November 2022 – Your Financial Pharmacist

YFP 283: How to Optimize Your Tax Situation with Sean Richards, CPA

Posted on by Caitlin Boyle

YFP Director of Tax, Sean Richards, CPA, EA, talks about how to optimize your tax situation as a pharmacist. He discusses tax basics that every pharmacist should know, the critical distinction between tax planning and tax preparation, and how to prepare for the year-end to put yourself in the position to have a headache-free tax season.

About Today’s Guest

Sean Richards, CPA, EA, received his undergraduate degree in Corporate Finance and Accounting, as well as his Master of Accountancy, from Bentley University in Waltham, MA. Sean has been a Certified Public Accountant (CPA) since 2015 and received his Enrolled Agent certification earlier this year. Prior to joining the YFP team, Sean was the Senior Treasury Manager at PRA Group, a global debt buyer based in Norfolk, VA. He began his career at American Tower Corporation where, over 10 years, he held several positions in audit, treasury, and accounting. As the Director of YFP Tax, Sean focuses on broadening the company’s existing tax planning and preparation operations, as well as developing and launching new accounting offerings, including bookkeeping, payroll, and fractional CFO services.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, welcomes YFP’s Director of Tax, Sean Richards, CPA, to the show to discuss optimizing your tax situation as a pharmacist. During the show, they cover areas for optimization, including tax basics that every pharmacist should know regardless of their income or stage of career. The discussion covers basic tax terminology, the federal income tax formula, and why we don’t have a better understanding of tax fundamentals in general. Sean explains AGI (Adjusted Gross Income), how to calculate AGI, an overview of deductions and credits, and how they differ in their impact on your tax picture. Sean takes a moment to explain the difference between marginal and effective tax rates, how bunching charitable donations can impact tax optimization and the triple tax benefits that exist with HSA Accounts. Sean details the distinction between tax planning and tax preparation with a comparison that listeners will enjoy. The discussion leads to common tax strategies that many pharmacists currently employ to optimize their financial situation and things to look out for to avoid common mishaps and mistakes with tax. Sean answers a question on the Inflation Reduction act, providing examples of tax benefits that listeners might take advantage of, and closes out the episode with ways to prepare for the year’s end and put yourself in a position to have a headache-free tax season.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRO]

[00:00:00] TU: Hey, everybody. Tim Ulbrich here, and thank you for listening to the YFP Podcast, where each week we strive to inspire and encourage you on your path towards achieving financial freedom.

This week, I had the pleasure of welcoming YFP Director of Tax, Sean Richards, onto the show to talk about how to optimize your tax situation as a pharmacist. During the show, we discuss tax basics that every pharmacist should know, regardless of income or stage of career, the important distinction between tax planning and tax preparation, some common tax strategies that pharmacists are employing to optimize their financial situation, things to be on the lookout for where there’s common mishaps and mistakes, and finally how to prepare for the year end to put yourself in the position to have a headache-free tax season.

Now, at YFP, we know that filing your taxes and figuring out how to optimize your tax situation can be stressful and overwhelming, and that’s why YFP Tax is opening up its tax planning services to more pharmacist households this year. Unlike other firms, YFP Tax isn’t focused on just completing your return. Rather they provide value care and attention to you and your taxes. Because they work specifically with pharmacists, they are familiar with aspects of your financial plan that have an impact on your taxes like student loans, benefit packages, side hustles, and more. You can visit yourfinancialpharmacist.com/tax to learn more and to join the waitlist for the 2022 filing season. Again, that’s yourfinancialpharmacist.com/tax.

[INTERVIEW]

[00:01:29] TU: Sean, welcome to the show.

[00:01:30] SR: Thanks for having me. I’m glad to be here.

[00:01:33] TU: Excited to have you officially part of the YFP team, leading our tax team and efforts. I know some folks listening may not be aware of who is Sean and what is he doing, as it relates to the YFP team. So give us a brief intro to, Sean, some your background and the work that you’re doing with YFP Tax.

[00:01:52] SR: Sure, yeah. So I mean, I wouldn’t be surprised that people haven’t seen my face yet. But it’s crazy because I’ve only been here for about three months, and I feel like I’ve met so many people and done so many things. It’s been awesome. But, yeah, I’m Sean Richards. So I’m the Director of Tax at YFP Tax, CPA, EA, my most recent certification there. So for those who don’t know, EA is an enrolled agent. It’s the IRS certification. It kind of gives you a leg up with talking to the IRS.

Like I said, I’ve only been with the YFP team for a few months now. I worked at a large corporate for a while. They’re doing audit, accounting, treasury, a couple of different functions there. I briefly had another job before this. But, yeah, now I’m leading the YFP Tax team. So we have some tax offerings that we focus on, sort of more direct to consumer, where we’re doing prep tax planning, some of the things we’ll be talking about during this call.

Then we also have a completely different sort of bookkeeping, payroll, all the way up to fractional CFO services, if you’re doing more of the side business or small business type thing. So, yeah, I’m really excited to be here and be part of the team.

[00:02:55] TU: Yeah. We also are excited, grateful to have you on board. It’s been fun to see the momentum of the work that you’ve been doing in just a couple months. It feels longer than that and that’s –

[00:03:05] SR: I said the same thing but in a good way, not a bad way. It feels longer but because it’s been a lot of good fulfilling work, not in a bad way.

[00:03:12] TU: You’re going to be hearing a lot more from Sean on the podcast and webinars, probably on the blog as well. As we’ve talked about on the show many times, tax is such an important part of the financial plan, one of the reasons that we’ve brought these services in house, so we can make sure that the financial plan is humming with the tax plan. Because of that, we’re going to be focusing on even more content than we have done in the past, as it relates to tax strategy and tax planning.

The theme of this show today is really how to optimize as a pharmacist your tax situation. Our hope is whether you’re just getting started as a new practitioner, whether you’re mid-career, whether you’re further along in your career, maybe retirements on the rise in that. Regardless, you’ll be able to take one or two things away that you can apply to your situation, right? Whether we like it or not, taxes ain’t going away, right? It’s not like student loans where we pay them off and they’re gone. This is something we need to be thinking about throughout our career and how we can optimize. As Tim Baker says, we want to pay our fair share but no more. So we’re going to talk about how we can best optimize our tax situation.

The first thing, Sean, is really understanding the tax basics. We’re going to talk about some specific formulas and terms that we need to make sure we understand, so we can appropriately prioritize that as a part of the plan. But first off, why are most of us, myself included, deficient in our basic tax understanding, right? We should all, I feel like, have a more foundational understanding, especially since we’ve got to pay these every year. Why don’t we have that?

[00:04:45] SR: Well, we could probably have a completely separate hour-long conversation about lobbying and all sorts of things from that standpoint. But, I mean, I think it really comes down to, I mean, I’m a product of the public school system, and I didn’t learn about taxes in school. I feel like it’s something where it’s just some schools might offer basic finance classes and how to open up a credit card or something.

But taxes is something that doesn’t really come up. It’s one of those things that you just sort of join the workforce, and all of a sudden it’s expected that you’ll know what to do. Or you’ll have a guy or your dad or somebody will have a guy who can do it for you. But, I mean, I went to a business school, and it wasn’t even until my third year or so that I even took a tax class, where you kind of get into some of this stuff.

So it really is something that isn’t fundamental as part of the education system here. As unfortunate as that may be, that’s why I’m hoping that I can kind of give some background to folks, so they’re not completely lost when it comes to the end of the year.

[00:05:35] TU: Yeah. I don’t think it’s a super exciting topic. Even in Econ 101, like we did some fun investing games and other things. I don’t remember learning about tax. Or maybe we did, and I just zoned out. But it certainly isn’t ever present in our educational system. I’m trying to teach my boys a little bit about taxes right now, and I’m having very little success. Hopefully, Sean, maybe they’ll hear your voice and listen a little bit closer.

Let’s start with the federal income tax formula. How do we ultimately get to the final number of what we either owe or we receive back as a refund? Why is it so important that we understand this formula?

[00:06:12] SR: One of the reasons why it’s so important is that a lot of these terms get thrown around interchangeably, or they’re used as buzzwords. You’ll be hearing car commercials, and you hear kind of REITs and all these different things thrown out there. Everything’s sort of used interchangeably. So if you don’t really understand how the basic formula works, you might misinterpret something, or you might think that somebody’s talking about something that they’re not talking about.

The basic formula is you have your income. You take out anything that’s tax-free, so things like municipal bond interest, something like that. Then you have your gross income, so not adjusted gross income, your gross income. Then we have what we call above the line deduction. So some of those would be like IRA contributions, things like that. Those are the what we call above the line because the magic line is what gets you to that AGI.

Once you take out those above the line deductions, you get to what I just referred to, the magic number of AGI, which is an important one, and we’ll get to it in a little bit. But, I mean, that’s something where a lot of different phase outs and things kind of come into play. So that’s a really important number to have in the back of your mind.

[00:07:13] TU: Yeah. I think if folks, Sean, can really look at their tax returns, again not super exciting, right? But if you look at the 1040, if you start to understand some of these terms, and you can visualize like these above the line types of things, all of a sudden, the strategy pieces start falling into play, correct?

[00:07:30] SR: Yeah, exactly. A lot of people just have their tax return. They hand a box to their accountant. At the end of the year, he says you owe this much, or you’re getting this much in a refund. You say awesome, shake their hand, and you’re done. But all the things I’m talking about right now, I mean, your return could be 100 pages long. But if you look at that front page, you’ll be able to see these numbers that I’m talking about to at least give you a better understanding of how some of these things work.

Once you have your AGI, then we get into deductions. I want to be careful here because this is one of those ones that gets very often thrown around interchangeably. So deductions, which can either be itemized or the standard deduction, depending on which one’s larger in your individual circumstance, are, what, take your AGI and get you down to the taxable income. That’s what actually ends up getting multiplied by your tax rate at the end of the day. So those are things to get you to your taxable income amount.

Then you multiply by whatever your tax rate is. So there’s marginal rates and stuff, which I’m sure we’ll talk about in a little bit. But you take your taxable income, multiply it by your tax rate, and that gets you to what you theoretically will owe or what you’ll get back. Then we get into what we call credits. Those are, again, kind of used interchangeably or often confused with deductions.

Credits dollar for dollar reduce what you owe at the end of the day. Whereas a deduction reduces your taxable income, you’re really only saving 30%, whatever your tax rate is on that deduction amount. So if someone says, “Oh, I’ll write it off,” you’re only really saving the times your tax rate portion of that. A credit is dollar for dollar. So if you’re able to take advantage of credits, you can really have a big impact on reducing what you owe at the end of the day.

[00:09:07] TU: Awesome. So you defined well deduction versus credit. Again, as folks are listening, pull up your tax return. Again, I think as you visualize this, it starts to come to life a little bit more. Let’s break down further AGI, and then I want to come back to marginal and effective tax rates, two terms that you threw around that are important that folks have a good understanding of.

AGI, adjusted gross income, tell us more about that in detail. This comes up all the time, right? You saw this recently with some of the debt cancellation news. What’s your AGI? We talk about it as relates to different strategies with how we invest or how we save. What is AGI and why is it so important?

[00:09:43] SR: So AGI, again, is your gross income. So that would be your income less any of the non-taxable stuff like municipal bond, just like I mentioned. Less those above the line deductions. So that would be things like student loan interest deductions, contributions to the HSAs, traditional IRAs, things like that. That’s what gets you to that AGI. Why AGI is so important is because, like you just mentioned, a lot of different policies or different credits or things like that are based on that number. So they’ll say, “Hey, you’re eligible for this credit if you’re in this AGI range. Or if you exceed this AGI, you’re no longer eligible for this credit.”

PSLF student loan relief is a big one. So they’ll say, “Hey, you’re eligible for this if your AGI is within this range or under this amount.” So that’s why it’s really important to have that number. Of all the numbers, that’s probably the most important one to have, just sort of handy when you’re looking at these different things.

[00:10:36] TU: How about your marginal versus effective tax rates? What’s the difference and, again, why is this important to understand?

[00:10:42] SR: So marginal is – When people say tax bracket, that’s usually what they mean. They mean marginal when they’re talking about that. So that’s where you’re sitting there, and you’re saying, “Oh, I’m in the 25% tax bracket. If I make another dollar, I’m going to be in the next tax bracket. I can’t make any more money. I’m going to owe more taxes.” So it doesn’t really work out that way because for each of these different brackets, you’re being taxed at the marginal rate for that particular bracket. If you average that out, that’s your effective rate at the end of the day. If you take what you actually owe in taxes versus what your income is and do a simple mathematical equation, you get your effective rates of what you truly are paying.

Again, when you’re looking at your marginal rate in your bracket, that’s important for things like deduction. So if you say, “Hey, if I’m going to take this deduction,” if you want to do a quick calculation of what that would be for a dollar value for you, you multiply that by your marginal rate. But if you’re really thinking about it saying, “Oh, I don’t want to make any more money. It’s going to put me into the next bracket,” you got to really think about your effective rate when it comes to something like that.

[00:11:43] TU: Yeah. Usually, we want to be careful about not making more money because of taxes, right? So if we’re making more money and we’re paying taxes, that’s not necessarily a bad thing, right? We want to –

[00:11:52] SR: It’s a good thing.

[00:11:53] TU: It’s a good thing.

[00:11:54] SR: Some would argue that the more money you pay in taxes, the better that you’re actually doing at the end of the day, despite what anybody would say about trying to cheat the system or anything. You tax bill shows how healthy your finances are.

[00:12:06] TU: Yeah. [inaudible 00:12:07] and I wrote a book recently that he makes an argument that your number one KPI, key performance indicator, is the amount of taxes you pay to the IRS each year. I think the point is a good one, right? Obviously, you want to optimize and be as tax-efficient as possible. But if we’re able to earn more money, we’re paying more taxes. Again, that’s not a bad thing. That’s the first bucket here, understanding the tax basics.

The second thing, Sean, is tax planning versus tax preparation. It’s something we have talked about on the show before but I think, honestly, something we can’t talk enough about because we confuse sometimes the filing versus the actual strategic look, as it relates to the tax planning and how we can optimize that as part of the plan. I’ve heard you presented this talk before and give a really cool example of a film director and a film editor, and how that helps highlight the difference between the two, tax planning and tax preparation. Tell us more.

[00:13:01] SR: Yeah. So it’s actually kind of what you were just saying, where you want to pay your fair share. The more you pay in tax at the end of the day, whatever your tax bill is, it kind of shows that you’re doing better, right? But at the same time, you don’t want to pay more than your fair share. You don’t want to pay more than you need, just because you’re not paying attention or for whatever reason.

The way I like to think of it is tax planning is like a film director. So film director is watching the actors. They can affect change as they go. They have kind of an idea of what they want at the end of the day. If something goes wrong, they can say, “Ah, let’s take that back. Let’s change that.” Or, “I don’t like the way that that worked. I have this other vision in my head. Let’s do that.” Whereas a film editor, equally as important in the film production process, but they’re basically getting film that’s already been recorded. They’re saying, “All right, now work your magic and make this look good.” Of course, they can do a lot. They’re professionals. They can tweak it. They can make it look beautiful. But they can’t go back and change what’s already happened in the past, right?

Even though it’s an important piece, that tax preparation piece is really only a historical look back. It’s not something where like the tax planning, the director side, you can actually make changes throughout the course of the year and have those kind of play into the final product. So that’s the way I like to look at it.

[00:14:13] TU: Yeah, especially if you think about the timeline of filing your taxes mid-April. We’re already a quarter-plus into the New Year. So even when we file – Even if at that point, we’re starting to think ahead and more strategically, we’re already beginning to put a dent in that year. So, yes, we’ve got to file, right? Or else the IRS can come knocking on our doors. But better yet, we’re doing some of the strategy, the look ahead, the planning as the year is going on, and we’re being more proactive than just the filing alone. Then we’re not only optimizing but, hopefully, also minimizing any surprises.

[00:14:47] SR: Exactly, yeah. You don’t want surprises. You want to be able to take a look at things in the middle of the year and say, “Hey, where am I going to be come filing time? Or where am I even going to be a couple years from now down the line?”

[00:14:56] TU: I’ve seen you present on this before, where you give an example. Obviously, there’s many ways that tax planning can help optimize, but one example being around how one might bunch their charitable giving to help optimize how efficient that tax is in that given year. So talk to us a little bit further about that example. It’s just one of many examples of how someone might optimize your tax strategy.

