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Month: November 2019

YFP 128: How One Pharmacist Helped Another Out of Homelessness

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How One Pharmacist Helped Another Out of Homelessness

On this special Thanksgiving episode, Tim Ulbrich welcomes Melissa Akacha, a pharmacist that helped rally her community to bring another pharmacist out of homelessness. This is a story of generosity, of being aware of your surroundings, and extending a helping hand to those that encounter misfortunes that could happen to any one of us.

About Today’s Guest

Melissa Akacha was resides and works as a community pharmacist in King of Prussia, Pennsylvania. She studied pharmacy and graduated from the University of Science in 2004. Melissa is divorced and has two daughters, Ava (11) and Emma (8) and is also mom to Paris and Milan, their two French bulldogs. In her free time, Melissa enjoys coaching cheerleading, crafting, watching movies, cooking and home projects.

Melissa has compassion for all living things and believes we all have a purpose. She trusts her instincts and takes time to slow down and enjoy moments throughout the day. Her children have taught her how to love in a way that is simple and pure.

Summary

Melissa Akacha, a community pharmacist in King of Prussia, Pennsylvania, shares her story of rallying her community to bring another pharmacist out of homelessness.

Melissa first saw Lynn when she was taking one of her daughters to school. Lynn was living in her car with two large dogs in the Target parking lot. When Melissa saw her, she knew that something wasn’t right. She approached Jen, her friend, neighbor and former social worker, to let her know about the situation. Together, they decided they would approach Lynn and see if she needed help. In the meantime, they posted about Lynn on an app called Nextdoor to see if anyone in the community had seen her or knew what was going on.

Melissa and Jen walked up to Lynn’s car and asked her, “Is everything ok?” Lynn couldn’t roll down her window or start the car because her battery had died. She said that she was fine, but the two knew something deepers was going on. They offered to come back later in the evening with pizza so they could talk and help her figure out a plan.

When Melissa and Jen went back, they learned that Lynn had lost her husband died suddenly and that she was faced with a lot of medical issues and bills and felt embarrassed to be homeless as she was a former pharmacist. She didn’t reach out to anyone to ask for help, but she said that Melissa and Jen were the first ones to ask if she was ok.

A group of 15 community members joined together to help Lynn get her life back on track. Lynn now lives in an apartment with her two dogs and has a community to support her.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Tim Ulbrich here, and happy Thanksgiving on behalf of the team at Your Financial Pharmacist. I hope everyone is having a great day with family celebrating this important holiday and reflecting upon everything that we are thankful for in our lives. This week, we have a special episode for you highlighting an incredible story of generosity involving a former pharmacist that was forced into homelessness. And then her community, led in part by another pharmacist, stepped up to help. That pharmacist that stepped up to help is Melissa Akacha, who we welcome on the show today. Melissa, welcome and thank you for taking the time to come onto the Your Financial Pharmacist podcast.

Melissa Akacha: Thank you so much for having me, Tim.

Tim Ulbrich: Before we jump into learning more about this story, tell us a little bit about yourself, why you wanted to become a pharmacist, where you went to school, and where you currently work and live.

Melissa Akacha: Sure. Well, I’ve always loved medicine, pharmacy, and my father actually was the one who had a great relationship with our local pharmacist and kind of sent me in that direction. I went to University of the Sciences, graduated in 2004, and since then have been working in retail. Right now, I reside in King of Prussia, and I’m fortunate to work in King of Prussia as well in the community.

Tim Ulbrich: And I sense that just based on the story, which we’ll get into here in a little bit, the sense of community and rallying around somebody that’s in need, I had a sense through reading that story that you’ve been a part of working and living in this community for some time. Is that true?

Melissa Akacha: Yes. Yeah, I actually grew up here and pretty much stayed in the area. Love King of Prussia, love the community, had a great experience with the schools here. And now I have two daughters, and they go to the same schools that I did.

Tim Ulbrich: That’s awesome.

Melissa Akacha: Yeah, so it’s great.

Tim Ulbrich: So this story really I think is a story of life’s unexpected turns and misfortunes that really could happen to any one of us. And here, it just happened to be a former pharmacist, Lynn Schutzman, that had found herself living in her car for two years, homeless. And from the article on WEUR 90.9 NPR, “After 43 years as a pharmacist, Lynn could have never imagined starting her days like this. In the morning, she’d go to McDonald’s to wash up and then drive around.” The story goes on to say, “That was the lowest point in my life. I had no dog food. I had just emptied the last bottle of water into the dog’s bowl, so I had nothing to drink. I was very upset because I realized I would have to surrender the dogs because I couldn’t feed them that night.” And I think that, Melissa, that many listening may be wondering, how is it possible for a pharmacist to become homeless? So tell us a little bit more about Lynn’s story and how she got to the point of ultimately living in her car for a couple years.

Melissa Akacha: Right. Yeah, Lynn was — unfortunately had many health issues. Well, rewinding back, she had lost her husband. He was only in his 40s, he died suddenly. After that, her life kind of started to fall apart. She had cancer, she had kidney problems, she was in and out of the hospital, she was wheelchair-bound for quite some time and was unable to work. She unfortunately had with medical bills, and also not a lot of — she wasn’t able to have children, so she didn’t have that family support that a lot of us are fortunate to have during those financial times when you need some help. She did not have that. And because she was a pharmacist in the community, a mentor to so many, she actually was just really embarrassed to be in her situation. And she still stayed in the community. She had a beautiful home in King of Prussia, and she still stayed in the same area and went to see some doctors. Nobody knew that Lynn was homeless. She kept in contact with some people, but she didn’t share. She was embarrassed because she was professional and she saw herself as a failure. And she probably, she was ashamed to ask for help.

Tim Ulbrich: Sure. Yeah, it makes sense. I think about your role as a community pharmacist and many others that are listening, and I think you become very much a pillar of the community, especially to those patients that you serve that come to see you, you know, every other week or every month. And people are often coming to you and looking up to you as a role model and looking for advice. As you mentioned and as the article highlights, Lynn was really trying to go unnoticed, didn’t want her previous patients and people in the community to see that she was homeless and living out of her car. But — but — you noticed her and you noticed something that was wrong. So when did you see Lynn? And what went through your mind when you saw her?

Melissa Akacha: Well, in the mornings before I go to work, I have two daughters and on my way to take my oldest to school, I’ll go at Starbucks and go through the Target parking lot. And a couple days, maybe it was about two days, I would see a car parked and there was a woman sitting inside. And I noticed her car was full to the brim of stuff, clothes, it looked like paper towels, and I saw an older lady sitting there. And I thought maybe she’s on break. I wasn’t really sure. But the second day, it was maybe the second or third day when I drove by, I looked at my daughter, and I said, “I just have this feeling I need to go check on this lady.” That’s it. I really don’t know how to describe it. It was just a feeling where I felt I need to check on her. And just having with the pharmacy background, the first thing I was thinking is dementia, maybe she’s confused, maybe she’s lost, maybe her family doesn’t know where she is. Something was just off about the situation. And I dropped my daughter off to school that day and I was with my best friend and neighbor, Jen Husband. And she has a social worker background. And I was telling her about the situation, and I said, us being the two nosy ladies we are, we said, “Let’s go up there together and see what’s going on.” And talking with Jen, my other daughter mentioned that when she was on a walk with her friends, she noticed this woman also. And she said she had two larger dogs in the car. So that right there was an indication that this woman is living in her car. And when Jen and I approached Lynn that day, she could not open the window, and she couldn’t turn the car on. She had no gas, and the battery died. So we spoke with her maybe like 2 inches of the window being cracked, and we asked her, you know, “Are you OK? Do you need help?” And she said, “No, I’m OK.” And we said, “No, we don’t think you are. And will you allow us to help you?” And she kind of gave us a look like, yeah, I’ve been down this road before. And I said, “You know what? There’s a lot of good people in this world. And through social media, we’re going to rally them together. And we’re going to be back later today.” I had to work that afternoon, and I promised her, I said, “We’re going to come back tonight and bring our children. And we’re going to have pizza together. And we’re going to talk, and we’re going to come up with some plan.” And as silly as it may sound, I wanted Lynn to trust us and our intention.

Tim Ulbrich: Yes. Yep.

Melissa Akacha: And that’s why I wanted to come back and just have dinner together and sit in the parking lot with our kids and just talk to her and let her know that our intentions are pure, and we’re not going to take advantage. I didn’t know what happened, how she got here. That day, very important that we were just talking about where she worked. And she said, “I’m a pharmacist.” And I said, “Really?” And I thought, I still in my head thought, oh, OK, she’s probably crazy. Maybe she’s — and then she started saying names. She said, “I worked for CVS.” And she started saying so many names that I knew. And it’s just impossible. And when she said that, then she said, “I went to University of the Sciences.” And I said, “Oh my gosh, I did too.” And she, her face, when Lynn spoke about pharmacy, her face lit up. She loves pharmacy. She loved her job. She loved being a mentor to students. She loves telling stories. She worked at a lot of different places, and she’s just a great, vivid storyteller. That was a really special part of her life. And that day, I went to work, and I called the store where she had claimed to work at. And that pharmacist, I said, “Do you know Lynn Schutzman?” And I told her where I found her, and that pharmacist just started crying. “Melissa, please, this woman is so generous. Generous beyond words. And she’s always been a giver for everyone. And she would always buy everyone gifts on holidays and never accept anything and tell students to save their money. And she lost her husband and kept working and always said she was OK and never asked for help.” And she said, “Please help this lady.” And I’d never forget it. I just had chills. I thought to myself, wow, this is someone who really, really deserves being helped. Just the way she was described, I thought, wow. What are the chances that I would have came across someone and had this very, very similar background? And personally, in my life, a lot of people would say, “How can a pharmacist” — and I’ve had to answer this question because once we started doing fundraising, many people would say, “How could a pharmacist be homeless?” And they would Google salaries and say, “How could that happen?” And myself, I knew it could happen.

Tim Ulbrich: Sure.

Melissa Akacha: Because I a couple years ago went through an awful divorce and if I didn’t have support, I could be in that situation. I was a paycheck away from that situation. And overnight, my life changed. And that could have me if I did not have family. And there was plenty of times I was embarrassed. Here I was, self-sufficient, and then overnight, the expenses are enormous and it’s embarrassing. So life throws a lot of different things to a lot of people, and it’s really important to prepare. I didn’t prepare because I thought, oh, I’m in my 30s, I don’t have to worry about anything, and what’s going to happen? And I wish I did more. And so I saw myself in Lynn a lot. And I personally was very, very draw to her because of that.

Tim Ulbrich: It’s such a good reminder I think for many of us, many listening, of why we went into this profession to begin with, to help people without judgment and to see need where need is, that need needs to be met, and I really respect your ability to just be aware. You know, I think I’d feel guilty that in life’s busyness of work and with young kids and running from one thing to the next, do we even have margin in the day that we can see those needs that are presented to us probably every day that we just may not even be aware of and then to be able to follow through and follow up on those. But to follow up in a way that doesn’t cast judgment. I mean, I think that it’s easy for people to maybe hear this story and sympathize and empathize with Lynn and be able to rally around her, somebody who was a helper to others in the community and also a pharmacist. But you didn’t know any of that before you initially decided to engage and to step in. And I think that’s great. And one of the articles, or one of the quotes from the article that really stood out to me is when Lynn says, “You feel like somewhere, you had to have failed. You accomplished all of this, but now, here you are in the gutter, and you don’t want people to know. You don’t want to ask for help.” And I think it’s such a good reminder to ask how you can help others or ask how somebody is doing. You never know where that conversation can go. So tell me, Melissa, a little bit more how the rest of the community got involved. So you identified this need, you begin to build that trust and relationship over a meal and having pizza — and I’m going to ask you in a little bit how you engaged your daughters and you alluded to that a little bit and the impact that that’s had — but the community specifically. How did you and your friend Jen get the community involved? And what was the response from the community?

Melissa Akacha: So the first thing we did was when we went on an app called NextDoor, and that’s a site that people in the community, they post things, everything from something they’re trying to sell to “I need a mechanic, can anyone recommend something like that?” And I’ve used that site before, and we posted on there saying that there was a homeless lady living in Target parking lot, and she needs our help. And I had no idea, Jen and I had no idea what response we were going to get. And I was working that day, and you know, we had said on there that she is unable at this time to get out because of her car battery, and she began getting I would say hundreds and hundreds of dollars of gift cards, food, water, dog food, there were veterinarians that came, dogsitters that came. That night, when we went back, she had — there was just random people coming all — like cars and cars of children, family, pet lovers, and Lynn could be — I understand now because she kept saying, I’m just overwhelmed. There was a time I thought, wow, is she upset?

Tim Ulbrich: Sure.

Melissa Akacha: And she just said, “I’m overwhelmed with love. I’m overwhelmed. I can’t sleep, I can’t talk. I’m just overwhelmed.” And now, I get that because I’ve had plenty of moments that I just was on a high and couldn’t sleep and just in awe of what people were doing. And sometimes, people were coming and they would just give her, they gave her something home-cooked and just kind words or a card. All sorts of things to the point that night, she said, “I don’t have room in my car anymore.” And we actually took some things out because she had no room. And we said to her that night, we said, “Listen, we are going to — we need some time, we’re going to plan this. But this is the last night, we give you our word, that you will be in your car.” And Jen and I went that night, and we had a big talk, and we were seeing a lot of donations and a lot of people were saying, “We want to give. How can we give?” And all these suggestions. And we knew that so many people wanted to help, and we weren’t expecting it. So we needed to organize it. And we set up a GoFundMe and a Facebook page, and people began donating through there. Although there was some backlash because there was some negative things that happened before with GoFundMe, but we were thinking that was going to be an issue, but clearly, it wasn’t.

Tim Ulbrich: Sure.

