needed. You fill out the form, submit it, you have a Roth IRA opened. And then you’re able to convert those traditional dollars, non-deductible traditional dollars, into your Roth IRA. And the beauty of that is not only is your money going to be in the Roth, but it’s going to be after-tax, you’re not going to have to pay any taxes for it going in because you just made the non-deductible contribution. You will have the earnings grow tax-free. And then if you’re — there’s certain stipulations about once you hit retirement or you’ve had the account open for five years, you can start to withdraw those contributions and earnings tax-free. So there are many, many other benefits to having the Roth IRA. One, you do not have to make what’s called a required minimum distribution. And with a traditional IRA, you have to start pulling out money at the age 70.5. You have no choice.

Tim Baker: Right.

Christina Slavonik: But with the Roth IRA, you avoid that altogether as well.

Tim Baker: So just to recap on that, you know, and to back up, anytime that you see “Roth,” you automatically should think after-tax. So whether that’s a Roth IRA, a Roth 401k, a Roth 403b, the money that goes into that bucket is going to be after-tax. The flip side of that is the traditional IRA, the traditional 401k, the traditional 403b, those are all funded with pre-tax dollars. So in simple terms, you know, if I have a traditional 401k and I’m putting in 10% and I make $100,000, then basically I’m putting $10,000 into that account, and the government sees as if I’m being taxed on $90,000. So it lowers my income for which I am taxed on. In that same breath, you know, if I’m putting into a Roth, once I’m putting in with after-tax, so I don’t go from $100,000 to $90,000. I stay at $100,000. But when the money comes out in retirement, I’ve already been taxed on it, so I’m not going to be taxed twice. Whereas traditional, when it comes out, it will be taxed. So it’s important to understand that dynamic. So everyone can contribute to a traditional IRA as long as you have earned income. But not everyone can contribute to a Roth IRA. So if you make a certain amount of money — so it’s if you’re single, if you make more than $137,000, married filing jointly, if you make more than $203,000, then the door slams shut for the Roth IRA for you. So what the Roth conversion does it takes those non-deductible IRA contributions — so everyone can contribute to a traditional IRA, not everyone will get a deduction. So because we don’t get a deduction, we want to move essentially those moneys from the traditional IRA to the Roth IRA and, you know, for a variety of reasons, Christina, that you mentioned, that’s the thing to do. So Christina, if I am a Do-It-Yourself investor out there and I’m looking at kind of my investment game, I don’t have anything open outside of the 401k that I have through my employer, basically you’re saying first step is to open up the traditional IRA and the Roth IRA concurrently? Is that right?

Christina Slavonik: That is correct. If you can, yes.

Tim Baker: OK. And then if I know that I’m not going to be getting — I’m not going to get that deductible IRA contribution so I’m single, I make more than $122,000, how should I actually go about contributing. Should I wait ‘til the end of the year or the tax year to contribute? Should I be contributing per month? Like what’s your thoughts on that?

Christina Slavonik: Sure. Well, it really just depends on personal preference. I’ve seen both sides of the spectrum where a person will save money, like just put it aside in a regular bank savings account, set that aside for their IRA contribution at the end of the year, and right before the tax deadline, they will put it in and do the conversion right away. You know? Others will contribute monthly to that traditional IRA and over time, once they get the contribution to where they can max it out for the year at $6,000 for 2019, then they would make the conversion. And so yeah, the only caveat with contributing directly to the traditional on a monthly basis is if you do have it in any kind of interest-bearing account or if you do decide to put it in a short-term investment, when you do convert, you are going to be converting those earnings as well, which may have a little bit of a gain or may have a little bit of a loss.

Tim Baker: Right.

Christina Slavonik: So it’s just something to consider when you’re going about that process.

Tim Baker: And I think that’s kind of the nuance is it can be a fairly complicated situation, so that’s kind of some of the nuance that a lot of people may not think about is that, you know, if you contribute $6,000 over the course of the year but the account has grown $100-150 in appreciation, that’s something to consider when you’re doing your conversion. And most likely, you’ll have to pay the tax on that, on the difference. So Christina, when you go to make a non-deductible contribution to your IRA, there’s some say that you should have, there should be a small waiting period to let the funds settle. Can I actually go and convert that right away? What does that look like? What’s best practice with regard to making a conversion?

Christina Slavonik: Sure. The common consensus is just to wait a few months, you know, just to let that contribution settle. There are some people that will do the conversion right away, but just because you just want to look like you are making a non-deductible contribution and not immediately converting, it just kind of puts some space between that. It’s just kind of a best practice.

Tim Baker: Sure. Well, and I think there’s some think that the Roth conversion is something that’s illegal or that we shouldn’t be doing. That’s not the case. This is a perfectly legal kind of technique to move the non-deductible traditional IRA contributions into the Roth that is part of the how the tax code is written. So let’s fast forward to it’s April 2020, we’re hopefully in the process of filing our taxes, which we just recently got through, what are some of the steps that we should do in terms of any forms that we need to file or anything that we need to worry about with regard to filing the taxes? And then secondarily, if we see that maybe we’ve contributed in excess to the IRA, how do we fix that issue?

Christina Slavonik: Sure. Well, make sure your CPA or whoever is doing your tax return, that they know that the contribution you had originally made into the traditional was a non-deductible contribution. And most likely, they will have a form 8606, which they will need to fill out. And yeah, just make sure they’re aware of what you were doing. And as a best practice, we try to say if you can do your contributions and your conversions in the same tax year, that helps your CPA or tax preparer out a lot so he doesn’t have to be tracking what happened in 2018 versus what happened in 2019, so to speak. So there’s for that one. And if you for any reason get a massive pay raise and you had been contributing directly to a Roth and then you go back and you look and you see, oh my goodness, I’m making — my income is being phased out, I shouldn’t be able to contribute directly to a Roth, well, you’re going to have to figure out — there’s a calculation or you can have your tax preparer help you — that you’re going to have to remove whatever excess contribution you had put into the Roth IRA.

Tim Baker: Right.

Christina Slavonik: And so again, there’s a calculation to go about figuring that out, but just know that there are three ways that you can remove it. If you happen to catch it before the tax filing deadline, by all means, withdraw it. Journal it back over. You could talk to your firm and see how they go about doing that. Some will just, you know, say to recharacterize, which normally doesn’t happen until after the tax filing deadline, or you can apply the contribution to the next year. Just don’t make a Roth IRA contribution directly. But just know that if you do decide to leave that excess contribution in the Roth IRA, there is a 6% excise penalty that you will have to pay every year that excess remains in there. And so generally as a best practice, if it’s not a whole lot, I would just say carry it forward to the next year. You may have to pay a small 6% on whatever that excess was, but at least you’ll be covered for the coming year, if that makes any sense.

Tim Baker: Yeah, so just to kind of recap, from basically January to April of say 2020, you can still contribute towards your 2019 bucket for the IRA. So if we were to kind of determine that we’re at our limit already, you could essentially contact your custodian, whether that’s Vanguard or Fidelity or whoever, and say, “I’d like to apply that excess contribution forward to the 2020 bucket.” So Christina, you know, in terms of the process, we have determine what your adjusted gross income, which again, that’s going to be the number that really drives the train on a lot of this tax stuff that goes on. And typically, you take the gross income and you subtract out any contributions you make to the retirement plans. And if you have HSA contributions, student loan interest deduction, if you’re a resident out there, you can probably still get those. That gets to that number, and that’s going to be the driving force of what you can do from a traditional IRA, a Roth IRA, if it determines that you can only make non-deductible traditional IRA contributions, make those contributions, typically, you want them to season a little bit. So wait 30-60 days to get those into the account, and then go ahead and basically fill out the necessary to make the Roth conversion. So we’re essentially, we’re moving those non-deductible IRA contributions from the traditional bucket into the Roth bucket, which is the after-tax bucket because we’re going to pay the tax on it anyway, and there’s lots of benefits to do that. And come tax season, working with your CPA, your advisor, to fill out Form 8606 just to track all of that. It’s best to do that kind of in the same year, so contributions basically marries up with the tax season that you’re filing. And if there is excess contributions to the Roth, we can fix it before the tax filing deadline or recategorize after the fact. You could also contribute to the, move it forward to the next year just so we kind of stay within compliance. So Christina, any other thoughts on the Roth conversion? Anything that we missed that probably listeners should know about when they’re trying to tackle what sounds at first glance kind of can be a very simple procedure but when we peel back the onion a bit, it can be a little bit complex. Any other thoughts?

Christina Slavonik: Yes, just one final thought. When it comes to look at your traditional IRAs — and this is just assuming you have other traditional IRAs when you are considering doing a Roth conversion — that amount that you convert, you can’t just pick that ‘Oh, I want to do this sum of money in this IRA.’ It takes into account your entire balance, not just the $6,000 contribution for the year. So say you were to have your traditional IRA, you have $20,000 in there. Well, for that initial tax year, you may have to move over the full $20,000 because it’s going to take into account — the conversion piece will take into account all the money you have in that one traditional IRA. It’s blind. It can’t really see that you only want to do $6,000. So that’s just one other piece of advice to keep in mind. Most people that do this kind of transaction, they do not have traditional IRAs. If they do, it’s only for this purpose. So that is just one thing that I’d like to point out there, Tim.

refinance student loans

Tim Baker: Yeah. Another thing to also point out is I think this particular technique is going to become more and more valuable. With the new tax code, for a lot of people out there, taxes are going to be lower in the near future. So to kind of do this conversion and get these moneys in the right bucket, I think is very valuable. But also remember when you make the contributions into the IRA, whether it’s the traditional or the Roth, that’s just half the battle. The next part of it is really selecting the investments that are inside of that. So we come across pharmacists that are putting money into an IRA, but they’re not actually investing that, whether it’s in a mutual fund or an ETF or a stock or a bond, that type of thing. So understanding that when the money goes in there, we still have to take the necessary steps to get that invested and get that money working because at the end of the day, intelligent investing where you’re taking risk in the market and know that the market is going to go up and down is necessary really to become that “Seven Figure Pharmacist” and really get ahead of things like tax and inflation. And these are some of the things that we work with when we go through the investment module with our clients is making contributions is only half of it. And we have to make sure that we’re building out a proper low-cost asset allocation that has exposure across a variety of sectors in the market, whether it’s large-cap or small-cap or international, bond, that type of thing. So Christina, great job today kind of going through this kind of somewhat complex topic. Like I said, Christina recently helped Tim Church on this blog post that we put out. So if you go to the Your Financial Pharmacist web page, YourFinancialPharmacist.com and check out our blog, you’ll be able to see a lot of this information, also, five steps that we talk through. If you go to YourFinancialPharmacist.com/096, YourFinancialPharmacist.com/096, you can get the basic steps for the backdoor Roth conversion, the checklist to kind of work your way through this process. And like I said, if you’re working with another custodian, a Vanguard, a Fidelity, they’ll be able to walk you through this hopefully to provide the necessary forms and guidance — maybe not guidance but at least point you in the right direction to go through the logistics of converting that. At YFP Planning, we kind of do this on behalf of clients as part of the investment management that we do. So Christina, thank you so much for coming back on the podcast, really enjoyed kind of having your voice on here. We’re going to have to do it again soon. Yeah, thanks again for coming on.

Christina Slavonik: Thank you so much, Tim. I look forward to doing it again.

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YFP 095: Level Up Your Career: An Interview with RxAshlee

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Level Up Your Career

Dr. Ashlee Klevens Hayes, founder of RxAshlee and creator of the Rx Buzz Podcast, joins Tim Ulbrich to talk about her career journey and passion for supporting high-level professionals to in creating, launching and landing their dream jobs.