[00:15:21] SR: That’s a perfect example to give right now because, like you just said, we’re getting towards the end of the year. So someone might say, “Well, if tax planning at this point isn’t really going to make much of a difference, maybe I’ll start next year or something.” But with something like bunching, that’s something that can be affected at the end of the year, up till the last day. So that’s something where if you’re looking at things and you’re saying, “Well, all right. I’m taking the center deduction this year, but I’m really close to being able to itemize my deductions.” So some people might just do what they’re normally going to do and just take whatever they get, whether it’s a standard deduction or itemized.

But if you’re going to be donating to charity for an example, and you know that you want to give, say, $10,000 over the course of the next couple years, you could break that into 5,000 this year and 5,000 next year, whatever. But if you look at it and you say, “Hey. Well, what if I bring some of these charitable contributions into this year and maybe be able to take advantage of itemizing my deductions? And then in a future year maybe not give that money and take the standard deduction?”

That’s something where you could make that donation on December 31st, and it’s effectively like given 5,000 on December 31st and given 5,000 on January 1st. But from a tax standpoint, it can make a really big impact. So that’s something where that tax planning, that directorial thing really comes into play, where if you look at those things and think about the impacts that will have down the line, even where you don’t change any of the facts and how much money you’re actually going to give, it can make a big difference.

[00:16:43] TU: That’s one tax strategy to employ a good example of where the tax planning can really be helpful the more strategic look ahead versus just the filing alone. Let’s shift into the third area here, which is common tax strategies to employ. Certainly not an exhaustive list, right? There’s many, many, many different strategies. It’s, of course, customized and individualized to one’s personal situation. But let’s talk about a few common ones that we see. Let’s start with the HAS, Sean. What is it? If folks are kind of new to that term, what are some of the tax benefits? Who qualifies, contribution limits? Give us the lowdown on the HSA.

[00:17:18] SR: HSA is great. That’s one where if I had a time machine, I’d go back and tell myself to get involved in those more. It’s something where I just didn’t really hear much about it. Or even if I did, it was something where I’d say, “Well, I’m young. I don’t have a lot of health expenses or anything. I’m not going to really worry about that.” But HSAs are great because they’re one of the few vehicles that have a triple tax benefit. So any of your contributions are going to be tax-free. The growth of those contributions will be tax free. Then when you actually go and make your distributions on it, those are tax-free.

Basically, what it is, it’s sort of like an IRA, where you put money in, and you can take distributions on it. Until you get to retirement age, you can only use those distributions for medical expenses. But it’s something where, again, it’s just a different type of investment vehicle for you. So if you have medical expenses that you can use now, great. If not, well, maybe not great, but it’s a good way to use it. If not, then you let it grow. When you reach retirement age, you take it out.

Anybody can contribute, as long as they’re enrolled in a high-deductible health plan. The limits are pretty similar to IRAs. I think in 2022, it’s 3,650 for individuals, and then double for married folks. There’s no limit based on how much you make. Well, there’s the limits that I just mentioned, but there’s no phase outs or anything like that. So if you make too much money, you don’t disqualify yourself, so definitely a great vehicle to take advantage of.

[00:18:41] TU: Yeah. Sean, we see this a lot with our community, I think, for good reasons. One being you just mentioned, right? So higher income professionals, especially if they have a joint household income, where they may be phased out of other opportunities, this is not one of them. Then depending on what they’re thinking of this, either use of short-term known healthcare expenses so that they can optimize and save a little bit on taxes or using it more in that long-term savings vehicle to also optimize the tax benefits.

We’ve talked about this on the podcast before, but we’re going to keep talking about it because we still see a lot of pharmacists that aren’t taking advantage of this. Given that there’s more and more high-deductible health plans that are being offered that people are opting into because of the rising costs of health care expenses, I think we’re going to see this even more popular in the future than it is today.

So Episode 165, we talked about the power of an HSA. We’ll link to that in the show notes. We also have a blog post, why I’m not using my HSA to pay for medical expenses. That talks more about the strategy side of using the HSA as a long-term investing vehicle. We’ll link to that blog post as well in the show notes.

Next up, Sean, for common tax strategies is the IRA. Talk to us a little bit. We’ve covered this in detail on the show, but just traditional versus Roth and some of the strategy around the IRA side of things.

[00:19:57] SR: Yep. I won’t go too much into this because I’ve listened to the podcast before. I know it comes up often. But basically, the two differences here are your traditional IRA, your Roth IRA. So the traditional is something where your contributions you’re making now, you’re taking a tax deduction on it now. Then in the future, when you take it out, you’ll have to pay taxes on it. Roth is the opposite. So you do not get the deduction now. But then when you go to take the money out in the future, when you reach retirement age, it will be tax-free.

With that, that one’s really one where you want to sit down with your financial planner or whoever is kind of coming up with the financial strategy and really determine where am I going to be in the future? What’s my tax bracket going to look like there versus what’s my tax bracket going to look like now? It gets into that whole planning versus preparation thing I was talking about before. So there’s a lot to unpack there.

Like I said, similar as the HAS, so there’s a $6,000 limit. I think it goes up to 7,000 if you’re over 50. So you get a little bit of a catch up there if you’re older. But, yeah, no, just another one to take advantage of definitely. You should be making sure that with all of these, that you’re looking at what you’re – If your employer has any benefits and stuff and really try to take advantage of all these.

[00:21:01] TU: Yeah. Both of these HAS, IRA are great examples, where if the financial plan is humming with the tax plan, we can really start to think about this strategically, rather than we’re filing taxes here, and then we’re looking at the financial plan over there.

[00:21:14] SR: Yeah. It’s something that definitely should be married together.

[00:21:16] TU: Third area, I want to talk about the common tax strategies and the Inflation Reduction Act. You and I are not here to debate whether or not the Inflation Reduction Act is actually going to reduce inflation. But rather, we’re here to talk about what are some of the opportunities and the credits that folks might be able to take advantage as a part of the Inflation Reduction Act.

So hit us with the highlights of some of the things around the energy-efficient homes or Residential Clean Energy Credit and the Clean Vehicles Credit that folks may or may not already be aware of.

[00:21:44] SR: Yep. So I will try not to use too many of the different names for these because I know that they keep changing. So if I say it now, I’m sure by the time this airs, they’ll have some new fancy name for it. But basically, there’s three areas to highlight. So there’s sort of the more traditional home improvement type energy credit stuff. That’s things like installing new doors and windows on your house that are more energy-efficient, which is almost anything nowadays that’s coming out. But that’s something.

So people might be familiar with the $500 lifetime credit. That’s where that used to kind of sit. Going forward, that’s going to be a $1,200 annual credit on your taxes. Remember, credits dollar for dollar reduce your taxes. So if you’re thinking – And this goes into effect next year, so something just to kind of keep in mind with planning ahead and everything. But if you’re thinking about getting some energy-efficient renovations done on your place, that’s definitely a big one to keep in mind.

Even more on top of that, so if you’re not only thinking about, hey, let me get some new windows or something, but why don’t I throw some solar onto that or get some geothermal heating systems or anything, something like that going, so the Residential Clean Energy Credit, that recently bumped up to 30% of whatever your expenses are in that regard. Again, say you’re putting new solar panels outside. You can get a 30% tax credit on the cost to install that equipment, which is huge.

Especially, again, if you’re planning ahead, you can maybe knock down some of your withholding. So if you know you’re going to have kind of a bigger tax bill at the end of the year, but you have this large project to offset, it’s something really to keep in mind there. Then the clean vehicles one, so there’s a lot to unpack there. I won’t get into too many of the details. But basically, they’ve expanded the credits available for buying electric vehicles or energy-efficient vehicles.

The biggest one that I’d like to highlight there is going forward they’re actually going to start allowing a credit on previously-owned vehicles. So that’s something where in the past, you had to buy a new car, and I’m sure a lot of people want to buy a nice brand new Tesla but might not have been able to jump into that or afford it right away. So opening up that secondary market to be able to take advantage of the tax credits is going to be huge.

There are some restrictions on that. If you’re buying a new car, definitely make sure there’s some restrictions around the car being assembled in North America and avoiding some of the mineral countries and stuff. So definitely go out and take a look. We can link to that in the show notes as well. The IRS has specific guidance on that, but those three are definitely some big areas to look forward to going forward.

[00:24:12] TU: Great stuff. I think there’s been a lot of news and potentially some confusion around that. So awesome, brief summary on what folks may be looking out for and how they can take advantage of those credits. The fourth area, as we continue this discussion on how to optimize your tax situation, is some things to be on the lookout for, perhaps some common mishaps or stumbling blocks along the way.

The first one, Sean, may not apply to a huge percentage of our community listening, but we do have a handful of folks that work in the biopharmaceutical industry or in situations, where restricted stock units or employee stock purchase programs may be a thing, and so it’s worth talking a little bit further about. But what are some of the things that folks should be thinking about if RSUs or if ESPP does apply?

[00:25:00] SR: Yeah. So you’d be surprised. I mean, I’ve done some webinars and some speaking events. Even though it might only apply to a small percentage of people, the people who does apply to it really does kind of nail home because there’s a lot of, I don’t want to say, hidden tax confusion there. But it’s something where you’re excited you’re getting a bonus, you’re getting these restricted stock units, and you want to get in the market. People are all excited about Robinhood and everything. But you have to be careful because there might be some things that you might not be considering.

With RSUs, you definitely want to make sure that when you’re selling your shares at the end of the day, when your shares vest, oftentimes you will actually recognize income when those shares vest. So taking a very, very quick step back, restricted stock units is usually something where a company will say, “Hey, we’re going to give you 40 shares, but it vests over a four-year period of 25% a year.” So when they vest, normally, you’ll recognize income on that. So what you want to make sure is that you’re not double counting that. When you’re going to sell those shares, make sure that that piece has been picked up already, and you’re not kind of picking it up again.

Similarly, with employee stock purchase programs, ESPPs, another great thing to take advantage of if it exists for you, usually, what that is is a company, if you work for a publicly traded company, allowing you to buy into the company at a discount. What you want to keep in mind there is that oftentimes, when you buy it at that discount, that discounted price, say, it’s 15% of the market value, that will often come on your W2 as income as well.

Again, it’s something else that you want to keep in mind. Make sure when you’re paying capital gains on that at the end of the day that you’re backing that piece out. They’ll often be what they call a supplemental form that comes with your 1099. So make sure that you look at that and adjust your basis or work with your accountant. I know I’m probably going over a lot of people’s heads, but make sure you find that piece of paper and give it to your accountant. So they know, hey, I need to adjust this basis and not pay additional on that income that you already were taxed for, right? You don’t want to pay twice in the same money.

[00:26:55] TU: Yeah. This is something, Sean, we see, as you mentioned, a lot of interest and attention, especially from folks that may be doing fellowship programs or others, looking at job offers, trying to understand what do these terms mean, and then how do they strategize around them, of course, the tax considerations that you mentioned.

The other area to talk about, as we continue discussing things to be on lookout for, cryptocurrency transactions. I know this was something that our tax team spent a lot of time on during the previous filing season. We saw rapid growth in folks that were investing in cryptocurrency, making transactions. Maybe that slowed up a little bit, just because of what’s been going on in the market. Maybe it hasn’t. But nonetheless, this is reaching more and more people out there that may be dabbling into cryptocurrency.

So we’re not going to talk about the strategy around cryptocurrency but here specifically about some of the tax considerations. Tell us more.

[00:27:47] SR: Yeah. So the thing to keep in mind with crypto is that – And I just talked about ESPP and RSUs, and that might, to some people, sound complicated. You get into capital gains and all that stuff. Cryptocurrency, the IRS considers that to be property, just like stocks. So if you’re going to the store and you’re buying a coffee with cryptocurrency, you’re effectively, at least to the IRS, going and selling like a share, right? Then buying your coffee. So every time you do that, there’s capital gains or losses associated with it, every single transaction.

It’s something to keep in mind. I mean, I’m not discouraging anybody or giving anybody advice on whether to use it to buy a coffee or not. But something to keep in mind at the end of the year, you’re going to have to report on each one of those transactions. Some of the crypto software out there doesn’t readily print out that stuff for you, so you might have to use a third party to do it.

The other thing to keep in mind is that NFTs are another kind of hot topic. I know that IRS has recently – I actually think that the 1040 this year, right on the front page, is going to have a little checkbox like they did last year with crypto saying, “Hey, did you buy or dispose of any digital assets?” So something else to keep in mind, NFTs are a hot topic, but it’s something that you actually have to record all those transactions. If you had a gain, you have to pay taxes on them.

[00:29:00] TU: Yeah. I wonder if anyone at the IRS 5 years ago, 10 years ago would have predicted having questions front and center on the 1040 about cryptocurrency and NFTs. But here we are, right? So obviously, there’s a lot more attention for good reasons that’s been given to those transactions, and I would say our tax team learned a lot through the tax season last year on this, just working with clients and kind of working through some of these issues. So if cryptocurrency transactions were something that was a part of your planning, something that we may be able to assist with.

[00:29:30] SR: Yeah, absolutely.

[00:29:31] TU: Sean, the last thing I want to talk about here on things to be on the lookout for is something we commonly see, which is paying the right amount of tax throughout the year. Especially important for those that maybe have significant changes in income, changes in dependents, maybe for those that are earning additional income, side hustle, business. Really, what we’re talking about here is whether or not we need to adjust withholdings or set aside some money for tax throughout the year, if that’s not being taken out of our paychecks. So what are some of those considerations around estimating and being able to estimate our taxes due throughout the year, so we’re not surprised come the filing season?

[00:30:08] SR: Yeah. So this goes back to what I was saying before, where you really want to keep the whole tax planning throughout the course of the year in mind. You don’t want to commit to at the end of the year and have a large bill or have even a large refund at the end of the day. I mean, it’s always nice getting cash back. But at the end of the day, it’s an interest-free loan that you’ve given to the government. So you want to avoid that.

One of the things you want to do, like I said, is sort of project it out and see what you’re going to owe at the end of the day and decide whether you need to withhold any additional interchanger withholdings or make estimated payments. So one thing you can do, it’s called the safe harbor. So if you look at last year’s return and look at what you actually owed at the end of the day – Sorry, not actually owed at the end of the day in taxes but what your tax bill was. Your tax liability, I should say.

So whether you had a refund or not, what your tax liability actually was, if you multiply that by 1.1, so 110% of that, and you make sure that whether you’re making payments to the IRS or just having regular withholdings from your W – For your regular paycheck. If you get that money into the IRS by the end of the year, you will avoid having to pay any additional penalties. Now, you might actually owe tax at the end of the day, but you won’t have any penalties. We call that the safe harbor amount saying, “Hey, that’s what I owed last year. 110% of that, we’re good to go.”

One thing – So if you have a side gig and you’re not having money taken out of your paycheck is you might have to actually make estimated taxes. So there’s a schedule on that. It’s a quarterly schedule. But it’s something – Again, you want to take a look at your calculation and say, “Hey, if money is not being taken out my paycheck, I need to put this money aside and actually send it into the IRS on a regular basis.”

So the way I like to look at it is think of your friend who’s the most financially irresponsible. If they didn’t have money taken out of their paycheck at the end of the day, would they be able to cover it at the end of the year? Probably not. So something you want to keep in mind.

[00:31:59] TU: Yeah. This is another reason. I think when you’re working with someone effectively throughout the year and planning and being more strategic, someone can help you with estimating what these payments will be. Obviously, especially for those that are earning additional income, side hustle, business, whatever, we want to make sure we’re doing that, and we’re looking at the overall financials of the business and accounting for the taxes that we’re going to owe.

Sean, as we wrap up here with our fifth and final point, preparing for the year end, great timing as we’re getting ready to turn the calendar into December. Hopefully, it’s the time of year we’re starting to think about our taxes more intentionally. Hopefully, if we’ve done our job here, people are going to be thinking about this all the way throughout the year. So what are some of the year-end things that folks should be thinking about to ensure that they can minimize the stress and headaches that may otherwise come during the tax filing season?

[00:32:49] SR: Yeah. So it’s a lot of the things that I talked about before, right? Especially what I even just ended at, you want to look at your income, your taxes, your withholdings. Kind of project that out and say, “All right, here’s what I think I’m going to owe at the end of the day. Here’s what I’ve withheld. Here are the estimated payments that I made, and am I going to be in a good spot?” Maybe I am. I mean, at this point, there’s not a whole lot you can do from withholding standpoint. But you can change that going forward. You can make estimated payments now. So you want to do that. You want to make sure you maximize your HSA contributions, IRA, any of those types of things. So make sure you’re taking advantage of anything, any benefits that your employers are giving in that regard.