Melissa Akacha: And we got her in a hotel with some funds immediately the next day. And then we had to think of our long-term goals, getting her healthy. She could barely walk at that point. She had a big ulcer in her leg and getting her wound care — there was a lot of stuff we had to do. So we kicked about — I think there was about 15 or 16 people from the contacts in NextDoor, between that and Facebook that we began to trust, Jen and I, and we had a meeting at our home and we delegated. We had one mechanic come and take care of all her car issues. We had another woman come handle all the dog walking because these were dogs that were bigger dogs, a Beagle and a Sheltie, and they needed exercise and getting introduced again, socializing because they were in a car two years. We had a woman take care of that. We had someone, we had a couple ladies help with her financing, seeing what we could do. So we had — that was really helpful. We all, everyone came together. We talked that night, and everyone kind of split up and did their thing. And we just got her life in order. And it was beautiful. We finally found a apartment complex, we definitely wanted her to be in King of Prussia because now she has friends and family. And she needs long-term support. And we need her. Everyone needs a Lynn in their life. She’s just an amazing lady, and we needed to be close with her. So she is in the area. And getting that apartment together, that was one of the most emotional things because so we had this place and we had lists of donations and people were purchasing new things and donating items, everything from forks to toilet paper to cleaning supplies to beds. Her place in about nine hours was completely furnished, repainted, decorated. It is such a beautiful, beautiful, beautiful apartment. Everyone came together, and there was maybe I bet 20-25 people just coming in and out that day, putting furniture together, painting. And that night, when Lynn came through the door, she’d said that day, she said, “You know what? You guys just do your thing. I’m tired.” And we thought, OK, we’re really going to surprise her. And now, this was a woman who had traveled a lot, I mean, all of us, we can think of so many possessions that we have that mean stuff to us. Lynn had nothing. She even had to sell her wedding ring, just whatever she could fit in the car, and that was basically some clothes, dog stuff, dog bed, and water. And her diploma was all chewed up. So we even had a copy of her diploma, we had what was engraved in her wedding ring, which she had mentioned. We wrote that down and someone had a beautiful plaque, had that printed. We had a lot of, we tried to personalize it with a lot of things that she had lost in the moves and losing her — that meant a lot to her.

Tim Ulbrich: That was an incredible video that I think was linked to in the WBUR article of her walking into the apartment and just an incredible moment of seeing all that generosity come to fruition. And we’re going to link to our community in our show notes of the GoFundMe campaign as well as the Facebook page. I know we have a community that is generous and wants to be a part of giving in their own communities or even in situations like this. So we’re going to make sure to link to that. One of the things, Melissa, that you said that really stands out to me is that you mentioned before — I think it was the last thing, I think you said before, it was going to be the last night she stayed in her car, there was people coming, giving all types of things. And some were just coming to express that they were caring for her or thinking about her, others were actually bringing more tangible items, and I’m sure that was to all different degrees of how people were able to contribute. And I think that’s such a great reminder that I think giving, while financial giving is certainly an important part of giving, there’s many other ways that we can all give and contribute in our communities. And that could be time, that could be facilitating other people’s that maybe have the monetary means, it could be contributing financially, but I think there’s so much opportunity to give if we can just slow down and see that opportunity that is in front of us. Now, one of the things, Melissa, that really, really stood out to me as a father of four young boys where my wife and I are really trying to instill a mindset of gratitude and giving is in the WBUR article, there’s a photo of you and your two daughters. And I can’t help but think of the impact this story, as you’ve already alluded to their involvement and your role modeling of generosity and giving and the impact that that has had on them. Can you talk more about how you have included and taught your girls about giving and generosity throughout this story and this journey?

Melissa Akacha: Yes, well, the girls have, they have been with me through every step of the way, through cleaning out the car that night, which was a big project to moving to painting, and they’ve loved it. And they actually — it’s funny, every person with a messy car now, the kids nudge me and say, “Mom, I think they need help!” So they just, they really want to — they loved, loved, loved helping. And they had a lot of questions too, you know, as children. How could this happen? Where’s her family? And so I mean, I’ve tried to be as transparent as possible and also age-appropriate. But I really am so thankful that they got to experience all this and see — they would ask me, why are these people, why are they coming all day? And how do you know them? And I don’t know them. I don’t know these people, and they are coming all day because they’re good people and they want to help, and there are good people in this world. And we need that, we all need to hear that because there’s so much negativity.

Tim Ulbrich: Yes.

Melissa Akacha: And many people — one thing that struck me is that many people that were helping, sometimes they would just start crying that day when we were painting and decorating everything, they would just cry because they would say, “Oh my God, you have no idea how my heart needs this right now,” because look at all these people coming in. And it is, it’s overwhelming. I sometimes right after that, I just couldn’t even talk about it because it was just — it was overwhelming to just see so many people. We couldn’t even answer. I mean, we literally couldn’t get a committee here at our house because it was too much for us — too many people wanted to help. And we needed to just organize it. And Jen and I were not expecting this at all. So it really changed our lives. Many people came up to me and said, I walked past her. I drove past her, and I didn’t stop. But now I’m going to stop, and I’m going to ask someone if something’s wrong, are you OK, can I help you? And Lynn did tell me, she said, “You know, I didn’t go out of my way asking,” she’s like, “But you guys were the first people that asked, can I help you?”

Tim Ulbrich: Wow. Wow.

Melissa Akacha: And a lot of people have approached me and said that, “Yeah, we saw her at the park. We saw her washing up in the bathroom, and I didn’t say anything.” And you know, also we have to use caution. So I do understand why some people would be hesitant or the situation, but I think the takeaway message is sometimes just take an extra step because our — my gut that day just told me, you’ve got to check on her. And I am so glad I did. And I now try to incorporate that in my life just little things, asking people if I can help them or smiling or how are you? And my kids, they do the same. And it’s been a very rewarding thing that I’m thankful I got that experience to meet her and also to see that in life, see just abundance of good people. People love hearing this story because they like hearing good things. They really do.

Tim Ulbrich: Exactly. Yeah. I think in a time where there’s so much negativity, I mean, I’m grateful. I don’t know you personally, but your story has inspired me and is just a great reminder of being aware, being intentional, asking is everything OK? How can I help? And I think that will be the same for our community as well. So thank you for your willingness to share. And let me end on this quote from the article that really, I think just brought it home for me. It says, “None of this was part of Lynn’s original plan. She did everything right: the right education, the right job, the right marriage. Still, there was so much misfortune outside of her control. Misfortune that could have happened to anyone. She thinks about others in that same situation, and she hopes all of us can step up to ask our neighbors a simple, life-changing question, is everything OK?” So as we take a minute to reflect upon this incredible of generosity on this Thanksgiving Day, we are hopeful, I am hopeful that this is an opportunity for you, for me, as individuals to reflect on opportunities for giving, for generosity, and for being more aware of our surroundings and furthermore, how we as a community can do the same. You know, Anne Frank is quoted as saying, “No one has ever become poor by giving.” And we have a vision for the YFP community to be a generous group and to inspire one another to work towards achieving financial freedom in part to be in a better position to give to others. So again, on behalf of the YFP team, happy Thanksgiving to you and your loved ones, and Melissa, to you and your family as well. And thank you so much for taking the time to come on the show.

Melissa Akacha: Thank you. Happy Thanksgiving to everyone.

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YFP 127: A Widow’s Journey to Love, Happiness & Financial Independence

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A Widow’s Journey to Love, Happiness & Financial Independence

Michelle Cooper, author of I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence, Director and Co-Founder of XML-W, a division of XML Financial Group, and former practicing attorney, joins Tim Ulbrich on this week’s podcast episode. Michelle shares her personal story and unique perspective on finances and law to inspire hope for those experiencing loss and provides sound financial principles for those seeking financial independence.

About Today’s Guest

Michelle P. Cooper is the Director and Co-founder of XML-W, a division of XML Financial Group which focuses on the planning and financial needs of women at all stages of their lives. She brings to XML-W over 25 years of experience in the estate planning, finance and tax fields. Prior to joining the XML team, she worked for Merrill Lynch and U.S. Trust as a Director helping high-net-worth clients design and update their estate plans. She also had the responsibility of educating over 650 financial advisors on estate planning and trust services. Before starting her career at Merrill Lynch in 1996, she worked as an attorney specializing in tax and estate planning for the law firms of Ralph R. Polachek & Associates and Joseph, Gajarsa, McDermott & Reiner, P.C.

Michelle recently wrote a book called I’ve Still Got Me – A Widow’s Journey to Love, Happiness & Financial Independence. In this book, Michelle shares her personal story of resilience after the loss of her husband to suicide. By sharing her journey and the life lessons learned along the way, she hopes to empower women to become more active and involved with their finances and estate plan so they can live a more healthy and secure life. Michelle has been featured on several local and national media outlets and was recently named one of JWI’s 2019 Women to Watch.

Summary

Michelle Cooper joins Tim Ulbrich to share her personal story of navigating her finances during loss and grief and her unique perspective on financial planning for those seeking financial independence.

Michelle is the Director and Co-founder of XML-W, a division of XML Financial Group which focuses on the planning and financial needs of women at all stages of their lives. Michelle worked for Merrill Lynch and U.S. Trust as a Director helping high-net-worth clients design and update their estate plans and previously worked as an attorney specializing in tax and estate planning. When she was 36 years old, she unexpectedly lost her husband to suicide. Although she talked about estate planning all day at work, she didn’t think something like this would ever happen. They luckily they had some aspects of their financial and estate plans in place, however, her husband Scott had previously handled everything financial. She was fortunate to have a background in estate planning and was able to find financial resiliency during such a difficult time.

Michelle shares three practical tips that every couple should think about: insuring both names are listed on every service account, having a conversation about bills before tragedy strikes, and automating bill payments.

She also shares her five building blocks to an estate plan which includes creating the following documents: a will, a revocable living trust, a power of attorney, a healthcare power of attorney and a living will. While not everyone will need each of these, it’s important to know what you want when you’re not here. Michelle shares that having a will and power of attorney are documents that everyone should have in place.

On this episode Michelle also discusses the importance of life and disability insurance and the process of getting your estate plan in place.

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. We have a special guest for you this week, Michelle Cooper, an attorney who specializes in tax and estate planning and author of the book “I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence.” A little bit of background on Michelle before we get started with today’s interview: She’s the director and cofounder of XMLW, a division of XML Financial Group, which focuses on the planning and financial needs of women at all stages of their lives. Prior to joining the XML team, she worked for Merrill Lynch and U.S. Trust as the Director and Senior Trust Specialist, helping with high net worth clients designing and updating their estate plans. She also has had the responsibility of educating more than 650 financial advisors on estate planning and trust services. Before starting her career at Merrill Lynch in 1996, she worked as an attorney specializing in tax and estate planning. Michelle earned a BS degree in business from Miami of Ohio University and her JD and MBA degrees from Capitol University here in the great city of Columbus, Ohio. She’s married to Paul Cooper, and they have five wonderful children together. She enjoys yoga, traveling, a good bottle of wine — amen to that — and helping women thrive with their financial plans. Michelle, welcome to the Your Financial Pharmacist podcast.

Michelle Cooper: Thank you, Tim. It’s great to be here. Thank you for the warm welcome.

Tim Ulbrich: Absolutely. I’m so excited to have you. I’ve really enjoyed your book and what we’re going to talk about in today’s interview, again, your book “I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence.” I really think this book is fantastic. I would highly encourage our listeners to check it out. I think it’s well written, it’s easy to digest, it’s honest, it’s raw, and I think it’s a quick read. And I really do think the key principles that we’ll talk about here on the show are those that will stick with you and are action-oriented towards one’s financial plan. So your story that led to the book — and the book that we’ll discuss today — starts at the age of 36 where your life really took an unexpected turn. You were thriving in your career, you were a new mother to twins, you were happily married, and then in an instant, things changed. What happened at that moment in time?

Michelle Cooper: Yeah, like you said, Tim, I was happily married. I had been with my husband Scott for almost 11 years. And we just had a great time in our marriage. We did a lot of traveling and dining and just fun stuff. And then we decided to have kids and with the miracle of modern science, we were able to have twins. And they were quite small. We had a boy and a girl, but we were just elated. It was really I think the best time in our marriage and in our lives. We were so excited. And my career was going gangbusters. I was nine years in to kind of growing the corporate ladder at Merrill Lynch. And you know, one day, it was a March rainy day, I was sitting at my desk and looking out and the phone rang. And it was late afternoon because Scott usually called me about that time. And I was expecting kind of our normal banter, which was “What are you making for dinner? What do I need to pick up?” But instead, he kept saying, “Michelle, I love you. I love you. I love you.” And I said, “I love you too, honey. And I’ll see you at home.” And I buttoned up my desk and walked to the elevators, took the ride down to the parking garage, and it was in that elevator ride where I recalled the conversation, and my heart started racing. I was thinking, something was weird. That was not what Scott normally would say over and over again. And when I got into my car and out of the garage, I kept dialing his number, dialing his number, and there was no answer. And when I got home, he wasn’t there. And I filed a police report, and weeks later, I got a call from the police letting me know that they had found him in the Potomac River. And in an instant — he had committed suicide — in an instant, my life went from just a normal, everyday where I was happy with life to a day that changed me forever. I was a single mom overnight, a young widow, and I had more responsibility than I could ever have imagined. It was overwhelming.

Tim Ulbrich: And in the book, Michelle, you describe that evening you come home. And as a father of four young boys and happily married to my beautiful wife, I could just picture that moment you describe in the book where life’s kind of going on, you’re trying to bathe them and get them ready for bedtime and the uncertainty of the evening and just really, really a compelling picture into how difficult that moment was and the weeks to come. And as you talk throughout the book, not only that moment obviously personally, what that meant for your family, but what we’ll talk about here today in the interview just what that meant for your financial plan. And hopefully, it’s an opportunity for our listeners to really ensure that they have the right tools and resources and knowledge and understanding of their own financial plan, even if they have somebody else who’s helping them, whether that be a spouse or a financial planner or even potentially both. So at this point, you have 2-year-old twins, you’re working full-time as director at Merrill Lynch, so obviously you have what would be a unique background in this field in terms of estate planning attorney and working in finance where you’ve helped many, many couples plan their own estates. So surely, things were all in order and in place when it came to your financial plan, right?

Michelle Cooper: You would think so. But the answer, unfortunately, was not really. I talked about estate planning all day long. I knew it inside and out. I talked about finances with clients. And I knew that we had to do planning, and we had some things in place, but you know, frankly, I never thought anything like this would happen to me, especially not at that time in my life. I had read about lots of hypotheticals in law textbooks and I knew from dealing with client situations that things happen in life, but I just never expected it. So we divided and conquered. Our plates were full, and this is similar to so many other people in their 30s and 40s where you’re just juggling work, home, everything. And we divided and conquered the way gender roles typically fall. Scott handled everything money, he did our investments, bills, and taxes. He was really good at it, and I was like, great. I totally trust you. And I handled all things children and running the household. And I just, I had to pick up the pieces. And I was fortunate because I had this background knowledge, and we had taken some steps that really enabled me to find resilience and rebuild my life. But not everybody is that lucky to have some planning in place.