About Today’s Guest

Ashlee Klevens Hayes is a third generation pharmacist who set out on a traditional pharmacy path that turned into so much more. She’s an initiator, an entrepreneur and career strategist. After graduating from The University of Southern California School of Pharmacy she completed a 2-year health system pharmacy administration residency at the University of Kentucky and then took on the position of Associate Director of Central Pharmacy Operations at UK. In 2017, she founded Rx Ashlee, a career development company that focuses on business development, branding, marketing, career pivots and interview preparation for highly skilled professionals. Shortly after, she launched the Rx Buzz Podcast on the Pharmacy Podcast Network and started with the University of Southern California School of Pharmacy as a career strategist.

Summary

Dr. Ashlee Klevens Hayes is a third generation pharmacist. She is a career strategist at the University of Southern California School of Pharmacy and launched RxAshlee in 2017. Ashlee completed a 2 year health system pharmacy administration residency at the University of Kentucky and loved it. She enjoyed seeing how quickly outcomes and results could happen. Ashlee and her husband had to move 7 times in 5 years for his job making it difficult to stay in one position for a while. Ashlee transitioned to be a consultant at a startup company and was exposed to a different side of entrepreneurs.

RxAshlee began in 2017. Friends were turning to Ashlee for advice on how to get non-traditional pharmacy jobs and she realized she was able to support people in this capacity. The main trend Ashlee saw was that people were underselling themselves and that they don’t spend enough time or energy on branding so they can stand out on paper and in interviews. RxAshlee aims to help you level up your career and get your dream job.

Ashlee currently works with high-level professionals in creating, launching, and landing their dream jobs. Ashlee offers a variety of packages and services, but is incredibly passionate about interview preparation. In 1-3 hours with a client, Ashlee watches a person transform in their interviewing skills and loves hearing when clients land their dream jobs.

Ashlee reminds you that your education is a starting place and your career isn’t necessarily a direct path. Blending your education with you passions, strengths and what you want to do and then branding yourself as that person will allow you to step into fulfilling work that you want to be doing.

Ashlee reminds people that if you want to make a change in your life, you have to get comfortable with being uncomfortable. Ashlee has a lot on the horizon with her business. She has several keynote presentations in 2019 and is writing a book, among leading a women’s group and working on more courses to launch.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. I’m excited to have on here – it’s been a long time in the making – Dr. Ashlee Klevens Hayes. We’ve got an exciting conversation to talk about career development, interview preparation, business development, lots of exciting things, to share her journey on this path to the work she’s doing today. So quick introduction to Ashlee: She’s a third-generation pharmacist who set out on a traditional pharmacy path that turned into so much more. She’s an initiator, an entrepreneur, and a career strategist. After graduating from the University of Southern California School of Pharmacy, she completed a two-year health system pharmacy administration residency at the University of Kentucky, and then took on the position of Associate Director of Central Pharmacy Operations at UK. In 2017, she founded RxAshlee, a career development company that focuses on business development, branding, marketing, career pivots and interview preparation for highly skilled professionals. Shortly after, she launched the RxBuzz podcast on the Pharmacy Podcast Network and started with the University of Southern California School of Pharmacy as a career strategist. Ashlee, welcome to the show, excited to have you.

Ashlee Klevens Hayes: Tim, this has been long overdue. Thanks for having me. This is super exciting.

Tim Ulbrich: Long overdue.

Ashlee Klevens Hayes: I love talking to you.

Tim Ulbrich: So fun. Hey, I thought I knew you pretty well until I started doing my homework for this show and totally forgot about the two-year admin residency. We’re going to talk about that, your inpatient experience, I forgot about that, and – have we made the Buffalo connection before? I didn’t realize you did undergrad at the University of Buffalo.

Ashlee Klevens Hayes: I did. I moved from Orange County out to crazy Buffalo.

Tim Ulbrich: What were you thinking? I grew up in Buffalo, and I was like, why would she move from southern California to Buffalo?

Ashlee Klevens Hayes: I’ll be honest with you. My dad was faculty at the University there.

Tim Ulbrich: OK.

Ashlee Klevens Hayes: And we had some connections, and it just – long story short, it just made sense for me to go out there financially and just in terms of seeing my parents. They were traveling out there a ton, and so I made the commitment. And honestly, the first year was really hard because it was snowing, and I had never been around snow before. But then ultimately, I ended up finding my husband out there. So it was a good move.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: And I suckered him into coming back to California too.

Tim Ulbrich: I don’t blame you. I mean, it is night and day, right? Buffalo and southern California?

Ashlee Klevens Hayes: Totally.

Tim Ulbrich: I grew up in Buffalo. It’s a great city, but I mean, when you’re used to the sunshine…

Ashlee Klevens Hayes: I loved it there. No, I really did. It was a great just start to my nontraditional path.

Tim Ulbrich: Yes, yes. And we’re going to talk about that. We’re going to talk today about how to invest in yourself; we’re going to talk about, you know, how to set yourself apart. And you’re doing some awesome work in this area. And I really enjoy following your journey and have a lot of respect for your energy and your passion and your commitment in this area. So before we talk about what you’re doing today with RxAshlee and with USC School of Pharmacy – which by the way, is getting around – I had people here from Ohio State ask me about this work that you’re doing at USC, so it’s exciting to see that work.

Ashlee Klevens Hayes: Oh yeah? OK, let’s do it. Let’s talk – I would love to talk to them.

Tim Ulbrich: But I want to start back at the point of graduating with your PharmD from USC. And you make this decision to go into a two-year admin residency. So PGY1, PGY2, Master’s degree, very specific for many that go through this route in pharmacy.

Ashlee Klevens Hayes: Kind of, yeah.

Tim Ulbrich: What was the goal here? And why did you make the decision at this point in time?

Ashlee Klevens Hayes: Well, to be totally transparent, like you mentioned in the beginning, my dad was a Chief Pharmacy Officer, and so I kind of had a front-row seat my entire life to all the unique, different opportunities and journeys that pharmacists could take, but my dad was a huge, pivotal point, a mentor to me forever. And he loved his job. He loved it. He loved the autonomy, he loved the business side, and he also could have some indirect patient experiences too. So I decided to join that bandwagon, and I followed his footsteps. And I ended up at UK. I was the first PGY1, PGY2 health system administration resident under the new leadership at the time. So gosh, now it’s been about 5-6 years. I don’t even remember. And so they’ve had a few others behind me, which has been really fun for me to be a mentor to them and witness them grow their muscle in that field. So you take a traditional clinical residency program and throw in a nontraditional clinical program, and you know, you have growing pains. But ultimately, the goal was for me to come out and to be a manager or assistant director or a, you know, eventually a Chief Pharmacy Officer, which I was totally down that path. I was heading down that path. I was like, this is what I want to do. I want to be a CEO, I want to be a Chief Pharmacy Officer at a healthy system, and things kind of took a change, as you might notice.

Tim Ulbrich: So what I find interesting, Ashlee – I was glad to look that up before we had talked. And we had discussed that before, but when I think of pharmacy operations and I think of you and your strengths and your talent and what you bring to the table, not that you couldn’t do operations really well, but I think you’re a big vision person, you’re a strategist.

Ashlee Klevens Hayes: I am.

Tim Ulbrich: You’re an entrepreneur. So when did that click for you? Because I’m guessing, you know, you went into the operations role post-residency.

Ashlee Klevens Hayes: Oh, I loved it. It was great.

Tim Ulbrich: Yeah, talk us through that transition.

Ashlee Klevens Hayes: It was awesome. And I was exposed to so much at such an early phase of my career that I realized I really like seeing outcomes and results happen pretty quickly. And I just felt like project management and multitasking and working with whole different interdisciplinary groups: physicians, prescribers, nurses, I loved that part of the work. What was hard for me – and Tim, I’ll be totally honest with you because that’s what I do – it was hard for me because my husband had a big job, and we were constantly having to relocate. It happened probably seven times, literally seven times, over the past five years.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: And in order for me to have that trajectory of getting to CPO, to Chief Pharmacy Officer, it really just wasn’t ideal. And it wasn’t working. So that’s — at some point, I was like, how am I going to do this whole entire love of operations, project management, strategy, planning, vision, just overseeing so many different projects while still balancing my relocation, which is honestly — I knew going into our marriage that I was going to have to do this eventually, so then you get creative. You get thrusted into this. How do you make all of this work? And at that point, I was the assistant director, and I had an opportunity to transition into be a consultant for a startup company — a consultant in operations, and I did that. And it was so fun. And I was exposed to a whole different side of non-pharmacy work, but it was pharmacy work. It was non-pharmacy because I didn’t talk to patients at all or prescribers. It was just different because I was working with software implementation. So then I was exposed to this entrepreneur side, and I was talking — and the people I was working with had no pharmacy background. They had no pharmacy education, but yet, they were talking the language of pharmacists, and I was like, what is going on here? And it was eye-opening. I was traveling the world, literally traveling the world, traveling across the country talking to different people about our products, and I realized what do I want to do next? You know? What am I good at? What are my skills? And that was really teaching people how to do what I was doing, start a consulting company, go do nontraditional things. And that’s kind of when the fruition of RxAshlee started.

Tim Ulbrich: That’s so awesome. I mean, there’s such a need for nontraditional, you know, career paths, mentorship.

Ashlee Klevens Hayes: Totally.

Tim Ulbrich: And I was looking at your website and stuff before, and just to be able to see that merging of hearing from others that recognize that talent within you and that passion to help others and for me and what I’ve known you for the last 1-2 years, like it makes so much sense. But to hear your journey and where it’s come along was a lot of fun.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: So we’re in 2017, and entrepreneurship, the bug sets in. And as you know, once you have the entrepreneurial bug, it isn’t going away, right?

Ashlee Klevens Hayes: No, never. Well, you can try for it to go away. And then it just never goes away.

Tim Ulbrich: Yes, yes. So true. So you start RxAshlee, which for our listeners, we’ll link this in the show notes. It’s RxAshlee.com, RxAshlee.com. So where did this idea come from to get started? Because in reality, any business starts with a problem that needs a solution.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: So what was the problem? And what was the solution? And what did you bring to the table with this?

Ashlee Klevens Hayes: The problem was that a lot of my friends were turning to me for advice about how to get nontraditional pharmacy jobs. So problem for them, but a solution for me because I felt like innately, I kind of just knew. And I was unclear at the time why am I the one answering these questions? I’m not sure. Like why aren’t these people just going out and doing what I did? Isn’t that easy? Like just go out and do it. And I recognized there was an opportunity for me to actually, I don’t know, just support them in this capacity as actually, this could be my job. And I started doing this just for free, to be honest. I started reviewing thousands of resumes. Thousands of CVs. And I started realizing how much people undersell themselves. It’s sad, you know? I talk to these highly qualified people, very competent, very educated. It’s not like the people I’m talking to are Joe Schmoes. They’re like really legit, really, really smart people. But how we distribute ourselves and how we talk about our story and how we articulate, you know, our goals, that’s a disconnect.

Tim Ulbrich: Yes. Absolutely.

Ashlee Klevens Hayes: And especially, you know, CVs and cover letters and all that stuff, I don’t think we as clinicians spend as much time and energy and focus on how do we look on paper and our image, our brand? And so I realized that’s when kind of the fruition and the whole start of RxAshlee actually came was when I saw that I was talking to people all over the world just because I wanted to do it, like for free, for fun. And then I was like, wait a minute, I’m spending all my time and my energy and my resources. Why don’t I kind of see where this goes? And that was two years ago, so.