If you’ve over contributed, so those limits I mentioned before, if you’ve gone over that, make sure to correct those. Take that cash back out or re-characterize them for next year because, otherwise, you’ll end up getting penalties on those. If you are able to contribute to charity, make sure you have a conscious strategy regarding that. You can use donor-advised funds, which we didn’t get into. But it’s kind of like mutual funds for charitable contributions. Think about your capital gains, so things I just mentioned. If you’re sitting there going, “Oh, my goodness. I’ve been buying coffee every day with crypto,” you got to kind of think about that, and maybe go back, and take a look, and see what your gains were or your losses might have been on those, and think about how to apply those going forward.

Then just make sure you have all of your documentation ready to go and saved down and everything. Then just decide what you’re going to do, or you’re going to do it yourself. Do you want to reach out and hire somebody to prepare your taxes for you? Or better yet, reach out to somebody who can actually be a partner throughout the course of the year and give you more of that guidance and really align your tax strategy with the rest of your financial strategy like it should be.

[00:34:27] TU: Great stuff, Sean. For those that have listened to this episode or have followed us for some time and this concept of year round planning from a tax standpoint, if that really resonates with you and really aligning your taxes in a more strategic, proactive, look ahead way, yes, of course, we’ll do the filing. But we really want to be a partner with you throughout the year so that we can optimize that situation and employ much of what we talked about here. Really, we just, I think, scratched the surface on some of this as well.

If you’re interested in working with Sean and his team over at YFP Tax, you can visit yourfinancialpharmacist.com/tax. There, you can learn more about the services. You can sign up to join the waitlist for the 2022 filing season. As well, you can also reach out to Sean directly if you have a question, [email protected].

Sean, thanks so much for coming on the show and looking forward to having you involved in future episodes as well.

[00:35:21] SR: Yeah. Thanks for having me. I’m looking forward to it as well and looking forward to getting into tax season, hearing from some of the listeners. So have a good one.

[00:35:28] TU: Awesome. Thank you.

[END OF INTERVIEW]

[00:35:30] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

Furthermore, the information contained in our archived newsletters, blog posts, and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist, unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward-looking statements that are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward-looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer.

Thank you, again, for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

[END]

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YFP 282: The Top 10 Mistakes First-Time Homebuyers Make

Posted on by Caitlin Boyle

Nate Hedrick, The Real Estate RPh and co-host of the YFP Real Estate Investing Podcast discusses the top ten mistakes first time homebuyers make.

Episode Summary

On this episode of the Your Financial Pharmacist podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, welcomes Nate Hedrick, The Real Estate RPh, back to the show to discuss the top 10 mistakes that first-time home buyers commonly make and how you can avoid them. In their discussion, Nate shares a brief market update since his last appearance and details how market changes have impacted him as a real estate investor looking for new opportunities in the current environment. Next, Tim and Nate go through the top 10 mistakes first-time home buyers make in a rapid-fire style, elaborating on each of the common themes plus some insight on how to avoid them when shopping for your first home.

The Top 10 Mistakes include:

Letting the Bank Set the Budget
Rushing In
Comparing Your Rent Payment to Your Mortgage Payment
Assuming You Need 20% Down
Skipping the Pre-approval
Waiving a Home Inspection
Overlooking the Big-ticket Items
Making a Large Purchase Before Closing
Forgetting to Lock in Your Interest Rate
Skipping Out on the Proper Team

Listeners will learn how best to position themselves for their first home purchase and the critical role a real estate agent plays in the process.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRO]

This week, I had the chance to welcome back a friend of the show, Nate Hedrick, the Real Estate RPH, and cohost of the YFP Real Estate Investing Podcast. On today’s episode, we talk about top 10 mistakes that first-time homebuyers make.

Now, we know that buying a home or investment property is certainly an exciting experience, but also can feel overwhelming at times. Between finding an agent, securing your financing, and actually searching for a property, it’s hard to know where to get started. That’s why we’ve teamed up with my guest today, Nate Hedrick, the Real Estate RPH, to provide a simple solution to jumpstart your home buying process. Through this concierge service, Nate will help you craft a plan, connect with a local agent you trust, and stay by your side throughout the process to lend an ear or helping hand.

You can learn more about the free concierge service with Nate and book a call by visiting yourfinancialpharmacist.com. Click on home buying at the top and then find an agent. Again, yourfinancialpharmacist.com. Click on home buying and then find an agent. Okay, let’s jump on an interview with Nate Hedrick, the Real Estate RPH.

[INTERVIEW]

[00:01:15] TU: Nate, welcome back to the show.

[00:01:16] NH: Hey, Tim. Always great to be here.

[00:01:18] TU: Glad to have you back. It’s been a while. Episode 268, we had you on the show. At the time, we talked about how interest rates, inflation, and market insanity are impacting homebuyers. Here we are, just a couple weeks later. Interest rates have gone up even more since that point, and I want to get a pulse from you on what you’re seeing out there in the market, before we talk about some of the common mistakes that we see with our first-time homebuyers.

[00:01:43] NH: Yeah. Obviously, the interest rate increases have been significant since we last talked, and it’s affecting the market in different ways. Again, I’m only one piece of the broader country that is the market because it’s different everywhere. But in my neck of the woods, in both my personal investing and with my clients that are buying homes or investing in homes, is that the interest rates are hurting, right? It’s really raising that monthly payment. So it’s affecting people’s budget. It’s affecting their ability to purchase, in some cases.

I’ve had investors completely back out of deals because a couple months down the road now, it’s – Nothing makes sense any longer in terms of the buying price. So it’s making some waves there. On the flip side, though, demand is still high because there aren’t a lot of sellers that are ready to release their properties. Just like we talked about previously, if you’re locked in right now at three or three and a half percent, what’s the use in selling, just to go grab seven percent somewhere else if you don’t have to? Absolutely. So it’s an interesting time right now. It’s still getting – It’s still crazy, and I don’t think it’s going away anytime soon.

[00:02:43] TU: I keep coming back to that, as we talked about in a previous episode. But it’s such a good point. If somebody’s locked in high twos, low threes, when we saw the rates really dip, unless there’s a real urgency to move, new job, whatever might be the situation, like who wants to trade a three percent rate for a high six in the time right now? Yeah.

It’s crazy. When you just look at monthly payment, which, of course, many folks are thinking about their monthly budget and how the home purchase fits into the rest of their expenses. But, man, what you can get today from a monthly payment versus what you could get 12 months ago is wild. I mean, just wild to see the differences. So I’d be curious to see what happens with rates longer term.

I’m curious, from your perspective as an investor, considering you’re the cohost of the YFP Real Estate Investing Podcast, like how has the market, environment conditions, interest rates, how has that changed your perspective and outlook as an investor looking for opportunities?

[00:03:43] NH: Yeah. It hasn’t changed the fact that I’m looking, right? I’m always looking to purchase. It’s just changing how we’re running the deal analysis, right? I just had a property come out. I kind of have to relearn the market. We just had one come up this week that kind of hit those numbers, right? Where we know the markets that we look in so well, that when a property pops up and it’s in a certain price range, like I immediately would know, “Oh, this is a deal. We need to go look at it,” right?

Well, this one that just popped up hit those warning bells. But then when we actually did the deal analysis, it’s no longer a deal. So I have to really reset my numbers, which is tricky, just because the interest rate is hurting cash flow so much. So if we are making those purchases, they have to be a really, really good deal for it to work.

[00:04:24] TU: Yeah. I think you know better than I. You’re much more active in the space than I am. But it feels like a time period like this, where you start to really whittle down maybe the investor pool that’s out there actively looking. It really feels like it incentivizes those investors that have a sound system and process in place and have been doing this for a while. Not only on a deal analysis, but also how can you efficiently manage a group of properties and how can you optimize the portfolio that you have.

I think for those like you and David that have done the hard work over several years to develop those systems, not to say deals are readily available, but that I think it incentivizes those that have a good foundation and a good system in place.

[00:05:04] NH: Yeah. They’re still out there. It just takes, like you said, some creativity, some diligence, and making sure you adjust.

[00:05:11] TU: I love that, though. I’m always looking, right? I’m always looking.

[00:05:14] NH: Absolutely.

[00:05:15] TU: All right. So this week’s episode, we’re going to cover the top 10 mistakes that we see first-time homebuyers making. Nate, to be clear, there is no judgment here, as you and I, I think, have probably made all of these mistakes maybe between the two of us. So we’re hopeful through our experiences. Being both first-time and second-time homebuyers, we’re hopeful that we can share some of this information, what we’ve seen also with other pharmacists, to help prevent others from maybe making some of these same mistakes. We’re going to run through these in somewhat of a rapid fire format. I’m going to present the mistakes 1 through 10, and then we’ll talk about each one in more detail.

Nate, number one is something we’ve talked about often when it comes to first-time homebuyers, and that is the number one mistake is letting the bank set the budget. Tell us more about what you mean here.

[00:06:02] NH: Yeah. I think what we see from first-time homebuyers, especially, is the thought that, “Well, I’m going to go to the bank. I’m going to get pre-approved. I’m going to ask them what I can afford.” The bank looks at your finances and says, “You can afford up to a $500,000 house. This is your budget,” when in reality, the way we should be approaching it is to determine our budget way in advance, separately together, whatever that looks like, without the bank even involved. Then you can go to that lender and say, “I’m looking to purchase up to $350,000 home. Help me get financing for that,” and really trying to approach it from that budget first perspective, rather than letting the bank determine it for you.

[00:06:39] TU: Yeah. We’ve talked about this before, home buying, important piece of the financial plan. It’s one part of the financial plan, right? There’s a lot of competing priorities for your monthly budget. I think that you and I have been talking about this now for years, but this is maybe even more true than it has been in years gone by. When we consider the impact of inflation on the monthly budget, the average student loan debt continues to creep up in a direction where a greater percentage of one’s monthly income might be accounted for when it comes to student loans or other debt.

Oh, and by the way, like pharmacists’ income, even if we see some growth there, like they’re not accounting for what we’re seeing the rise when it comes to not only inflation, but also the rise in the housing market, as we were just talking a few moments ago. So all the more reason that we really need to be setting the budget when it comes to purchasing the home before the bank sets that budget for us to make sure that it fits in with other priorities, and that we’re able to accelerate those other goals in the financial plan, and that we don’t find ourselves locked into a 30-year timeline of something that we look up and say, “Hey, wait a minute. We don’t have a whole lot of cash flow to do other things.”

Number one mistake, letting the bank set the budget. Number two is rushing into the purchase, right? Easier said than done. Nate, tell us more.

[00:07:54] NH: Yeah. What I’m seeing right now, especially in the last six months or so, is individuals who have this this FOMO, the fear of missing out. The interest rates are rising. The market is crazy. I have to bid fast. But take a step back. Take some perspective. Realize that, again, if we look at the huge timescale that is mortgage interest rates over time and the market in general, we’re still not at a point where the interest rate is exorbitantly high compared to history. We’re still not at a point where there aren’t going to be homes on the market soon.

They’re not going away, right? So don’t rush into this decision. It’s a huge purchase. So you want to make sure you’re doing your work upfront. You’re setting that budget, like we just talked about. You’re choosing a location that you actually want to be in, right? You don’t want to make that decision and then want to change it later. You’re looking at what’s important to you. Again, what I’m seeing and what I’m hearing from others in the marketplace is they’re making decisions. Then six months later, they’re regretting it because it’s not exactly what they wanted. They just felt like they had to buy now. So don’t rush in.

[00:08:52] TU: Yeah. I think there’s always a feeling of pressure around that home purchase, right? You and I felt that even in the market. That is not the market that we’re seeing today, right? I just remember that feeling of like, “Okay, I graduated. I did residency. I got married. We’re thinking about starting a family.” It just feels like that box. Like you got to go check it off and buy a home. As we’ll talk about here in a moment, like, “Hey, I don’t really want to pay rent anymore.”

I think that pressure is always there for first-time homebuyers. But in this current environment, it’s on fire even more. I think there’s this feeling of like, “Oh, man. The Fed’s going to raise the rates like even more. It’s going to go up. Everyone else is kind of rushing into this period of competition. I better jump on this.” Certainly, if the deal, location, and everything lines up, there’s a case, obviously, to move forward. But there’s very few things that we’re locking ourselves into for 30 years, and we want to be careful to make sure that, again, fits in the budget. We talked about that in point number one, but also that it fits in with our plans, and that we’re not 6, 12 months in and saying, “Man, maybe I should have waited a little bit longer,” or, “I regret this purchase at the time.”

Number three is comparing your rent payment to your mortgage payment. Guilty as charged. I remember when we bought our first home, Nate, back in 2000 – I think it’s been 2009. We were paying $1,100 a month for rent, and it’s even hard to say that out loud in 2022, three-bedroom condo. I think it was like 1,500 or 1,800 square feet. I remember looking at a mortgage payment, our first home we purchased for $176,000. Again, hard to believe in 2022, and I remember seeing, “Wait a minute, $1,100 rent. Principal and interest is going to be about $1,100. Why would I not purchase a home?”

So talk to us about why comparing rent payment and mortgage payment can potentially be a mistake and not considering all the costs involved?

[00:10:45] NH: Yeah. I think this is something I, again, totally agree. I did the exact same thing when we bought our first home, right? You’re looking at that price, and you’re saying, “Well, it’s a monthly payment that makes me live here, versus a monthly payment makes me live here. I got to compare those.” But with buying a home, there are these other costs, right? You’ve got property taxes, which is huge. You’ve got insurance, which you might not have any insurance, or you might just have renter’s insurance on your current rented property.

It’s not just that upfront balance. There are a lot of these hidden costs that go into purchasing a home, even something as simple as maintenance and repairs, right? Today, you probably have a landlord or a management company that you call if something breaks. But when you buy that house, you’re in charge, right? You’re calling a plumber. You’re calling an electrician. You’re calling a HVAC specialist. So you have to expect those costs and be ready for them.

[00:11:31] TU: Yeah. Depending on the area that you live in, property taxes, it feels like there’s, obviously, a significant creep that can happen in there. But that can be a big part, the monthly payments. I think about our property taxes here in Columbus. We’re looking at about $500 per month, which I know in some parts of the country might be higher. Some might be a little bit lower. But when you look at that as a percentage, compared to your mortgage payment, like for us, it’s a pretty big chunk that’s going to our property taxes. Then you add on top of that insurance. You mentioned potentially HOA fees, depending on the area that you live in, maintenance and upkeep.

Especially for first-time homebuyers, like you don’t have a garage full of lawn equipment and other things. You might want to do landscaping. You might want to do some remodeling, furniture you’re going to need for the home. So making sure that we’re factoring all these things in. I’ll link too in the show notes that the New York Times has a really cool calculator that looks at the rent versus buy, and it really tries to put it as apples to apples as you possibly can. So factor in a lot of the costs that Nate’s talking about here and making sure that we’re looking at the big picture, as we look at what the impact of that will be on the monthly budget. That’s number three, potentially making the mistake of comparing your rent payment, your mortgage payment.

Number four, Nate, is assuming you have to have 20% down. So this really gets into the types of loan options that are out there and how we need to be thinking about saving for that down payment. Tell us more.

[00:12:59] NH: Yeah. I often see this when somebody talks to somebody who bought a house somewhere else, right? Or 10 years ago. I talked to my folks, and they said, “This is how I bought a house,” and they get this advice that, well, you got to have 20% down, and then you can move forward. Some people can feel really stuck with that, especially in these higher cost of living areas, where 20% down could be $200,000, right? So what we’re advocating for is not – Don’t skip 20% down. That’s not a bad place to be but evaluate it. Look to see what your other options are.

We’ve got pharmacist home loan options that are three and a half percent down. We’ve got FHA lending. That’s the same rate. There’s a lot of different options out there that aren’t just 20%, and there are advantages and disadvantages to each of those. So weigh those options, look at them, talk with somebody who knows what they’re talking about, a mortgage lender, preferably, and figure out what the best option is going to be for you.

[00:13:48] TU: Yeah. Nate, I’m curious. Is your opinion on this changing at all, as interest rates creep, right? So when you and I talked about this a year, a year and a half ago, if we’re just thinking about from an opportunity cost standpoint, obviously, there’s a risk in if we have nothing down or too little down, market changes. You would potentially be upside down on the mortgage. We need to be considering that, our comfort with risk. How else that fits into the rest of the plan.

But purely from an opportunity cost standpoint, when you’re talking about a loan at 3% or 2.8, 2.9%, you could make a reasonable argument that like, “Hey, if I can put as little down as possible and finance that out over 30 years, I could potentially use those dollars elsewhere in the financial plan in a more strategic way.” As we look at high sixes, is your opinion on that changing at all?