Tim Ulbrich: Yeah, and my wife and I, we’re talking the evening or after that I had read through your book, and you know, it’s a very similar situation for us. And I would say on the other side would be for all the inner workings and understanding of the day-to-day of things that she’s doing with the kids, I’ve done similarly on the finance side. And we have a planner that we work with, and we have legacy folders and documents and estate wills and plans, but there’s that level of preparation, but then there’s also just the day-to-day. And we’ll talk about some of this in terms of paying bills and whose names are on accounts and what’s the monthly process look like and how important it is for each individual to make sure they have a solid understanding of that. One of the things, Michelle, that stood out to me in the book in Chapter 2, you start with a question from your financial advisor the day of the funeral. And that question from your financial advisor was, “Are you planning to keep the house?” Why was this question so overwhelming at the time?

Michelle Cooper: Yeah. I’ll never forget that day. I mean, I can picture it in my mind right now. And when he asked me, I was really taken aback because I thought, well, why are you even asking me that question? Is there a possibility I can’t continue living in this house? And I just remember my stomach turning more than it already was. And shortly thereafter, I started digging into all our financial details because I knew that in order to keep the house, I had to make sure I was able to pay the mortgage and the real estate taxes and utilities. And frankly, I had no idea. But that house, when you go through a tragedy, was my one source of stability.

Tim Ulbrich: Right.

Michelle Cooper: And so just the thought of moving in addition to everything else going on was overwhelming. And so that’s why that question really rocked my world. And I had to figure out at that point, what did we own? What were our assets? What did we owe? What were our expenses or liabilities? And did I have enough income coming in to cover all the expenses? So I did a deep dive into our whole financial picture.

Tim Ulbrich: And my hope with this episode is our listeners will be able to hear your story and certainly there’s many others out there and use this as an opportunity to make sure that they are effectively aware and educated and ready when it comes to certain aspects of the financial plan. So I want to get practical for a moment in that I’m guessing there’s many of our listeners that are hearing the beginning of this interview and thinking to themselves, I’ve got some work to do to bring myself up to speed with my significant other or spouse. Or potentially on the other side of that, I’ve got some work to do to help my partner, my significant other, spouse, get up to speed. And in the book, you go through three I think very practical tips that help people begin to execute and think about this. And I’ll read those off and then we can talk about each one in more detail. One of them is ensuring your name is listed on every service account. The second one is having a conversation about the bills before a tragedy strikes. And the third is automating payments or setting calendar alerts. So let’s tackle that first one. Tell us more about this idea of ensuring your name — and that it’s listed on every service account and why that’s so important.

Michelle Cooper: You don’t really think of these things when you’re moving into a new house or you’re renting an apartment. It’s either one person or the other if you’re in a relationship that just wants to check that it’s done, that the water is turned on, that you’ve got power, you’ve got internet hooked up, you’ve got your cable. And no one’s really thinking about hey, both people need to be able to talk to the service provider. So when all this happened, we had cable, I had telephone, and all of those bills were in Scott’s name. So when I called the provider, they would say, “What’s your name?” I’d say, “Michelle.” And they’d say, “Well, you’re not Scott. We can’t talk to you.” And then I’d explain the situation, they’d say, “Well, I have to get a supervisor.” And it was a long, drawn-out process that really could have been simplified if when we opened the account, my name and Scott’s name would have been on the ownership. We would have both had authority to talk to the provider, make changes. So I encourage everyone, know what your bills are and make sure that if something happens to your partner, you have the ability to keep the lights on. Very simple.

Tim Ulbrich: And you give a great example in the book, and I think you do throughout as well, where you talk about an example where a couple was living together, but they’re not necessarily married. Both are contributing to savings for expenses but that the bank account may have been opened in one of those individual’s name. So I think these are just situations to think about, whether it’s service accounts, whether it’s bank accounts, whether it’s people that are living together and maybe they have a home but the home’s only in one person’s name and the other is contributing to it. And therefore, that asset isn’t necessarily — that they would have a portion of that. It’s just a good reminder I think in this tip, and again, as you do throughout the book, to think about the implications of some of these as we sign up for accounts. Because as you articulated well, you know, we just want to make sure things are moving. We want to make sure the water’s on, we want to make sure the lights are on, especially when you’re in a very busy phase of life where you have lots of things that are happening. The second tip you give here is having a conversation about the bills before tragedy strikes, which I’m guessing everybody hears that and says, “Yes, of course, I agree with that.” So my question here is tips or strategies on how to have this conversation and why, of course, this is so important as well.

Michelle Cooper: Well, when you think of like the fun thing that you want to do in the evening, it’s usually not talking about bills.

Tim Ulbrich: Right.

Michelle Cooper: So I always try to advise people, don’t do this when you’re tired. Do it on a weekend when you’re relaxed. And start off by saying something positive like, “You know, I want to make sure that we’re both on the same page with our expenses.” And maybe bring in some wine or something fun like a nice dinner out. And you know, make it conversational where you’re not accusing the other person of spending too much. You’re a team. And you are taking care of each other by making sure that each of you know what the expenses are and how they get paid. So sometimes, bills are on autopay or you have to pay them through an online password because you turned off the hard copies that get sent. I mean, there’s a lot of things that have happened since my tragedy where bills are automated. So it’s important to know how to access paying them and what is currently set up? And again, don’t make it harder than it is. It’s helpful to maybe make a list of the bills that you think are there just to start the conversation. And then it will flow from there.

Tim Ulbrich: Absolutely. And I think you do a nice job just building on that in talking about the third tip, really automating payments. I think especially in the situation where a tragedy strikes and maybe there is an account that didn’t have both names on it that payments can continue to be made. And again, you talk about setting calendar alerts and the importance of that as well. One of the things in the book you mentioned is that “a larger percentage of people fail to have a financial plan that will help them track and achieve their goals. And if you can take away one tidbit from this book, please take away the importance of having a financial plan.” And so my question for you in the backdrop of somebody who’s maybe listening that says, “You know what? I’m single, I don’t have any children, I’ve got $200,000 in debt. I’ve got very little assets to manage.” You know, whether it’s them or somebody that does have some of those variables involved in terms of children and other assets, why is this concept of a financial plan so critical?

Michelle Cooper: So when you’re thinking about a financial plan, I like to look at it more of a life plan. And it doesn’t matter what age you are, how much you have in assets, what your income is. You need to have a plan to achieve your goals and to achieve inner happiness. And so I analogize a financial plan to getting directions through a GPS or Google Directions where you don’t know how to get to that address, but you have a roadmap to follow. And if someone doesn’t have a lot of assets but maybe they have student loan debt or credit card debt, a financial plan is going to help you structure how do I repay those debts? What’s the interest rate? What’s the underlying principle that I owe? Can I refinance? Can I consolidate? If you are newly married with young children, part of the financial planning process is making sure you have an estate plan with term life insurance, disability insurance. So there’s many different aspects to financial planning that are going to be important depending on what stage of life you’re in. So it’s super important no matter where you are on the spectrum of your life.

Tim Ulbrich: And as you were talking, Michelle, I was just reflecting on all the conversations that Jess, my wife, and I have had with our financial planner, Tim Baker, over the last three years and all the things we’ve talked about from goals and visions for our family to the what are we going to do next month in our sinking funds and our accounts and our estate planning documents. And I think what resonates with me is that certainly I think that’s important for everyone but especially when you think about in the example of when a tragedy or a situation like this strikes is that you have a plan, you have a roadmap, you know, to use your example, you have directions and where you’re trying to go and I think you have a planner who’s in your corner that can really help continue to move that forward and especially in such a difficult time, talk that out loud and continue the path and also continue to execute on the things that you were trying to move forward with.

Michelle Cooper: That’s exactly right.

Tim Ulbrich: I want to dig into this next section. It almost has a checklist, just like we did with those three tips. I want to talk about things around income protection, appropriate insurance coverage, and estate planning. We’ve talked about many of these things on the show before like life insurance, disability insurance, and estate planning. But I want our listeners to hear it in this show. And my hope is that they’ll walk away with each one of these say, “OK, what are the things that I need to be thinking about with life insurance and disability insurance or my estate plan?” And hopefully this can be a reminder that they heard us talk about it before and they didn’t execute on these things, and they need to execute on these things, that they can take that action step here today. So let’s start with life insurance. Why is life insurance so important? You know, who do you generally think about absolutely needs life insurance? And then you alluded to term life insurance. Talk to us a little bit more about this area.

Michelle Cooper: Yeah, so there’s two main types of life insurance. There’s term, which goes on for a period of years, and whole life, which covers you until age 95 or 100. Term is more economical the younger you are and the healthier you are. That’s also true of whole life. But term is so important in those years where you’re really relying on a dual income to support your family. So as you listen to my story, put yourself in my shoes and think, if something happened to my partner or my spouse, would I be able to continue living the same lifestyle with the income that I earn or the assets that we have saved. And if the answer is no, then you have to plan for enough life insurance to produce the income or the cashflow that you need to continue living your life. And it’s not just until the kids are in college, unless you want to go back to work. It’s really for the rest of your life. And that number could be a big number because if you think about a $1 million policy, I usually look at that producing about $50,000 of income. So depending on what your expenses are — and that’s one of the things that you do in the planning process is figure that out — depending on your expenses, that’s going to dictate how much you need in terms of insurance. And there’s different ways to buy the insurance. Sometimes, there’s group policies at your employment. You can also work with an insurance agent to get a separate policy. And I usually recommend if you can, having both because you never know what’s going to happen with a job. Sometimes companies downsize, you might decide to go to a different job that doesn’t have life insurance. And those policies that you get through employment are not portable. So a really good plan is going to have a separate term policy. And get it when you’re young because it’s going to be the cheapest at that point.

Tim Ulbrich: Absolutely. And what you said just resonates with a lot of what we’ve talked about here before on the show in terms of individual coverage on top of the employment coverage but also not using just a general rule of thumb for life insurance calculations. You do a really nice job in the book of encouraging people to take a step back and say, what are you trying to do in terms of replacing with this policy? And for everybody listening, that’s going to be different depending on their situation, depending on if somebody’s at home and whether or not they go back to work, do you want to keep the home, this is going to serve retirement funds, kids’ college savings funds, you know, what’s the purpose of these funds and really objectively trying to evaluate that to determine how much need there is before purchasing a policy. Now, disability insurance, again, we’ve talked about this before on the show, but I think long-term disability, especially for our audience, is so important where their income is typically their greatest asset. And I think many pharmacists, certainly like life, they don’t like to think about a situation where they may pass away, and they don’t like to think of a situation where they may become disabled and unable to work as a pharmacist. So talk to us about the importance of disability insurance, especially when you think of somebody like a pharmacy professional.

Michelle Cooper: Yeah, I mean, I think disability insurance is at the same importance level of life insurance. It goes to relying on that income for your life. And if you’re not able to work for whatever reason, you need to replace that income, not only for yourself, but for your spouse and your family. So if your employer has a disability policy, I highly recommend. And also with your insurance agent or financial advisor, evaluating what types of disability policies are out there and work it into your financial plan.

Tim Ulbrich: So to our listeners, life, disability, I know many of you out there listening have thought about these, haven’t executed on these plans for probably just a variety of reasons. Again, it’s not necessarily something that’s fun to think about it. I know as I’ve shared before on this show, it’s something that I delayed in my own financial plan. So make sure to head on over to the website at YourFinancialPharmacist.com. We’ve got a whole section that helps you understand more of what Michelle and I are talking about here in terms of types of coverage, what to look for, projected costs, so make sure to head on over to YourFinancialPharmacist.com and check out our section on income protection. Now estate planning — and again, I think this is a topic we cannot emphasize enough. We’ve talked, again, before on the show about this. But the quote I love that you have in the book from Suze Orman was, “Estate planning is an important and everlasting gift that you can give to your family. And setting up a smooth inheritance isn’t as hard as you might think.” So for a moment I want to break down the different parts of an estate plan, quick definitions that I think our listeners can take away and begin to think about and evaluate their current estate plan or if they don’t have one, begin to think about what they need to have in place.

Michelle Cooper: So we’re going to talk about basically what I call the five building blocks of an estate plan. And the first one is a will. A will basically spells out your intentions on how you want to be buried, that’s in there, that’s one of the first paragraphs. It also names a guardian for your children, so for all of you that have children under age 18, this is so important because if you don’t name a guardian or a contingent guardian and something happens, a court’s going to decide who’s going to take care of your kids. And we don’t want that. A will also spells out how you’re leaving property to your beneficiaries. So it could be leaving something outright, meaning they get it right away when they’re age 18. Or it could mean leaving money in trust until they’re a certain age, which is what I recommend. And a will could work by itself or depending on what state you live in and what the probate laws are, sometimes they go hand-in-hand with what’s called a revocable living trust. There are many different types of trusts, but what we’re talking about is a trust that is revocable, meaning you can change it. And the main purpose of a revocable trust is a few things. One is avoiding the probate. And probate, depending on your state, can be costly and time consuming and an attorney would be involved. So states that have very expensive probates, people or attorneys will typically recommend a revocable trust. It also helps for incapacity. So for your listeners that have older parents and maybe one has dementia or Alzheimer’s or some kind of illness, a revocable trust would allow the spouse to step in and manage the affairs quicker if someone’s disabled. The same thing for us. It’s also private. So when you open a probate estate, a will gets filed at the county where you pass away. A trust is private unless there’s some kind of litigation. So a lot of folks like the ability to have things private, avoid probate, and have that incapacity protection. So those are the two main governing documents that spell out your intentions. And then there are powers of attorney. So there’s what I call two different flavors. One is a financial durable power of attorney, and what durable means is it’s going to go through incapacity. So it’s a document that you would sign today giving your agent, usually it’s a spouse or maybe a brother or sister or relative, the ability to transact financial affairs in the event you’re incapacitated. You’re alive, but you know, mentally or physically, you’re just not able to. Very important to have and also healthcare power of attorney. And the people that you name in these documents might not be the same. For example, I am aging and my husband’s financial power of attorney, but in the healthcare power of attorney, he’s named my brother because my brother has more health knowledge — he’s a physician — than I do. And so he would be a better choice in kind of an emergent situation than I would. So you have to think about who you’re naming and if they’re the right choice. And then you have a living will. Some of you might have signed these if you ever had surgery in the hospital. It’s a document that spells out whether you want to be kept alive if you’re in a vegetative state, if you want the plug pulled. And that goes along with the healthcare power of attorney.

Tim Ulbrich: So you covered will, revocable, living trust, financial durable power of attorney, healthcare power of attorney, and living will. And you talked about those in more detail, all of those, in the book. So when I hear “revocable living trust,” that implies there is a irrevocable living trust. So what are the main differences between the two?

