August 2023 – Your Financial Pharmacist

YFP 323: 5 Tips for Selling Your Home

Posted on August 31, 2023 by Tim U

Nate Hedrick, aka The Real Estate RPh, joins the show to talk about 5 tips for selling your home – valuable information for buyers and sellers alike!

Episode Summary

Most of our real-estate episodes to date have covered the topic of buying a home, but today we’re putting ourselves in the shoes of the seller. If you think this episode isn’t for you because you’re only interested in buying a home, think again! Being able to see things from a seller’s perspective will add huge value to your home-buying journey. Today’s guest is Nate Hedrick, a pharmacist, and the founder of Real Estate RPH. It’s a seller’s market at the moment and he is here to share five top tips for selling your home for its maximum value. From the benefits of enlisting the help of an agent to getting to grips with price-setting strategies and understanding buyer versus seller costs, this conversation will equip you with the tools you need to navigate current chaotic housing market with confidence!

Key Points From the Episode

Introducing today’s guest, Nate Hedrick
An overview of Nate’s recent interview with first-time home buyers, Neal and Katie Fox.
Why this episode will benefit you if you are a home-buyer or a home-seller.
An overview of the current market from Nate’s local perspective.
Two of the main pain points for newly practicing pharmacists.
Costs you can expect to incur when selling a home with the help of an estate agent.
The benefits of enlisting an agent to help you sell your home.
How most people choose an agent.
The difference between an excellent and a mediocre agent.
Examples of how good agents can maximize value for their clients.
Benefits of depersonalizing the home.
Different types of pricing strategies that can be used when selling a home.
How the appraisal process should work.
An overview of buyer costs versus seller costs.
Understanding the concept of seller’s credit and the problems that can arise when this strategy is used.

Episode Highlights

“If you’re a first-time home buyer, you have no idea what it’s like to sell a home, right? You don’t have an idea what it’s like to buy a home. Being able to put yourself in somebody else’s shoes as you’re going through that journey, it can give you some perspective and it can be really helpful.” — Nate Hedrick [0:03:23]

“It’s still a seller’s market. We have a lot of people who are sitting on three and a half percent or lower interest rate loans that they refinanced over the last three or four years, and they don’t want to move if they don’t have to.” — Nate Hedrick [0:04:19]

“The list price of a home is completely made up. The market value of the home is the number you want to determine.” — Nate Hedrick [0:25:15]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00] TU: Hey, everybody, Tim Ulbrich here. Thank you for listening to the YFP Podcast for each weekly strive to inspire and encourage you on your path towards achieving financial freedom.

This week, I welcome back onto the show a familiar voice Nate Hedrick at the Real Estate RPH and co-host of the YFP Real Estate Investing Podcast. We discuss five tips for selling your home, helpful information whether you’re looking to sell now or in the future, and even for those looking to buy a home to gain some insights and understandings to what the seller is going through.

All right, let’s hear from today’s sponsor, Real Estate RPH, and then we’ll jump into my interview with Nate.

[MESSAGE]

[0:00:38] TU: Are you planning to buy a home in the next year or two? With the state of current home prices and mortgage rates, the home-buying process can feel overwhelming. But what if you could leverage the knowledge and ongoing support of someone who has worked with dozens of other pharmacists through their home-buying journey all at no cost to you?

I’m talking about Nate Hedrick at the Real Estate RPH. Nate is a pharmacist who has been a partner of YFP for many years now and offers a home-buying concierge service that can help you find a high-quality agent in your area and support you throughout the entire process. Head on over to realestaterph.com or click on the link in the show notes to schedule your free 30-minute jumpstart planning session with Nate.

[INTERVIEW]

[0:01:24] TU: Nate, welcome back to the show.

[0:01:25] NH: Hey, Tim, always great to be here.

[0:01:27] TU: Well, I’m excited to be back in the host seat. Not too long ago on the podcast episode 316, you interview Neal and Katie Fox about their journey and lessons learned as first-time home buyers. What a neat episode that was. Just to recap for our listeners that maybe haven’t heard that episode already, tell us about that interview and the story with Neal and Katie.