[00:14:38] NH: It’s always been that you want to create a safety net, right? Like David and I talk about on the podcast all the time, we are safety-oriented, boring pharmacists, and that’s not a bad place to be, right? Where you want to go into this with the idea that if the market does correct and I have to sell because that’s when it’s a problem, when you have to sell. Or am I going to be okay? So if you’ve got 10 percent down in a property and there’s an 8% correction, you’re in a good space.

But if you’re talking about maybe a bigger correction or a lower percentage down, it can be a little more risky, right? There’s no way to know exactly what the future holds, so just it can be beneficial to at least consider that 20% down, just because of the safety net that it provides.

[00:15:20] TU: Yeah, yeah. Good point about the future, right? We might find ourselves with a huge refinance market in a year or two if rates were to come back down, so good thing to be thinking about. Can’t bank on it but certainly might be an option in the future. The other thing I think of here, Nate, with a 20% down, you’ve talked before on the podcast, you also wrote a blog post about this, we’ll link to it in the show notes, is that student loans is often a common barrier to being able to save up 20% down, right?

You think about even here in pretty affordable Ohio, if you’re looking at buying a three to four-bedroom home, 2,000, 2,500 square feet, depending where you’re living, probably pushing now 400,000 to 500,000 dollars on that home. So traditional 20% down, we need 80,000 to 100,000 dollars. Trying to accrue that as a first-time homebuyer, while making student loan payments, which we haven’t been doing now for over two years, but those are going to start back up, that can be very overwhelming. So I think that consideration of how do I balance a student loan repayment with the home buying, and that’s an opportunity where maybe you don’t need 20% down. Maybe you decide to do 20% because you feel comfortable with that. But we’ll link to that article in the show notes, as I think that’s probably a topic of interest among many listeners. So that’s number four, assuming you have to 20% down.

Number five mistake is skipping the pre-approval. Tell us more here.

[00:16:40] NH: Yeah. One of the things that I’ve seen other buyers and I always advise my clients is to get that pre-approval process done early. That’s going to the lender and making sure that you are going to be able to get a loan from them. What you really want to check with them is, one, are there things that I was not aware of, right? Maybe the budget that I said is not realistic, and the bank is going to tell me otherwise or perhaps that the rates are higher than I was expecting, and my calculations are off. That data check is really important from a perspective of which houses can I look at.

But then more importantly is once you do find the house that you like, everybody’s requiring you to have that pre-approval letter with your offer. So if you find a place, and let’s say there’s competing offers, or you need to move quickly on it, and it’s a Friday afternoon, you don’t have that pre-approval letter in place, you might not be able to purchase that home, just because your offer is no longer a competitive one. Doing that upfront, doing that early is never going to hurt you. You can always renew those pre-approval letters 90 days later or 180 days later. Do it upfront. Make sure that you’ve got that pre-approval letter in place. It’ll just protect you when you’re going to look at those homes.

[00:17:45] TU: Yeah. I think that’s really good advice, Nate, because it’s one of those things I remember when we were looking for homes. My thought was like I’m just casually looking exactly on realtor.com or Redfin or Zillow or whatever. That often quickly turns into like, “I’m seeing a property, and I want to make an offer.” So I think we got to be realistic about where are we at in the process of readiness to buy home. Then as you mentioned, you can renew those, but having that ready if there’s a potential that we’re going to be moving forward with an offer.

All right, number six is waiving a home inspection. Nate, that gives me anxiety, even hearing that. So tell me more about what you’re seeing here.

[00:18:22] NH: Yeah. So especially the last year or so and even going back a little further, we saw a lot of the craziness in the market leading to people saying, “Well, how else can I be competitive, right? What else can I do? I can’t offer more money. So maybe I’ll waive the inspections, and I’ll just get the house and kind of roll the dice that way.” so I’m always an advocate that you need to have that expert in there to take a look at home, especially if you’re a first-time homebuyer, right? You don’t know what you’re looking for. Your agent can be helpful in this, but they are not an expert in home maintenance. They’re just not.

We’re experts in the process. We’re experts in the communication. We’re experts in the forms that you need to fill out and how to navigate the actual buying process. But we are not contractors, right? I don’t know how to look at a roof and say, “Oh, yeah. That’s a 15-year roof or a 30-year roof,” right? We just – That’s not part of our process. So making sure that you’ve got an expert on your team that specializes in that area is absolutely essential, and that last line of defense is that home inspection. So make sure you’ve got one in place.

[00:19:20] TU: Yeah. Not all inspectors are created equal, right? Just like not all agents or financial planners or accountants are created equal. So we’ll talk in a little bit about having a team, but this is why I think it’s so important that you’ve talked about this before. If you start with a really good reputable real estate agent, they often are going to be able to point you to a reputable inspector, right? You want to make sure if you’re spending whatever, 400, 500, 600 dollars on an inspection that you’re going to feel good about the quality of that inspection.

I’ve been through the process of because of the results of an inspection pulling out of a purchase of a property, and like it’s significant. If it’s something that maybe comes up that’s going to cost you 500 bucks, 1,000, 2,000 bucks, like you can roll with that. But it’s the big structural foundational types of things that, man, you just don’t want to be surprised. I think we got to know our role as pharmacists, right? I can’t walk into a home. Maybe you’re [inaudible 00:20:12], but I can’t walk into a home and be like, “Oh, yeah. This is really going to be a problem,” or, “This is not.”

I’m more enamored in the moment about like what does this look like for our family living in this home, right? I think that tends to even gloss over sometimes what can be some of the bigger pieces that come up.

[00:20:29] NH: Even with my experience and David’s experience, I mean, when I’m working with a client as their agent, I still don’t want to be the only expert they’re getting advice from, right? I can look at something and say, “Yeah, that’s probably going to be a problem.” But the extent of that problem, I don’t want to be the one to speak to that. You need an expert, right? So it’s super important to clarify that and just make sure that even if you’ve got a really, really good agent on your team, that inspection is still a super important piece.

[00:20:54] TU: So that’s number six, waving a home inspection. Number seven is related but different, and that’s overlooking the big ticket items. Again, I think often when we’re looking at a home, we get excited about maybe some of the fixtures, the furnishings, the remodeled kitchen, those types of things. But are we thinking about the major expenses that might be coming in the future, even if it’s not something in the moment that they’re going to be coming down the road? Are we ready for it from saving standpoint as well? So tell us more here what you’re thinking about.

[00:21:23] NH: Yeah. Just I wanted to put this in people’s heads because it’s something that I often have to coach my buyers through of, hey, the inspection report says this is perfect, and it’s working today. But take a look at the fact that it’s deteriorating, and that it’s going to be replaced in five years, right? Your furnace is working, and everything looks great, and the house is warm. But it’s 22 years old, and we’re about to be done with it, right? So those are things that even with an inspection you might not necessarily catch.

The other one I saw just recently was a house that was – It was painted wood siding, and it looked flawless. It looked great. It was probably done in the last two years, and just, again, look fantastic. But that’s something that’s going to have to be maintained, right? You have to paint that every five, six, seven years. So a buyer might go into that and think, “This is great. It’s painted siding. I’m done.” But that’s a huge expense that’s going to be coming down the road. So what I advise buyers to do is to look at some of those big ticket items, even if they’re not problems today, and sort of budget for them for the future because they can become problems quite quickly.

[00:22:22] TU: Yeah. Some of them you don’t necessarily think about, even on the second or third home purchase. So I think for first-time homebuyers it makes sense. But things like the roof maybe are some common ones. But driveway, so like we have asphalt driveways. It’s getting beat up right now, and we got a quote for what would that take to eventually repair, put in a cement driveway. Holy cow, right? That’s really expensive. Or what’s the potential lifespan of your AC unit, your hot water tanks? How new or not are those? Other types of upkeep, you gave the example of kind of painting the wood. So there’s a lot of things that could come up.

Just to nerd out here for a moment from the financial plan perspective, this is where having a bucket of funds that you’re planning each month for these expenses that we know are going to come up, we want to be planning for it, right? So we talk a lot with the planning team about creating buckets of savings. If I need a roof, and it’s expected to kind of be at the point of replacement in five years, that’s not an emergency when it gets to that point, right? So what can we be doing to both plan and project those, and then create the buckets of savings, so we can accrue those funds over time and to be ready to pay for those when they come to be?

I think those are great examples, Nate, of things that we’re often overlooking when we do like the rent versus buy comparison.

[00:23:41] NH: 100%. Yeah.

[00:23:42] TU: Those big – Especially if you convert them into like a monthly payment of what it would take to save those and then tack that on to what we may be paying in terms of rent.

[00:23:50] NH: Something that people often rely on here is a home warranty, which is not a bad idea, right? You can use a home warranty at purchase to help combat some of those high cost items, maybe fixing a furnace that breaks down or repairing an AC unit, whatever. But don’t rely on that only, right? A lot of those home warranties – I’ll give you another example from recent past, home warranty for a roof. Great. It seems like, okay, if the roof is going to break, when it does, I’ve got this home warranty in place.

Well, what happens a lot of times is that home warranty company looks at when you purchase that warranty. Let’s say you purchase it at year 15 on a 20-year roof. We’re only going to cover that quarter of that roof that you’ve actually kind of paid for at the time that you bought it. So keep in mind, home warranty can be helpful in terms of defraying some of those costs, but it is not a solve all the problems kind of a thing.

[00:24:39] TU: Yep. Great point. So that’s number seven, overlooking the big ticket items. Number eight common mistake among first-time homebuyers is making a large purchase before closing. So I assume we’re referencing some impacts here on credit and lending. Tell us more.

[00:24:54] NH: Yeah. When you were going through the pre-approval process, the bank is looking at all of your debt and all of your income and all of your assets. If you are adding things to the debt side of that equation before closing, when they go to recheck things, you can actually price yourself out of things. You could mess up your interest rate. You could mess up actually getting the property. I’ve seen people where they go and they buy furniture before closing. This has never happened to me but to others I’ve heard about, where they go to those great 36 months, same as cash. I’m going to buy all the new furniture I need for this new house before closing.

When you buy something like that on credit at a furniture store, for example, it’s looked at like a maxed out debt. So if I buy $5,000 of the furniture, 36 months, same as cash, they are taking out a $5,000 line of credit, and I have maxed out that line of credit.

[00:25:40] TU: Oh, utilization of it. Yeah.

[00:25:42] NH: Exactly. So when the bank goes to rerun your report on this great home that you’re about to purchase, they all of a sudden see that, whoa, you got this credit hit. Now, your credit score has dropped. Your new interest rate is now a point higher because you’ve messed this up. So don’t make any major purchases. Don’t take out credit cards. All that stuff should be just put on hold until after closing.

[00:26:02] TU: Yeah. A point higher over 30 years is going to be a lot more than $5,000. That’s a really good one. So really making sure that as you get to that point of closing, as you’re working through the process with the bank, making sure any purchases, any opening up credit card you need to put on hold or making sure you got some space in separation in that as well.

[00:26:25] NH: Or at the very least, talk to your lender first. Hey, lender, I know we’re going through this, but I’m thinking about doing this. Is that going to be okay? Is that a bad idea? Ask them. Keep them engaged. Do not surprise your lender. That’s the worst thing you can do.

[00:26:38] TU: Okay, number nine is forgetting to lock in your interest rate. I know another common question that comes up here is when people are comparing rates, especially if they’re searching these on a website, is the option of purchasing points as well. So tell us about rate locks and then how one should be thinking about the purchasing of points and what that means.

[00:26:59] NH: Yeah. So the rate lock point was actually something that I just added kind of for this time, right? Because previously, locking your interest rate wasn’t nearly as important. Interest rates weren’t going anywhere. So if it was 3.5 this week or 3.3 next week, I mean, whatever, right? It’s not that big of a deal. Locking it was great, but it was not as important.

Now, with the way that rates have been increasing recently, what we’re seeing a lot of lenders offer is a locked rate, where you can lock it for 45 days or even sometimes longer with a float down option so that if the rate does drop, you’re allowed to drop along with it. But if you don’t lock in that rate, your rate can increase with the market.

So I actually saw – I had a buyer recently that closed on a property, and we almost missed the date for his rate lock. Luckily, the lender was able to extend it and make sure that we met with closing. But if you don’t lock that rate at the right time or don’t close on time, you can miss that window and easily see half a point or a point increase as that month and a half goes by that it takes to close on a property. So it can be a big deal.

[00:28:01] TU: Tell us about the option of purchasing points. I know this comes up a lot, where kind of the window rate that someone will get may include or be assuming that you’re going to be buying points, essentially buying down that interest rate. So what are you seeing out there right now in terms of the viability of that and how people can think about the breakeven point where that makes sense?

[00:28:23] NH: Yeah. Another question that’s changed dramatically in the last two years since I last talked. But the idea with a point is that you can essentially pay money up front to have a lower interest rate over time, right? You can decrease your interest rate by paying for it in the form of what’s called points. You can even, in some cases, have the seller pay the points at closing. That’s pretty uncommon still in this market, but it’s out there.

Typically, again, in the past, I was not recommending buying down points because the rates were already so low that why spend cash up front, just to get from 3 to 2.9, right? Who cares. But now, if you can get significant movement on that interest rate and you’re looking at a very, very large loan, it might be worthwhile to consider, especially if you’ve got a little extra capital upfront today and want to lock in that lower interest rate over a longer period of time.

It’s something to consider. It’s always worth looking at. The best way to do it and compare things apples to apples is to ask every lender that you’re shopping with for a rate that is without points. Give me the flat rate without points. Let me see that first, and then let’s talk about adding points onto it. Because that’s the only way you’re going to be able to compare it apples to apples.

[00:29:26] TU: Yeah. That might not even be so obvious when you’re initially shopping. I was talking with a pharmacist recently that was talking about a rate they had received from a lender, and they didn’t realize that there was built into that an assumption they were going to pay X dollars to buy down the rate. But they were comparing that to another rate that didn’t have points involved. So to your point, we really need to compare those as equal as possible to be able to make a decision on where to go forward. That’s great.

Number 10, Nate, is skipping out on the proper team. I talked about this a little bit with making sure you’ve got a good agent that can be a connection and referral to other parts on the team. But there are a ton of folks involved in this process, right? When you think about the agent, you think about the lender, you think about the title company, the lawyers that are working as a part of the title process. Tell us a little bit about what is the proper team and some strategies folks can employ to make sure they’ve got the right team in place.

[00:30:16] NH: Yeah. This part can feel overwhelming. Whenever somebody started talking about team, I started to feel like, “Oh, I don’t know how to make a team. I’m a first-time homebuyer. I don’t know what I’m talking about. I don’t know who to call. That’s too overwhelming. I’m not going to deal with it,” right? But I encourage you to look at that and not think of it as something scary, but it’s something that’s there to help you, right? Just like we have a team in the hospital or a team in the pharmacy, we’re not expected to know and do everything exactly, right? It’s a team effort.

Starting with someone like a real estate agent can be a great place to go. You can find one expert. Then from that expert, they can refer you to others that are in that space, so your accountant, your insurance agent, your lawyer, your home inspector, your contractors. All those can stem from that real estate agent if you’d like. But you want to make sure those experts are in place because, again, relying on you to do all the background research and googling things ahead of time and YouTube videos online, right? Like you want to make sure that you’ve got experts in place that can help you with those difficult things so that you’re not trying to manage all of it, while also having a career and a family and everything else that’s going on.

[00:31:18] TU: I really like how you’ve simplified this because the concept of all those individual members is overwhelming. But if I can feel good about finding a good agent who is qualified, reputable, I feel good about the working relationship with that individual, good communication skills. From there, I can really rely on them and trust them to help me with those other connections and other parts of the team.

Just like we talk about with financial planning, the bar of entry into financial planning is fairly low in terms of someone being able to call themselves a financial advisor. Therefore, there’s a huge span that’s out there in terms of experience, credential, certifications, individuals that they’ve worked with and areas of expertise. I would argue there’s a lot of similarities in terms of real estate agent, in terms of how many deals they’ve done, experience they have in working with pharmacists or working with certain lending options and their awareness of lending options that are out there. So I think really doing due diligence and homework to make sure you have that good agent is really important.

That’s one of the main reasons, Nate, that we’ve now collaborated probably going on, what, three-plus years working with you to develop the home buying concierge service, which is really intended to help individuals in the YFP community, looking to purchase a home, whether it’s their first home or a second home, whether it’s a real estate investment property to make sure they find an agent that they are comfortable with, that’s a good fit, but also that has you there as a resource along the way. So tell us a little bit more about that home buying concierge service, and then we’ll make sure to point folks in the right direction to learn more information.