Michelle Cooper: So an irrevocable trust, there are so many different types. But when you hear irrevocable, it means that it’s a document that typically cannot be changed unless you go through the court process. So some examples of an irrevocable trust might be a life insurance trust, which holds an insurance policy to keep it from being taxed in someone’s estate. It could be a charitable trust like a charitable remainder trust, some people have heard of those. It could also be what we call a testamentary trust. And that is an example of is in your will, you might have provisions that delay when a child would inherit assets, say until age 40. So if something happens to you when your child is 25, your will would create a testamentary trust for them with the provisions that you and your attorney draft and talk about. And that trust is an irrevocable trust. Typically, irrevocable trusts are going to file their own tax return, both a federal return and state return. But again, there are so many different types of irrevocable trusts, you just need to know that they are typically not easily changed and they accomplish different things.

Tim Ulbrich: So Michelle, as I hear you talking about — I’m guessing many of our listeners, you know, I’m thinking of the objections as I hear this, like oh my gosh, it’s so much. There’s five documents that we talked about, it’s a busy phase of life, the costs of doing this. So you know, Suze Orman’s quote that I outlined before talked about these and suggested it isn’t as hard as one may think. So talk to us a little bit about the process of putting these together, the potential costs of doing it, and I think that will help our listeners get some guidance about OK, maybe this isn’t as big or as overwhelming as I thought to ensure these documents get in place.

Michelle Cooper: So you definitely want to look at this as something that you can accomplish very easily because you don’t have to know all the documents. All you have to know is you want this person taking care of the kids, you don’t want your kids to get money until they’re age so-and-so, and where you want your property to go. The attorney that you work with will figure everything else out. And being in this field for so many years, I do recommend that you meet with an estate planning attorney that specializes in this type of law because there’s a lot of nuances in drafting. And every family situation and different. And you want to make sure when you’re not around that what you think is going to happen actually happens. And it doesn’t have to be super expensive. You can get a plain, vanilla will and powers of attorney. Not everybody needs a revocable trust. You know, you can probably get it, depending on where you live, I would say low end, $500-800, and on up into several thousand. When you add an irrevocable trust, that could increase the bill. But the best way to find an estate planning attorney — I talk about this in the book — is you could ask your financial advisor, your accountant if you work with one, you can ask a trusted friend, you can also look at your state bar. They’re going to have different choices online. And then interview two or three of them because you want to like this person just like you like your financial advisor. You have to open up to them about your concerns with leaving money to family members because that’s the way the attorney is really going to make a good document for you.

Tim Ulbrich: Yeah, and I can attest to what you had said about a good attorney will ask you the right questions. And you don’t have to get bogged down in the legalese and the terminology of it. And that was the experience for Jess and I. We spent an hour with an estate planning attorney, they asked some great questions getting at the individuals listed and certainly talking about the basics of the documents as well. But they asked really good pointed questions, good conversation starters for Jess and I, things we needed to go back and think more about if we hadn’t thought about it already. And then that led to a follow-up meeting and essentially the drafting of the documents. We had I think one revision, and then we finalized all five of these documents. So it definitely — I think like life and disability, it’s one of those things you go through and you look at at the end and say, “Wow, I am so glad I did that. And I thought it was going to be way worse than it was in both time, expense, and how overwhelming it can be.” One of the quick tips you give, Michelle, in the book that I really like that I think is something that often gets overlooked is you mentioned outlining your burial wishes and personal property in a letter along with having a list of your digital assets. Can you talk more about that?

Michelle Cooper: Sure. So you know, we just talked about working with an attorney to get documents done. And I wanted to mention that when you sign those documents, it doesn’t mean that you never look at them again because your life is going to change, evolve and change, and some of the provisions might need to change. But at the same time, you don’t want to have to go back to your attorney every time you change your mind on how you’re leaving particular assets. So the letter that Tim is talking about is a letter that spells out for your personal assets who gets what: maybe a watch or an engagement ring, particular furniture, because what I’ve seen in my practice is that the most simple personal property can cause a lot of family conflict. And that conflict can take a long time to forgive. And by having a letter right attached to your will that spells out who you want to give what assets to, you’re going to make the job that your executor has of handing out all this property much, much easier. And the other thing is explaining what your burial wishes. Nobody really loves the topic, but when there’s a tragedy and your children or a family member is trying to figure out what you wanted, if they can see in writing that you wanted to be buried or cremated or you wanted a celebration of life party, it’s going to make them feel so much better when they’re in this challenging time trying to do what you want and what’s best.

Tim Ulbrich: And I was also thinking, Michelle, as I was reading the book and I saw you mentioned digital assets, I even just started to think, well, if my wife or I were to pass away tomorrow, like I’m thinking of things even just like family memories and photos and all those things that might reside on a computer behind a password that nobody knows how to get in or on my phone or on a Google shared drive or something. So you know, or is there letters to children or family members or other things that, again, not something you want to have to think about, but certainly memories and other types of treasures that you want to ensure can get passed on. As we wrap up, I’m going to end on a quote that you have in the introductory letter to your readers that I think sums up so well the conversation we’ve had here today as well as the takeaways from the book. And that quote is, “In order to be empowered and independent financially, we all need to take an active role in our financial well-being. The good news is that it can be done. And all it takes is the willingness to do it. I am living proof of that. You too can accomplish this by being proactive, starting early, and following a plan, whether you’re single, married, widowed, or divorced.” So Michelle, I want to thank you for your time. I want to thank you for your willingness to share your story. And I hope our listeners will pick up a copy of your book as we have just scratched the surface during our time together of the wisdom that you share in this book. We also didn’t talk about during the interview mommy guilt, finding love again, kids and money, working as a blended family, and elder care, all of which you do a great job of covering in the book. So in addition to getting a copy of the book, “I’ve Still Got Me” on Amazon or Barnes & Noble, where can our listeners go to learn more about you and the work that you’re doing?

Michelle Cooper: They can find me at MichellePCooper.com. I spell Michelle with two l’s. They can also find me on Facebook or on the XMLW Financial Group website. And I would be happy to talk to any of your listeners that have questions on the estate planning side or how to get the conversation started with a spouse, whatever your listeners have, I’m willing to help.

Tim Ulbrich: And again, that’s MichellePCooper. Make sure two l’s and a P between Michelle and Cooper. And the book “I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence.” Michelle, thank you so much for taking the time to come on the Your Financial Pharmacist podcast.

Michelle Cooper: Thank you so much, Tim.

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YFP 126: Going Beyond Six Figures Through Medical Writing

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Going Beyond Six Figures Through Medical Writing

Brittany Hoffmann-Eubanks, Founder and CEO of Banner Medical, joins Tim Church to share her side hustle journey in creating a company that’s on track to hit over $100,000 in revenue and what she did to get to this point.

About Today’s Guest

Brittany is the Founder and CEO of Banner Medical and a native of the Chicago-land-area in Illinois. Banner Medical combines her passion for writing with her medical background as a pharmacist; with the goal of improving patient outcomes through educating healthcare providers. Brittany is an expert in the development of needs assessments, continuing education, and scientific writing. With over a decade of experience in community pharmacy, Brittany tailors and delivers medical communication projects in any topic area in a balanced, accurate, and timely manner.

Brittany earned her Doctor of Pharmacy and Masters of Business Administration degrees from Drake University College of Pharmacy & Health Sciences in 2012. After graduate school, she completed a Post-Graduate-Year-1 Community Pharmacy Residency where she earned her teaching-and-learning certificate, dedicated herself to patient-centered pharmacy care, and learned the business of pharmacy. It was during her residency year that Brittany discovered her passion for education and desire to be an entrepreneur.

After residency training, Brittany accepted the role of pharmacist in charge and clinical pharmacist within the community pharmacy setting. Brittany also precepts student pharmacists helping to prepare them for their future careers as pharmacists. In her free time, Brittany loves to travel to new and exciting places with her husband and family, playing with her dogs, and singing. She is also very involved in her State Pharmacy Association where she serves as a Board Member, Journal Editor, and Co-chair of the Public Relations Committee. In 2018, Brittany was awarded the Edmond P. Barcus Distinguished Young Pharmacist Award for her service to the Illinois Pharmacists Association.

Mentioned on the Show

Episode Transcript

Tim Church: Brittany, thanks for stopping by and for being part of this side hustle edition.

Brittany Hoffman-Eubanks: Thanks so much for having me. I’m really excited:

Tim Church: Well back in Episode 116, Tim Ulbrich talked with David Burkus, author of “Friend of a Friend.” He discussed how one and can and should grow their network and how to build key connections. And this really reminded me of how we met and ended up doing this podcast today. So do you mind talking about that story?

Brittany Hoffman-Eubanks: Sure. I was just looking to put my business into place with a website and kind of make everything official after unofficially starting my side hustle about four years ago. And so one of my connections that we met through a mutual friend, someone that I had been working with on my business. And I was like, “Man, I really want to get my website together, have a place where I can put my portfolio for prospective clients. Do you have any ideas?” And they’re like, “I have a person, and they’re a pharmacist.” And I was like, “Oh, that’s fantastic. Who knew that pharmacists do websites on the side?” So we were connected and got to talk to you, and I was really excited because you understood my vision of what I was looking for for the website and just turned out to be an awesome partnership. And I’m super excited with how things turned out. And we started talking about my business, and here we are in the podcast.

Tim Church: Yeah. It’s really fun. Is it OK if I mention who our mutual connection is?

Brittany Hoffman-Eubanks: Oh, for sure. I don’t think he’d mind.

Tim Church: Yeah, shoutout to Alex Barker. I think he knows everyone in the pharmacy profession, by the way. But a great guy and really cool opportunity that we got to meet through him. So Brittany, talk about your full-time pharmacist position and also your career path.

Brittany Hoffman-Eubanks: So as a full-time pharmacist during my day job, as I like to call it, I’m a community pharmacist, and so I work as a pharmacy manager and clinical pharmacist with a large community pharmacy chain in the Chicagoland area. And as part of that role, I kind of wear a couple different hats of making sure that my pharmacy is running, we’re able to take care of our patients as well as managing my team and one of my passion of working with patients. So I do a lot of MTM with patients, Medication Therapy Management, hyperlipidemia management, diabetes, especially, and then also probably my favorite part of my job as a community pharmacist is the immunizations. So I’m travel health certified, I get to see people going all over the world. Traveling is a passion of mine, so that’s kind of the day-to-day job that I have in pharmacy. And then in terms of career path, I think I took probably a pretty traditional route. I went to Drake University College of Pharmacy and Health Sciences, got my Doctor of Pharmacy degree. Also did their dual program where I obtained my Master’s in Business Administration. And then after I graduated from college, went on to do a postgraduate Year 1 residency, community pharmacy residency, with the company that I now work for as well as Midwestern University in Chicago. And I loved my residency year. It was an opportunity just to immerse myself in direct patient care, learn about the business of pharmacy, do some ambulatory care projects on the side as well as obtain a teaching and learning certificate. And that’s kind of where my nontraditional pharmacy career that I have now happened by accident during that timeframe, my residency year. I didn’t jump into it right away. I just decided to work for a little bit and really just get my feet wet in being a pharmacy manager, helping take care of patients, really just immerse myself in community pharmacy before moving onto what I’m doing now, which is medical writing.

Tim Church: Yeah, so talk about how did that happen? Where did that vision come from during your residency and as you transitioned into your community pharmacy role?

Brittany Hoffman-Eubanks: Yeah, when people ask me about this story, I always share with them that my becoming an entrepreneur happened by accident. It was in my residency year that we were asked to write a continuing medical education written piece for a pharmacist to help educate them on a topic. And as part of that process, I received some really good feedback and just kind of got the wheel moving, so to speak, of is this something that I’m interested in? Could this be something I could do in the future? How can I earn some additional money on the side in addition to what I’m doing in my day job? I love to travel, as I said, and all of those student loans, trying to get rid of them as quickly as possible. Through that process of just trying to figure that out, what I was doing, what I wanted to do, I had a friend that I had worked with — I guess I should colleague that I worked with during my residency year who moved onto a different position with a large national publication, so I just reached out to them and said, “Hey, how do you get your content? I’m really interested in potentially doing more of this type of work. Do you take writers? Or how do you obtain new writers?” And that really kind of started it. And from there, I did my first project and just kind of morphed into what I am doing today with my full-fledged business.

Tim Church: So was that your first paid gig where you just reached out and you were looking for opportunities?

Brittany Hoffman-Eubanks: It was. And actually, it’s kind of a funny story because they didn’t give me just one project. They actually gave me two to work on simultaneously. So it was a fun challenge, and actually the first project they’d given me to write about was a topic that I wasn’t an expert in. It was actually on pet medications, so it required me to just take a step back, think about what angle I wanted to attack it from, and go from there. It was such a great experience. It was an opportunity to get my feet wet and just really figure out how I wanted to move forward with this type of writing that I was interested in.

Tim Church: So how did that feel getting that first gig and actually getting paid to do it?

Brittany Hoffman-Eubanks: It was exciting. I think oftentimes, we think about how can I make money on the side? And is it going to be worthwhile, so going to be that return on investment? Or what’s the opportunity cost? You know, what else could I be doing if I wasn’t doing this right now? And I think for me, the biggest piece of it was is that all it required was my computer and my time at that time. So it was easy for me and kind of exciting to be like, OK, I can go to my day job, come home, fit this into when I have time to do this and make some extra money on the side that I can either use to put towards traveling or I can add some extra funds to paying off my loans quicker.

Tim Church: And so those were the two biggest motivators, at least initially, for kind of pursuing this side hustle?

Brittany Hoffman-Eubanks: It was for me. I knew — just to back up for a second, I came out of school with probably close to $250,000 in student loans, which is a ginormous amount of student loans. I’d done an undergrad degree first, so four years before I went on to Drake. Drake actually has a six-year program, and I didn’t go that route. I did the four years and then the additional four years. And in addition to that, added on a second degree where I obtained the MBA program and stayed during the summers to achieve that dual degree by the time I finished pharmacy school. So I knew going into that that it was going to be a lot more burdensome in terms of the cost factor. And so you know, having had that background with the MBA degree, looking at those amortization tables and the compounded interest, I was like, I’ve got to do something to get rid of this student debt as soon as possible. So I think paying that off as quickly as possible and having some extra funds was a big motivator in the beginning.
Tim Church: So your medical writing business is called Banner Medical. Talk a little bit about what your business specifically is all about, other than obviously we know it’s medical writing, but what is your mission of the business? And who are you specifically serving?