[0:01:47] NH: Yeah. Neal and Katie were just an awesome couple that I got a chance to work with as home buying concierge clients. We got them hooked up with an agent, helped them buy their first home together. It was just really cool to be able to sit down and talk to them about what it’s really like to buy a home in this market. We went through everything from A to B or A to Z and just got their perspective on it, right? Somebody that doesn’t have experience, right?

I sometimes forget how long I’ve been doing this. There’s things that I don’t even think about anymore, as a first-time home buyer. So, to actually talk to first-time home buyers and see where their pitfalls and strategies came from, that was just, it was fun. It was really cool to talk to them.

[0:02:24] TU: Yeah. Great interview. They had some really interesting tidbits, lessons learned, things on financing, importance of working with an agent, who you’re working with and the value of that relationship. We’ll link to that episode in the show notes if folks haven’t already heard it. Today, Nate, we’re going to be talking about a topic we haven’t really covered in depth before. I’ve lost track. You’ve been on the show at least 10 times now, maybe more, obviously co-host of the Real Estate Investing Podcast. We talk so often about buying a home, but we haven’t really talked about selling a home.

Now, for those that are in the home buying journey and are listening to this and saying, “All right, I’m turning this off, they’re talking about selling a home, that’s not applicable,” hold on, right? Because I think as you and I talked about before the show, as a buyer, if you can really understand some of these tips and components as it relates to the seller, that is going to be helpful to you and the buying journey as well.

[0:03:17] NH: Yeah, 100%. Understanding that other side where the other person’s coming from, it’s really difficult, especially if you’re a first-time home buyer, you have no idea what it’s like to sell a home, right? You don’t have an idea what it’s like to buy a home. So, being able to put yourself in somebody else’s shoes as you’re going through that journey, it can give you some perspective and it can be really helpful.

[0:03:35] TU: Now, before we jump into five tips for those that are selling a home, and again, the relevance of that to buyers as well, important to talk about context, right? We’re recording this episode in summer, 2023, wild times just in terms of where the market’s at, what’s happening with interest rates, where the economy is at. I do think that context is really important to understand things like leverage, right? As a seller or as a buyer. Nate, just give us a quick update knowing that every market is, of course, different, but you have a unique perspective working with pharmacists and agents all across the country. What are you seeing right now?

[0:04:07] NH: Yeah. Obviously, real estate is local, right? What I tell you that we’re seeing may not be exactly applicable in your area, but broadly what we’re seeing is low inventory, right? It’s still a seller’s market. We have a lot of people who are sitting on three and a half percent or lower interest rate loans that they refinanced over the last three or four years, and they don’t want to move if they don’t have to, right?

You’ve got people that want to buy, as there always are, but people that aren’t really ready to sell their home yet. So, that’s causing a lot of low inventory. We’re seeing high prices still and just things are moving quickly. It’s not as crazy as it was in 2021 and early 22, but it’s still an interesting and difficult time if you’re a buyer and a pretty good time if you’re a seller in most parts, because you can typically move your houses pretty quickly.

[0:04:54] TU: Yeah. It’s really interesting. Jess and I often talk about this. We love our home, right? But it’s just a natural point of conversation where it’s like, “Well, what about moving here? What about doing this?” When you look at what interest rates are doing right now, not only what our interest rate is, refinance close to three, but seeing what you’re going to be buying at, but then also just the elevated prices, because of the supply and demand, it’s a double whammy effect, right?

[0:05:17] NH: Yeah.

[0:05:18] TU: For existing home buyers to give up that loan, to take on a new higher interest rate loan, as well as a higher mortgage on price of the home. So, that makes sense, what’s happening there on the supply side. Then to be frank, Nate, I’m feeling for the first-time home buyers right now, right? Many of them we know in our community are also facing significant student loan debt. Here we are now ready to have those payments turned back on.

I think that’s a topic we just aren’t talking enough about. We know from our community, student loans and home buying are for many people, two of the top pain points, right, especially for that new practitioner group. I think when we look at the rising home prices, rising interest rates, student loan, payments turning back on. We’re looking at more challenges that I think are being added to this. Doesn’t mean it’s impossible, right? Doesn’t mean it’s a goal that can’t be attained, but it means we’ve got to be a little bit more diligent in the planning process to make sure we’re looking at the broader financial plan.