[00:32:53] NH: Yeah. What we wanted to develop was a way to take the guesswork out of that first step. Like I said, when I was buying my home, first-time home purchase, I was overwhelmed by this idea of the team and like where do I start. I think I just like asked a couple of friends for a real estate agent. That can work, right? It’s good to get a referral from someone personal. But what we’re finding is that a lot of times, people are moving somewhere, or they’re in an area where maybe they don’t know a good agent, or maybe that friend didn’t have the best experience.

So if you’re looking to take that guesswork out of the process, what we’ve developed is a really simple phone call. You can connect with me 20 or 30 minutes on the phone. We’ll get an idea of your budget, where you’re looking to buy, what your must haves are, what type of agent we think you’d work best with. We have some really cool targeted questions about what that process looks like and what’s important to you when picking an agent. Then we help you get connected with them, all for free. So we’ll actually interview agents in your local area, if we don’t have anybody already in our Rolodex of people, and we’ll get you connected with them so that you can get off and running on the right foot. Like we said, If you don’t know anything else about the area or any other people to work with, start with that agent, and everything can kind of grow from there.

The last piece that I think is important is that once we make that connection to the agent, we don’t go away like, “I don’t drop off the team. I’m still part of that process.” So if you need a second opinion on something, if you want to bounce ideas off of somebody who’s both a pharmacist and an agent, come right back. I’m still part of the team that can help you guys out. So it’s been a fun service because I get to see pharmacists buy places all over the country and see them grow. It’s a great way for us to kind of give back and help out with a pretty stressful process and making it less stressful.

[00:34:30] TU: Yeah. Again, whether you’re a first-time homebuyer or you’re moving or you’re looking for an investment property, all of those involve finding a good agent, and that service that Nate just described is intended to do exactly that, regardless of if it’s a primary home or an investment property. We’ve had some really cool success stories through this program, and I would point folks to episode 160 as an example of that, where you talked with Shelby Bennett and Bryce Platt about their experiences, working with you through that concierge service and what that is experience was like and why it was valuable. We’ll link to that in the show notes.

For folks to get connected with you, very easy, you can go to yourfinancialpharmacist.com. At the top, you can click on home buying and then find an agent. From there, you’ll find an option to reach out and connect with Nate. Then you’ll be off and running with finding a good agent that’s local to your area.

Nate, as always, thanks so much. It’s been an awesome 2022 and looking forward to having you on throughout 2023 to provide our community with ongoing updates and information related to home buying.

[00:35:29] NH: Thanks, Tim. I really appreciate it.

[END OF INTERVIEW]

Thank you, again, for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

[END]

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YFP 281: The Connection Between Finances and Fitness with The Fit Pharmacist

Posted on by Caitlin Boyle

Dr. Adam Martin, The Fit Pharmacist, talks about practical strategies you can implement to help you thrive, five areas of the SMILE framework for living to your full potential, and the most effective antidote and prevention to disempowering feelings.

About Today’s Guest

Dr. Adam Martin works with people to write their scripts for success using proper nutrition, stress management, and the power of a positive attitude. He earned his doctorate of pharmacy degree from the University of Pittsburgh School of Pharmacy, and with over 7 years of experience working full-time in the community pharmacy setting, he’s passionate about empowering other pharmacists and pharmacy students to put the health back into healthcare through leading by example in their professional practice to not only live their best lives but to

inspire others along the way to do the same. He pairs his PharmD with his expertise as a certified personal trainer and nutrition consultant to guide self-care back into healthcare.

Dr. Martin is the founder of The Fit Pharmacist, LLC. As a National Speakers Association (NSA) Professional Speaker, Adam’s core passion is traveling to pharmacy schools across the world to speak to pharmacy students, sharing practical plans of action that will empower them to maximize their careers and create a competitive edge in the profession to maximize their success and degree of impact.

He has made his life’s work showing people how to take control of their overall wellness, sharing SimpleSolutions through his writing for numerous pharmacy publications including PharmacyTimes magazine, and is the author of the best-selling book “Rx: You: The Pharmacist’s Survival Guide for Managing Stress & Fitting in Fitness” as well as “Gen-Z Pharmacist: Dominate Pharmacy School & Script Your Dream Career.” He is the host of The Fit Pharmacist Healthcare Podcast, sharing successes and practical strategies from the most successful minds in the profession of pharmacy with a new episode released every week.

With a passion for learning and serving his patients, he’s an inaugural member of the Pennsylvania Pharmacists Association’s Leadership Excellence and Advocacy Development (LEAD) program, and strives to serval the global community of pharmacy as a medical missionary, having served in Honduras and Panama as a pharmacist in the field. In 2019, he was named the “Most Influential Pharmacist” by SingleCare’s Best of the Best Pharmacy Awards.

Episode Summary

In this week’s episode, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by Dr. Adam Martin, The Fit Pharmacist. Dr. Adam Martin is known for working with people to write their scripts for success using proper nutrition, stress management, and the power of a positive attitude. In today’s show, Tim and Adam discuss the eBook, “5 to Thrive Healthcare Habits,” and how those mindset habits for thriving in life mirror the mindset for financial fitness. Adam shares how he came up with the SMILE framework, how to operate from a thriving versus surviving mindset, and how to form a realistic work-life balance with practical strategies that anyone can implement into their lives. Tim and Adam work through the five areas of the SMILE framework, created to help others live with intention and unlock their full potential by providing examples and demonstrating the concepts with real-life examples.

The SMILE framework consists of the following:

Shift Your Focus
Move and Groove
Identify the Best You
Let Loose and Celebrate
Electrify Your Spirit

Together they discuss what Adam calls the most effective, instant antidote and prevention to disempowering feelings. Adam shares a technique, “GRIN (Gratitude Ripple In the Now),” for celebrating and igniting joy.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRO]

This week, I had a chance to welcome a friend and colleague, Dr. Adam Martin, The Fit Pharmacist, to talk about Five to Thrive Health Care Habits. Highlights from the show include Adam and I talking through practical strategies you can implement to help you not just get by or survive but to thrive, the five areas of the SMILE framework to live with intention at your full potential, and the most effective instant antidote, as well as prevention, to disempowering feelings.

Now, before we jump into the show, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 280 households across the country. YFP Planning offers fee-only high-touch financial planning that is customized to the pharmacy professional. If you’re interested in learning more about how working one-on-one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call by visiting yfpplanning.com. Whether or not YFP Planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

Okay, let’s jump into my interview with The Fit Pharmacist, Dr. Adam Martin.

[INTERVIEW]

[00:01:21] TU: Dr. Adam Martin, The Fit Pharmacist, welcome.

[00:01:24] AM: What’s up, Tim. How you doing today?

[00:01:26] TU: Man, I’m doing great. How’s your week been, and how are you doing?

[00:01:30] AM: Dude, it’s Fit Pharmacist Friday. Let’s go. Let’s go.

[00:01:35] TU: Let’s do it. So you recently published a resource, and we’ll leave a link to this as well, Five to Thrive Healthcare Habits, simple and quick ways to use what you have to live a lifestyle you dream about. It caught my attention because of how much overlap there was between those five habits and what I often think about as it relates to the financial plan. So I’m going to dig into each one of those in more detail.

This has been a long time in the making. You and I had the opportunity to present together at the OPA Annual Meeting last year in Columbus. That was on fire, right? That was an awesome session that we did together, and I’ve thought so many times, when you and I have a chance to converse and dig deep, like there is so much synergy between a lot of the work that you’re doing and the focus on the mindset in the healthcare and how we often need to, should be thinking about the financial plan as well.

So this is going to be a party of sorts. It always is when Dr. Adam Martin is on the line. So before we get into those five habits, we’ll walk through them one by one, I don’t want to just gloss over the significance of operating from a mindset of thriving, rather than just getting by and surviving. Since the focus of our time together is going to be all about thriving, tell us more about why that is center to what you’re doing and what you’re talking about and how you’ve developed that mindset and learn that through your own experiences.

[00:03:05] AM: Absolutely, Tim. Well, first off, thanks so much for the opportunity. Like you said, it’s always fire getting together, especially in person, but we’ll roll with this. But, yeah, OPA was awesome. First live event since COVID, I believe, for both of us in a long time. So that’s kind of where that idea stemmed from because there are so many overlaps with wellness and fitness and also your money because you won’t feel very well if you’re broke or in debt, so it just kind of goes with that through line.

But the reason that I made this, and just so y’all know, this is a free e-book, so I’m not selling anything, this is such a needed resource. I created it, like put a ton of time, made it simply applicable because there’s so much information out there that, yeah, it’s great. But how are you going to apply it?

[00:03:54] TU: That’s right.

[00:03:54] AM: For example, we all want to get healthier, right? So we go and hire a nutritionist, dietician, whatever. That’s outside of our normal, and they say be mindful when you eat. Chew your salad 30 times before you eat. We don’t get lunch breaks. What are you talking about?

So when you take the science, the research, and you say, “How can I practically apply this in a simple way,” because here’s the reality, you ain’t got more time. You don’t got any time. You ain’t got more things, and you’ve got no room left on your to-do list. So how are you going to make a change that you know you need to make and you want to make when you don’t have time, when you don’t have money, and you don’t know what’s going to actually work and what’s a scam?

I took all the things that I’ve learned in my journey in coaching my clients and working with some of the best in the world of mindset of fitness, of nutrition, and I condensed them down into a practical framework that is easy to understand, and more importantly, easy to implement, that actually gets results. So that’s kind of where that came from, from the need of burnout and stress and how do I manage a work-life balance. There’s such a need for it. That’s where it came from.

[00:05:12] TU: That’s why they call you The Tony Robbins of Healthcare right there, right? That is why. I think that the practical implementation is huge, and we see this every day from the financial side. I live it in my own personal financial journey. We can have these big lofty goals with big numbers. Until we break that down to something that means something to us today, that we can put our arms around, that we can grasp, that we can implement, that we can get some momentum and wins on, those are just nebulous, big, scary goals that we can have somebody coach us and say, “You know what, Adam? You need $3.5 million in your retirement account to save.”

What does that mean for today and how we can practically implement this? Again, I just love the synergy between the work that you’re doing and what we’re obviously talking about over at YFP. So let’s jump into these five habits to thrive, and the acronym here to remember is the SMILE framework, okay?

[00:06:10] AM: That’s right.

[00:06:10] TU: S is shift your focus. M is move and groove. We’ll talk about these each individually. I is identify the best you. L is let loose and celebrate, and E is electrify your spirit. So number one, shift your focus. In this habit, you talk about how we often set a goal. It could be around losing weight. It could be around healthier eating, connecting to our community, in our case, improving our financial situation. Despite knowing what to do, we don’t do it. The choices that we make that do or don’t lead us to our goals often revolve around our state of mind.

So my question for you here, Adam, is why are we drawn into these negative thought patterns and habits that can put us in ruts and prevent us from achieving our goals, even when we don’t want that to be the case?

[00:07:02] AM: Excellent questions. Why don’t we do that? We’re like – It’s like in the moment. We know we’re not supposed to do this, but we’re doing it anyway. So big picture, I just want to simplify this. The reason it’s called the SMILE framework is that regardless of your nutrition, your job, your career, your personal brand, all of it, the reason you do anything is so that you become happy. You want a happy life. What’s the most characteristic thing that would kind of show that someone’s happy? A smile. While this might seem mute, it is absolutely true. We all want to be happy. That’s why we do anything. By being happy you SMILE.

The reason I did this is to make it simple, so that you can see that you are focused on the outcome. You’re focused on what you want. A lot of times, when we get overwhelmed or we’re pulled in all these directions, for example, what do I do with my finances? The world’s going into recession? What do I do with this? What I do with that? What’s the best workout plan? What’s the best nutrition plan? How do I manage stress? The question you have to ask is what is your outcome? What do you want?

That comes right into your question, ironically, because that’s the answer. The first kind of pin of that SMILE framework is S, to shift your focus. What you need to ask yourself is what do I want? What is the outcome that you want? If you reverse engineer that, it will lead you upstream to realize that it all starts with the quality of question that you ask. To your point or question, again, the answer of why do we ask questions that get us so worked up, that get us so stressed out and focused on what’s wrong? It’s because that’s our survival brain.

Here’s something that I want you to hear and understand. Your brain does not exist to make you financially successful, to make you happy, or to make you thrive or live your best life. Your brain exists to keep you alive. That’s it. So when you’re taking a financial risk for a potential gain, that is interpreted as dangerous.

[00:09:11] TU: Scary. Yup.

[00:09:12] AM: Threats to your survival.

[00:09:14] TU: That’s right.

[00:09:15] AM: Your subconscious is going to hijack you and say, “Oh, no. That could mean death. Let’s not do that.” Going to work out, that is painful, right? I mean –

[00:09:25] TU: Literally tearing muscles. Yes.

[00:09:26] AM: After not going for a while, that is painful. That is a threat to survival. So whatever area of your life you want to improve, you inherently know that when you start that process, that it is uncomfortable. We’ve all heard that phrase, nothing grows from comfort zones. So you have to recognize that you will have resistance from the good intention that your brain is trying to protect you. So don’t be hard on yourself and say, “Why is my brain so stupid?” It’s trying to keep you alive because that’s what it’s designed to do. So you have to identify the purpose. You have to identify what you want, and then recognize there’s a gap there that is going to require your active participation.

[00:10:09] TU: Yeah. Adam, my mind is spinning with the financial connection here. So a great example, I just mentioned a big scary retirement number before, $3.5 million. That often is not the question we want to focus on. So we’ve been trained societally through a lot of financial information commercials to ask the question of how much do you need in your bank account to retire, right? It’s an important question, but it’s not the question that we need to be asking ourselves, right?

The question we need to be asking ourselves is what does it mean to live a wealthy life, not just in dollars and cents, right? How can our financial plan support and get us towards living a wealthy life? Why do we even care about this topic of money to begin with? Money is a tool that derives value, only because you and I and the rest of the world say it has value. Objectively, by itself, it doesn’t have value, right? So why does money matter to you? What does it mean to live a wealthy life? How can we support a financial plan that aligns with that?

Because to your point about some of the pain, it’s no different with our finances. If I say that, I want to be able to save money for the future because of X, Y, and Z, and that’s a compelling reason, well, guess what? That means I’m going to have to not spend it today to save it for the future. There’s pain in that, right? There’s pain. So I love how you focus. Again, we’ll link to this, so folks can download it and read it in its entirety.

But you have a whole page, maybe two pages. I remember at least one page of questions that we can be asking ourselves, right? Better questions, give us better information that we can live with more intentionality. I think that’s so important here, when we talk about shifting your focus. So that’s habit number one, shifting your focus.

Number two is we work to the SMILE framework. The M is move and groove, and you argue that this is the most effective instant antidote, as well as prevention to disempowering feelings. That’s a pretty strong statement. Tell us more. Why is that the case, and what does this practically look like?

[00:12:14] AM: Absolutely. So without a doubt, if you’re in a funk mood, if you’re scared, if you’re terrified, the fastest way to break out of that state is to move your body, the fastest way. You can do it immediately. For example, if you ever had like an argument, a confrontation, or you’ve heard the phrase, “Go walk it off,” there’s truth behind that. So this comes to go like, well, if we just move. What are you just saying? Like run away from your problems? Running away from your problems burns zero calories, okay?

But what you have to recognize is that when you move your body, you are changing your state. So I’m not saying go run a marathon. But I’m saying, for example, if you’re out in public, and I told you that I would give you 50 grand if you could tell me which of the people in public was depressed, I guarantee you could do it. You’re not a psychiatrist. You’re not a therapist. You don’t have ESP. But how can you see that? Because when they’re walking, their heads’ down. They’re walking slow. They’re chests in, right? They’re kind of like this. From someone that has overcome that, I can tell you, that’s absolutely spot on.

But if you – If I do the same to the other side, I say, “What if I gave you 50 grand to identify the most confident person that you encounter?” You can already see in your mind what that’s like. They’re walking with purpose and intention. Their shoulders are back. Their chest is out. Maybe they’ve got like a little swag in their step. It’s because that motion is inducing the emotion. If you look at emotion, I don’t want to feel bad. I don’t want to feel better. I want to be happy. I want to feel fulfilled. Emotion is energy in motion. So to snap that, it’s very simple. Change how you’re carrying yourself, moving yourself.

Now, to the practical implementation part. Well, Adam, how do I just snap out of it if I’m having such a bad day, week, month? Music. Let me ask y’all a question. Have you ever worked in a community pharmacy or just been out in public and on the PA system, on the radio in the store, a song comes on? Maybe some Gloria Estefan, if we want to throw it back. All of the sudden, you see Granny Smith in Aisle 5, tapping her foot to the point where she’s like, “[inaudible 00:14:38] pop out or what?” She can’t help it. She might not even be aware of it.