Brittany Hoffman-Eubanks: Yeah, that’s a great question. I appreciate you asking that. It’s probably the first question that everybody asks me of what is that? Or what is medical writing? So by now, I’ve gotten very good at explaining to people what it is that my company does. But essentially, if you were talking to a lot of the pharmacists out there and maybe other healthcare providers who are listening in your audience, it’s pretty simple. We write about medicine. And there’s a lot of different areas that encompass medical writing. It could be continuing medical education, it could be education grant writing, which is something that we now are experts and something that we’re typically sought out for with our writing for a needs assessment. It could be on the editorial side where we’re writing about maybe a new drug that came out or something that’s going on in the healthcare field. Or maybe even the academic scientific writing where we’re helping a company put together their manuscript for a journal submission or working with a pharmacy organization to spread some of their grant work that they’re doing. So it’s a wide, encompassing field. There’s a lot of different types of medical writing. And every business is going to excel in certain areas and have a focal point. So for me, the mission of my company, it really is a business-to-business company I would say. We serve many other businesses, helping them, whether it be through educational grant writing with the needs assessments that we do, but ultimately, it serves the patient and the healthcare provider in the end. And so for me, our mission at Banner Medical is really just to optimize that knowledge to improve clinical care or clinical outcomes for the patient. So if you think about it, when we’re writing these types of medical writing pieces, our goal is to help healthcare practitioners and clinicians, especially, make better clinical decision-making or improve their clinical decision-making so that they can ultimately take better care of their patients and improve the outcomes for them in the long run.

Tim Church: I love that, Brittany. And I think that’s so cool the way that you articulated that because it’s not just about the education piece of the healthcare provider but ultimately, what is going to happen as the end result of that education? I think that’s so great the way that you put that. So the businesses that you’re working with, is this primarily have pharmacists as the audience in terms of who’s reading this content and taking charge? Is it other healthcare providers? Is it a mix?

Brittany Hoffman-Eubanks: So when I first started my business back in 2014, it was exclusively for pharmacists and pharmacy technicians. And now, since we have been moving forward with expanding the business, we’ve moved into other clinicians as well. So for example, we now service regular physicians, we do non-physician clinicians like Physician Assistants, Nurse Practitioners, really have gone beyond exclusively writing for pharmacists, which is really exciting for Banner Med because it opens up our opportunities, additional revenue streams and additional access to helping improve outcomes for patients.

Tim Church: Now you talked about initially reaching out and getting that gig or actually two gigs in the beginning. But how difficult has it been to acquire new clients and getting them on board? I mean, was it easy after you did the first couple and then you didn’t have to market as much? Or is that a constant thing that you’re doing in terms of getting new business?

Brittany Hoffman-Eubanks: I think maybe the answer to your question is two-pronged. So when you have your own business, you spend a good amount of time working in your business as well as working on your business. And I think finding the right balance of that is really important, especially as you’re trying to grow and obtain new clients, especially. I think the biggest thing for Banner Med and me specifically is that it really comes down to the relationships that you build. So you always have to be making sure that you’re reaching out to new people, be it somebody you know through your network, just always be ready to have that elevator pitch, so to speak, when you meet someone knew and they may be interested or how you can help them or provide value to them for what they’re looking for. So to answer your question, I think for me, I spend a good amount of time each week looking for new prospective clients, now gotten to the point where a lot of times, people are reaching out to us now, seeking out our help, which is great. It’s taken a bit of time to get to that point, but I’m excited to be moving into that arena rather than having to constantly hustle to find new clients. And we have a group now of great core clients that are repeat business, which is fantastic because it makes it a little bit easier to not have to always constantly be looking for new work all the time to build those revenues. So to have repeat customers is really helpful too.

Tim Church: What percentage of the business right now is repeat customers?

Brittany Hoffman-Eubanks: I’d say about 80% at this point in time is repeat customers. And then the other 20% is new clients that we’re working with that have either been referred to us or that we’re actively seeking out.

Tim Church: Great. So talk a little bit about what is the earning capacity for doing medical writing? Because one of the things that you mentioned was basically what you needed was a computer and you needed some time. And obviously, it takes time to do what you’re doing. But talk a little bit about how much you’re charging for the different pieces of medical writing and the different focus points that you have.

Brittany Hoffman-Eubanks: So the revenue piece of it, of what you’re able to earn is to a degree, kind of limitless. It really just depends on the clients that you’re working with, what types of projects they’re asking you for as well as experience. And all of that kind of goes into the whole thing together. So there isn’t really like a strict fee that we charge for every single project. It’s always going to be individualized. But to give you an example, for this year alone, we’re on pace to be six figures this year, which is amazing compared to where I started when I had my first gig that I told you about where I was doing two projects and made about $700 for those two projects, which at the time was fantastic because it took me about two weeks to write the two different projects that I was asked for, and I made $700, which was really exciting at the time. Now, fast forward, it’s been a growth process over the last few years where I think year 2, we did a little bit over $10,000, and then it’s just gotten — the revenue stream has gotten bigger and better. So really, it just depends on how much you want to put into it and what types of projects you’re willing to take. And the other piece too that I think is really important, especially for new, aspiring writers is not to undervalue your work. You know, oftentimes, we’re afraid to charge a certain price or tell a client or a vendor that oh, I think this project’s probably going to be about $1,000 based upon the amount of work that you’re asking for and what you need whereas someone who is maybe less experienced and maybe has that fear of oh, $1,000, like can you afford that type of thing, they may undervalue themselves and say, oh, I’ll do that really big project for you for like $450. But at the end of the day, you’re putting so much time and effort into it that it doesn’t make financial sense. So it’s important to consider the type of work you’re doing, what’s being asked of you, and one of the biggest places I always start is I ask the client, do they have a budget? And what have they budgeted for this particular project to kind of help me determine if I’m going to be able to work with them within their budget or if we need to negotiate and talk about what the project fee should be.
Tim Church: Now Brittany, I’ve got to step back for a minute because you just nonchalantly said that your side business is earning about six figures on pace to do this year, which is really exciting and just pumps me up. And I think a lot of people who are listening are probably thinking, that’s incredible, No. 1. But No. 2, how have you been able to do that?

Brittany Hoffman-Eubanks: Well thank you. It’s been pretty exciting to see the business grow. And I’ve spent the last year working really hard to scale it. And frankly, I think a lot of the credit I would have to give to just working with Alex Barker through the coaching process for my business. And I’ve talked about this previously, but I think for me, it was initially when I thought about the idea of hiring a business coach, it seemed a little silly to me at first. But then I sat back and thought about it and I was like, well, we have coaches for a lot of other things that we do in our lives, sports, especially. So you know, why not for a business? This kind of makes sense. And initially, probably like a lot of other people who’ve maybe considered doing coaching wonder about the costs of it and is it going to be worth it and what’s the return on investment going to be? But I have to say, working with the Happy PharmD and Alex specifically just really helped push me to think outside of the box and how I wanted to expand this business and I was really worried about hiring someone because I was becoming that rate-limiting step, right? There was only so much I could do in the time that I wasn’t at work in order to build this business. I mentioned earlier about working in the business and on the business. And I was really tapped out for working in and on it. So in order for me to move forward and expand to where I wanted this business to grow, I had to get over that roadblock, so to speak. And Alex was instrumental in helping me do that and just kind of work through the process and figure out, OK, this is the fundamentals, this is where I started, this is where I want to be. How do I get to that next level? And I’m super grateful just for the time that I’ve spent and wish I probably would have done it sooner because it’s been amazing from last year to this year where I’m on pace now. And I think about oh man, what if I had done this in like year 2 or year 3 instead of waiting? But it’s been really exciting. And I think it’s a testament to how working with someone else to think about different factors in your business can really help you grow and move forward.

Tim Church: I think that’s such a key. I mean, we don’t know what we don’t know. And sometimes, it takes really that outside perspective to help get to that next level. What were the initial hesitations with working with a coach or just paying money out of pocket to do that?

Brittany Hoffman-Eubanks: Yeah, I think for me, it was just being comfortable with the amount that it was going to cost on a monthly basis and just thinking long-term of OK, well, I understand having a business background that you have to spend money in order to make money. But as I mentioned, paying off those student loans were really important to me, and my business at that point was — I was at kind of a fork in the road. Either I was going to go to the left or I was going to go to the right. And I just decided to just go full boar to the right and do something different and hope that the return on investment was there and that it paid off, and it has. Within the first six months of working with a business coach, I tripled my revenue, which was amazing to see that happen and just be a part of that and just have those small wins, and it really just helped invigorate me. And I never looked back, so to speak. And as a result of working with a coach for the business, it just helped me think about things from a different perspective, bringing on a new employee to the company. I now actually have three employees, which is really exciting compared to where I was just a year and a half ago where I was terrified of hiring one and how was that going to affect my business and the quality, which was really important to me to teach someone else how to do what I do and just working through all of those pieces to be where I am now. So it’s been a long journey, but it’s been exciting. Each new thing, just thinking about something differently, not letting analysis paralysis take over and just stopping me from moving forward with the things that I wanted to do.

Tim Church: That’s really exciting, Brittany. And you mentioned that you were the rate-limiting step in the business, and I think that’s really interesting to kind of realize and recognize that. And talk about how you brought on employees and what that process was like and kind of what are they doing day-to-day in the business right now?

Brittany Hoffman-Eubanks: Yeah, so for me, I really needed someone who could help me with some of the pieces that didn’t really require me in the writing process. So I decided that hiring a medical writing assistant made sense, someone that could help me with the research, going through all the different articles that we need for the evidence-based writing that we do. Can they help me basically go through the research and highlight the pieces that are important for the particular types of work that we’re doing? Can they help me with bibliography writing and going through all the different sources that we have and that we’re using? Just some of those basic tasks that didn’t necessarily require me or my writing as well as someone who maybe was interested in becoming a medical writer with my business. And so it’s kind of funny how it happened because I have a group of pharmacists now who are working for me. And I love working with them, anyone with an advanced degree is perfect typically for medical writing, although there are a lot of great non-advanced degree writers out there. So I don’t want to generalize. But for what we’re doing at Banner Med, it’s been awesome to be able to hire other pharmacists and bring them on. But now, it’s turned into kind of a whole new thing where we’re working one-on-one with them, teaching them how to write the different types of medical writing projects or pieces that we’re doing and really helping them go from medical writer — medical writing assistant to medical writer and just being able to see that process and where they start and how they’re growing and their individual goals that they have as it relates to their own professional growth as well as Banner Med has been really exciting. So I started in one place and ended up being in a totally new place as well as far as the business is concerned, so that piece has been exciting too just not only educating healthcare providers but also helping to mentor and educate new aspiring writers as well.

Tim Church: And how did you primarily find these additional writers? What were the channels that you used?

Brittany Hoffman-Eubanks: So initially, this was one of the things that I think was kind of a hurdle for me to get over. In the beginning, I wasn’t quite sure how I wanted to go about that: Did I want to use a traditional place like Indeed or Monster or some of those places, the job boards that you think of when you’re going and looking? Or did I want to utilize a network and try to find people through that way? And I ended up actually utilizing a network, kind of a LinkedIn process of OK, I’m going to create an application, this is the qualities that I’m looking for, these are the things that are absolutely essential, these are the things that are ideal, and these are things that would be nice to have but aren’t necessarily required. I kind of went through that process, did a phone interview with them, made sure that they’re going to be a good fit for me, anyone that I work with, they ended up becoming like family to me. And my business is my baby, so to speak, so it’s really important to me that they’re just as passionate about writing. I can teach them a lot of the things that they need to know, but do they have good fundamentals? And so for us, we kind of went the more personal network route of utilizing LinkedIn and some other networking opportunities that made that process a lot easier. And now, believe it or not, just from some of the opportunities that I’ve had to spread the word about Banner Med, I actually have a lot of new aspiring writers that reach out to me now on a regular basis. And I’m always impressed by that. I think if you take the time to reach out to someone and tell them what value you can bring and how you’re interested in what they’re doing, then I can talk to that person a little bit more, find out what it is that they’re interested in, how they might be able to help us out or if it’s possible to work together. So there’s a couple — it’s changed from how we went about it in the beginning to how we do it now.

Tim Church: So are you still having a hand on each individual project? Or is your team taking certain project completely from start to finish?

Brittany Hoffman-Eubanks: Yes, there are — it depends on where they are in terms of the training process, how long they’ve been working with us. Quality control for me and making sure that every project is still meeting Banner Med’s expectations is very important to me, so the writers that I’ve been working with are absolutely fantastic. I do have one full medical writer right now who takes a project from start to finish. And then I come in kind of in editor role as opposed to writer role and just go through everything, make sure it checks every box that the client was looking for, just kind of as that last piece before we send the project off. And then with my new writers, I do take on a more hands-on approach where I work with them directly, offer feedback, and probably have more of a writing role with those projects. So like I said, it kind of depends on the individual. But yes, I do typically still look at every single project that comes through for Banner Med, just making sure that it’s going to meet the client’s needs and that we’ve successfully put together the deliverable that they’re looking for.

Tim Church: And then depending on kind of what stage they are as a medical writer, does that also impact kind of their compensation for each project?

Brittany Hoffman-Eubanks: It does. And unfortunately, in the medical writing world, there isn’t really a great compensation table, so to speak, where you can go and say, ‘OK, for this project, you’re going to make x amount of dollars,’ or, ‘This project, you’re going to make x amount of dollars.’ It’s really, for me, it’s a combination of their experience, their efficiency, their ability to write, along with what the total project cost is that we’re going to be receiving, the revenue that we’ve worked out with the client as well as my own just personal experience in terms of working with that individual of what the compensation’s going to be. But the one thing that’s really important to me is that the wage is always fair. And I strongly believe in that. I’ve gone back and advocated if a writer’s came back to me and said, “Hey, Brittany, you know what? This project took 10 extra hours more than we thought it was going to. And because of that, I had to spend all this extra time, x, y, z.” So in that case, you know, I have no problem going back to the client and saying, “Hey, you know what? We need to circle back on this project cost. These are some of the things that came up. Let’s talk about the compensation for this particular project and potentially renegotiate that.” Or I may even do that just on a personal level with that individual writer depending on how much extra time or effort that they had to put into it. So it’s a long answer to answer your question. But it’s so individualized that it’s impossible to say, OK, you’re going to do x and we’re going to pay you z every single time. It just really depends on the individual project.

Tim Church: So other than the payment to your employees for their assistance with the different projects that you receive, what are the other major costs of running your business?