[0:06:13] NH: Yeah. I appreciate you keeping it at the forefront, because I know if it were me 10 years ago, just starting out, dealing with loans, if they were on pause, I don’t know, it’d be in that bucket of, “Well, I’ll figure that out when it becomes a problem,” right? I 100% know that would have been me 10 years ago. Talking about it is super important, because don’t wait to figure it out, start figuring it out now, before it really becomes a problem.

[0:06:36] TU: Yeah. This is where the strategy, we’re not going to dig into student loan strategy right now, we’ve done that many times on the show before, but this is where that strategy part becomes really important, because not all student loan repayment plans are created equal in terms of the impact they have on monthly cash flow. For example, someone who’s pursuing loan forgiveness versus someone who’s doing an aggressive debt repayment. Those are going to have very different impacts on the budget, which obviously is going to change also how much money is available, discretionary income available, potentially for a home purchase.

Another example yet of where these puzzle pieces need to come together. Let’s talk Nate, five tips for those that are selling a home. Number one, not all agents are created equal. I’ve experienced this on my own home-buying journey. Not only that, but also there’s the using an agent versus not using an agent for those that are thinking about potentially a for sale by owner. Talk to us about tips as it relates to the agent and why that piece is so important.

[0:07:31] NH: Yeah. I think something you mentioned there about the first, the for sale by owner versus an agent. I think a lot of people are, they look at the market, they look at how, “easy” it is to sell a home. The first thought becomes, “Well, can I just do this myself? Couldn’t I just kick the agent out of the whole process, save a ton of money on commission?” Truthfully, it can be quite a lot, right? Typical way the commission structure works to peek behind the curtain, right, is that it’s going to be about five to 6%, depending on the agent that you work with, is what the seller is going to pay toward the commission. That, that seller paid commission is what goes to both the buyers and the seller’s agent.

It’s usually split 50-50. So, if we say 6%, you’re talking about 3% for the buyer’s agent, 3% for the seller’s agent. That can be $18,000 if you’re talking about a $300,000 home, which is a huge chunk of change. I think it’s natural for people to think, “Man, I can just do this myself. Why bother? I don’t want to pay that $18,000.” But there’s a couple of pieces I think that I think what people should realize before just jumping to that route. Only about 10% of homes in America are sold for sale by owner.

Again, there’s a reason for that. One of the stats that I like to throw out there, and it’s biased, so I’ll lead with that, but that is that according to the National Association of Realtors, and this is looking at 2021, for sale by owner homes sold for about, on average, $225,000 in that year. The typical agent-assisted home sale was about $330,000. About $100,000 difference. Now again, I think that’s biased. I think a lot of four sell by owners tend to being like friends and family. They bring the prices down intentionally in some of those cases right or wrong. I think that there’s some bias to that number.

Let’s say that $100,000 number, let’s just cut it in a fourth, right? Let’s quarter it to $25,000. If you have a $300,000 home, that $25,000 difference is more than the 18 grand we talked about in terms of commission sales. I still think there’s a lot of value there. The typical agent is going to bring a lot more value to the actual home and getting it for the right price, just on a dollar-for-dollar basis, even if again, we take that number and cut it in the fourth. I think that’s an important number to look at and to think about is that the agent is going to be able to bring more value or get more value out of the home on average than you might as a for sale by owner.

Then the natural next question to that becomes, “Well, why? What are they doing that’s different?” I think a lot of it comes down to just their experience and their ability to price the home appropriately and get the maximum value there. One of the things that an agent’s going to do if you are ready to sell a home, and we can dive into more of these details in a moment, but they’re going to come in and they’re going to help figure out, “Here’s where I think your house sits today. Here are some things that you could change to improve that value, whether it’s curb appeal or decluttering or whatever. Then here’s where I think the market value is on that property.”