Everybody is moving, tapping their feet, bobbing their head. Music is the fastest way to change your emotion. You can do it without even being aware of it. So that’s the fastest way to snap out of your state. Play a song that makes you jive.

[00:14:59] TU: So are we talking dance party in the pharmacy? Is that what we’re doing here?

[00:15:02] AM: So true story. When I started as a pharmacist back in 2012, it was, I mean, busy store, like super busy. When I retired there in December, we were doing over 600 scripts a day on Monday with no pharmacist overlap. That’s the reality. So there’s a lot of stress as you can imagine. So in order to kind of refocus, I would actually create something free on Pandora called Happy Radio. So whenever I noticed stress coming, the levels of tension going up, I would literally play that.

That’s where – If you ever heard the term club pharmacy, I coined that term back in 2012 because it’s how you frame your environment. If you say, for example, I have to go to work today, how does that make you feel? Versus I get to go to club pharmacy today. That’s going to interrupt your state. What is he talking about? What, like Sam’s Club? Like what? Yeah. So you frame it, and then you entertain it, and you do something different. That’s how you kind of snap out of the norm so that you can rescript what you want to get.

[00:16:06] TU: I love that. I think some people, this is more natural than others. For me, it’s music. You talk about the idea of creating your playlist. Have it ready, right? Walking is a huge daily rhythm or routine. It just provides like, for me, some perspective, some space, and some peace of mind as well. So find that piece that really helps you. That’s number two, move and groove.

Number three, the I in the SMILE framework is identify the best you. What do you mean by this, identify the best you, and how can individuals work towards accomplishing this?

[00:16:42] AM: Excellent question. When it comes to psychology, the most defended aspect of the human condition is your identity. People will defend that to the death. Look at any religious war that’s ever been fought. Look at anyone that’s done anything drastic. Look at people who refuse to do anything. What do they say? I’m not that kind of person. That’s not who I am. Your identity is the strongest driving force in your psychology.

When we’re talking about goals with finances, with fitness, why are you doing that? Why do you want to save three and a half million? Yes, that is, obviously, a good goal. But what is the means behind that? What does money mean to you? What will that afford you? There’s got to be some sort of compelling future because the reality that we all know is that whatever your goal is, whether it’s small or large, think big, by the way. Whatever your goal is, you are going to have resistance. You’re going to come across adversity. You’re going to be exhausted. You’re going to start with a lot of motivation.

But if you’re not committed to exactly with a perfect picture in your mind to visualize exactly why you’re putting in the time, why you’re putting in the work, why you’re sacrificing a comfortable lifestyle, and instead going after it, facing rejection to make calls, to grow whatever you’re trying to achieve. You have to have a clear, compelling future that pulls you towards what you want. Keyword, you, what you want. Not what your friends want. Not what you think you should want or should have or should do. Quit shoulding all over yourself, please. You want something that is genuinely authentic to what makes you happy. That’s the secret.

[00:18:43] TU: That last point is huge in the financial services space, right? Because I talked to people weekly. I experienced this myself as well, where often our goals aren’t truly our goals. The reflection of what we feel like should be our goals. Or we interpret it as someone else says it should be our goals.

One thing you said there I want to dissect a little bit more, you kind of mentioned like, by the way, think big. As you said that, my mind went down this path how often the goals I hear from individuals, guilty as charged, no judgment to anyone else, we often limit those. I’m wondering why? So for example, right? If someone says, “Hey, I really have a goal to give philanthropically or to give,” like usually we’ll put a qualifier on that like 3, 5, 10 percent of my income, or I really want to save for retirement.

It’s a big number. Don’t get me wrong. But we’re kind of defaulting to like what is a limit low number that is acceptable or that we’ve heard elsewhere, and our mind doesn’t naturally go towards, well, if instead of making $120,000 a year, and I gave 10% of that or $12,000, what if I made $500,000 a year? 30% of that or – Why doesn’t our mind go in that direction? Why are we kind of defaulting to this low norm, if that makes sense?

[00:20:11] AM: Excellent question. So another thing that we all know of, and I want to kind of bring this back home, is the only thing that’s going to stop you is you. Not the economy, not your circumstances, you. When I mean you, what I mean is your fear. While there’s lots of specific fears with everyone in specific situations, all humans have two fears. There’s two fears that are the most common fears, the fear of not being enough and the fear of being unlovable.

When you’re looking at, “I want to set a goal,” if you say like, “Oh, this would be a nice increase.” Let’s say, for example, you’re making 120 grand a year, and you want to go up to 150. Just a little bit. Well, if I set 500 grand a month, that is a huge jump. That is a risk that if I don’t get it, it might mean that I’m not enough. It might mean that I can’t be loved because I didn’t get this. It’s not what’s going on. It’s not your circumstance. It’s the meaning that you give to your circumstance that is the driving force of whether you’re going to face everything and rise or fall into that fear. It’s all based on the meaning that you give something that becomes the outcome.

[00:21:29] TU: In that example, we’re essentially trying to set ourselves up to avoid failure or not even actual failure. Our perception of what that failure would be in that. So that’s interesting. Okay. That’s number three, identify the best you. Habit number four in the SMILE framework is let loose and celebrate. You say, “You need to party more, like seriously.” You will feel like you’re losing when you’re actually winning, if you do not celebrate your wins. My question here is why do we not celebrate our wins, in the same way that we dwell on our losses?

[00:22:03] AM: Let me paint a scenario that those of you watching or listening might resonate with. You work for years, for months, for, let’s say, getting a job as a pharmacist, and you get the job. You get the email. You’re on stage, getting a promotion. As they’re calling your name and reading your bio, you say, “What’s next?” You get the promotion. Then you say, “I’m going to go after this goal.” Let’s say that you launch a book. Let’s say you’re trying to get your name out there and build your personal brand. So you decide that you’re going to publish a book. So it gets released. What’s next? What’s next? What’s next? You’re so focused in the future that you’re living in a state of anxiety.

Now, here’s something that I want to just share, as far as emotion, like why do I feel this way? What’s wrong with me? Those kinds of things that get us twisted. If you’re living in the past, you’re living in depression. If you’re focused on the future, you’re living in anxiety. But when you’re focused on the present, it is a gift, which is why it’s called the present. The attitude of gratitude is honestly the antidote for fear.

Try this. If you’re angry, frustrated, or ticked off, I want you to think about and just look around and say one thing that you’re grateful for. Then say another and then another. It is literally impossible to be both grateful and angry or upset or overwhelmed at the same time. It is impossible. So the antidote to this, really, is to be grateful at your progress.

Now, there is a thin line for this, and I think the best way to do it is to live it and really go after your goals because on one hand, you don’t want to rest on your laurels and take your foot off the gas, because if you’re not growing, you’re dying. So you want to constantly be pursuing the best version of you. But if you’re living in that what’s next, what’s next, what’s next, here’s the reality. You will feel like you’re losing when you’re actually winning, if you don’t take time to note how far you’ve come.

[00:24:16] TU: 100%. Yes.

[00:24:19] AM: That’s really it. So you say like, “Oh, Adam. There’s so much going on. I don’t know. How do I be grateful? I’ve heard this before. It’s not practical,” blah, blah, blah. So we’re going to go with the grin, with the SMILE framework, and stay on theme here. I actually found this out of a necessity when I was in a really dark time in my life many years ago because I heard this over and over and over from so many successful people. Gratitude is the antidote to everything, all this sort of stuff.

I woke up in an anxiety attack, and I thought, how can I start this gratitude thing? So I was laying in bed, and I said, “What can I be grateful for right here right now?” So I just rolled my feet around like, “Wow, these sheets are really comfortable. I’m really grateful to have comfortable sheets.” “Wow, I’m on a comfortable mattress. I’m really grateful to have this mattress and not be laying on the floor.” “Wow, I have my own bedroom. I’m grateful to be in this bedroom.” Oh, my goodness. I own a house. Wow, I own a house, and it’s in a neighborhood that’s quiet. Just be quiet and listen. I can’t hear anything. It’s so quiet. I live in the city.”

It became a ripple effect from wherever you are in the moment. State and feel and focus on wherever you are in the moment so that it’s real. It’s one thing to say that you’re grateful for something that might have happened. But when you can be lying in bed and feel your soft sheets, it gives evidence and makes that real. When you’re in your room, and you like peace and quiet, and you just listen to the silence, that is evidence that, yes, this is something I can be grateful.

So the acronym I made for this is to GRIN. It’s the gratitude ripple in the now. So wherever you are, just pause and start thinking like do you have clothes on? Those probably. I mean, not everyone in the world has clothes, right? Are you standing somewhere that is safe? Is it raining outside, but you’ve got to shelter over your head? Just start where you are, and ripple from where you are outwards, and just watch what happens inside. That is truly the secret. But it’s so simple, people throw it out like, “Oh.” It’s so simple, it can’t fix my complex problem. The antidote really is that simple, and it’s so simple that it actually works.

[00:26:40] TU: Yeah. I really liked that. You and I have talked about this before. This has been transformative in my own life. So I am notorious for living in the future. Living in the present is not my jam. I will say I’m not a big dweller of the past. So that is something I’m grateful for. But what I have found is like what you describe. Publishing a book, what’s next? Giving a speaking event, what’s next? Achieving this milestone, what’s next? It’s not natural for me to really pause and be present in the moment.

But the gratitude piece, what I have found is, and you described it perfectly, an example, when you’re laying there in bed in the midst of an anxiety attack, as you’re going through a gratitude, exercise, and reflection, it forces you to be present in the moment. It shifts your perspective and focus while you’re there as well.

I think the trick for this, in my opinion, which you’ve really addressed here with the gratitude rip on the now, the GRIN acronym, is it doesn’t have to be like a one time in the morning, I’m going to do a gratitude exercise for five minutes. This could be a quick reminder as you’re going throughout the day because as you highlight, I mean, at any given moment of the day, we can all stop and find one thing that we’re thankful for in that moment. So I love that.

[00:27:57] AM: One caveat to that, I don’t want to say that thinking in the future is a bad thing. You want to always be planning. This is one of the biggest sources of anxiety that pharmacists have. When you’re in pharmacy school, your goal is to graduate and get a job. So when you graduate and get a job, if you don’t have goals, you have a problem. That’s where a lot of pharmacy students transitioning to pharmacists life are.

I don’t want to downplay how valuable forward thinking is. Just make sure that as you make those milestones, you pause, you note them, and you celebrate them however you actually can feel that celebration of your progress in the process.

[00:28:37] TU: I love that. Great input. Number five in the SMILE framework is electrify your spirit. It’s clear as we’re talking that consistency is the key here when we talk about the SMILE framework and the importance of a daily routine. You say in the e-book, “Stand guard at the doorway of your mind at the most critical time of the day, the beginning.” Tell us more about why standing guard at the beginning of the day is that important, and what are some of the habits that folks can implement to help here?

[00:29:07] AM: If you ever woke up, and you stub your toe, and then you realize that you’re late, and you get a red light, and then your tech doesn’t show up, or someone comes and yells at you, and what do you say? Wow, this day keeps going from bad to worse. It is a ripple effect from what you focus on, literally taking all that we’ve looked at through the SMILE framework, starting with shifting your focus.

When you wake up in the morning, you have a clean slate. You are starting with a brand new bank account of time for those 24 hours. If the first thing you look at or think about is your to-do list or the news or all the things that you wish you did, then that’s going to ripple and transcend the whole mood of your day. So it literally – You all know this is true, but we all do it.

Again, simple doesn’t mean easy, especially if this is a habit that you’ve had for a long time, the simplest thing, to stand guard at the door of your mind is to not touch your phone for the first half hour, hour, whatever that might be. For me, it’s two hours because it’s that sacred of time. Because think about it. People want to get your attention, news highlights. They’re not talking about new puppies that were given out for free. They’re talking about stabbings and murder and death.

[00:30:35] TU: Push notification. Push notification.

[00:30:37] AM: Yeah, yeah. All that stuff. It’s grabbing your attention. Your eyeballs are the new real estate. That’s what everyone is after. The best way to get them, again, coming back to an original point, is your brain, and your brain is wired to keep you alive. So it is going to be focused on any potential threat as a means to protect you.

So knowing that, that’s how media and everyone uses that fact of your physiology to grab your attention, to lead with danger and all these negative things. So if you can just give yourself an hour to instead of let other people direct how your day is going to go and really own your hour and decide and declare that I am going to fill the first hour, half hour, whatever you allow, that that first fruit of your day needs to be given and stewarded in a way that it sets the tone and ripples you towards the compelling future that you want. Instead of I have to avoid all this stuff that I don’t want.

Really start simple. The phone is the most effective thing, and that’s hard for a lot of people. I remember when I first did this years ago. It was like an addiction, and it’s just how we are in society. But it’s become normalized to the point where no one really questions it. But when you realize that by doing that, you’re giving control of your mind and focus to other people that just want your eyeballs, and want you to click and scroll and all this stuff, it puts you in the driver’s seat so that you can now intentionally be present on what you want to do.

You can start simple. This is my routine. This has evolved over the years. I start off by saying, “Good morning, Jesus Christ. Holy Spirit, fill me and guide me, so I can be a blessing in your way through this day. Today is going to be an amazing, outstanding day.” Then I take a five-minute freezing cold shower, I read my devotional, I jump in the Bible, and then I’m off on my 45-minute walk. That’s how I start.

Now, that might not be practical for you. You might genuinely like realistically have five minutes. In those five minutes, don’t be on your phone and start with the gratitude ripple, the GRIN. So start where you are to start listing things you’re grateful for. I promise, if you do that every day for 30 days, you’ll feel like a totally different person.

[00:33:11] TU: Yeah. It’s about winning the start of the day, whether that’s five minutes or three hours, right? Some people, maybe there’s more flexibility and time, whatever. Many folks, that’s not the case. Winning the day and the momentum and, as you mentioned, the ripple effect that can come from that. I love that.

Mine has evolved over time, and there are certain seasons where I’m humming every day. There’s other seasons where I kind of fall off track. You give yourself some grace. You get back on. But I consistently come back to a noticeable, palpable difference. I’m sure Jess and the boys would say that they can see it as well when I start and win the day. Because what I have found, and this has taken a while to really, I think, realize and work through, is that things can just begin to quickly unravel, and you throw your hands up, if things aren’t going in the steps I think they should go.

What I’ve really, especially with my four boys, is that it is rare, very rare, actually, that their behavior changes in any given day. It’s my perspective, patience, and mindset, coming into my interactions with them. When I walk out of my home office door, that first two to five minutes, which is on me and my responsibility, sets the tone for the rest of the evening, the rest of the evening. For the longest time, I’d kind of throw my hands up a little bit of a victim mentality of like, “Ah, man. They are so loud, Adam. They are so loud. Can’t they just be quiet?” It’s like I remember I had this conversation with my wife one time. It’s like, “They really don’t change a lot in any given day.”

I mean, sure, there’s a behavior thing here there, but like it really is like my mindset, my preparation, my awareness. That, obviously, is talking more about the second half of the day. But same can be said, I think, for the first part of the day as well.

[00:35:04] AM: Yes. Tim, you said something that was such a gem, I have to bring it to the forefront. You said, “I have to give myself some grace.” I really want everyone listening to this to understand, embody, and implement that. Because if you’re listening to this, chances are you’re not like – You’re going after the best version of you.

I mean, if you’re listening to a podcast, if you’re in this community, it’s because you want more. You know you’re destined to be more, to give more, to do more, to contribute. Not just to improve your life but to be an impact on those that you are blessed to influence. That’s ultimate leadership is influence. So when you’re in this journey, remember that it is not about a destination. It’s about who you become in the process. It is about progress, not perfection.

So if you’re wanting to be a good leader, if you’re wanting to be the best employee, wherever you are in your career, if you want to receive something like grace, because we all are very human, the best way to receive something is to give it. To the point of finances, so many people, one of the reasons that they want to save, and call me on this, if I’m wrong, Tim. You’re the pro of the pros. One of the reasons that people give to save money and make more is so that they can have more to give away. They can contribute to their church, whatever it might be. True or true.

[00:36:36] TU: True, true. Yep.

[00:36:38] AM: So here’s the challenge. This is very humbling, but this is literally the cheat codes for life. This is how it works. Whenever you identify whatever it is you want to receive, you must become it and go give it because, especially with finance, here’s the reality. If you won’t give a dime out of a dollar, you’ll never give a million out of a billion. So it’s not I’ll wait until. It’s how can you give from where you are right now. Because whatever you give will come back to you tenfold.

Now, that’s not the reason that you give. But the secret, the life hack, the behind the scenes truth is that the secret to living is giving. When you embody that and say, “If I want this to come in my life, how can I become it,” and then use that to give and serve others, your life will never be the same, and you will actually start to find that you are smiling more than you ever thought possible.