Brittany Hoffman-Eubanks: I think the other major costs really come down to some of the software programs that we use. There’s a particular reference product that we use that has saved just so much time and energy when it comes to doing the bibliographies for a lot of the different products that we use. So I would say primarily software would be the biggest expense that the business has on a day-to-day basis in terms of operating costs. Aside from that, there really isn’t a whole lot of extra overhead types of things. I mean, we have some of those fixed costs like internet and if we want to have meetings with all of us together, there may be particular software that we use to facilitate that process. So it just — I guess it really just kind of falls into that software, the things that make our job a little bit easier. All of my writers live in different parts of the country, so they’re all remote-based. And so it’s not like we’re just meeting up in an office, working together. We have to facilitate those online meetings in some way or fashion.

Tim Church: And do you guys meet together as a team to kind of help foster some of that mentorship that you’re providing?

Brittany Hoffman-Eubanks: Yeah, so we’re going to actually start doing that. Recently, we acquired two new employees that now make us a team of four. So I’m really excited about that. Prior to that, when I was working just with my medical writer that I’ve now had for almost a year, actually, you know, her and I would meet quarterly. Sometimes it would be on the phone, other times it would be through a video chat. But it’s really important for me to make sure that we’re not only discussing the projects that we’re working on but that I’m also helping them with their individual goals that they have, what things do they need help with, what is their biggest difficulty when it comes to the projects that we’re working on, and really just having that open communication, that feedback, so that we can keep improving and keep growing the business and help them move forward into new roles that they’re excited about or interested in or their particular topic. So yeah, I would say that group discussion, the mentorship, is really important for the business.

Tim Church: I think that is so cool how you continue to grow and bring other team members on. And it’s just really exciting to see that growth. I think one of the other burning questions that a lot of people probably listening right now, and including me, is how much time are you personally spending in the business? Because even though you have writers and you have some help, I mean, clearly you said that you’re still having a hands-on, even if it’s from an editorial perspective, but just on the business itself. So talk a little bit about that.

Brittany Hoffman-Eubanks: Yeah, it’s a significant amount of time. I’m definitely not going to sugarcoat that. Probably I’d say between my full-time job and this side hustle, which is probably can’t even categorize it as a side hustle anymore. Now it’s like a full hustle.

Tim Church: That’s right.

Brittany Hoffman-Eubanks: I would probably say it’s easily like 80 hours per week. I’m definitely probably doing full-time on both right now. But you know, some of you guys may hear that and be like, ‘Oh my God, I can’t do that. There’s no way.’ You don’t have to do that to be in medical writing, right? You can pick the projects that you want to work on, you could do some extra money on the side if that’s what your goal is, or you can go full in like I’m doing. I think for me, I absolutely love this. And it doesn’t feel like work to me. So when I come home and I’m working on a project, it’s exciting to create this, to have my clients excited at the end of the day that they don’t have to spend hours upon hours redoing work and really come to us when they have those difficult projects or difficult topics that they know they need a good writer on. And I think that’s really important, and the biggest thing no matter what you choose is that at the end of the day, it’s awesome to make extra money on the side. But do you love the work that you’re doing? And if you don’t, then obviously you need to make a change or think about things differently. My grandfather always told me when I was a little girl, if you don’t like something, change it. And if you can’t change it, then change the way you think about it. And I’ve really just tried to use that as a guiding light for me in everything that I do. And this business is something that I absolutely love, so at the end of the day, even though I’m putting tons and tons of time into it right now, I know later on, it won’t be like that where I will have to spend as much time. But right now, we’re in that growing phase where it’s necessary. But I look forward to the days where I can step back a little bit and work on maybe some pet projects. But right now, it’s just fun and exciting to see things moving forward.

Tim Church: That’s so good, Brittany, and I think you just dropped a bunch of wisdom bombs in there, which was great. And what I want to know is because you’re doing so well and this is scaling, is this something that is going to take over your community pharmacist position? Is that going to cut back? What does that look like going forward?

Brittany Hoffman-Eubanks: Well, it’s hard to say right now. I absolutely love being a community pharmacist. I enjoy the patient interaction. I feel like to a degree, it helps me be a better writer, so to speak, in just being able to help patients navigate different difficult topics. In the community, I see people that are dealing with cancer, dealing with all kinds of just difficult types of long-term conditions or maybe it’s a short-term issue. So you know, I don’t know that I know the answer to that question right now, but I definitely know that I’m excited to see where things go in the future and depending on where the business takes me, you never know. This could be the final thing for me, or I may choose to scale back a little bit and do both. It’s hard to say right now, but I’m definitely excited for the future of what Banner Med can do.

Tim Church: You talked about you’re spending 80 hours many weeks out of the year trying to do both of your jobs, basically two full-time jobs.

Brittany Hoffman-Eubanks: Yeah.

Tim Church: So one of the things that often comes up that people feel that time is that limiting factor to work on a passion project, a side hustle, or another job. What seems to work for you in terms of managing both of those but then also your personal life?

Brittany Hoffman-Eubanks: Yeah. I get asked this question a lot, like how do you do it? And I think the biggest thing is that you have to be intentional about your time, right? So you know, if I’m working on a project, then I have to get rid of the distractors. I’m working specifically on that so that I can be focused and be efficient. But one of the things that I found during my residency year that was really helpful is just to schedule out my time. So my calendar — I’m that person that’s got thing color-coded and have a specific time I guess for everything. But that works for me. So I think the biggest thing — and everybody always says, oh, time management. But what does that actually mean, right? How do you put that into action? Are you the type of person that you need to work on something for 30 minutes and then take a five-minute break and then come back at it for another 30 minutes? You just really have to figure out what works for you. For me, scheduling my time, be it the time I’m going to work on projects or am I going to work out at 5 a.m. tomorrow? What time am I doing dinner with my husband, date night, etc.? It’s just really helpful for me to make sure. And then when that time comes up and I’m supposed to be working on that particular project during that time or whatever it is, make sure that you actually do it. I think that’s the biggest thing is just that follow through of whatever way that you find to manage your time, that you’re being consistent and that you follow through. Don’t say on Tuesday at 6 o’clock, I’m going to set time aside for my family and then be like, oh, sorry guys, this came up. I can’t do that. Like you need to honor those commitments and just stick with it.

Tim Church: I think that’s so true. There’s such power in that intentionality but then figuring out that system on how you’re going to actually execute. One of the things that you wrote to me before we jumped on the interview is that your husband has been one of your largest supporters. So I wanted to give him a shoutout because clearly, you seem to have written that with a lot of enthusiasm. And it seems like that’s probably necessary for the undertaking that you have.

Brittany Hoffman-Eubanks: Oh, 100%. I honestly couldn’t do what I’m doing right now without his support. I mean, just think about that for a second. You’re married to someone, you have committed to spending your life together with one another, and here I am going to work 40 hours during day, either work typically 8-4 or 2-10 at my job, and then when I come home, it’s like, “Hey, honey. Let’s have dinner. OK, I’m going to work again.” So I could totally understand him being frustrated or like what the heck, she has no time for me. But I think you know, we try to always schedule time with each other, which sounds very unromantic, I get that, but I’m in that phase right now with the business where these things have to happen, and I think he definitely understands that it’s a dream of mine, something that I’m pushing really hard for. And he’s just awesome. I can’t thank him enough for being super understanding about it, never gives me a hard time when I say, “Oh, I have this project I have to work on,” or, “Oh, I have this deadline.” He’s my biggest supporter, and I love him for that.

Tim Church: That is awesome. What’s his name?

Brittany Hoffman-Eubanks: His name’s Matthew.

Tim Church: Matthew, you’re doing an awesome job. Keep supporting Brittany. So Brittany, one of the questions I think that often comes up — and I feel like especially with medical writing — but just in general with trying to start a business or a side hustle, one of the things that comes up is just how do I get started? How do I break in and get going? Because I think it’s easy to kind of sit back, hear your story, and obviously it’s taken a lot of hard work to get to the point where you are now, but what advice, what guidance would you give to somebody who’s just trying to start to break in?

Brittany Hoffman-Eubanks: Yeah, I get asked this question all the time, actually. And so much so that I am actually working on a new project that’s hopefully going to help new, aspiring medical writers solve that problem. So stay tuned. There’ll be more to come. But just in general, to answer your question, I think the biggest thing that people who are aspiring to be a medical writer have to think about is one, what type of writing do they want to do? Do you want to have a staff position? Do you want to be a freelancer? Although that isn’t my favorite way to characterize what it is that we’re doing, but it’s in the vernacular to describe this medical writing role when you’re not working full-time for a particular company. And then ask yourself what types of things do you like? What are you interested in? And then seek out those types of opportunities. This is a gig economy where you can seek out different projects, let people know what you’re interested in, and just make sure that you come in prepared too. We want to make sure that you’re not only just asking people but that you’re letting them know what it is that you can provide to them that’s of value because that’s the biggest thing when it comes to different companies is how can you provide that value to them?

Tim Church: Well said, Brittany. So if somebody wants to reach out to you to learn more about your business, what you’re doing, or maybe just needs a couple key pieces of encouragement about getting started, how can they do that?

Brittany Hoffman-Eubanks: Yeah, so they can reach out to me on LinkedIn, Brittany Hoffman-Eubanks, can also find my email address on my website at www.BannerMedicalWriting.com. Either one of those is a great way to reach out to me. I love hearing from new people and talking about your story. So don’t hesitate to reach out. And if I can help you, I’m happy to do so.

Tim Church: Well, thank you again for coming on the show, sharing your story, and just really looking forward to hear about the progress as you continue to grow your business.

Brittany Hoffman-Eubanks: Thank you. I’m super excited. Thank you so much for having me. I hope that anyone who’s out there listening that if you’re really interested in being an entrepreneur, starting your own side hustle, start small with the things you can control. And you never know where things will take you.

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YFP 125: Why Lowering Interest Rates for Student Loans is an Alternative to Debt Cancellation

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Why Lowering Interest Rates for Student Loans is an Alternative to Debt Cancellation

Dr. Joey Mattingly, a faculty member at The University of Maryland School of Pharmacy, talks to Tim Ulbrich about a recent article published in the American Journal of Pharmaceutical Education titled Before we talk about student debt cancelation, can we talk about the interest rates? They cover the basics of loan terminology, discuss why lower interest rates would have such a significant impact on student indebtedness and discuss the reasons why lowering interest rates may be a better option than loan cancellation or forgiveness.

About Today’s Guest

After graduating from the University of Kentucky College of Pharmacy and Gatton College of Business and Economics, Dr. Mattingly dove directly into pharmacy practice for The Kroger Company as an EPRN super trainer, facilitating the implementation of a new pharmacy information system software to more than 40 pharmacies. After completion of the pharmacy system rollout, Dr. Mattingly managed four different Kroger Pharmacy locations (L292, L780, L366, and L389) between 2010 and 2012, revamping operations at each location to improve multiple business and patient care activities. Dr. Mattingly was promoted within Kroger to serve as District 6 Pharmacy Coordinator in the Mid-South Division, based in Carbondale, Illinois, overseeing operations for 12 pharmacies.

In 2013, Dr. Mattingly left The Kroger Company to lead Indianapolis operations as general manager for a start-up long-term care pharmacy company called AlixaRx, providing pharmacy services and remote automated dispensing systems to 23 skilled nursing facilities (SNFs) across Indiana, Kentucky, and Ohio. He currently serves as an associate professor in the Department of Pharmacy Practice and Science at the University of Maryland School of Pharmacy, where he teaches business strategy to students in the professional program and is a strategic consultant for the University of Maryland Medical Center Department of Pharmacy. In 2016, Dr. Mattingly was selected as the graduating class Teacher of the Year.

In addition to his work as a faculty member, he serves as the Director of Operations for the PATIENTS Program and recently earned his PhD in Pharmaceutical Health Services Research with a special focus in pharmacoeconomics. Dr. Mattingly is also passionate about policy and parliamentary procedure and is the Speaker of the House of Delegates and Board of Trustee for the American Pharmacists Association. He has previously served the American Pharmacists Association Academy of Student Pharmacists (APhA-ASP), the Kentucky Pharmacists Association (KPhA), and Phi Lambda Sigma Pharmacy Leadership Society as speaker of the house.

Summary

Dr. Joey Mattingly joins Tim Ulbrich to discuss some important pieces from his APJE article titled Before we talk about student debt cancelation, can we talk about the interest rates? He also breaks down key loan terminology, what the math on interest rates shows, and four reasons in favor of supporting lower interest rates instead of debt cancellation.

To kick off the episode, Joey discusses what the words principal, term, interest rate and amortization mean in regards to student loans so that everyone has a basic understanding of what this debt is comprised of.

Joey then jumps into this APJE article titled Before we talk about student debt cancelation, can we talk about the interest rates? Using the AACP Graduating Student Survey from 2017, Joey estimates that that graduating class carries a total of $2 billion in student debt. Although there are Presidential candidates that are discussing loan forgiveness, Joey encourages a discussion of lowering interest rates. By lowering interest rates, principal balances will come down quicker and monthly payment will be less expensive. Joey talks through what this math looks like for interest rates at 6%, 3% and 1.5% When looking at a 6% rate, after a 25 year term, the total interest accrued for the $2 billion of student debt is $1.9 billion, almost double the principal. Lowering the interest rate to 3% or 1.5% significantly reduces interest as well as lowers monthly payments.

Joey also talks through four reasons to support lower interest rates instead of debt cancellation: resentment, incentive realignment, decision making uncertainty, and public support for lower rates.

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 welcome back onto the show Dr. Joey Mattingly to talk about one of his most recent articles published in the American Journal of Pharmaceutical Education titled, “Before We Talk About Student Debt Cancellation, Can We Talk About the Interest Rates?” Joey was on the Your Financial Pharmacist podcast all the way back in Episode 005, where we talked about the impact of rising student debt on a pharmacist’s income. So a little bit about Joey before we get started: After graduating from the University of Kentucky College of Pharmacy and the Gatton College of Business and Economics, Dr. Joey Mattingly dove directly into pharmacy practice for the Kroger Company, where he facilitated the implementation of a new pharmacy information system software to more than 40 pharmacies. He managed four different Kroger Pharmacy locations between 2010 and 2012, revamping operations at each location to improve multiple business and patient care activities. Dr. Mattingly was promoted within Kroger to serve as the District 6 Pharmacy Coordinator in the Midsouth division, based in Carbondale, Illinois, overseeing operations for 12 pharmacies. In 2013, Dr. Mattingly left the Kroger Company to lead Indianapolis operations as General Manager for a startup long-term care pharmacy company called Elyxa Rx, providing pharmacy services at remote automated dispensing systems to 23 skilled nursing facilities across Indiana, Kentucky and the great state of Ohio. He currently serves as an associate professor in the pharmaceutical health services research department at the University of Maryland School of Pharmacy, where he serves as a strategic consultant for the pharmacy department at the University of Maryland Medical Center in Baltimore. Joey, welcome back to the Your Financial Pharmacist podcast.