Once you know market value, then you can start to come up with strategies for how to price that home. That’s where an agent’s really going to come in, right? Let’s say we were going to price it 10,000 under asking or under market value rather to try to generate a lot of business or let’s say we’re going to price it right at market value and try to get the most dollars we can for it right up front. There are a lot of different things that go into that strategy that I think an agent brings to the table that a typical home seller might just not have access to that information or be aware of.

Then if you go beyond the dollar amount, I think that that’s where the agent comes in with paperwork and helping with all the legal paperwork. There’s a lot of legality that goes into home sales and a lot of this a title agent or a good lawyer can help you with, but the agent takes all the guesswork out of that, right? Everything’s been predetermined, pre-established by a broker. It’s all going to be put in front of you in the way that it needs to be. There’s a lot of value that can be created from that.

[0:11:15] TU: Yeah. The other thing too here Nate, great points, that stands out to me would just be peace of mind knowing that there’s coordination, assuming, and we’ll talk here in a moment about why all agents are not created equal here. We’re talking about agent versus for sale by owner. Peace of mind assuming you’ve got the right person on your team, right? That’s coordinating all of these, but also time. I’ve gone down this pathway and I don’t think I would do it again, to be frank.

I think even though it was someone within the neighborhood and it was a pretty easy process, there were a lot of those questions about pricing it appropriately and is this fair, right? Now, you’re not dealing with, what does the market say the home’s worth. But it gets more emotional when it’s just one party with another party, right? Is this fair between two parties? But then just the time and the coordination, the title, and there’s this lingering feeling of like, is everything being done correctly and coordinated?

I remember, maybe part of that is just my type A personality a little bit, as well, but this is a podcast of busy healthcare professionals, like I think they can appreciate, especially if the ROI is there as you mentioned, how important it could be to really make sure that you’ve got someone in your corner. Now, that’s an obvious one, I think for many would be the agent versus the for sale by owner, especially considering folks are busy.

Again, not all agents are created equal. I think this is interesting, right? We talk about this a lot on the show about financial planners. I think we’ve done a really good job highlighting how the term financial planner in and of itself, doesn’t mean a whole lot and how there’s so much variance between planners in terms of credentials, and experience, and how they charge, and transparency. I don’t think we give the same diligence to real estate agents. I don’t know why, but the more I started to think about this, I’m like, “Well, this is really interesting. Experience matters a lot.”

Somebody understanding my local market matters. Connections, right? Someone who can, you shared before we hit record about an example of a deal you’re working on where some pretty simple work needed to be done and you’re able to line up a contractor and move that forward. That matters, those relationships. Talk to us about why the right agent matters and how do people vet this? How do they find that?

[0:13:28] NH: Yeah. It’s certainly tricky. I think what most people do, I’ll tell you what most people do and I’ll tell you what I’d recommend, right? What most people focus on is the commission, right? They want to find out how they can get this on for as cheap as possible as –

[0:13:39] TU: Like an interest rate on a mortgage, right?

[0:13:41] NH: Right. Exactly. Yeah. “I want the guy that’s five and a half percent.” Now they got it 6%, right? People focus heavily on that. Again, in the grand scheme of things, that 1% difference that you might find across the market, that’s not where your focus should be, but that’s what a lot of people like to focus on. The other thing to focus on is when you do a listing presentation, when I present to a seller and say, “Look, this is what I’m going to do for you.” They’re really focused on the number. “Well, what do you think you can sell my house for?”

I’ll tell you, there’s only so much an agent truly can do with the home that’s in front of them, right? The same home, the same parameters, different agents are not going to be able to sell that house for more, just being upfront. What a good agent’s going to do is come in and tell you, “Here’s how to maximize the value of your home. Here’s how I can sell it for more.” Not, “Here’s the same house as the next agent’s going to be selling, we’re not changing anything.” They’re not going to ink more value out of that house just by being a “better agent,” right?

What a great agent it’s going to do is come in and say, “Look, if you declutter this a little bit, if I let you borrow this storage unit that I have specifically for my sellers, we get a couple of these pieces of extra furniture out of here. We take down some of the pictures.” We hear the things that we’re going to do, that’s how you’re going to maximize value.