Tim Ulbrich: So much good stuff there, and I think back to my previous role. I reviewed thousands and thousands of residency letters of intent, CVs, and at the end of the day — and I think it must be either from, you know, just form examples or things that are out there, like unless I had met them and they had been intentional about how they branded and marketed themselves and made relationships, they all looked the same at the end of the day. They were all successful, they were all doing lots of great things, but it came down to that relationship, that networking building, and those that really could, to your point, sell themselves.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: And so I hope the P4s and 3’s and 2’s and 1’s, anybody, really, hears that and I think the intentionality of that is so, so important.

Ashlee Klevens Hayes: Yeah, and sometimes, there’s a negative stigma around the whole phrase “selling themselves.” But we’re not built to be sales people, but at the same time, I just want to affirm to you that it’s not you selling yourself, it’s just about you talking. Being able to confidently walk up to someone, whoever it may be, especially an employer or someone who could lead you to employment, just being able to talk about yourself. And I think a lot of people are very uncomfortable with that. And for whatever reason, that’s not my problem. I have a lot of problems, Tim, let’s just be real. But that is not one of them. As a pharmacist, as a clinician, I’ve always been able to kind of keep up with prescribers, pick up on the key words, pick up on what they want to hear and how they want to hear it. And same with job employers, people who are hiring. You have to be able to articulate and just really be able to talk the talk, and that’s what it’s about.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: It’s not about qualifications once you get to a certain point. It’s not really about your qualifications or about, you know, what skills and certifications you have. It really is about just being able to confidently walk into a discussion if it’s a networking event or if it’s a job interview. Just be able to talk about yourself and why you want to do the things that you want to do.

Tim Ulbrich: So I’m curious, you’re in this moment of saying, OK, I’m doing this for fun, I’m reviewing all these CVs, and you probably have this “Aha!” moment of like, oh my gosh, if I see another Microsoft Word tracked changes document, you know, I need to eventually turn this into some type of a business, and there’s an opportunity to do so. But I’m guessing at the same time, you probably had some self-limiting beliefs, fears about is this an actual business? Will people pay for this? Is there a need? Is it validated? So talk me through that. Were there fears that were holding you back in doing that?

Ashlee Klevens Hayes: Let’s talk about — yeah, we could talk about a whole podcast episode on that. You know my story through that.

Tim Ulbrich: That was a stupid question, yes.

Ashlee Klevens Hayes: I talked to you about that a variety of times. But of course. 100%. I am no different than any of the other listeners in my fears and, you know, what people thought about me at that time. Now my life looks a little bit differently because I have results, right? I see positive results. When you see results, confidence tends to follow. At first, it just takes a little bit of courage and a little bit of humility. And then here I am a little bit of I see the results that my clients get, so now I’m like, OK, this stuff works. It’s validated. But in the beginning, let’s go back a couple years. I remember having conversations with my husband, like how am I going to do this? What are the logistics? And he looked at me, he said, “Ashlee, I don’t really care what you do. Like you do you. You just need to pay for your student loans, and you need to pay for child care, and you need to be able to like keep up with rent and keep up with our bills.” And I was like OK. So we shook on it, and I was like, “Watch me.”

Tim Ulbrich: Yeah, yeah.

Ashlee Klevens Hayes: And from there, I knew exactly how much money I needed to make in order to survive, right? Like bare minimum. I wasn’t talking about like going to Target and spending $100 there. No. I was very intentional with every penny spent. So you’ll appreciate this, Tim. I was very intentional with all of the money at first.

Tim Ulbrich: I like that, I like that.

Ashlee Klevens Hayes: You know, like I was just head down, focused on how am I going to pay my bills? Like that’s at the end of the day. And I did that for a year and then I started seeing, again, I started seeing results, and I was like, OK, so it’s time to reevaluate. I’m going to look at some services, I’m going to put together different packages. Who do I want to work with? Instead of I’ll just work with anyone. And it just really has evolved over the past couple of years. And one thing led to the next, for example, like I had a career coaching client that came to me, and we were working together for a couple months. He landed a job interview, and he called me up. He’s like, “Ashlee, can you prep me for my interview?” And I was like, “Sure.” I whipped something up, and the next morning, I prepared him. A week later, he was flown out to the job interview, he nailed the interview, like the interview of his dream job. And he called me, he was like, “You should have charged me five times that price because I got the job.” And I was like, here we go. Here comes the results. And so from there, not that — a few more too. I started creating packages for people and how I could really, really support them land their dreams jobs.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: And it wasn’t — again, I just want to reiterate, it’s not a matter of qualifications. It’s not a matter of, you know — once you get the interview, it’s not really a matter of what’s on your resume or what’s on your CV or what jobs you’ve had in the past. It’s about how you craft your own story. And that’s what I help clients with. And that has been so potent and so powerful. And quite frankly, so fun for me because that’s what energizes me.

Tim Ulbrich: Yeah, and what I love about that — and I’m sure you hear this from your clients all the time — is that while they’re engaging with you in that, whether it’s interview prep or you’re working them through that process, that is a lifelong benefit that they’re investing in.

Ashlee Klevens Hayes: Yes! Totally.

Tim Ulbrich: Because to your point, once you knock that out of the park and it leads to a job or whatever, confidence builds. And you know, I can speak from my own personal experience, once you go through that process and you get some wins or you go through a successful negotiation, whatever you’re working through, all of a sudden, you start approaching things with a different mindset.

Ashlee Klevens Hayes: A different lens. Yeah.

Tim Ulbrich: And that mindset — a different lens, exactly. So —

Ashlee Klevens Hayes: And that’s what happens too. So I have career pivot clients that turn into interview prep clients that turn into lifelong clients because they recognize the value of investing in yourself and investing in this process.

Tim Ulbrich: Yes, yes.

Ashlee Klevens Hayes: And it’s always nice to have kind of an outsider looking into your own little bubble and to kind of give you an outside view of what’s going on.

Tim Ulbrich: So speaking on investing in yourself, I shared with you before we jumped on the interview here that for me, 2019, you know, I don’t know if I’m having a third-life crisis, whatever we want to call it, but to me, 2019 is all about game on mindset and investing in the things that I think are most important in my life. So you know, whether that’s my marriage with Jess and I, whether that’s from a career standpoint, finances, health, (inaudible), it really feels like it took me awhile to really see into that positive lens of the ROI of investing in that support.

Ashlee Klevens Hayes: Totally, yes.

Tim Ulbrich: And I think that I tend to be probably be somewhat frugal. You know, I’m the financial guy, after all. But when you begin to see the return on investment, those things that are most important, and you think about, hey, when this is all said and done, I look back and say, ‘These things were the most important,’ I’m never going to regret in making those investments. So talk to me. I’m guessing you have several clients that some get over that hurdle to invest in themselves, some —

Ashlee Klevens Hayes: 100% of clients are like, why should I ever spend money on this? Literally everyone asks.

Tim Ulbrich: What is that? I mean, give us the background on why that is.

Ashlee Klevens Hayes: Right. Well first and foremost, just because you’re the finance guy doesn’t mean you’re frugal. You’re just intentional with your time and resources and money, right? Money’s just a tool. So I love that. I mean, just because you’re an expert in money doesn’t mean you’re frugal. It means you’re smart. And you spend your money intentionally. And that should be for everything. Your life needs to be very holistic approach in the sense of where do I want to spend my energy? Where do I want to spend my money? And what do I want out of all of this? And I’m the same way. I look at everything with intentions. My diet, my lifestyle, who I spend my time with, what I say yes to, what I say no to. And I know for me personally, the more I invest in the process, the more accountable I am to the outcome.

Tim Ulbrich: Amen.

Ashlee Klevens Hayes: So for example, I mean — gosh, I have so many examples — but one of them being I myself invest in a business coach. I myself have a speaking coach because I know that I want to bring my level up, right? I’m always just like how do I perfect some of the things? How do I tweak some things? So what do I do? I invest in experts who are better at these things than me. And quite frankly, one of the things that I guess I could speak for RxAshlee is that I’m really good at interviewing. And so what I’ve turned this into is a service. And how do I teach people? And whether or not they want to invest in it is whether or not they feel like they need it. That’s a whole other conversation of if you need it or not. But I am a big believer of investing in the things that are going to give you the biggest ROI, as with you, Tim. But one of them is my marriage. I’m very committed to whatever it takes, you know, my husband and I go away two weeks every year, just us two just because it’s important for us. We get such little time just between us amongst both of our busy careers, amongst our family, balancing all of the things that we do together. So we invest in our marriage first and foremost. And that is by time away and by all other things too. I mean, marriage counseling or whatever it is you need, you have to take those steps in order to really get the best outcome. And financial advice is no different. If you don’t know how to manage your financial services, what would hold you back from investing a little bit of cash, a little bit of income, to get you the bigger result of, wow, I feel confident in the direction that I’m going now.

Tim Ulbrich: Yeah, and that’s why we share with people, I have a financial planner as well because I know at the end of the day, you know, that for me, knowledge aside, there’s always something more to learn on this. But even with knowledge on the topic, I need accountability, and I need somebody to challenge me and to set goals and to help my wife and I navigate it. So I’m with you. And if you listen and watch most of the successful entrepreneurs that are out there, I can think of probably almost all of them, the stories that I’ve listened to, that all have a coach in different areas of their life, you know? And I think that speaks to it. Let’s talk about interview prep for a minute because I think that is your jam. Right?

Ashlee Klevens Hayes: Totally. I love it. I mean, I love a lot of things, right? I’m a multi-passionate person. I love supporting clients in whole different aspects of their career, anything career-related, I just love it. But the thing is is the interview prep — to be totally transparent to me — it’s a quick win. People like quick wins. I spend a couple of hours, maybe 1-3 hours, with a client. And from time 0 to the end, it is like a totally different person. And it’s so fun for me to watch that process. So that’s why it’s been a big one because it’s very little time that I’m spending to see such an awesome result. And so that’s why it’s been growing, and it’s been huge, and the testimonials and the reviews, it shows itself. But long term-wise, I mean, I love working with clients long-term too.

Tim Ulbrich: Absolutely. Yeah, I think —

Ashlee Klevens Hayes: It’s like a constant pull of, you know, interview prep versus long-term clients.

Tim Ulbrich: I think, though, as we think about some of the things that are going on with the job market and other things, and this is a way that I think people, to your point, a quick win can really, really differentiate themselves and is one thing that has a win that will last much longer than the individual preparation work that they do with you. So for those that are interested in learning more, I know you’ve got some info on your website, RxAshlee.com. You’ve got a section on interview prep, sign up for your email list, make sure that you’re up-to-date, and I think you’ve got some information on there for a call as well for those that may be interested.

Ashlee Klevens Hayes: Yeah, I have a course that I produced. Basically, what I realized was that 99.9% of the clients that come to me have the same questions. They don’t know how to answer a few basic but sometimes tricky questions, and so what I did was in order to lower the cost and to make it just really more potent and quick for the client, I created a course. And it’s been really successful. And then what happens is if the client has more one-on-one questions, then at that time, they can invest in working one-on-one with me. And I have found that extremely beneficial because I gave you like the down-and-dirty, simple tricks on the course. But then if you want just to take it a little bit more to the next level, then I would love, obviously, to support them even more. So that’s been really fun.