[00:37:39] TU: Oh, man. That is so true and so much wisdom in that that I think we can fall into that trap, and it is a trap to think that in that day in the future, a future state when I’ve got X in the bank, at that point, like I’ll be ready in a position to give. To your point about building that habit and that muscle and making that a priority, so important.

There you have it, the SMILE framework. As always, Dr. Adam Martin, it has been a pleasure. I’m so grateful for you as a friend and a colleague. For folks that don’t yet know you and follow your work, which I think are few and far between listening to this, but for folks that don’t, where’s the best place that they can go to stay in touch with you?

[00:38:22] AM: Thank you, Tim. So, so honored. So I’ve had the honor and privilege of working with and helping many pharmacists and students grow their personal brands all across the world. Your brand is my favorite because you embody the principles and values. You are the best steward of your gifts I’ve ever seen in my life. So it is such an honor.

[00:38:40] TU: Thank you.

[00:38:41] AM: I just want to give a shameless plug of real talk real real quick there. But if you want to see more smiling faces and goofy things, feel free. The best place to interact with me is on Instagram, all one word, @thefitpharmacist. I also have a podcast that I’ve been running for a little over five years now a new episode every week. It is The Fit Pharmacist Healthcare Podcast. That’s on your favorite podcast platforms, iHeart Radio, iTunes, Spotify. You name it, I’m there. So feel free to subscribe on there if you want more content, also on LinkedIn. But, yeah, feel free to interact and engage.

But definitely make sure, if you’re not for some crazy reason, following Tim and Your Financial Pharmacist because he has such a gift for connecting and nurturing people that have an incredible spirit and value within them. That he invests and nurtures so that they can then become the people that go and nurture and gift them. Just an amazing quality that you have, Tim, and I’m just really inspired by you personally. So seriously, thank you for who you are and who you continue to become.

[00:39:50] TU: Awesome, man. That means the world to me, really, guys. I really appreciate that, and I’m so grateful for you and appreciate you taking the time to come on here. Thanks, Adam.

[00:39:59] AM: An honor. Thank you.

[END OF INTERVIEW]

[00:40:01] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

Thank you, again, for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

[END]

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YFP 280: How and Why This Pharmacist Pivoted to a Writing Career

Posted on by Caitlin Boyle

Dr. Warda Nawaz discusses what led her to leave her full-time pharmacy job just 3 months in, how and why she pivoted to a career in writing, and what she has learned about herself in the early stages of entrepreneurship.

About Today’s Guest

Warda Nawaz is a freelance medical writer and a creative writer of YA fantasy fiction. She is also the owner of her online medical writing business, Jasmine Medical, which empowers women to take ownership of their bodies by communicating health content that educates professionals and consumers. Warda also currently has a young adult novel set for publication, which discusses women’s experiences with misogyny, predation, and violence. Her goal is to promote the perspectives and experiences of minority women and to encourage other women to embrace creative endeavors by placing their narratives, fiction, and non-fiction, in the publishing space.

Episode Summary

In this week’s episode, Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by Dr. Warda Nawaz, a freelance medical writer and creative writer of young adult fantasy fiction. In their discussion, Warda shares what led her to leave her full-time pharmacy job after just three months, how and why she pivoted to a career in writing, and what she has learned about herself in the early stages of entrepreneurship. After walking through her pharmacy journey, Warda details how the start of her career aligned with the initial events of the COVID-19 pandemic in the United States, making for a challenging and unusual career kick-off. Just a few months into her pharmacy position, Warda experienced a life-altering event that changed her career and the trajectory of her life. No longer able to endure the physical demands of her pharmacy job, Warda poured herself into her passion: writing. Now, as a writer, Warda has found herself in the medical and young adult fantasy fiction spaces. Her new career in writing has afforded her more work/life balance and allowed her to focus on her health. While she may have more flexibility, this new pathway in writing has not come without challenges, which Warda explains. Warda details how, through entrepreneurship, she has grown along the way, taking courses and coaching to improve her online presence, mindset, and marketing in her new creative career.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRO]

This week, I had the pleasure of interviewing Dr. Warda Nawaz, as we discuss what led her to leave her full-time pharmacy job just three months in, how and why she pivoted to a career in writing, and what she has learned about herself in the early stages of entrepreneurship.

Now, before we jump into the show, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one on one with more than 250 households in 40-plus states. YFP Planning offers fee-only high-touch financial planning that is customized for the pharmacy professional. If you’re interested in learning more about how working one on one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call at yfpplanning.com. Whether or not YFP Planning’s financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

Okay, let’s jump into my interview with Dr. Warda Nawaz.

[INTERVIEW]

[00:01:10] TU: Warda, welcome to the show.

[00:01:11] WN: Hi, Tim. It’s so nice to be here. Thank you for having me.

[00:01:14] TU: Yes. I’m excited to share your story with the YFP community, and really talk about how and why you pivoted to writing for a living, maybe a more nontraditional career path. We’re going to talk about that journey, why you made that pivot, what you’re currently working on, some lessons that you learned along the way as well.

But first, let’s start with your pharmacy journey. Where did you go to school? When did you graduate? And what drew you into the profession of pharmacy?

[00:01:41] WN: Yeah. So I graduated in 2019 from pharmacy school. I went to California North State University. I’m from California. I’ve lived here most of my life. So I just went to a local pharmacy school, which was nice. It saved me money, somewhat. I originally had plans to do residency, but I didn’t do that. I got into pharmacy because I majored in neurobiology, physiology, and behavior. So I had a scientific background, a very strong one.

The next logical step to me seemed like, “Okay, let’s build on that. Let’s do something with that.” At that time, I was really struggling with either let’s – Do I go the writing route? Or do I stick with the sciences? I have loved writing all my life, and it was always a passion of mine. But I also come from a community and a culture where the arts and the sciences are kind of looked down upon, and they’re not really taken very seriously. So I didn’t know if I could build a very serious career out of that, and I was discouraged from pursuing it.

So it was a very big struggle right after undergrad to figure out, well, what do I want to do? So I stayed one extra year in undergrad to figure out which health profession do I want to go into. I chose pharmacy in the end because I ended up taking a class on the neurobiology of addictive drugs, and I got so fascinated by how drugs can change the human physiology and the behavior. I also noticed that there’s a really big problem in this country with substance abuse and drug addiction. I wanted to play a role with that as a pharmacist.

That’s where my initial interest sparked. So I decided to go work in the community setting, and that’s what I was doing for the past two years. I was working on the frontlines of the pandemic. It was odd because I started working right when the world changed. So I never knew what a normal work situation looks like because everything was changing by the time I had just been hired. I got hired in March when the pandemic was announced. So everything had already changed. So it was odd, but it was interesting. But, yeah, that’s why I got into pharmacy.

[00:03:48] TU: So you mentioned 2019, you graduated, worked a couple years in community practice, and made a transition, which we’ll talk about here in a moment. Obviously, you’re in the thick of it in the pandemic. I’m curious, though, you mentioned a culture where some of the arts may not be as highly regarded and, obviously, we’re talking here about a career in writing. Where did that interest in writing come from? Can you remember back to your youth, having that love for writing? Where did that come from?

[00:04:16] WN: So I grew up in Pakistan. As you know, Pakistan was colonized by the British. So English was part of our language. In our culture, at least, I know growing up, I did not grow up reading books or novels per se, not like fiction novels anyway. I mean, there are books, obviously. There’s books in every country and nation and culture. But I realized there was something missing in my culture in regards to self-expression. I just didn’t see as much of people pursuing writing careers or scholarly kind of pursuits, and I had this burning desire to write stories, to share experiences.

I remember sitting down when I was like seven years old, and I was like sitting right next to my mom. One of my assignments was to write like a story in English. My English then was very like broken and not very good. My mom had done a master’s in English, so she basically told me the story, and I just wrote it down. But it was all her ideas. I realized when I grew up, I want to have my own ideas. I don’t want somebody to tell me what to do or what to write. I want to create my own stuff. I want to write my own stories. I want to create my own material and then be able to share it with the world.

I just didn’t have that power growing up. Like I was told, “This is what you need to memorize. This is what you need to know.” Then you just spit it out on a test, and I didn’t like that method. I didn’t like that way of learning. I wanted to compile different pieces of information and put it together, but I want it to be my own idea. I got that critical analysis and thinking, kind of learning more so when I came to the United States because the United States has a very different educational system and, I would say, approach to learning.

It’s very different from my own home country where over there, it’s more about regurgitation and memorization, which that works too for sciences. You got to memorize some things. But over here, there’s a little bit more, I would say, freedom to analyze and to criticize and to create. There’s more opportunities to publish, to write, to do things. I needed that freedom, and that’s what I was seeking.

[00:06:37] TU: Yeah. What a great time in 2022. We’ll talk more about this. But when it comes to opportunities for publishing and writing, it’s a much more open space than it used to be in 15, 20 years ago. So you have this initial flame through this experience as a child that uncovers this desire to really tell your own story, to write your own story. Then you go down this path into the sciences in the pharmacy school. But sure enough, this flame would remain and would come back.

So a few months ago, on LinkedIn, of which I really enjoy following you, and I hope our listeners will as well, you posted about a brutal wakeup call that you had in 2020 that ultimately changed the trajectory of your career and your life. Can you tell us about that, and what shift started to happen career-wise through that experience?

[00:07:26] WN: It was actually kind of sad because I was only three months into my pharmacy, first professional job as an adult, first job. Just imagine, you’re entering, and you’re so excited, and all you want to do is go and help people. I mean, this is what I’ve been training my whole life to do, right, or at least my four years in pharmacy school to do. I was traveling as a pharmacist. I worked in the Northern California region, so I had to travel a lot. I got into a car accident while driving to work.

The accident ended up damaging my foot in such a severe way that I couldn’t stand or walk for a couple months. My job, obviously, required me to be on my feet and to be very mobile and to move around. It was a very physically demanding job, and I was like, “Well, how am I supposed to do my job if I can’t even stand? I can’t even drive.” I couldn’t drive for a very long time. So that was a bit traumatic and also just PTSD. I didn’t want to go out and drive anymore. I was like, “I’m done.”

I did take the time to, obviously, recover and do everything the doctor told me to do. But then I went back, obviously, because I wanted to get back in the game and do what you’re supposed to do. But I realized I kept suffering. My suffering had not ended. My pain was persisting. I was having more injuries at work. I was suffering with more stress and more setbacks. My car was vandalized, which was lovely. I mean, I was seeing like signs after signs after signs that like, “Maybe you’re not where you need to be because you need to do something where you can thrive and you can – You shouldn’t have to kill yourself for your job, essentially. You should be thriving and having a good time.”

That’s not what was happening. I was not having a good time. Every morning, it was like waking up to like some dark abyss. I was like, “What have I gotten myself into? This is not making me feel excited.” During that time when I was recovering and I was just immobile and just sitting on my couch, I picked up my manuscript that I’ve been working on for many years, and I started working on it again. I’m like, “I have nothing else to do. I’m going to just work on my book. I’m going to pick up my writing and work on it because it doesn’t require a lot of driving. It doesn’t require me to be physically like on my feet.” I’m like, “I’m being productive. I’m using my mind. I’m using my research skills. I’m creating something. I’m being productive. Why don’t I do this? Well, why did I like leave this? Why did I abandon this?”

That was wake up call. It was me realizing that you can lie to yourself about all that you want. About like, “This is not what I’m supposed to do.” But I think life will always try to push you back to where you need to be, sometimes in traumatic ways. But I think you need to listen to yourself and your intuition, and that’s basically what happened but in a more, obviously, very sudden way.

[00:10:23] TU: Yeah. I want to read for a moment from that post because one of the things I really appreciate about your journey is that, obviously, the impact that you’re having through your writing and will have through your writing but also the impact and motivation you’re providing to others. One of the things you said in that post was, “This, my friends, was a wakeup call and a much needed setback in my life that reset my life and career goals. Today, I no longer travel for work. Today, I write for a living. I wake up every morning, looking forward to having control of my life, building my medical writing business, and working on my debut novel, and feeling alive in the process. I don’t put myself in dangerous situations daily so that I can bring home a paycheck. I live my life with more uncertainty but also more freedom and reward. I also live with a greater appreciation for adversity and embrace it for what it has taught me.”

So as you hear those words now, a few months later as you’ve made this leap, what jumps out at you? I mean, I’m sure this has been a challenging season. It’s not all rainbows and butterflies, right? You made a significant jump from a very known entity in terms of the work that you were doing. But how have you reflected on that over the last few months, since you made that post?

[00:11:34] WN: I feel the same way. Everything that I said in that is 100% still true, still true, holds true. There is a lot of uncertainty in, I guess, my line of business, freelancing, because it’s not a set job. You’re not working for a company, and you don’t have set hours per se. You are your own boss. You have to go out and find clients. You have to take the initiative. You have to be constantly showing up for yourself. So you have to divide your time and block out your day and block out your schedule. There’s a lot of self-initiative that you have to take in order to do this work. There is uncertainty in that sense because you know that every day will look a little bit different, and you don’t know how much work that you’ll be given or that you’ll be blessed with.

Then for the novel writing, I mean, it’s something I have to block out time for that as well. Finally, after 10 years of putting it away and finally picking it up and doing it and I’ve actually tried to come up with a routine. I’m going to write in the morning, and I’m going to write in the evening, and I’m actually taking classes to help me learn how do publish authors who are successful and who’ve been in the business, how have they been doing it? Because I know it’s – How have they written like 50 novels? Like they must have a method, right?

So I’m learning from the experts, like what did they do to make themselves so productive? Because you only have so many hours in a day and so many years in your life, so I’m doing what I can to make my time most efficient. I also use these last few months to recover. I had surgery in June. So I was also taking this time to improve my health. All of that is in your hands when you are your own boss. I mean, you decide when do you want to take a sick day, when do you want to be like working like crazy. I mean, it’s all up to you. But you have to show up every day for yourself.

[00:13:26] TU: Warda, when you made this transition, was there any overlap? Had you been working on establishing some of the medical writing business or even perhaps some of the novel work? Or was this a hard like, “I’m out and I’m going to begin to build this thing from scratch.”?

[00:13:41] WN: No, no, no. Yeah, yeah. I was already – There was some groundwork already done. For the novel writing, I had already finished my novel or my book in pharmacy school. So that was already done. That was a said and done thing. That was something on the backburner. I neglected it because I was now in the sciences and had zero time to write. I realized I can’t be writing full time and doing my day job. So I had to pick something. Obviously, the accidents and all these other events made me eventually choose one or the other.

Then for the medical writing, actually, I had done coaching in 2021, when I was still in my pharmacy day job with Happy PharmD. That kind of helped me figure out and establish myself a little bit better on LinkedIn and also build my network a bit more. It also helped me connect with other medical writers. I met Brittany Hoffmann, an RX author, and I met Sophie Ash as well. I followed her for a very long time. I followed her content, her story, and I connected with her. I messaged her a couple times, just asking her questions about, “What is it like to have your own business, and how do taxes work? I don’t know what this is like. Can I actually make a living doing this? Do you ever find it struggling to pay bills?”

So I asked these kinds of questions before I totally jumped because I didn’t want to jump and then not be like, “Oh, my God. Now, I’m all alone. What do I do?” So I had kind of done the groundwork, and I was talking and asking questions, and I attended webinars for medical writing as well and on LinkedIn, through LinkedIn, through people in the industry to help me learn more. I was following all these successful entrepreneurs, and I saw what they were doing. I’m like, “Oh, my God. Why is everybody starting a business? I guess this is the thing now.”

But I was like maybe this is like the modern age. It’s like where you have to be your own boss because nobody wants to be in the pharmacy setting. Maybe everybody wants to create their own thing. But it wasn’t just for me like following a fad. It was also knowing that like I was being very honest with myself. I’m like, “If I do open a business, can I maintain it? And it also has to be a business I’m passionate about.” I was like, “What kind of business should I start?” I was like, “The only one I can think of right now is medical writing.” So I got into the medical writing coaching program in January 2022, literally January 1st, 2022, first of the year. A month and a half into it after I got one client, I know that doesn’t sound very successful now does it? But –

[00:16:14] TU: Well, yeah. You got to start somewhere, right? Yeah.

[00:16:17] WN: Right. So I actually started having people approached me and asked me for projects and things. So I was like, “You know what? I think I’m going to do this. But in order to do this, I need to let go of my day job because there’s no way in heck I can split my brain in like for my day job and do this.” At that point, I had to make the difficult decision of jumping ship and putting my resignation for my day job, so I can focus on my business. Because I was like, “There’s no way I can do both.”