[0:14:52] TU: Yeah.

[0:14:53] NH: When I’m talking to a client and what I recommend everybody do out there, if you’re interviewing a seller’s agent, talk about, “What are the things that you’re going to do to maximize the value of my home?” Not, “How can you sell this for as much money as possible?” Those are closely related to the same question, but they’re not the same question.

[0:15:10] TU: Yeah. Future episodes, I just took a note, we should do a future episode on questions that you should ask right when hiring an agent. I think that’s a really good, really good one to consider. In your experience, working with other agents, but also in your own experiences as a realtor selling homes, what are some ways that you’ve either stood out? I mean, experience, let’s say that’s a given or that you see another agent stand out.

[0:15:32] NH: Yeah. So, I think there are a lot of big-ticket things that people stand out with that are attention grabbers. The one I mentioned was the storage unit. I’ve seen agents that will offer those pods. They’ll say, “Look, if you sell with me, I will give you a pod to put all your extra furniture in. Just put that in storage for a while, while we sell the home.” There’s definitely some value to that. I’ve seen agents offer staging, especially if the home is vacant, or if you’re in the process of moving out and things are hodgepodge, you can have the home staged and that can be really advantageous, and some agents will offer that as a big incentive.

I’ve also seen a lot of – this is pretty common on billboards with big-ticket, high-volume agents, where they’ll offer a guarantee, right? We’ll list your home and if it doesn’t sell in a month, then we guarantee, we’ll buy it from you. There are a lot of stipulations to that, but I’ve seen that as a big-ticket thing.

I’ll tell you where I try to offer value. Again, these are things that I might pepper in where it makes sense. Most sellers actually don’t need a lot of those services quite frankly. I try to just make things as easy as possible. You mentioned earlier, if you’re a busy working professional, if you want to hire an agent, you’re doing so because you want to take all the guesswork out of it and all the legwork out of it, right? It should be as painless as it possibly can be. That’s what I try to come in and show them how I’m going to be able to do that. That’s what I encourage other sellers to look for when you’re talking to a good agent.

[0:16:53] TU: Yeah. I think, Nate, the huge advantage that you have, the relationship piece, asking good questions, you’re a pharmacist that has gone down the path of a first-time home buyer, you’ve obviously worked with many individuals, you understand what it means to buy a home when you have student loans and the considerations. Certainly, it’s not financial planning, but it’s being able to ask good questions that really help people self-reflect and understand and not just like, “Yup, I’m ready to sell your home,” right? Whether or not that’s maybe in their best interest.

[0:17:25] NH: Even if it’s something as simple as, “Hey, you want to sell your home. What’s more important? Getting every single dollar we can out of it, or closing in the next 30 or 40 days so that we can move into the next place?” Or whatever.

[0:17:37] TU: It’s a goal.

[0:17:38] NH: Just a simple question about, what’s the goal of getting this home sold, right? Is it just to move it as quickly as possible, or is it to maximize value and starting from there?

[0:17:47] TU: Great stuff. That’s number one on our five tips for selling a home. Not all agents are created equal. Number two, you alluded to this a little bit already, but I want to dig deeper. That’s really, in terms of determining what is or not worth it, right? Upgrades, repairs, boosting curb appeal, staging the home, right? Maximizing the value of what someone may be able to get out of the home is what you mentioned just a few moments ago. What tips do you have here for sellers?

[0:18:11] NH: Yeah. This is something where a good agent can really make themselves worth it, right? Because there is a ton of stuff. I look around my house today and think like, “Man, if I was going to sell it, I have to fix that and I gotta paint that.” There quickly becomes this list of stuff that you could do before selling a house. What’s the ROI on that? A great agent is going to know the local market, is going to know the comparable properties that have sold recently and is going to be able to see what those high-value items are that you should focus on and what those low-value negative ROI things are that you could just ignore, right?