Tim Ulbrich: So I want to talk for a minute about some of the work that you’re doing with USC College of Pharmacy and from my experiences in the academic world, you know, I would often do career advising with students. And they would come to me, and we’d have a conversation about their goals and aspirations, and I could tell they were down one of two tracks. They saw, really — many of them saw two paths in their mind: community pharmacy or largely in-patient pharmacy residency. And I think as I see the work that you’re doing on the “nontraditional” setting, that’s a limit we have right now is that there’s not a broad awareness of the opportunities that are out there and really aligning students strengths with the interests that are there. So tell us a little bit about —

refinance student loans

Ashlee Klevens Hayes: Oh yeah, I could talk about that forever. Yes.

Tim Ulbrich: Yeah. And some of the work that you’re doing at USC.

Ashlee Klevens Hayes: Let me ask you a question. When students come to you, what do they define as, you know, nontraditional pharmacy? I’m just curious.

Tim Ulbrich: So if I get a response on that, they’re typically then starting, I would say maybe they broaden out to like managed care, PBM world. Sometimes I’ll hear things like nuclear pharmacy or long-term care consulting. But that really is the end of it. And if you look at the trend data at many colleges, if you take the residency pool and you take those that go into community pharmacy, that is usually 90-95%, if not in some cases more, of where the students are going. So how are you getting that message out there?

Ashlee Klevens Hayes: In my opinion, that is traditional pharmacy.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: All of those roles. So what is nontraditional pharmacy? And I think that’s the message I’m trying to spread amongst obviously our students but just really the global pharmacy world at large is nontraditional pharmacy is whatever you want it to be. It doesn’t have to be a pharmacy title. It doesn’t have to be a specific industry. It doesn’t have to be a specific sector. What you need to do as students and as just the larger body of pharmacists is recognize that your education is just laying the groundwork for you. It’s not a direct one-to-one path. It’s not this plus that equals this. Gone are those days. No longer are the days that that’s where it’s at. And if we’re not on the bandwagon, then we need to jump on that bandwagon because we have to teach the students to get really, really creative as to what are their skills? What do they enjoy doing? You know, use your background, use your education to just be like a starter place. And then blend with that with what are you good at, what are your passions, what do you want to do in this whole entire universe. Like the sky is the limit. And then just go out and brand yourself as that person. And go out and do it. What’s holding you back?

Tim Ulbrich: Yes, totally.

Ashlee Klevens Hayes: That’s the question. And I think what a lot of schools are missing is telling the students that, giving them the support, giving them the “I think that’s a great idea, go out and do it. I support you.” I just had a student in my office this morning talking to me about how he wants to get involved in health literacy and like how he wants to do outcomes research in that realm.

Tim Ulbrich: Huge problem, right? Yes.

Ashlee Klevens Hayes: Huge. It’s an amazing topic. I’m like, “OK, well, what can I do to support you? What can we do? What internship can you get? What alumni can I support you with? You know, let’s do it.” So it’s totally changing, and we just need to lay — from day one, from ground zero, from day zero, we’ve got to get them to start thinking like outside of that white coat.

Tim Ulbrich: Oh, yes.

Ashlee Klevens Hayes: Outside of the tradition of traditional pharmacy, this is the only thing, one plus one equals two. I strongly just don’t think that that’s where we’re heading anymore. And we need to support the students in thinking that because they’re very smart. They’re very, very competent, capable human beings. They just need a little bit more nurturing.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: They just need more impetus of, yeah, that’s an opportunity. Go after it.

Tim Ulbrich: And I’ve seen this mindset develop very quickly, you know, in a pharmacy student’s schooling. I mean, their first, second year, they’re obviously watching their peers above them, they may have come in with preconceived notions of what these paths are, so I feel like there’s somewhat of an uphill battle to redefine that, right?

Ashlee Klevens Hayes: Well, of course, because they see the faculty doing the, for the most part, fairly traditional roles.

Tim Ulbrich: Yes, yes.

Ashlee Klevens Hayes: So we have to realize as faculty, as staff, these students are looking at us. We are the embodiment to what they can and can’t do. So I think what we can do as staff and faculty is really just support their dreams, support their ambitions. Don’t tell them what’s right or wrong. We don’t know.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: Who’s to say who’s right or wrong?

Tim Ulbrich: I love that. And I think there’s so much fear there around, you know, obviously student loan debt plays a role in that, the income expectation.

Ashlee Klevens Hayes: Totally, yeah. I’m in that. Tim, that’s my jam. Like I pay my student loans — I am not innocent here. I am not student loan-free.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: So I get it. But I’m still doing it. And I still love my job and for some reason, my husband and I are still able to pay our bills.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: So I think it’s just the whole notion of having less fear.

Tim Ulbrich: So a student who’s listening to this podcast and, you know, hopefully they don’t have Ashlee Klevens Hayes as a career strategist at their college of pharmacy, right? So they may not be getting this. But they’re maybe going to begin starting —

Ashlee Klevens Hayes: First I would tell them to follow me on Instagram. I love Instagram.

Tim Ulbrich: There we go.

Ashlee Klevens Hayes: I love Instagram.

Tim Ulbrich: Yes. We are new on the Instagram platform.

Ashlee Klevens Hayes: It’s so fun. OK, first of all, you called it “the Instagram.” No. It’s Instagram.

Tim Ulbrich: Can you tell I’m new on the Instagram platform?

Ashlee Klevens Hayes: It’s fun. It’s a creative outlet. And I think LinkedIn’s a little bit — for me, personally, it’s a little bit more professional where I don’t feel like I can voice what I really want to because I feel like I get a little bit more pushback on LinkedIn, quite frankly. Instagram is creative, there’s so many different people on there, it’s so fun for me. So anyways. We digress.

Tim Ulbrich: We do. So student, let’s say a student at University of Buffalo, here at the Ohio State University, and they’re hearing this and they’re thinking, wow, I’m really passionate about this area. I mean, health literacy is a great example. It could be one of a thousand areas of healthcare, right? There’s infinite opportunities. But they think, I don’t know where to go with this. It’s an idea. I don’t necessarily see or know of a job that’s defined. I can’t find a job posting. Where do they start?

Ashlee Klevens Hayes: Well, it’s a great question. I would say, go read my blogs. There’s like 25 blogs that I have talked about this for a long, long time. You know, where do I start? That’s everyone’s question. How do I get a job? And that’s a mindset thing. And instead of asking, how do I get a job?, ask yourself, what am I good at? What are my strengths? What does success mean to me? You know, what do I want out of my career? That’s the first thing. What are your goals? Like what is it you want to create out of this life of yours? And how do you want to impact people? And how do you want to influence people? That’s No. 1. Step 2, go brand yourself as that person. Once you’ve identified kind of the path you want to take, I didn’t start off this way. I didn’t start off by having all these different services, packages, courses, books, speaking engagements. I just started off like reviewing CVs.

Tim Ulbrich: Yep. One step.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: And then I was like, oh gosh, it’s so much more and deeper than just the CV. It’s so much bigger. And the vision is you’ve got to figure out what you want and then OK, let’s make you look like the best freaking candidate out there. And then go for it. And only do the things that are going to get you closer to that bigger vision. And I think a lot of students come to me, and they’re like, I don’t know what a vision is. I’m like, “OK, well, what do you want for your career?”

Tim Ulbrich: Absolutely. What gets you excited, right? What leaves you energized.

Ashlee Klevens Hayes: Right, exactly.

Tim Ulbrich: Yes, yes. It’s that reflection. And I’ve talked before on the podcast about the book for me, one of the books, many that were game-changers, but one that was really pivotal in kind of my path was “Start” by Jon Eckhoff. And just, it talks a lot about this concept of like be aware, reflect on the things that you cannot get off your mind because you’re so passionate about it or that people are telling you, that you’re really good in this area and helping people and doing this or that, and acknowledge that. Reflect on it. And then take one step towards beginning to articulate what that vision is. And then obviously, begin to execute on that. But we talked on your show, if you articulate the 20-year plan, that becomes paralyzing, right? But you take one step. One step.

Ashlee Klevens Hayes: Totally. Oh my gosh, yes. Let me just say, just to be clear, five years ago, if someone would have told me that I was launching this business, I would have been confused. I would have no idea that I would have been in this place. But I had an idea and I knew what I was good at. And I knew how I wanted to help people. And that’s the same definition of a lot of pharmacists out there. They want to help people. The way I help people is much different than the way other pharmacists help people. So I think you just have to have that idea of what does helping people look like to you? And then what capacity do you like talking about that? And then from there, obviously, you just put your head down and work. And you don’t give up. You commit. Commit to this. And I think that’s what’s been the best part about all of this for me is seeing the clients that commit and the outcome is huge.

Tim Ulbrich: Let’s talk about that hard work and commitment for a minute because you and I both know that starting a business is both exhilarating and it can be a grind at the same time. And I think we don’t always talk about, you know, both sides of it. And of course, the passion brings you through those moments of, you know, difficulty. Seth Godin calls them the “dips,” and you’ve kind of got to — very few people get to the other side of the dip. So what keeps you motivated through the hustle, the hard work, balancing family, all these things?

Ashlee Klevens Hayes: Oh man, good question. All of the things?

Tim Ulbrich: Yes, yes.

Ashlee Klevens Hayes: First and foremost, I have a daughter who I want to show her that if she puts her heart and mind to something, that she is capable of doing anything in this whole entire universe. I want her to see that firsthand. Two, I — honestly, I have a support group that I go to. I’m in a big entrepreneurship group that I lean on them hard when I’m feeling like the little bit of imposterish. I don’t think that really goes away. And three, I see the results of my clients, and that drives me. And honestly, at the end of the day, I think that’s what I’m in this for. I want to see people just as happy and thriving just as much as I am. And I think the people that I’m serving, the audience that I’m working with, they’re all so smart. So smart. I have physicians, I mean, I have pharmacists, I have you name it: agriculture, architects, lawyers, that are coming to me, and they are brilliant. So smart. They just need a little bit of tweaking. And that’s — at the end of the day, that’s what I’m good at, and that’s what I support them through. So I think the results have been a big driver for me.

Tim Ulbrich: So you alluded to this a little bit in what you just said, but you know, the reality is — and it’s hard to think about this, but I think it’s so critical for you, and I know you’ve thought about it, but our listeners also be thinking about legacy. And the reality is what you’re working on today is obviously going to be left behind for others to continue to consume, to build upon, and ultimately, you know, I’m thinking of your daughter, to look back and say, yes, that was my mom. You know? So what do you want your legacy to be?

Ashlee Klevens Hayes: Oh gosh, this could get me like choked up, Tim. What the heck? I’ve had such great mentors in my life, one of them being my dad. And I talk about him a lot. He passed away very suddenly in the middle of my second year of pharmacy school. And he was like the legacy that I wanted to live by. And one of the last conversations I had with my dad, the last, which is so powerful, is I was driving to pharmacy school, he was driving to work, and we were talking about pharmacy, all of the stressors that came along with being a Chief Pharmacy Officer. But at the end of the conversation, he goes, “Ashlee, I just want you to know, I’ve kind of like word vomited on you, but I love my job. And at the end of the day, at the end of the day, you have to make a positive impact on this world, on your job, and on the people you’re working with. Or else it’s not worth it.” And that’s stuck — and eight weeks later, my dad passed away. And that’s stuck with me now nine years ago that that’s what’s the impetus behind me launching my own brand and my own business is I love what I’m doing.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: And it’s not every single day is like skipping and rainbows. No, I get things pop up all the time. But I feel really fulfilled. And I think if I can show that to the people around me and especially like my daughter and my husband and my family, then that inspires them to do that. It’s kind of like a trickle effect, you know?