Joey Mattingly: Thanks, Tim. I’m very excited to be back with your audience.

Tim Ulbrich: So the commentary you wrote for AJPE, again, titled “Before We Talk About Student Debt Cancellation, Can We Talk About the Interest Rates?” I really enjoyed this work. It was simple, it was straightforward. And I thought it was very effective in helping the reader understand the basics of loan terminology — and we’ll talk about some of that here today — as well as why a conversation around lowering interest rates should be happening alongside or potentially in place of the debt cancellation/forgiveness discussion that we discussed here on Episode 114 of the podcast with Richard Waithe from RxRadio and certainly I think many of our listeners are familiar with through the Democratic presidential debates that have been ongoing. So in this interview, we’re going to hit the high points of Joey’s article that he published in AJPE, but please make sure to check out the show notes, where we’re going to put a link to the full article. And it’s an open access journal, so you can read the article in its entirety. So Joey, before we jump into the specifics of your article – and again, you do a nice job of this in there as well, let’s break down some of the loan terminology, specifically principal, term, interest rate, and amortization to make sure we’re on the same page. So let’s start with principal. When you define the principal of a loan, what is it? Let’s start there.

Joey Mattingly: Absolutely. So and again, this is great, well-timed, Tim. Actually, I gave this exact topic today in my pharmacy management class at the University of Maryland.

Tim Ulbrich: Awesome.

Joey Mattingly: My students — and I always, because I think it’s important as any manager as well to understand debt. And I really — the goal for this article is not to scare people or freak people out because a lot of students when they’re graduating, you know, there’s that anxiety and fear around their debt. And I hope — what I love about your podcast and the work with your group is I feel like you’re doing your very best to try to empower students to understand their financial situation so that they don’t — rather than fear and anxiety, maybe they feel more hope and optimism. So anyway, I just start by hey, let’s break it down. So when we start, the biggest component that comes right off the bat that we think of is the principal. That’s that amount that we borrow from the lender. So thinking of if it’s going to cost me $100,000 to go to pharmacy school or $200,000, I guess that’s a whole other podcast episode, what am I going to have to borrow overall? And that’s the amount that’s really if you did not have — if you had all the cash in your bank account or your parents had a lot of money to help pay for your school, they would just pay your tuition, right? And so they would use, if it was $200,000, they would write a $200,000 check, right? Or whatever that may be. Whereas if you do not have the money in your bank account, then we look to financing. And so we start with the principal.

Tim Ulbrich: Yeah, and I think starting there, and you do a good job of this in the article, the way I think about it here too is if we have a P3 student listening and here we are fall semester of 2019, and let’s say they borrowed $10,000 for fall semester, that $10,000 and whatever that loan may be, unsubsidized loan, that’s the principal. But as you mention in the article, obviously we can’t stop there when we think about the full amount that somebody may end up being in debt because we have to think about the term as well as the interest rate. So why don’t we go on from the principal and talk about the term and the interest rate.

Joey Mattingly: Well, before we leave principal, one thing I think that often gets overlooked too is that when we’re having that initial transaction and say — so I keep using, I like easy numbers, Tim, I hope it’s OK.

Tim Ulbrich: Yeah, yeah.

Joey Mattingly: I know for everyone, the challenge is it becomes complicated when it’s $7,342 or whatever. So I always round and say, OK, say I need $100,000. If when I’m trying to get that initial loan, there are often costs that go into the transaction. And in the case of a student loan, often they’ll call them origination fees or things that around if you look at the Department of Education, you’ll see anywhere from about 1% to about 4.2%. So even in that initial signing the paper, once the $100,000 is transferred over into say it went into your account, if you tried to give that money right back to the lender, you’re going to pay possibly $4,200. Right? So there’s a cost in just the transaction.

Tim Ulbrich: And I think that origination fee, as you mention in the article, is often overlooked but so important, especially the students listening, that you understand how that is calculated and roughly what that may be in terms of the impact. You know, just this past week, I had the opportunity to speak with the vet med students here at Ohio State, and as we all know, the way these loans are typically presented to you, it’s hey, here’s the max. And sign the line, and the rest is good. And so often students will say, “Well, why not just take that? And then if I have anything left over, I’ll return it or whatever. At some point, hopefully I’ll be able to pay it off.” And I think what you’re describing here is so important is that right off the bat, you have that origination fee that anything you can do to minimize the amount that you borrow from the beginning is going to help you in the long run.

Joey Mattingly: Yeah. And then one of the things that — and I always go back to percentages and thinking about percentages versus whole numbers. And I can’t take credit for this, I actually, when I think of the whole reason why my whole life has changed when I think about percentages versus whole numbers, is because of an independent pharmacist in Kentucky that was originally from Alabama, so he’s got kind of an Alabama accent, and I would always tell him, I’d say, “Hey, Leon, we’ve got this medication. We’ll make 80% gross profit on it. We’ll make 80%. I’m so excited.” And he’s like, “Joey, how many dollars will I make? How many dollars will I make?” And it blew my mind. Tim, I had an MBA. I was the smart business guy. And it was this independent pharmacist for 25 years that said, “Joey, I need to make this many dollars,” dollahs, as he would say. So when you think about that for a second. As student loans increase or as the cost of tuition, the cost of room and board, all those other costs, as it increases, the percentage may stay the same, but what your total dollar amount that you need — so in a way, like guess what? If I’m a loan, if I’m giving out the dollars, if I am the person giving out the dollars, what does it cost for me to — as you’re thinking about it, like they’re able to make more whole dollars, not just yeah, that’s 4.2%, but it’s part of that incentive for the numbers to just get bigger. So anyway, we can move on to term, but I just wanted to, as we think about this, yes, it may be 1% or 2% or 3%, it may seem like nothing, but as we see the numbers get bigger and bigger, 1% and 2% can make a big difference.

Tim Ulbrich: And I think that’s a great point, Joey. You know, and we’re not talking here about tuition, whole separate — as you mentioned in the article — whole separate issue, whole separate topic for a different day, certainly a factor, but to your point, when you talk about something like an origination fee, we often see these presented separately where we’ll see OK, tuition has gone up x% this year, but it’s not just the increase in tuition, which is then going to increase what you need to borrow, it’s the increased amount that you’re going to borrow, which also increased your origination fees and then, of course, as we’re going to move onto here, the term in which you’re borrowing as well as the interest. So take us through those two terms.

Joey Mattingly: Yeah, so now the term. This is the one that we — when I say we, as graduates, as students, when we’re signing up — or not when we’re signing up, actually. So the difference — the interesting thing about student loans is that you don’t determine the term until you graduate. I think that’s something very different than when you’re buying a car, right?

Tim Ulbrich: Yep, right.

Joey Mattingly: So when you’re buying a car or buying a home — and often, when we’re buying a home, there’s opportunities to refinance and everything, which we can do that as well with student loans. I think you’ve got plenty of topics on that, you know. But when we get to the term, that’s just the time. That’s just the time that you’ve agreed to pay back the principal, principal and interest, I guess, over a period of time. And so what’s common is for student loans is somewhere between 10 and 30 years. 30 being the longest, which oddly enough, they have like the extended repayment plan is set at 25. So we often see 10 and 25 are common. But then I think there are other plans with the Department of Education where you can extend it out to 30. And that leads — and so we get the time built in. And again, we decide, you kind of get that exit counseling at the end of school. And so that’s often where you’re signing up. And think about what’s happening with some of our graduates right now. Tim, when you and I graduated — and we won’t talk about how long ago that was — but it was in a time when there was still a period where pharmacists were getting maybe bonuses, maybe we were getting multiple job offers, and let’s be real for a moment, we know a lot of our students right now aren’t in the same boat that we were in a few years ago. And so if I had been aggressive, which I wish I had gone back and was a little more aggressive at that time and taken a 10-year note, Tim, I just had my 10-year pharmacy school reunion this past, I guess, what was it? Two weekend ago back at the University of Kentucky. If I had not — so I initially signed up for a 25-year repayment plan. And I had been in that repayment plan for a few years, and after a couple years realizing oh my gosh, my principal isn’t going down. And so that’s what — and again, I would like to think I’m a smart person. I know how to do a lot of math, I’ve got the business and the degrees I think to say it. But a lot of it’s not about whether you can do the math, it’s about whether or not you’ve got the mental —

Tim Ulbrich: The behavior.

Joey Mattingly: The behavior. Will you do it?

Tim Ulbrich: Absolutely. And you had me reflecting back on when I graduated and the offers relative to the salary, and I’ve always tried to show graphs on debt-to-income ratio, debt-to-income ratio, debt-to-income ratio, where have we gone in the last 10 years? And if I’m correct off the top of my head, I think the median indebtedness for a pharmacy graduate in 2010, I believe in 2010 was $100,000. And so here we are now in 2019 and that now is north of $170,000, which you look at what’s happened, the Bureau of Labor Statistics I think for all pharmacists’ median salaries is a little bit misleading to the reality of the job market of somebody coming out today, but I would argue the entry-level community pharmacists in 2010 probably was making more than they’re making here in 2019, but we’ve seen the debt numbers go in the exact opposite direction. So you know, as you and I wrote an article on before and we’ve talked about in Episode 005, what’s the purchasing power of an income? And I think what we’re getting to here is when you think about your debt side of the equation, you’ve got what you borrowed to begin with, your principal, and then you’ve got the interest that’s accruing while you’re in school. And for unsubsidized loans, obviously that’s happening along the way and ultimately, we get to the point where those capitalize and it grows baby interest over the term, which as you mentioned is the repayment term, anywhere from 10 up to 30 years. So interest rate then is the next variable we’re looking at. So just basic definition of what is interest?

Joey Mattingly: Yeah, so this is what — if you think about it, this is sort of what the company that’s giving you the loan, they’re taking interest as sort of to cover their cost. So this is the amount that’s above, you know, I guess the way the U.S. Department of Education, is the cost of borrowing that money, it goes to the lender. And so if the lender is a nonprofit, then in theory, you’re just going to have the revenues meet the expenses and no additional profit. If the lender is a for-profit, so then we think about our private banks, we think about payday loan lenders or whatever, you’re playing with that number. Those interest rates are what puts food on your table as a lender. So anyway often we think about it annually. But I think it’s important to consider how — and again, as we roll into the more complicated thing, I think some folks can get down principal, term, and interest rate. It’s when we start to amortize the loan is when things get fun. But that’s where I really think we can have a big impact when we discuss amortization. But for student loans, it should range between 3-8.5%, which when you hear 8.5%, you’re like, it’s not our parents’ interest rates. And so that comes up. I make sure I have that conversation with folks is that I pull up 1980s numbers because I think about my father graduated high school in I think ‘80-’81, something like that, and as he was thinking about college, if you took out a student loan, comparatively or relative, you could get a 3.5%, 4%, 5% loan. Auto loans in the early 1980s were something like — it got as high as like 20% at one time.

Tim Ulbrich: That’s crazy.

Joey Mattingly: And so thinking about that, if interest to buy a house was 20%, then yeah, we’d say 8.5% is not too bad. But I just think it’s really important for us to understand that the area of interest rates — and that’s, again, the whole part of this exercise, the whole bulk of this article, but just to understand that these aren’t our parents’ interest rates. And so often, we think about our parents as our sometimes the folks that give us advice, you know? And we hope that they’re — and they’re trying, they want the best for us and are trying to give us some advice on how we can handle things. The number of times I hear people talk about how good student is, man, it’s something that — I don’t know how you feel about it, Tim —

Tim Ulbrich: I’m with you, I’m with you.

Joey Mattingly: I just don’t like calling it a good debt. Like you know, let’s talk about the math. Let’s do math first.

Tim Ulbrich: Yeah, let’s talk about the math, let’s talk about the career path, let’s talk about what you’re trying to achieve, what’s the ROI? I mean, so many factors that go into that. I mean, I think it’s a blanket statement that probably gets assumed too easily and too often. And I love what you had to say about advice we get from our parents because that’s something I hear so often from others, and this really gets to the concept of anchoring where when we talk to somebody and they’re like, “Oh, well, back in the day, my interest rates were 17% to buy a home.” All of a sudden, you look at 7% or 8% and you think, oh, not too bad. But even in that range you give in the article of 3-8% or so, as we know, as we’ve run various refi numbers and scenarios, having a 5% versus a 7% when you’re talking about $200,000 of debt, that’s a big, big deal. And so really digging in deep, especially for those that are in active repayment, understanding your options about what am I looking for in a repayment strategy and for those that are currently in school, really understanding and looking at what can I be doing right now to try to minimize any of the indebtedness while I’m in school. So Joey, in your article — so now that we covered the total cost of loans, which is inclusive of principal, term and interest rate — in your article, you mentioned that “for PharmD students, focusing on the impact of interest rates on their monthly payments and the total term (amortization) for their student loans may be the most beneficial approach to helping them achieve their personal finance goals. So there’s that term, amortization. So talk us through what you mean by that. Why is that the case?

Joey Mattingly: Yeah, so I highly recommend if this is the first time, if you’re an audience member listening and you’ve never really, you’re not familiar with the word amortization, get on the Google right now and start learning what amortization means. And download a free, I keep a free amortization calculator on my phone one, because I’m a nerd, but two, I mean, so it doesn’t matter what it is, if it’s a car or if it’s a house or whatever I’m in the process of discussing, I like to just throw out, look at the amortization schedule, play around with the numbers, see what it looks like if interest rates change, if terms change. So basically, the amortization schedule is simply the — when a lender is lending money and you’re agreeing to pay this back, it’s set up in a way so that the monthly payment is a fixed amount. And so you calculate it out so that the principal and the interest are captured over however many payments it is. And so it’s actually, there’s not a function of time, it’s a function of really how many payments and how frequently is the interest being captured. But typically, we think of it as annually, and then within that year, often you’ll see like 12, each month you’ll see things. So wanting to know how frequently does the interest start compounding because that’s something as well. So anyway, I don’t think listeners have to become experts in it, but I think getting to an amortization calculator quickly is a smart thing to do. Like being able to just pull up one of these calculators that has the different variables for you and then start with something simple, you know? Put $100,000 in it, put 5% interest rate, and just change the term from 10 to 20 years or change the term. And then look at the schedule, so the amortization schedule will map out all 120 months in the 10-year loan. And then if you switch it to 20 years, it will map out all payments for the 240 payments, the 240 months. And so that allows you then to break out what’s going, each month, how much is being contributed to the interest? And how much is being contributed to the principal? And this kind of really breaks down the nuts and bolts of your loan. And so that was sort of the purpose of this, getting into this and then walking through an example of — I use the class of 2017 as an example, and we had a little over $2 billion in student debt potentially estimated for this class. And you know, so we take that $2 billion and start thinking, alright, what if the average interest rate was 6%? And we start plugging it in. So that’s sort of what I hope folks as they follow along, they don’t get lost in the math. It’s meant to stay simple, but we wanted to use a real-world example to talk about how just changing those numbers from a 6% interest rate and then changing the terms or whatever, what would happen? And then if we were to hypothetically lower the interest rate, what would happen?