There’s always going to be stuff to fix on a house. The trick is finding the things that you can do now that are going to be not very labor intensive and we’re going to maximize the overall value and the speed with which we can sell that property. It’s a myriad of items. It varies based on the home itself. Generally speaking, you’re looking for things where, “If I don’t fix this, is it going to prevent somebody from making an offer?” That’s a really common one. Let’s say, the roof is actively leaking. A lot of people are not going to be interested in jumping into a $10,000 or $20,000 fix right off the bat. Those are things that are obvious that, “Hey, if I fix this, yeah, my ROI might not be huge, but it’s going to make people want to offer whereas, they may have not previously.” Thinking about things like that.

Then also, thinking about things like, hey, if other homes in the area that have a deck, for example, a back patio, or a deck, all of the deck houses are selling twice as fast as all the houses that don’t have a deck, right? You’re in a very similar community. That might be something that’s worthwhile putting in, right? Especially if you’ve got a sliding door already out there and it’s ready to go, it’s just begging for a deck. That might be an easy ROI item that you could tack on. It’s going to be high cost, but it might make that home sell for that much more. It’s those things that a really good agent’s going to be able to jump in and give you advice on to make sure that you can maximize that value.

[0:20:05] TU: Yeah, and that’s a great example with the deck, right? Because I think about, again, if we put ourselves in the buyer’s shoes, all of a sudden, I see the home as having a new outdoor living space. Maybe it’s not all the way there, but you’re providing vision, right? For somebody to come in and say, “Whoa. Wow. I’ve got maybe a smaller square footage home, or maybe it doesn’t have all the bells and whistles that I wanted, but I can really see how I could use this space differently.” Great insights there. I think that’s just so important.

Again, putting yourself in the buyer’s shoes, the roof example, the deck example, especially first-time home buyers are not coming with a bunch of cash sitting in the bank to do some of these things, right? Minor upgrades, minor improvements. But things that you can do. Obviously, the question, “Is there an ROI there or not?” is really going to be helpful to those buyers. I also think, Nate, be curious to hear your perspective here. Where you’re at in terms of price point of the neighborhood, I think could be really important here on potential ROI, right?

If I am the biggest house, the most expensive house in the neighborhood already, and I add a $10,000 deck, hoping I can raise the price $20,000, maybe not as much if on the low end. Is that fair?

[0:21:16] NH: Yeah. It’s spot on, right? Again, that’s where a good agent is going to be able to come in and say, “Look, here are the comparable properties that have sold. This is what people are going to be looking at.” Or better yet, one of my favorite things to do is to look at is what else is on the market today. If I’ve got a $300,000 home and there are three other $300,000 homes for sale in the same community, how am I differentiating? I don’t need to undercut them by $5,000 and just be the cheapest game in town, but I also can’t be $30,000 more and expect to be the first one that everybody buys, right? Unless, there’s some real big value item that I’m bringing and it’s different than those other homes. That’s where an agent can come in and really try to help that out.

[0:21:52] TU: Great stuff. Number three on our list, why it matters to depersonalize, or neutralize the home. This gets a little bit to what we’re talking about, wanting the buyer to really have a vision of their own. I know this is something that you hear all the time, you read about, but as a buyer, myself going through the process twice, I was amazed at how often this wasn’t done. Tell us about why this is important and what this may look like.

[0:22:16] NH: Yeah. I think everybody gets – you get really comfortable in your own home, right? You know what you like. You’re used to it. You think it’s perfect, because you live there. Why wouldn’t you, right? It’s a natural thing to do. I think it’s easy to miss some of the stuff that might come across to a buyer as making it feel not welcoming. That might be something that to you, again, is very welcoming. Families, family photos, all the furniture that you love, the beat-up chair that you love to sit in every night before going to bed, right? That’s your spot. I get it.

But somebody else walking in might look at that and go, “Oh, my God. That’s been scratched by the cat for 20 years. This looks horrible.” You have to be able to put perspective on that, as if you were a total neutral party walking into that home and trying to envision it as the place they want to live. You have to be able to reset that. One of the ways that I encourage sellers to do that is to really try to neutralize things. Like you mentioned, neutralize the home to where they can see that it’s someone living there, it’s comfortable, it’s a place they want to be, but it doesn’t feel like it’s not their space yet. They can start to envision themselves in that space because it’s not so personalized, or so specific to one individual.