Tim Ulbrich: I do. And that’s why I love, I love what you’re doing in terms of, you know, helping people whether it’s a quick win in interview prep, whether it’s helping them make a career pivot, whether it’s helping them take their business to the next level and develop it is that has such a profound effect on every other area of our lives. And we cannot disconnect them. And I think some of the negativity that’s out there right now in the job market is a disconnect or trying to disconnect between the work and the life and all the other parts that come. And you cannot. They all influence one another.

Ashlee Klevens Hayes: No. Yeah, no. Yeah. Well, I have to say, if you’re one of those people that is, you know, feeling a little — not just unhappy. It’s more than just unhappiness, right? If it’s unfulfilled or if you feel like you’re not living up to your expectations in your career. You have to understand that if you — and I say it on my business card, it’s on my LinkedIn, it’s everywhere. If you want to make a change in your life, you have to get comfortable being uncomfortable. Because with all this newness comes uncomfortable territory. On the first podcast I launched, I talked about imposter syndrome, and I read off the screen, I was so nervous. I was shaking. And I think I should have had a cocktail before that because I was so nervous to put my heart out there and to put, you know, all these thoughts out into the world for people to look at me. But it’s working, and that’s what kind of drives me too. I’m still uncomfortable, just to be clear.

Tim Ulbrich: Sure. Yes. So give us a book recommendation, a podcast that you’re listening to, something that’s inspiring you that can inspire our audience.

Ashlee Klevens Hayes: Oh, that’s a great question. So I just read the book, “Fearless” by Jean Case over the weekend. She is the national — or I might screw up her title, but she’s like the chairman of the National Geographic. She’s the first woman or second woman to be in that role. And she just talks about all these inspiring people who came from nothing. These people are essentially — not no ones, but they came from nothing, and then they turned their lives into this huge, impactful careers. And that’s really, just hearing those stories and hearing, you know, all of her tips and tricks on how she go to where she is now, and she’s a philanthropist. It’s really inspiring. So that’s the book I read over the weekend.

Tim Ulbrich: Awesome.

Ashlee Klevens Hayes: I read so much too. Just I love reading.

Tim Ulbrich: Me too. Me too. And I’m hoping to inspire that in my boys because I didn’t have that when I was younger, but I can’t get enough of it now.

Ashlee Klevens Hayes: I used to hate reading.

Tim Ulbrich: Me too. I’m ashamed to say that.

Ashlee Klevens Hayes: Oh, I’m not. I hated it. But now, over the last three or four years, I’m in it. I love it.

Tim Ulbrich: We’ll link to that in the show notes. So what’s on the horizon for RxAshlee? What are you working on?

Ashlee Klevens Hayes: Oh, all of the things. You know, it’s always changing. But I have four keynote presentations this year, which I have to say, when you take on a big presentation in front of a big audience, it’s so much work. Holy moly. So much energy. So that’s one thing. Two, I’m leading a women’s group. It’s a branding — it’s not a mastermind, I would say, but it’s just like 10 of us that are just trying to go through career pivots or launching their own brand, and that’s been so much — I love that group. I mean, those are my people. I am writing a book, I’m launching courses. You know? It’s just keeping up the grind, and I love it. It’s so much.

Tim Ulbrich: That’s awesome. So obviously, you mentioned before, you’re on Instagram at @RxAshlee. Again, that’s @RxAshlee. And we referenced the website, RxAshlee.com.

Ashlee Klevens Hayes: Thank you, Tim.

Tim Ulbrich: Absolutely. This has been so much fun. Looking forward to more collaborations. I would highly encourage our listeners to check out the work that you’re doing over at RxAshlee.com, and I’m sure we’ll have you again on the show here in the future. Thank you.

Ashlee Klevens Hayes: Tim, I love what you’re doing. You know, we’ve had this conversation so many times, and I just want to say, thank you for what you’re doing in the profession. I know how much work it takes to put yourself out there and to kind of like just go after it. And you are a strong mentor to so many of us out there. So thanks again for having me on the show.

Tim Ulbrich: Thank you. Have a great rest of your week.

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5 Key Financial Moves To Make With A New Baby

Posted on by yfpadmin

5 Key Financial Moves to Make with a New Baby

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.

This post contains affiliate links through which Your Financial Pharmacist may receive compensation

In an earlier post, we talked about how to prepare financially when expecting. Once your little one makes his or her big appearance, though, the financial planning is not over – it has just begun. Continue to work on those important financial moves we talked about earlier, and start to incorporate these additional tips.

Nothing can prepare you for life with a baby. Whether this is your first or fifth baby, the first few months are exhausting. You walk around on a few hours of sleep every night – getting more than four hours of sleep in a row is cause for celebration. You might not remember the last time you showered or sat down for an uninterrupted meal. Although it is the last thing on your mind, financial planning for new parents is key to ensuring a strong financial position for the upcoming years.

1. Start Saving For College

With the average cost of college for 2017-2018 at $20,770 for in-state public schools and $46,950 for nonprofit private schools (including tuition, fees, and room and board), and prices increasing every year, it is never too early to start saving for college. Don’t forget to multiply these numbers by six (years), the average length of time students take to earn a bachelor’s degree, and also by the number of children you have.

Having a monthly savings goal is a fantastic way to help your children pay for college. NerdWallet estimates that saving $500 a month, per child, earning 5%, should be adequate for you to cover $50,000 of college costs per year for four years once your child turns 18. Obviously if you’re planning to pick up the tab for potential graduate or professional school, you’re going to need to save a lot more. You can find calculator tools online to tweak the numbers to your personal situation. Often, saving for college will involve a combination of several of the strategies below:

529 College savings plan: The 529 is the most popular savings plan geared toward education; there are two types. The first type is the 529 investment savings account. With this plan, you invest with the same risk/return profile of other stock investments. Check your own state for tax breaks or matching funding before looking into 529 plans offered by other states.

The second type is the 529 prepaid tuition plan. This method locks in tuition costs and avoids the yearly increase in tuition. Paying for 6 semesters now, at today’s cost, will pay for 6 semesters in the future, even if the costs are higher at that time. These plans are starting to have more restrictions.

Pros of the 529 include: high contribution rates (plans typically allow up to $300,000 in lifetime total contribution), the ability to change beneficiaries, and the benefit of tax-free growth. Also, if the parent is the account holder, the 529 is considered a parental asset and it will have a minimal impact on financial aid as compared to other education savings options.

On the other hand, there are a few cons of the 529. It is strictly to be used for education, so if your child does not go to college, the money may be unavailable for other purposes. However, depending on the plan, you may be able to change the beneficiary or pay tax and a 10% penalty on the growth of assets. There is also the inherent stock market risk.

Savings Accounts & Other Low-Yield Options: Savings accounts are flexible, but provide little in the way of interest. Using a regular checking/savings account with the intent to save for college may backfire, as money may be tapped into and not replaced. Not only that, but because of inflation which is typically around 2-3% per year, you may actually be losing money keeping it parked here. Certificates of Deposit (CD) and US Savings Bonds are other options, but these are mostly out of favor due to low interest rates. Sometimes, a very conservative contributor may favor this option.

Roth IRA: A Roth IRA can be used as a combination retirement account and educational savings account. It allows you to invest with after-tax dollars while the earnings grow tax-free. Although this is typically used as a retirement account with a penalty for early withdrawals on any growth before 59 ½, if used for higher education, distributions can be taken tax- free and penalty-free. The biggest downside to this is that it could significantly reduce your overall retirement projections. In addition, the distribution must be made in the same year that the qualified expenses are paid. Another item to note is this distribution is considered to be income to the student and could reduce eligibility for need-based financial aid.

Coverdell Education Savings Account (ESA): This is like a smaller version of a 529: it offers tax-free withdrawals, and you can invest in the market. However, one of the biggest advantages is that you will have a lot more investment options to choose from, since you won’t be limited to what’s available to what a specific 529 plan offers. Contributions are limited to $2,000 per year, and until the beneficiary turns 18. ESA’s may offer more flexibility, and qualified expenses may include educational expenses from Kindergarten all the way through graduate school (529 plans also now allow up to $10,000 per year to pay for private elementary and post secondary school tuition).

Important to note with a Education Savings Account is that income limits apply, and depending on your salary/combined salary, you may not be able to participate. Currently, the income limit for a maximum contribution is $190,000 for a married couple filing joint returns, and contributions phase out at $220,000 in 2018/2019. The limit is $110,000 for those not filing a joint return.

If you are indeed eligible to contribute to an ESA, the cool thing is that you don’t have to choose between an ESA and a 529 – you can do both!

Trusts: These are structured as UTMA or UGMA. Assets are transferred to the child’s account and invested on his/her behalf until the child reaches the “age of trust determination,” which is between 18-21, depending on the state. As soon as the beneficiary becomes an adult, he/she can use the money however he/she wishes. As a custodial account, these assets are considered to be assets of the child/student and are included in calculating financial aid. These funds will stay in the custodian’s taxable estate until the child reaches the age of trust determination.

2. Make A Will

This is the happiest time of your life – who wants to think about something depressing like a will? Although it seems sad, a will is a very necessary part of life. Just think about the recent, unexpected passing of 90210 and Riverdale star Luke Perry from a stroke at the young age of 52. That was a major wake-up call for many people to get their affairs in order.

In your will, you will clearly and concisely state your wishes for the distribution of your assets after death, and appoint guardians for your children if both parents pass away. You will designate an executor, who will ensure the provisions of the will are carried out.

You can either hire an attorney to create your will or do it yourself. I would recommend hiring an attorney if you can afford to do so. The attorney handles all of the intricate details, making sure nothing is left out and can keep a copy on file. Attorneys may charge a flat fee or hourly rate, with an average cost of $300-$1000 for an uncomplicated will, or up to $10,000 if you have complex assets and an estate, or the need to establish a trust.

Many companies offer a very affordable legal plan for employees, where you contribute a small amount per paycheck for legal representation by participating attorneys. At the time, my husband and I were able to do both our will and closing on our house, and we did not have to pay anything above the regular paycheck contribution.

If you would rather create a will yourself, you can use an online program or software to make a will for less than $100. Requirements for witnesses or other specifications vary by state.

Another thing you need to do that falls under the “no fun, but necessary” category, that goes along with your will, is to create a living will, or advanced directive. This lets you set the terms for healthcare providers about the kind of health care you want or do not want to receive, in the event that you are unable to speak or make decisions for yourself. The living will sets forth your wishes on resuscitation, quality of life, and end of life treatment. The Durable Power of Attorney for Healthcare is a designated, trusted person who will make medical decisions for you in an emergency situation, in cases where the living will may not provide a clear answer. This person is there to fill in gaps that are not clarified by your living will, and cannot contradict your living will.

term life insurance, term life insurance for pharmacists

3. Obtain or Update Life Insurance

Now is the time to get a life insurance policy, if you do not have one already. Life insurance ensures that your beneficiaries (spouse, children) are financially taken care of if you die.

There are two types of life insurance:

  • Term Life Insurance: This type of life insurance offers coverage for a specified period of time. It is less expensive than whole life insurance and has a predetermined guaranteed death benefit. Your premiums will increase at preset time intervals, such as every 10 years.
  • Permanent Life Insurance: A number of policies such as whole life, cash value, and universal life, fall under this umbrella. This type of insurance has a death benefit that never expires as long as you pay your premium. In addition, there is typically a saving/investing plan baked in, which is one of the benefits that agents use frequently as a marketing tactic. The rates of return vary, depending on the policy, and they are generally filled with many different kinds of fees. Plus, these policies are often much more expensive than term policies. Because of these issues, the YFP team recommends that most people should keep their savings and investments separate and go for a term life insurance policy.