I mean, I do like the income side that comes with that security of that day job. But then I was like, at some point, you have to take a risk. From every advice that I’ve been given from the people who are way ahead of me, for these entrepreneurs, they say that you have to take calculated risks. You have to take risks. There’s just no reward if you don’t even try. So I was like, “I have to try at least.”

[00:17:10] TU: That was part of the reason I wanted to ask that question was because I hear from a lot of pharmacists that may have an idea, but they’re caught in between. When do I potentially take that risk? Can I bridge this and do two things at once? You mentioned calculated risk. Did you consider at one point like a part-time role, and then you’d work on the business part time? Or apparently, if not, like what really led you to this path of like, “I’m going to go all in.”?

[00:17:38] WN: It was at that point, honestly, my health was suffering so much, my mental and my physical health. There was no way I could have kept going at my day job. I couldn’t drive for long periods of time already. I had work restrictions. Standing on my feet hurt my foot. My work condition actually got worse as a result. So I knew if I chose my day job, just in order to keep the income and the sense of security, I was only going to dig myself deeper. I had already done that for the last two years. So I knew at that point, I had to pick me, even if it hurt me financially a little bit in the beginning anyway.

So I had started to save up, and I was being very careful with how I was spending my money. Obviously, the coaching was an investment as well. So I calculated everything like, “Okay, how much have I spent? How much am I planning on actually making a return on this investment?” So I had to put all of that into consideration before I jumped. But at some point, you have to do it because there’s – You can’t predict all, everything that’s going to happen, right? You cannot. There’s no way. But you can just look at your bank balance and be like, “Do I have enough to kind of keep me going for the next few months? Is my lifestyle –” Like change your lifestyle. If you think you – You have to change who you are as well, right? You have to change your own lifestyle and habits that might be contributing to your financial distress.

I’m no financial expert. You are, so maybe people can come to you and ask you about that. But I don’t invest money or anything. But, I mean, I know people do. People go into real estate and things like that. I, obviously, am way too young and early in my journey to know about all that. But I just make smart decisions and know what you have and save some for the next few months or maybe even a year ahead. It’ll help you so much during times of uncertainty or during times when you’re not getting any work.

[00:19:37] TU: Let me follow up on that because one of the things I often hear from pharmacists I talk with that have an idea and that could be a different position, that could be a business that they want to pursue, it could be a variety of nonprofit they want to start, is I can sense the passion and the idea. Then it’s often their financial position that really gives them pause about whether or not I should move forward. I think for many 2019 grads, such as yourself, they have an idea. They might be thinking, “Yeah, I have an idea. But I’ve got $200,000 of student loan debt. I feel like I need to be saving and investing for the future. I’m trying to buy a home. I’m trying to do other things.”

So my question for you is how are you able to reconcile some of that tension personally when it comes to the finances? Obviously, position and community practice can afford some of that safety net and some guarantee to be able to overcome some of those concerns, financially, personally, to be able to make that leap into the business. Was it coming up with a certain amount of savings? Was it evaluating other parts of the plan? How were you able to think through that and ultimately make that decision, despite perhaps some of those financial stressors that were there?

[00:20:48] WN: So I’m blessed in that I do have family to support me. I don’t have to pay rent. I don’t have a mortgage. I didn’t buy a home. I don’t have kids. I can’t say that for everybody. Everybody’s situation is different. If you’re a single mom with kids, I know your situation will be totally different from mine, and my advice will, obviously, not be helpful. But it kind of helped that I was single, and I didn’t have tiny kids to take care of, and I had family to lean on to help me during this time.

That being said, obviously, it was still a decision I made, knowing that maybe my family will not approve because it’s a risky one. So, yes, in the beginning, I was getting resistance and kind of side-eye look like, “How could you do this?” But ultimately, it was about them knowing that my health matters more than finances ever will. There is no point in being alive or having a six-figure whatever job if you’re not alive tomorrow, and you’re going to spend your days in the hospital, or you’re going to be going back to the medical office again for an issue that was exacerbated by your job. You have to ultimately pick and choose what is most important to you, what’s important right now, and what’s going to be most helpful for you in the long run. In the long run, my health was most important.

Also, for me, writing is very important. I can lose my ability to walk. Fine. But I do not want to lose my ability to write. I don’t want to have like a hand injury. I don’t want to have a brain injury. I want – There are certain things I know I will not compromise. So you have to as an individual choose what are you willing to compromise and let go of and sacrifice in order to do what you truly love and what makes you feel alive. That even if you lose one of those things, it’s not going to like ruin your day, and it’s not going to ruin your life.

Did my accident ruin my life? No, I think it just set me on a better path, and it helped me realize and reset my goals like, yeah, this is fine. Yes, I’m kind of in a financial rut right now. I’m not – I don’t have a six-figure income right now. I am struggling financially, right? But I have put the steps in to connect with people, which people are your wealth, essentially, right? Like your network is your net worth. So you don’t know what opportunities might come through the people and the relationships you’ve built.

I look at it that way. If you just look at the balance sheet, then you’ll always feel disappointed in yourself. You’ll always feel like, “I’m not good enough.” I had a six-figure income, but I was not happy. So that, to me, was enough evidence to know that it’s not just about money. It’s about your quality of life. If you don’t have the quality of life you want, it doesn’t matter how much income or how much work is being sent your way. You could still be having a very bad day. So look at the quality of life, rather than just the balance sheet.

I know in business that’s when most people like to follow the paper trail. It’s like, “Oh, how much money?” But it’s like that’s exactly why I did writing because I’m running away from that. I don’t want it to be all about that. So I’m okay not making six figures, as long as I am getting by, and I can change my lifestyle accordingly, like stop living so lavishly, stop buying unnecessary things, and lean on others. It’s okay to lean on others. You don’t have to have it all figured out. People assume that you hit a certain age, you have to have it all figured out. That’s not true. It’s a myth. Society told you, you have to have it all figured out, and you don’t have to.

[00:24:25] TU: That’s right.

[00:24:26] WN: Lean on your tribe. Lean on people you love.

[00:24:29] TU: That’s right, especially people. You mentioned a couple of folks earlier, Brittany and others. We had Megan Freeland on the show in 259. But others who have been down this path that you can lean on and learn from that have been down a similar journey. We talk often on the show that a good financial plan really has to be able to, yes, we got to take care of the future and plan ahead and think about 15, 20, 30 years down the road. But we also have to live a rich life along the way, and part of living a rich life is doing work that you love and contributing in a meaningful way based on the gifts that, obviously, you’ve been given and the impact that you can have. I think our work is often a piece of that. That can be so important.

I’m curious, Warda, because I enjoy writing as a hobby. I won’t claim to be a great writer. I just – It really is a fun creative outlet. I like to do it. But there’s a whole different level in terms of like writing for enjoyment as a hobby to like going pro, right? This is like my main thing. So I’m curious, and you mentioned writers that have published 50 books and others. But how has that journey been where you’ve got to now have the discipline, the schedules, and making sure you’re writing so much per day? Like do you still maintain the energy and enthusiasm for the work? How do you build those disciplines and routines into the schedule each week to make sure that the production’s moving forward?

[00:25:54] WN: I’m actually part of a writing mastery academy. It’s basically a website created by a very successful bestselling author. She’s written like 20 novels, and she has a lot of content and coursework on there about exactly the questions that you asked like lifestyle, routine, things like that. But also like how to write quickly and efficiently so you can actually make a living out of doing this, how to sell your work, marketing because these are all these skills that, obviously, I did not learn in pharmacy school, right? These are new skills I’m learning and developing constantly.

I have talked to authors as well. Then I’ve talked to publishing experts about like writers conferences and where you can meet people and you can develop yourself. So it’s basically like in pharmacy, where you go to conferences. You network. You talk to people, right? There’s just like that with the writing industry as well. There are so many writers conferences. I was like googling it the other day, and there’s like a million of them. I’m actually scheduled to go to one in LA. God willingly it works out in August. There’s another one in Kauai in November that I’m planning on going to. It’s, obviously, editors will be there. Agents will be there. Published authors will be there. There’s webinars, master classes. There’s workshops. You get feedback on your manuscript. I already have a manuscript, and I’m like I’ve prepared a pitch. You just kind of prepare yourself.

For me, the daily routine – Right now, because my manuscript is done, my focus is more on preparing my manuscript, you could say, for sharing to an agent. So it has to be like polished and beautiful. So I’m like doing those last minute look through and read through on that. I’m also part of a beta reader and critique partner group in the community as well. So I have like a group of writers who are writing in my genre to read and provide me with feedback. All of that is happening simultaneously. So you have to start thinking of your writing as a business as well like, “This is my new identity. This is my career.”

Then you start developing yourself. Go to conferences. Connect with beta readers. Connect with other writers. Have them give you feedback. Improve your work. Don’t take it personally. It’s not about you. It’s about the work and the quality of work that the publishing industry expects you to produce. I used to be like that. In the beginning, I used to take everything personally like, “Oh, my God. They hate me.” It’s like, “No, it’s not about you.” There’s certain standards in every industry, and you have to know about them, and that’s what I’m building myself. I’m learning from experts. That’s what I’m doing right now.

[00:28:35] TU: Warda, a couple of weeks ago on LinkedIn, you posted something about reaching out to an author that you’ve looked up to and was somewhat surprised, I think, by the response that you received. Can you tell us about that story and what you learned through that interaction?

[00:28:50] WN: Yeah. So as an author, a teen fantasy author that I had read her books when I was a teen, and I reached out to her, basically asking her like – I’m not asking her anything, but just kind of telling her, “Hey, I’ve read your books my whole life. And, oh, my God, I really admire you. And now, I’m starting to also become a published author. And do you have any advice for me?” Then she told me that like, “The best advice that I was given was that you should never stop writing.” She also told me about writers conferences, and she told me to develop myself more and to meet people in the industry.

It just basically told me that even if you’re like the only person in your family or whatever who’s pursuing this path, don’t feel discouraged and just start. I think, for me, at least, I know I’m a perfectionist. I’m very hard on myself. I’m very self-critical. I’m like, “Will I ever be good enough?” But I think it starts with you not trying to compare yourself to people who are already well-established and knowing that everybody has to start somewhere. Yeah. I just loved her response because she was so supportive. It’s, obviously, a very big deal when it’s somebody that you actually read their works, and you really admire it. A lot of her stuff actually helped inspire me to get into this genre as well. So that was cool.

[00:30:15] TU: I love that that story because I think that for whatever reason, when I talk to aspiring pharmacy entrepreneurs, and I encourage them to do what you just did, reach out to someone who’s doing something, along the work that you, obviously, admire and can learn from, there’s this perception that like people are unreachable, untouchable. I think more often than not, not always but more often than not, people are willing to share. People are willing to be encouraging. That might mean other pharmacists. Or in this case, it might mean not pharmacists and, obviously, other people that are out there.

I think taking a little bit of a leap of faith to reach out to 3, 5, 7, 10 people, and get some input, feedback, someone that will be willing to take some time to bounce some ideas off and not necessarily just make the assumption that, “Oh, they’re too busy. They’re not going to take time to listen to what I have to say.” So I was glad to see that. That was a neat example.

Warda, when I think about the transition to starting your own business, it can be exciting, and it can be overwhelming. It’s, obviously, exciting as you explore an area that you’re passionate about. But it also can be overwhelming. That there’s just a lot of things that you have to do and to put in place, and that could be things like setting up the actual infrastructure of the business. That could be now you’re having to market yourself and sales and reach out to folks.

As you reflect on this journey and making this transition from employee to entrepreneur, have there been one or two areas that you can identify that have really been opportunities, whether you want to call them bumps in the road or opportunities to grow and to learn that you really have experienced and learned about yourself through this transition?

[00:32:00] WN: Yeah. There have been a couple of opportunities, where I’ve definitely learned new skills that I didn’t have before. Well, number one is, obviously, social media and being comfortable being on that platform. Figuring out, well, what’s the best platform to develop your presence? Depending on what kind of business you’re setting up, it will be different. For medical writing, I mean, LinkedIn is good enough. I could explore other options. But right now, I’m just staying focused on LinkedIn. It’s a very intellectual platform. I think, yeah, LinkedIn is just good for meeting other professionals because it’s focused more on your career development. So I like that.

Then for my author platform, that is something I’m still looking into. I know a lot of authors use Instagram for that and also Twitter as well. So I was actually going to enroll myself in a master class to figure that out. There’s also a conference in San Francisco coming up in which a couple of speakers talk about what is the best platform that authors can establish themselves prior to putting their book out there. But the important part is to promote yourself and to be constantly present. That is the best way to grow. If nobody can find you, nobody – You can’t grow and your business can’t grow. So you have to be comfortable being in this space, in the public space.

That is something that I, obviously, had to learn to do. It doesn’t come easy because I’m an introvert, and I’m extremely shy about being in this open space. It feels very awkward at times, but I know it’s part and parcel of just being in this business, even as an author. We’re very reclusive. We’re like, “Oh, don’t come near me. We don’t want cameras on us. We don’t want the attention.” But we do want our work to be known. But it’s not like – It’s hard. You have to eventually realize the focus is, in the end, not going to be on you but more on the types of work that you’re putting out there. So just learning about that, it’s a mindset shift as well.

Also, another, I guess, hard skill that I learned, besides just developing an online presence, marketing, learning how to sell yourself. I mean, that’s pretty – I’m still developing that. I’m by no means an expert. I’m still figuring out, okay, what software should I use, if I want somebody to like buy something from me? Setting that up and also website. I have built a website, but it’s a DIY, do-it-yourself website. It’s not by any means done by a professional or a graphic designer. So I was learning about like graphic designing a little bit, like what fonts work, what colors work. I was just tinkering with it. I’m not an expert, but I’m figuring it out. What really helped –

[00:34:52] TU: Got to start.

[00:34:52] WN: Yeah, exactly. That’s why I did the coaching program because it taught me all those skills. Week by week, we went and focused on different issues. So the first week, I think we focused on building your online presence. The second week, we worked on the resume. Third week, we worked on writing samples and portfolio, so having an actual thing to showcase. Then fourth week, I think we worked on something else. Then fifth week, we worked on building the website. So each week, we focused on something else, and that’s how I basically ended up building the infrastructure of my business like, “Okay, this is how I’m going to market myself. This is the platform that I’m going to use.”

It’s up to you as a business owner. Do you want to have a website? It is an investment. That’s why I say like save a little bit ahead of time, so you can prepare yourself for this. But just also know it doesn’t have to be all squared away in the beginning. You can always invest more professionally later. But at least I got the basic groundwork. Also, do you want to have a logo for your company? Come up with a company name. Figure out a logo. Logo is not that important. But, I mean, it helps. It kind of makes you feel good if you created something for yourself, right?

For medical writing, if you’re opening your own business or a company, it’s good to register it as an LLC, limited liability company, so you can protect yourself from liability. So all of that.

[00:36:15] TU: That’s great, and I admire your hunger to learn. I’ve heard you mentioned, at least three or four times, different courses you’ve jumped in to learn through new things, different communities that you’ve jumped in. So I think that hunger to learn, that motivation to recognize, it’s one of the gifts we have of living in 2022, right? We can pretty easily, if we’re willing to put in the time and the effort, go out and find opportunities where we can learn and grow our skills. So I love that mindset. I love not only the hunger to learn but also the hunger to just implement and get started, even if it’s not perfect, and really to step outside of your comfort zone.

I would encourage you, and I think you do an awesome job of this that as you continue on this mission and the work that you’re doing, on some level, it’s a responsibility to put yourself out there because, yes, it’s increasing the awareness of your work. But I can also assure you that it’s also motivating others in their own journey. I think that is perhaps equally as exciting.

This has been fun, and I look forward to continuing to watch your journey as you progress with the business. Where is the best place that folks can go to connect with you and to continue to follow your work?

[00:37:27] WN: Oh, that’s so sweet. LinkedIn, I’m on LinkedIn. I’m thinking of actually creating an Instagram account. I was told by somebody in the publishing industry like, “Oh, you should have that if you’re really serious about this.” I’m like, “Okay, cool. I’ll do that.” But, yeah, LinkedIn is a great way to follow me. I don’t have any other. I mean, I do have Facebook, but I don’t really use it. So follow me on LinkedIn. Email me. DM me.

[00:37:53] TU: Great. We will link to that in the show notes. We’ll also link to the website, jasminemedical.com, if folks want to take a look there as well. So thank you so much for taking time to come on the show. I really appreciate it.

[00:38:03] WN: Thank you so much for having me. This has been very fun.

[END OF INTERVIEW]

[00:38:06] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

Thank you, again, for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

[END]

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