Tim Ulbrich: Yeah, and I echo your recommendation to our listeners. If you have not dug into an amortization table before, please do. Whether it’s your student loans or buying a home, I think it’s really powerful to be able to see if you’re on a 30-year type of mortgage repayment, for all of those months, how much would be going toward principal? How much would be going toward interest? And for those of you that are making those payments, you know very well when you get those statements, you’re like, man, I send in a big check, but only a little amount actually went to pay off the principal on the loan. And I think it’s a small but very important behavioral move that as we talk about over and over and over on this podcast, the more educated you become, the more empowered you feel, the more informed decisions that you make. And I think looking at an amortization table is just a great example of doing that versus you just blindly accept the debt for what it is. So Joey, let’s dig in. You talked about in the article, you walked through a case study using the class of 2017. You used the projections and the data provided by the AACP Graduating Student Survey, which we’ll link to in the show notes for those that have not seen that before. And obviously, those numbers have even gone up here in the last couple years. But you noted a total of indebtedness — if we assume across the entire cohort, all the graduating students, a little over $2 billion. And you then walk through essentially three different assumptions: one with an average interest rate of 6%, one with an average interest rate of 3%, and one with an average interest rate of 1.5% to determine what would essentially be the savings to the borrower and thus, the cost, I guess for lack of a better word, cost to the federal government if we were to move in this direction of actually lowering rates. So tell us more about what you found when you ran through that scenario.

Joey Mattingly: Yeah, so — and again, as the title of the paper sort of signifies, that there’s a lot of discussion around what if we forgive the debt, forgive the debt, forgive the debt. And I just thought that that is a pretty big jump. And whatever your politics are, that’s fine. I just want to make sure that we have a discussion around the issue of potentially the interest rates being problematic. And if we were able to — whether it’s subsidize or come up with a way to offset the interest, we could actually show gains, the students could — graduates, I should say — can make their payments, see their principals coming down, and pay off their loans. And from a budget perspective — and this is probably more our article that we did a couple years ago when we talked about what that payment is and budgeting out that student loan payment — and so as you walk through the scenarios, at 6%, this $2 billion in debt — I thought it was interesting to, I wanted to point like what if it was the entire cohort of students? Because you know, maybe the CEO of CVS Larry Murlow’s listening right and he’s thinking, hey, what can we do to help our pharmacists? So maybe CVS or Walgreens, one of the big boys, will step in and say, what if we wanted to help out? Have the Walgreens, CVS loan program.

Tim Ulbrich: Absolutely.

Joey Mattingly: So say that we were looking at that. The interest paid at the full term, so over 10 years for someone if we average it out at 6% and students had a mix of 8% and 3%, whatever — I like to keep the numbers simple for an article like this, so I just picked 6% — that we would see on the $2 billion about $677 million of interest would be collected over a 10-year period. And then if you were to take that out to 25 years, so if all the students picked 25-year terms, the total interest paid over a 25-year period would be $1.9 billion. So you actually, you essentially double —

Tim Ulbrich: Double, right.

Joey Mattingly: Double the principal. I mean, so you know, it’s interesting — and that’s just extending the repayment. That’s not messing with the interest. And then I started saying, well, what if we cut in half. What if we cut it down to 3%? 3% is like — in economics, we love that 3% number for an inflation number.

Tim Ulbrich: Inflation.

Joey Mattingly: Yeah. Because it’s probably more accurate on the whole for different types of areas. So anyway, let’s just say we were able to cut it to 3%. Well, as you’d imagine, when you start working out the math, it has a significant impact. Actually, one of the things I probably should point out is the monthly payment for students, the average monthly payment at that 6% level over 10 years is $1,815 a month. Now, imagine a resident trying to pay that. Imagine a pharmacist who took a full-time job but their hours got cut to 32 hours a week, imagine now paying that $1,815 a month.

Tim Ulbrich: For 10 years.

Joey Mattingly: For 10 years, right? So just cutting the interest, we knock $300 off of that 10-year scenario. And as we continue to cut, we cut $400 a month off if we — and I wanted to show an ultra-low, like what if it was just 1.5%? What if it was just enough to like this is the CPI? Economists would argue that’s too low for inflation, but let’s just say we had some philanthropy or something involved to offset so we got some dollars in interest. Because remember, the interest is the cost of the borrowing, the cost of the $2 billion. So anyway, just in doing that alone in a 10-year scenario, you’re knocking $400 a month off for each student. And when we look at the 25-year term, it’s that same kind of you’ll see about a $400 a month knocked off their payment, but you’re going from $1,000 a month to $654 a month in terms of your payments. And a lot of pharmacists can afford, we’ve gotten used to paying those $1,000-1,500 a month payments. So if you’re paying $1,500 a month but your interest, you’re actually able to get it done in 10 years, that’s — I don’t know, I just wanted to show that you can have significant impact in bringing it down. And one of the things I wanted to show in the article was I wanted to show a picture of just how the interest in terms of the amount of principal paid comes off. It’s not a linear line. It’s curved because your principal comes off at a faster rate later in the term. And so I think it’s disheartening for a student or a graduate in the first five years out because in the first five years, if you’re even on a 10-year repayment, you’ve only got about 40% paid off. It’s not exactly half, you know? In a way, it just I think — doesn’t it feel a little disheartening when it feels like it’s taking a long time to come off?

Tim Ulbrich: It does. It’s like the first five years of a mortgage. Same thing. You see those statements, as I alluded to, and the student loans, exactly. You’re making these big payments and you feel like you’re not making the momentum that you should. And this is where we hear from people, especially those that decided to more aggressively pay them off, whether that be a refi or not, they’ll say things like hey, I made an extra $3,000 payment. Boom, you jumped on the amortization table. That goes directly toward principal and then they start to feel like they’re getting a sense of momentum. And separate conversation for a separate day, but I think what’s interesting — and I would encourage our listeners, again, check out the article, this is all in Table 1 where you can see the data, but what we’re not even talking about here is what’s the opportunity cost of what that money could be doing? So when you talk about a 10-year term and you talk about going from a 6% rate to a 3% rate, essentially that would take it down to a little over $1,800 a month to $1,579 per month. Well, what happens then if that difference you invest in your 401k, your 403b, your Roth IRA, you make extra home payments, you’re investing in growing businesses? I mean, what’s the value of that? And how do you even start to factor all of that in? So what I want to wrap up on, Joey, is I thought you did a really nice job at the end of summarizing really four reasons that you think this concept really is in favor of supporting lower interest rates over debt cancellation. And you talk about resentment, incentive, realignment, you talk about decision-making uncertainty, and public support for lower rates. So let’s walk through those briefly. When you say resentment, what do you mean by that? Why would this type of plan be more favorable compared to something like debt cancellation?

Joey Mattingly: Yeah, so this is the — I mean, honestly, if I could weight them, this is probably like I’d say 50-60% of one of the things that we need to really consider is that while — and I even put, I don’t know if you noticed in the paper, you know how, so for when we write academic papers, we put out our conflicts of interest?

Tim Ulbrich: Yes, I saw that.

Joey Mattingly: I put in my conflicts of interest, I said my wife and I have student loans. I was like, it’s absolutely — like I absolutely have a conflict in writing this paper. Now in the case, I’m actually arguing against my own best interests, you know. But I’m saying that so I have a lot of friends who have sacrificed or made choices in their life where whether it was maybe not buying a home right away, maybe even delaying having children, maybe it was whether they stayed in the same car for an extra 10 years and kept it going or whatever it was, the sacrifices that they made, didn’t go on trips or whatever, so that they could put larger chunks of their income right on top of those students loans and get them paid off. Now imagine my classmates that I love to death, we have grown through pharmacy together, find out that magic wand is waved from the federal government or whoever, and your loans are paid. Right?

Tim Ulbrich: Right, right.

Joey Mattingly: Now, they would probably think for the last 10 years, oh my gosh, they could have been investing in the stock market, they could have started a business, they could have done all these things had they known. And now, I totally agree that yeah, that would feel really, that would feel kind of challenging. Now, for some would say, well, you know, I’m still in principle OK with getting rid of the student debt just because you’re against, you know — maybe your politics are that you’re against students having this much debt to begin with. That’s another discussion. I just think that that’s an unintended consequence of this, and I think in a way, it sort of polarizes us. We get into these bigger philosophical discussions about what’s fair. And I just, I think that we can get past that. So I just wanted to put that out there. I think that’s a big one.

Tim Ulbrich: And I would agree with you. I think your percentage weighting is accurate. We actually had this out on the Facebook group, on the YFP Facebook group, a couple months ago when the candidates’ forgiveness/cancellation plans came out. And the word “fair” was by far the word that kept coming up over and over again. And some people were, as you mentioned, even though I’ve gone down that route, I still am in favor of this for various reasons. But I would say largely, many people had this concern, well, what about the people who have already paid this off? Is this fair? And that word, “fair,” did keep coming up. So the second thing you mentioned is incentive realignment. Tell us about that.

Joey Mattingly: Yeah, so I’ve shifted to become more of a health economist over the last few years in my studies and so incentives are something that I look at all the time and what are the things that the healthy behaviors that we think about, but anyway, in this particular case, imagine a policy shifting that saying, OK, we’re forgiving student loans. Does that tell future students or people who are thinking about doing another degree or whatever it may be to take out the maximum amount when maybe they don’t need the maximum amount? Because oh, hey, maybe it will just be forgiven later. And so I think there is a potential unintended consequence that may make it to where it’s not — we’re not aligning the incentives appropriately. And then one of the things I think would be kind of odd — again, this is theoretical, I don’t know this for certain — but think about some universities right now. We have a lot of universities, organizations, that they recognize that this is a problem. And I think some — and again, we could have a whole other discussion on whether or not schools are being more efficient — but that’s one of the things I do think some schools are working to become more efficient. And what if their consumers, the people paying the tuition, all of a sudden come into a windfall of more tuition dollars? Does this sort of put them in a situation where they’re thinking, oh, well, no sense in being efficient, anyone can pay for it?

Tim Ulbrich: Yeah, does it de-incentivize the efficiency? And you wrote a piece on the efficiency of the PharmD education.

Joey Mattingly: I’m just trying to get more citations.

Tim Ulbrich: We’ll link to that in the show notes as well. So the third point you make here — and again, we’re talking about reasons to support lower interest rates over debt cancellation — is decision-making uncertainty. What do you mean by that one?

Joey Mattingly: Yeah. So and I wanted to give an — I tried to give an example of myself. You know, my wife and I, as I stated, have student debt balances as we’ve worked to pay these things off. And we have a mortgage, we bought a home. Well, with all of this stuff happening in the politics, the national politics, Ashley and I have been working hard to take extra dollars putting on our student loans. You know, you listen to Your Financial Pharmacist, we’re trying to follow good behaviors and do those things. Well, for the next 12-24 months, Ashley and I have had the discussion, should we put that extra money in a savings account or somewhere or even towards our mortgage at least until we figure out what’s going to happen? Because you know, for those who are holding debt, I mean, come on. Like that would be dumb financially for me to not consider the prospects of that debt being paid off. And then if it never happens, if my debt doesn’t get magically forgiven by whatever policy, then if we invested wisely, we should be able to take that money from our savings and then put it on the debt. But in a way, that’s going to cause more interest rates — we’re going to pay more interest over that in the short term. But it’s kind of one of those risk things. But I just think it causes some uncertainty in decisions and whether that’s good and bad, I just think that it’s a negative to like look, while we’ve got this uncertainty, we don’t know what’s the best thing for our money.

Tim Ulbrich: That’s a great one. And the last one, which is of course of interest, you know, what would be the appetite for something like this in terms of the politics and the public support? And you addressed just that, the public support for lower rates. So what did you find in the literature and how this compares to debt cancellation?

Joey Mattingly: Yeah, so you know, when you think about it, it shouldn’t be that surprising when we think of if you ask in a general survey about interest rates on loans, no one likes interest rates. Like why would anyone — like I’ve never met a person that’s like, man, you know, I think they should raise our rates. I feel like I should be giving more to the financial institution. And so now I’m assuming the 12% that disagreed must work for a lender, right? Because like why would you be against lower rates? Now, I think that’s going to be the flip side is when you’re thinking about if folks are trying to lobby for lower interest rates or even debt forgiveness, actually, either way, you’re potentially destroying an industry where people work. OK? So those interest rates are paying people’s salaries. They are paying companies, lenders, it’s going to those groups. And so you’ll eliminate the need for those groups. But let’s not forget that there’s people behind that. And so that also means lobbying groups or whatever. There are going to be companies that are going to be very much against anything like this, that may even if we all believe as a society it’s good for us, there’s special interests that will be against it. But overwhelmingly, like from a general population standpoint, I think this is something we can all get behind. And Democrat, Republican, whoever, like you can support this without it being too political. And that’s one of the things too because I know this argument has gotten so political. And once you put on your red and blue hats, like you might as well stop talking.

Tim Ulbrich: Yeah, and this reminds me, Joey, I recently had the pleasure of interviewing Dr. Daniel Crosby, who wrote the New York Times bestseller, a couple books, “The Laws of Wealth,” and most recently, “The Behavioral Investor.” And he talks about the contentious debate of passive versus active investing. And he actually proposes an alternative, kind of a third, takes the best from both worlds. And this reminds me a little bit of that. You know, I think that when some bold proposals come out like debt cancellation or loan forgiveness, there tends to be OK, I’m on the yes side, I’m on the no side. And we forget about what other solutions that exist. And I think your article did such a nice job of OK, what other viewpoints are there? And is there a solution that can get us all on board of trying to move the needle on this rather than something that may be more polarizing that actually never moves forward. So Joey, I appreciate your time. Again, for our listeners, what we’ve discussed is a commentary that he wrote and authored in the American Journal of Pharmaceutical Education titled “Before We Talk About Student Debt Cancellation, Can We Talk About the Interest Rates?” So Joey, I greatly appreciate your time and your work here and the support that you’ve had for what we’re doing over at YFP.

Joey Mattingly: Thank you, Tim.

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