Once you determine the term (usually 10-30 years) that works best for you, you need to decide the amount of coverage. Financial experts often recommend that your death benefit be 6 to 12 times your annual salary. However, this may not be enough and a number of factors will come into play, including what you can afford, homeownership, and number of dependents. For a more tactical approach, you can check out this calculator.

long term disability insurance

4. Obtain or Update Disability Insurance

Would you be able to support yourself and your family, pay bills, and achieve your financial goals if you became disabled and couldn’t work anymore? If your answer is no, then you need disability insurance.

Do you know your most valuable asset? Surprisingly, it is not a material possession such as your house, but it is the ability to earn a living. Disability insurance pays a portion of your regular income if you are unable to work for an extended period of time due to illness or injury.

Although it seems unlikely, more than 1 in 4 20-year olds will have a disability for 90 days or more by age 67. Often, people think of worst-case scenarios and assume that they are immune, but something as “minor” as a back injury can put an otherwise healthy person on disability.

There are two types of disability insurance – short-term and long-term coverage. Both replace part of your monthly salary up to a certain amount, such as $10,000, during a disability. Some long-term policies also may pay for additional services, such as training to return to work.

Short-term disability replaces 60-70% of your salary, and pays out for several months up to one year, depending on the policy. It has a shorter waiting period, about 2 weeks, between the time of disability and the time when payments are made to you.

Long-term disability policies typically can replace up to 40-60% of your salary. With long-term disability insurance, benefits end when the disability ends. If the disability continues, benefits end either after a certain number of years or at age of retirement. There is a longer waiting period, usually 90 days, between the time of disability and the time when payments are made

Disability insurance can get pretty complex as there are a number of riders and definitions that vary between companies. Besides your age, occupation, term, benefit amount, and waiting period, these riders will play a huge part in the cost of your policy. To get a better understanding of these and what to expect, you can check out this free guide.

How do you sign up for disability insurance? First, look at your workplace. Often, employers include coverage and contribute towards the premium. Even if your employer does not pay towards your coverage, you can often buy your own coverage through the employer’s insurance broker at a discounted group rate. You can also check with professional pharmacist associations. Another way is to buy an individual plan through a broker or directly through an insurance company. Your Financial Pharmacist offers a helpful service through Policygenius that shops multiple companies to find you the best disability insurance policy.

disability insurance, disability insurance for pharmacists

5. Start or Continue Contributing Toward Retirement

Although retirement may seem far away, and college savings for your children may be at the front of your mind, it is an inevitable event that requires planning. I always remember Suze Orman telling callers on her radio show, “You can take out loans for college but you can’t take out loans for retirement.” The sooner you start saving, the longer your money has to grow. Be sure to contribute to your company’s 401(k) plan, and if your company has a match, try to at least contribute that much since it’s basically free money. The maximum 401(k) contribution limit for 2019 is $19,000 unless you’re over 50 in which you can add an additional $6,000.

Even If your company does not offer a 401(k), or you are self-employed, you can open up an IRA (individual retirement account). For 2019, your total contributions to all of your IRA’s cannot exceed $6,000 if you are under 50 years old, or $7,000 if you are age 50 or older.

Besides an IRA or 401(k), a Health Savings Account (HSA) is another great way to save for retirement as it has triple tax benefits. It lowers your taxable income, grows tax-free, and can be distributed tax-free if used for qualified medical expenses. Despite its name, your contributions do not have to sit in a simple savings account, but can actually be invested aggressively. In order to get access to an HSA, you have to have a high deductible health plan (HDHP).

These financial moves to make with a new baby may not be the most exciting things to do and they can come with a high cost, but they will help you sleep better at night, knowing that you are taking care of your family. Now, here’s to hoping your new bundle of joy sleeps through the night!

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 click here to book a free call with the YFP Planning financial planning team.

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YFP 094: Debt Free Theme Hour

Posted on by yfpadmin

Debt Free Theme Hour

On this debt free theme hour, sponsored by Airbnb, Tim Ulbrich welcomes Matt and Amy Farley who paid off $207,000 in just under 4 years. They talk about what motivated their journey, how they were able to work together and what’s next now that they are debt free.

About Today’s Guests

Matt and Amy have been married since 2011. Matt graduated from the University of Iowa College of Pharmacy in 2015 and has worked in the informatics space since then. Amy is a high school choir director at Washington High School in Cedar Rapids, IA. They have two kids and a dog named Millie.

Summary

Matt and Amy Farley share their journey of paying off $207,000 of student loans in 4 years. Matt accrued $60,000 of student loan debt from his bachelor degree and the rest in pharmacy school. When he graduated, his debt totaled $187,000. Fortunately, his wife Amy didn’t accrue any debt for her undergraduate studies.

Amy grew up in a frugal household where her parents didn’t make a lot of money but were able to provide them with a great upbringing. Amy says that her parents trained her and her siblings to budget and helped them find scholarships for their college education. With scholarships, Amy was able to complete her bachelor’s degree with no debt. She later completed her master’s degree which was cash flowed through their budget while she continued to work.

While Matt was in college, his view on money shifted. After reading Total Money Makeover by Dave Ramsey, he began to view possessions and money differently. Instead of seeing success marked by the purchase of a new car or large house, he saw monthly payments and debt. When Matt graduated, he saw a high debt number and realized that his take home pay wasn’t as much as he expected, even with a 6 figure pharmacist income. His motivation behind paying off his student loans quickly was that he wanted to be free of debt and have options in the future for other experiences. Amy’s motivation came from faith and wanting to be free from the control of money so that they could give back to others and their children, as well as have money for future goals and experiences.

Initially, Amy and Matt planned to pay off their student loan debt within 2 years. They realized that this trajectory wasn’t sustainable and “slowed” down how aggressive their payments were so that they could start a family and buy a house. The couple shares that their secret of success was found in their budget. They used the budgeting tool YNAB and created a zero-based budget so that every penny went somewhere. They talked regularly about their budget and made sure they were on the same page regarding large purchases and big financial decisions. They also used a debt snowball calculator in Excel to gain momentum to reach $10,000 milestones. Additionally, they were both paid biweekly which allowed them to budget with 24 yearly paychecks and use the additional 2 paychecks for larger payments or other goals.

Matt’s advice to those in pharmacy school is to minimize your lifestyle and not live off of your loans or take trips using them. He also suggests that residency, although can be very helpful for networking and specialized training, may not be necessary for everyone. If residency isn’t pursued, your higher income could be used to pay off your debt or work toward your financial goals.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. And we have a good one for you this week. I have Matt and Amy Farley with me, who paid off over $207,000 in just under four years. And they hit submit on that last payment of debt just a couple days ago as we’re sitting here doing this recording today. They’ve got a great story to share about their journey, what worked, how they have worked together effectively as a couple and now what is the future ahead that they’ve gone through this journey. You might remember, we asked you, the YFP community, what you wanted to hear more of on the podcast, and Debt Free Theme Hours was near top of that list. So we have another great one for you today. We’re going to hopefully continue to feature more of these into the future. So Matt and Amy, welcome to the show. And thank you so much for coming on.

Matt Farley: Hey, Tim. How’s it going?

Amy Farley: Thanks for having us. Hello.

Tim Ulbrich: Yes, excited. You have an incredible journey. We just talked briefly before the show, and I know Matt, you and I were messaging back and forth over the past couple months. But I am excited for our listeners to get a sneak peek into the journey that you went through. And it’s really incredible if you think about what you did. $207,000 of student loan debt in under a four-year period and just hitting submit on that last payment just two days ago. So first of all, congratulations on doing that. That’s an incredible accomplishment. And Matt, I’m guessing as you now log out of the Navient platform and you see that big $0, that has to be a great feeling, right?

Matt Farley: Yeah. Honestly, it doesn’t even feel real. You know? Like I’m so used to there being thousands and thousands of dollars on there that I just kind of started accepting that. But now, I log in and it says $0. It feels pretty good.

Tim Ulbrich: Yeah, it’s amazing when you log onto the platform and you see hundreds of thousands of dollars and, you know, we’ve talked before, it feels like Monopoly money. It doesn’t feel real, and sometimes, you send in those big payments, you don’t see the needle move very much. And I felt the same way when my wife and I hit this journey and we finished paying off our debt. Same thing, Navient platform, I was sitting at my kitchen table. I’ll never forget the moment, but it was like the fireworks, I needed them to come, and they never came. So it took awhile to really set in the reality of that. But you guys have a bright, bright future ahead. So Matt, why don’t we start with your background in terms of undergrad and then into pharmacy school? Tell us a little bit about your journey and some of the debt that you accrued along the way in terms of both undergrad and pharmacy school and then obviously, that collectively being the large part of the debt that you were working through paying off.

Matt Farley: Yeah, yeah, absolutely. So I went to undergrad. I did four years at the University of Northern Iowa and accumulated about $60,000 of debt. Wasn’t super wise with how I paid for school. I kind of lived on loans and paid for tuition all at the same time. Then I went to pharmacy school at the University of Iowa, accumulated the rest of the debt. Actually kind of going through pharmacy school got some pretty good scholarships that paid for a little less than half of pharmacy school. But you know, it just seemed like it still accumulated to when we graduated being at about $187,000. And so luckily and fortunately, my wife Amy didn’t have any debt from undergrad. So that was kind of the number we were looking at when I graduated pharmacy school. And so you know, after pharmacy school, I took a job as an IT pharmacist. My background’s in IT, in informatics, and I’ve been a part of a couple startup companies along the way and in pharmacy school and so was able to land that job out of school and just felt really motivated at that point to knock out this debt. And so that’s the number we started with, and yeah. Now I’m working as an informatics pharmacist for a pharmaceutical company.

Tim Ulbrich: Thank you for sharing. And Amy, talk us a little bit through your background. And as we talked before the show, my understanding is you grew up in a little bit more of a frugal environment and you kind of strapped your way through this with scholarships and ultimately, cash flowing a Master’s degree. And so I guess we can blame Matt for all this debt, right?

Amy Farley: Oh, absolutely.

Matt Farley: Unfortunately, it’s my fault.

Amy Farley: I reminded him of that once in awhile. But no. Yeah, so I grew up in a really frugal house where my parents didn’t make much, but they worked very, very hard to use every penny and give us a great upbringing. And then they trained me and my siblings along the way too of budgeting techniques and worked really hard alongside us to find a lot of scholarships going into college, so yeah. I went and got my undergrad at the University of Northern Iowa as well. But I was able to pay for all of that using scholarships that my parents kind of helped me figure out and learn how to do. And then I started working as a high school choir director and decided that I wanted to get my Master’s, so I did that online while working and while we were starting to pay off all of this debt. And just like you said, we cash flowed my Master’s.

Tim Ulbrich: That’s awesome. And so the work you’re doing now is in music education, and you had mentioned directing the high school choir, correct?

Amy Farley: Yeah, yep. So I direct show choirs and your regular choir that you think of and then a jazz choir as well. It’s a lot of fun.

Tim Ulbrich: Awesome. Yeah. So Matt, how many thank you cards have you written to Amy’s parents for helping out with all those scholarships?

Matt Farley: Yeah, I mean, definitely. We talk about it. I haven’t written any cards, but we’ve definitely talked about it.

Tim Ulbrich: That’s fun, that’s fun. So one of the questions I want to ask — and I’d love to hear from both of you on this — is we talk a lot on the show about, you know, the why, the motivations, the what’s behind the hustle and the grit. And for everybody, that often is different. But when I hear your story, $207,000 of debt that you paid off in less than four years, to me, that really says there’s a significant motivation and why around getting this debt off of your shoulders, for whatever reason. So Matt, let’s start with you. Talk me through some of the motivations of why you wanted to have this debt paid off — and let me even add on to that, I guess. Was it always that way? Or can you recall a moment where that transition had happened?

Matt Farley: Yeah, you know, for me, my view of money throughout this process has shifted a lot. I discovered a book, “The Total Money Makeover,” when I was in my second year of pharmacy school that shifted a lot of how I viewed money and possessions in general, right? You know? I think I used to view when people had a nice car, I thought that they were successful. Now, I almost view that as a negative. You know, not that it’s bad to have a nice car, but I always kind of wonder if that car has a payment attached to it or if that ginormous house has a payment attached to it. And so for me, that was when I started this process of viewing money differently and viewing my student loans differently, right? I kind of just thought when I was in pharmacy school that yes, I’m taking out money for school, but I’ll have so much income that it won’t really matter, right? That my lifestyle will be able to be whatever I want it to be, and I won’t have to think about money very much because we’ll have that six-figure income that a pharmacist gets. And so, you know, we graduated and just kind of recognizing that that was a huge number and that when you look at the take-home pay that you actually get as a pharmacist, there really isn’t as much as you might think, right? And so kind of looking towards the future and looking down at like all these different loans you could potentially have and all of the interest that goes along with them. For me, the motivation was being free of that. You know? When you’re talking about loans at 6% or 7% on this debt and then if you have a car payment, you add in 3-5% and then your mortgage is 3-5% or whatever, right? You start doing the math on this over 10-40 years on some of these loans. And it really eats away at your financial success. And so for me, a lot of my motivation was just looking towards the future and wanting to have options for the things that we wanted to do. You know? I love working, but it would be nice if I didn’t have to, right? Or it would be nice if we could just take three months off and think about things or you know, like I love being a pharmacist, but maybe someday I want to start my own company or something. It just seems like the options are available to you if you become financially free from these loans, right?

Tim Ulbrich: Yeah, and I love that, Matt, because we talked before the show a little bit that having options, it’s very difficult to put a number to how valuable that is. So you know, I’ve talked to pharmacists before that maybe they want to have an option like you mentioned in pursuing something entrepreneurial. Or they love their work, but they want to have the choice of doing it or how much. Or maybe they’re burned out, and they’re ready to seek something new. Or maybe they have an ill child and want to spend some more time at home. Whatever would be the case, the point is you have options, right? And that is incredibly freeing, and it’s very difficult in a financial plan to put a number on that. And I’m so glad that you had mentioned that. The other thing I really appreciate your comment there is just the concept of the future. And I think, you know, you had mentioned, if you look at really a pharmacist’s take-home pay after taxes and all the things that come out of your paycheck, that dollar amount isn’t necessarily as big as you may think it is. And when you look at the goals or things you need to achieve 20, 30, 40 years from now, you know, that’s not necessarily a whole lot of time to be able to get those things done, and there’s a lot of diligence that needs to be had there. So Amy, same question for you. Tell me a little bit about some of the motivations and why for you guys to be so aggressive because the reality is — and you know this well — is that as you’re dumping all this money at student loans, this means you’re not doing necessarily some other things and there is some sacrifice there. So what was the motivation for you to be able to pay this off so quickly?

Amy Farley: Yeah. I think one of the other things that was a motivation for both of us was our faith and just wanting to be free from the control of money. I think that we’re called to do that in our faith, and so just wanting to be free from that control and the love of money in that way so that we can give to others freely, that we can use our money to bless other people really easily. And then I think another side that Matt didn’t really touch on either is being able to give back to our kids or our future generations, you know, wanting to pay for their college or give them experiences that maybe we weren’t able to have growing up, those types of things too. Just so that we have kind of a freedom financially to live the way that we would like to.

Tim Ulbrich: Love that. Love that. Matt, you had mentioned that when you had initially started, you guys were thinking all in on two years, which I look at those numbers, and I’m like, that’s crazy talk. But and then you had to slow that down, “slow that down,” a little bit, and you did it in less than four. So tell us about that decision to pivot, slow down, be a little bit more flexible, because I think that’s important for our listeners to hear that is that sometimes, the plan changes, right? That’s just the reality. So talk us through that.

Matt Farley: Yeah, you know, kind of the trajectory we were on wasn’t super sustainable. I think it’s a good thing to be intense, but I also think that if you view getting to the point where you are debt-free is like the end-all, be-all of like accomplishment in your life, you’re kind of going to be let down, right? Like you’re going to get to $0 and be like, OK, well, that was probably not worth killing myself. It was really important for us to start a family when we did. And we had been living in an apartment, and we wanted to move to a house and kind of get closer to work. And so we made that decision about a year into that aggressive payoff that we’re going to just slow this down, we’re going to try to build up some down payment for a house, and then have kids, which obviously is expensive. We didn’t go crazy. We bought a townhouse, and we definitely did things that were below our means so that we could continue to be aggressive. But I guess it was just a heart change about viewing the debt. I almost was kind of idolizing it, like this is the reason for life. You know?

Tim Ulbrich: Yeah.

Matt Farley: And while I think it’s really important, I definitely think while you’re paying off debt, it’s important to make it a sustainable process. I almost compare it to like losing weight, right? Like if you go on a crash diet, it’s not something that’s going to be sustainable. But if you learn the fundamentals of eating right, exercising and having like a good lifestyle, that’s actually something that will last a lifetime. So I guess that’s sort of the change in mindset for us a little bit.

Tim Ulbrich: So as I look at that number, $207,000 in just under four years, you know, my first thought is, I want to know exactly how Matt and Amy did this. So as you look back on that journey, give us some insight for our listeners that maybe are struggling with a similar debt load and have the desire to become debt-free but are struggling with trying to figure out, how do I actually do this? What does it look like? So Amy, what was the secret of success for you guys in terms of getting this done? Is it the budgeting? Working together? You know, how did you practically get to the point where you could free up enough money each and every month to make extra payments toward your student loans?

Amy Farley: Yeah. Well, I would say the budget is No. 1. And we use a software called YNAB, which is You Need A Budget.

Tim Ulbrich: Yeah.

Amy Farley: YNAB. And one of the things in there is that every penny goes somewhere. So we got to the point where we were living on last month’s income, which I think was huge in all of this. So we knew going into each month, here is every penny we have to spend this month. And Matt’s our budgeting guy, so he would make sure that every penny went somewhere, and we really worked through like what is the minimum — or like what is actually what we need for groceries? What is what we need for all of these things? And then every penny that we didn’t need to use went immediately to debt. So I think that that’s a big thing is knowing where your money is going and having a plan for it so that you don’t just randomly spend and all of a sudden, you can’t make that loan commit, you know?

Tim Ulbrich: Absolutely. So it sounds like you guys used a zero-based budgeting process, I’m guessing if you’re using YNAB. My wife and I use that tool as well. It’s fantastic. We’ll link to it in the show notes, and I think it’s like $7 a month, right? Something like that if I remember right? $80 a year? Something not too crazy. But it is built off of — you’ve heard us talk before on this podcast about a zero-based budget, which essentially to Amy’s point, is accounting for every single — literally every single penny prior to earning that rather than tracking those expenses at the end of the month. And so we teach this process, we have some blog posts, we’ve talked about on the podcast. If our listeners go to YourFinancialPharmacist.com/budget, they can download an Excel template that will walk them through that process, and then they can upload it to a tool like YNAB or EveryDollar envelopes, Mint, whatever tool that they would want to use. So Matt, you are, it sounds like, the budgeting person. So how does this work for the two of you? Are you taking the lead and then you’re bringing Amy in as kind of the final decision or to make sure there are certain goals or things you’re trying to achieve that you’re on the same page? What does this look like week-by-week, month-by-month?

Matt Farley: Yeah, so we talk pretty regularly about the budget. Generally, I’ll put it together and then if there’s anything that’s a major change, we’ll talk about it together. We use the functionality in YNAB where when you’re making a purchase, you can log what you’re purchasing and actually check against how much money you have, right? So if I’m buying groceries, I know I have $200 left in that category. So that’s sort of how we communicate just through the app, in a way, because we can just know how much is there. And then when we’d have big purchases to make or we would have big decisions about how much to pay out towards loans, typically I would just consult with Amy before doing that, you know? It seems like we’re at this point with our budget where it’s standard about what’s going to happen. And then anything outside of that, we have a discussion about. Like I feel like I’m blessed that Amy is very just frugal in general, so if I just put her on autopilot, she’s not going to, you know, rack up a credit card or something like that, which is great.

Tim Ulbrich: So Matt, besides the budget, anything else you would add in terms of the secrets of both you and Amy being able to pay off so much debt in such a short period of time?

Matt Farley: Yeah, there’s a couple, actually. You know, one that doesn’t work for everyone, but we happened to be paid biweekly. And so when you get paid biweekly, you can live off two paychecks a month, and then there’s actually 26 paychecks a year that get paid out, so for both of us, we had two extra paychecks each year. So we basically live on 24 paychecks but get paid 26 paychecks. And that was actually really helpful for us from the perspective of like little bonuses and big chunks of money that came off the debt. So I think anytime you can do that, that’s really helpful. And then we use a debt snowball calculator in Excel to really visualize the dates that certain payments were going to be made. Yeah. This probably isn’t totally popular with everyone, but we didn’t consolidate our debt. We had lots of little debts, and that was almost helpful for us to get motivated, you know. It was like, we paid off another $8,000 debt. And then we paid off a $10,000 one. You could almost see that progress. Now, if someone’s more mathematically motivated, that doesn’t make sense sometimes, right? But that was helpful for us.

Tim Ulbrich: Sure. Well, and I think you’re highlighting — just to make a comment there — I think you’re highlighting two very important things that are behavioral aspects that allowed you to be successful. So for somebody, and maybe it doesn’t matter for somebody else, but if you’re paying off debt in a very short period of time, and you’re able to see that progress because you have multiple loan debts that you’re paying off and rolling to the next one, rolling to the next one, and if you were to consolidate or to refinance into one big payment, then that would have maybe lost some motivation along the way, especially when you think about a short time period and interest that’s accruing, maybe that behavior was more important, you know, than the math along the way. The other thing I love that you said, Matt, is the concept of the biweekly pay and allowing you to have some chunks of money that you could strategically put towards goals or things that you’re working on or debt payments, whatever it be, because I think — and I’m guessing it sounds like for you and Amy — those moments when you had those bigger payments or those bonus type of payments, those are the moments where you feel like you’re really getting some momentum that keeps you motivated, that keeps you going and going and going. And I see this with the model you’re describing, I see this with tax refunds or things that people use, but those wins along the way really help keep the motivation as you’re in it for the long haul, even here just under four years, but obviously, it’s a grind while you’re going through that.

Matt Farley: Definitely. It’s like for us, it was really motivating every time we went to the next $10,000 increment, right? So OK, we’re in the $50s now, we’re in the $40s now, we’re in the $30s now.

Tim Ulbrich: Yeah.

Matt Farley: So the chunks of money helped with that when you can jump those increments.

Tim Ulbrich: Amy, one of the questions I have for you — and Matt, certainly feel free to build off of it — but as everybody knows who’s listening, you know, finances and relationships are sometimes like oil and water. Right? And it can be difficult to be on the same page. Obviously, as we zoom out, you two have been very successful. My question is, you know, has it always been rainbows and cupcakes? I mean, has there been difficulties along the way? Or if not, what really have been the strategies that have allowed the two of you to work together and to be on the same page towards this common goal?

Amy Farley: Yeah, I think we have worked pretty well together and started off working really hard to be on the same page from the get-go, which has helped a lot. But yeah, it hasn’t been roses the entire time. I think there have been a lot of times when we’ve disagreed where our money should go. I know that like when we were buying a house, I really, really, really wanted that single-family home, and Matt was like, “Nope. We can’t spend that much money. We can’t.” You know? So we had arguments and disagreements in that way where we’d want to spend the money in different ways, and I think just being willing to sit down and really talk through it and, you know, make compromises where it’s necessary but also remind each other frequently that like someday, we will be able to have that single-family home if we want it. You know?

Tim Ulbrich: Sure.

Amy Farley: But for now, we’re going to make this sacrifice. And so yeah, it’s been good to just work together and be involved. For both of us to be involved in it so that when those hard times come up where we don’t agree that we can look back and be like, OK, here’s where the progress is, here’s where we’re going, you know, at this point in life, we’ll be able to do that. So I think it’s hard in our society where there’s a lot of comparison to other people. You know, you get on Instagram, and you see, oh, my friend just went to Cabo. Oh, crap. You know, like I would like to go. But just having to be like, that’s not for us right now, and that does not fulfill life.

Tim Ulbrich: Sure.

Amy Farley: And having to remind each other of those things frequently.

Tim Ulbrich: And the reality — we’ll talk more about this here in a few minutes about what’s kind of ahead — the reality is if you guys want to go to Cabo in the future, you’re certainly going to have the option, you know, to do that among with many other things that you want to do because of the position you put yourself in. What I love about what you said there, Amy, is the reality of, you know, two people being involved in the process. And even if one person’s taking the lead, I think if two people can get on the same page with the vision, that for you all the debt-free was the vision that you were really working towards, and obviously, that was going to be able to allow you to achieve the other things that were most important to you, the why types of factors. If you can get on the same page with that shared vision, the month-to-month budgeting I won’t say is easy, but it becomes easier because that vision is in the background. Right? You shared the direction, and now it’s a matter of month-by-month, what do we need to do to get there? So Matt, one of the questions I wanted to ask for you — and really, on behalf of the listeners because one of the things I often get asked is, ‘Well, what about retirement during this aggressive debt repayment?’ And obviously, you balanced other things, so you purchased a townhome, you cash flowed a Master’s, you cash flowed a car, but what was your retirement strategy? And were you contributing? And if not, like how did you reconcile the delay of doing that?

Matt Farley: For sure. Yeah. So we did contribute enough for a lot of those four years to get the match at our employers. But towards the last year, kind of bumped that up to more like 10% of my take-home — or sorry, of my pay. And I did struggle with this a little bit because you’ll hear different strategies, right, when you’re getting out of debt. You know, should you? Should you be investing? Or should you not? For me, I wanted a little bit of a mixed bag approach, knowing that — I guess what I would say is I’d rather cut my lifestyle than I would the potential compounding you get from investing, right? So I wanted a little bit going in there to just get things started. But I wasn’t as aggressive as I would have liked to be, obviously, if I didn’t have any debt. I guess I wouldn’t ever yell at someone for like not investing. It’s really hard for me to mathematically not take a match from an employer, though, just to give that up is hard.

Tim Ulbrich: Yep, I share that with you. And we kind of preach that here as well of, you know, the free money, and it’s hard to dispute that. And I think the other thing that it does is it keeps it top-of-mind. It doesn’t distract you from the goal, but it keeps it top-of-mind, and you feel like you’re making some momentum, even if it’s not the 15-20% that you want to get to. You’re starting to move that snowball, right? And it’s going to eventually get downhill and pick up some speed. So Matt, this next question I have for you since you were the one that had all the baggage with the student loans, so as you look back now on this journey, 8+ years of school, accruing undergrad debt and obviously that compounded in pharmacy school, you know, I’m really asking this question on behalf of the students that may be listening. If you could start all over again, you know, what would you do differently? And what would you have done during school to help minimize this position?

Matt Farley: I mean, honestly, if I was coming out of high school right now — I know that’s not a lot of the pharmacy students listening — I would be so much more aggressive towards scholarships and trying to be involved in those types of activities. In pharmacy school, it’s hard, you know? There aren’t as many scholarships to go around. And so I think the main thing you can do is minimize your lifestyle. We did have some scholarships, and I was able to get some of those, but you know, I think mostly, I just wouldn’t live off loans, right? Like we went to Europe off loans, which was obviously a really stupid decision. I think it’s easy to tell yourself when you’re in the situation, pharmacy school is stressful, right? That you kind of deserve to have fun activities, you deserve maybe to go somewhere for spring break or you deserve to make a really awesome trip in the summer. And I guess I would encourage people to not do that and recognize that your lifespan is likely to be really long, and this is just a season of life where things are hard. And so if you can minimize that lifestyle as much as possible, that helps a lot. And then just get creative, you know? I’m sure there are more scholarships out there than I was aware of to apply for, and so I guess that would be my advice. And then you know, I guess the last part of that is if you’re considering residency, I think residency is a great thing from the perspective of experience and kind of widening your network. But I do think it’s over glanced over on the opportunity loss that it costs to actually do a residency. You know? I was considering doing a two-year residency in administration when I came out of school. There’s no way I would be debt-free if I would have done that. Now, that’s maybe not the worst thing if maybe that’s exactly what you want to do for your career, but I guess kind of what I tell pharmacy students a lot is employers are looking for you to solve their problems not necessarily be qualified for a job. And so if you can work hard and you can understand how things work in the field you want to get into, it’s possible to do things without a residency. Now, I’m not discouraging people from doing that, right? But I do think it needs to be considered when you’re actually looking at your finances.

Tim Ulbrich: Amen to that. And I hope our listeners heard that last part there. I firmly stand with you that that first door is opening is such a critical one to open, and sometimes, it requires a training to get there. But once that door opens, if you have a good work ethic, and you’re somebody that can identify problems and propose solutions, you’re going to be very successful and other doors will open into the future. So I think that’s great wisdom there. So Amy, here you are, you and Matt are a fresh 48 hours off of being completely debt-free from your student loans. And you know, obviously, you guys have a good household income. My question is, what’s next? I mean, what’s ahead? What from here becomes a priority of you were making massive student loan payments, and now you’ve got this monthly income that’s freed up. What’s the game plan going forward?

Amy Farley: You know, I think that’s a great question. We haven’t talked a ton, but we have kind of looked at the things that we weren’t able to put money into that we would like to, kind of life goals, putting a little bit more into retirement, paying off — being able to pay for our kids’ college, things like that, and starting to save up for those now. So we’ve already done a little bit of looking at how we want to shift around this money into new places. But it also means that we have a little bit more freedom to kind of enjoy life. So hopefully, maybe a trip to Cabo or you know? I think that there are some of those things that we will definitely take advantage of now. It also just frees us up to be able to, you know, once we have more kids or whatever that if we would like to get a bigger house to fit those kids, then we’d be able to do that. So we haven’t really made an exact plan, but it just opens up us to live in a new way.

Matt Farley: As you might imagine, I’ve already put together a spreadsheet of where our money is going.

Tim Ulbrich: Thought so, maybe.

Matt Farley: And we haven’t talked through it.

Tim Ulbrich: You might want to fill Amy in, yeah. No, what I’m excited to hear from you guys over the past few months and year and beyond is thinking of the zero-based budgeting process. What’s so powerful about that is you had a line item for student loans. It was a very big line item, right? In YNAB. And now the question is, what does that become? You know? Is it giving? Is it experiences with the family? Is it entrepreneurial interests? Is it buying a home? What is that? But that really becomes that exciting conversation about life after debt-free, which is something we’re going to be talking much more about on the podcast going forward. So Matt, one question — I know you mentioned you read “Total Money Makeover,” so that was an indicator to me that you’re a financial reader/nerd probably.

Matt Farley: Yep.

Tim Ulbrich: So my question for you is, you know, how important was reading or listening to podcasts, you know, how important was that to your success? And is there a specific book or two or resource out there that you would recommend to our listeners?

Matt Farley: Yeah, definitely. So I think the biggest thing is just kind of consistently reading or listening to anything financially-minded because I think it causes you to pay attention to what’s going on, which is half the battle. You know, you might not be the best budgeter or the best investor, but if you just kind of know what’s going on with your money and understand the products that you’re purchasing from an investment standpoint, that is huge to me. So some of the books that I read — and I’m just going to preface it, I don’t agree with all these books. I don’t think they’re like perfect. Some of them tell you to do unwise things, but “I’ll Teach You to Be Rich” for me was an interesting book to read to understand investing a little bit better. I forget the author’s name, but he talks some about using credit cards more than I would be comfortable with using them. Actually, we did use a credit card to pay for a lot of our expenses, and we’re able to do that without any concern of actually carrying a balance. But I know that’s not the case for everyone. So if you have a tendency of doing that, right, I’d say avoid that. I listened to Dave Ramsey’s podcast pretty consistently and recently discovered yours, so I’ve been listening to yours recently too. And I think it’s another great podcast to listen to understand what’s going on with your money and hear from other folks that are like-minded.

Tim Ulbrich: So “I’ll Teach You to Be Rich” is a Rumeet Sethi book. That’s a great book. I would also recommend that. I share the same feelings that you do. There’s some things in there where, you know, I may approach them differently, but I really like the way he teaches. I think it’s very easy to understand, and it’s a very digestible book and resource. So we’ll link to that in our show notes as well. But I would echo, Matt, your comment about just absorbing information. And sometimes, you know, I’ll listen to something or read something, and I’ll walk away with a very tangible action item. But many times, it’s just that keeping the topic front-of-mind, right? And that’s true with anything, you know? It could be your goals around spirituality, it could be your relationship. But the things that are most important to you, always having those top-of-mind and making sure that you’re always prioritizing those, setting goals on those, and reflecting on how things are going. So.

Matt Farley: And one thing if I could add — I don’t mean to interrupt — but one of the things that I actually learned the most on that got me started with investing was a Frontline documentary on PBS called, “The Retirement Gamble.” It’s like a 40-minute video, and it’s pretty old at this point, but for some reason, it actually resonated with me for how to invest, what’s an expense ratio, what’s a mutual fund, what’s an index fund. That was really helpful for me to actually watch, so I would suggest that to anyone who’s interested in learning more about that as well.

Tim Ulbrich: Absolutely. Awesome. Thank you for that. And Matt and Amy, thank you so much for your time, for coming on to share your journey, really an incredible journey of paying off over $207,000 in just under four years. And I know you’ve inspired me personally, and I’m confident you’re going to do the same for our listeners. And I can’t wait to hear and talk from you in the years to come to see the amazing things that you’re doing. So thank you so much for coming on the show.

Amy Farley: Yeah, thank you.

Matt Farley: Yeah, thanks for having us. You can do it, everybody!

Tim Ulbrich: Yes. Thank you guys.

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Tim Ulbrich: And one last thing if you could do us a favor. If you like what you heard on this week’s episode, please make sure to leave us a review in iTunes or wherever you listen to your podcasts. Also, make sure to head on over to YourFinancialPharmacist.com, where you’ll find a wide array of resources designed specifically for you, the pharmacy professional, to help you on the path towards achieving financial freedom. Have a great rest of your week.

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