[0:23:27] TU: Yeah. I think of things like paint and photos and odors in the home, right? Good, bad, indifferent. You gave some great examples, like the chair that we like to sit on at night. Some of these, what’s great about this is it’s not wildly expensive, typically, right? Neutralizing paint colors. I have vivid memories of going into houses where it was red carpet, lime green walls, and it’s like, man, that is such an easy – or dark paint that made the room look smaller. Miniscule changes in light fixtures and other things that can really open up a room and make it look bigger.

[0:24:02] NH: You mentioned smells too, like you hit the nail on the head with things that are unique can be the problem, right? Maybe it’s an air freshener you have that you love, and it’s like tropical oasis or whatever.

[0:24:11] TU: In your face.

[0:24:12] NH: It’s like pineapple when you walk in or whatever, right? That stuff can be just as bad, even though it smells good, it can be just as off-putting to somebody. I’ll give you a great example. I had a client that was real sensitive to the candles. We’d go into any house, even if it smelled phenomenal to me, she would immediately say like, “Oh, I feel like I’m getting a migraine, like is driving me crazy.” Yes, it’s a good smell, but it’s not helping your case. It’s all about neutral. That’s the way you’re going to maximize that potential value and the people walking in and out of your home are going to have a good experience.

[0:24:41] TU: I like that. That was number three. Why it matters to depersonalize. Why it matters to neutralize the home. Number four is setting the price. I’m really curious, Nate, I have not yet gone through the buying or selling process in this chaotic market that we live in. Just curious about what you’re seeing in terms of pricing lower to try to generate more interest. Maybe you have somewhat of a bidding war, pricing it a little bit higher because of the market and where things are at. Again, all markets being local. What are your thoughts here?

[0:25:10] NH: Yeah. I think the biggest thing here, and I tell this to every single client I work with. The list price of a home is completely made up. The market value of the home is the number you want to determine, right? All pharmacists here, we’re all interested in facts and numbers, right? I don’t want to just make things up. That’s why you want to determine market value first and adjust from there, right? A good agent’s going to come in and tell you, “Look, this is the market value of the home. It’s between 340 and $350,000.” They should be able to give you a pretty tight range.

“And here are the factors that I’m basing that on. If I were to list your home today, here’s the pricing strategy I would use.” Like you said, it can be anything from listing it at that 340 or 335 mark to try to generate a lot of activity. Typically, we’re going to do that if there are many other homes on the market, right? That’s more typical in a neutral market or a buyer’s market, where I want to be the first one of the five that are available that people go see. The reason they’re doing that is because it’s priced lower than everything else, right? I’m still going to get close to market value for it, but I’m going to be the first one that everybody looks at, especially –

[0:26:10] TU: Yeah. I think of the filters, right, on realtor, right?

[0:26:13] NH: Exactly.

[0:26:13] TU: Or filtering by price. Yeah.

[0:26:14] NH: Exactly. The other strategy is, hey, if there’s nothing available, if you’re in a market like the community that I live in, where a home goes on the market and it sells in two days, because everybody wants to buy and there’s not enough inventory, you can push that market value quite a bit, right? If we determined that it’s 340 to 350, I might list it 375 and see what happens, right? You might get a bite at that price and as long as it appraises, awesome. You’ve gotten more than market value out of your home, but you have to start with what is the market value before you can determine a strategy.

So many agents, I hear this all the time from prospective sellers, they will just throw these giant numbers at people. They won’t tell them market value, they’ll say, “Well, if I were to list your home today, I’d list for $400,000.” Why? Just because it’s the biggest number and you want me to work with you, or do you have a real reason behind that, right? That’s the kind of questions you want to be asking.

[0:27:03] TU: Since you brought up appraisals, I want to talk about that for a moment, because in my experience, it feels like appraisals are a little bit like the Wild Wild West, and just a ton of subjectivity. I know that’s supposed to have been tightening up. I don’t know, it just feels like it hasn’t when you think about the process and how it’s completed. What are you seeing, again, small sample size in your area, but what are you seeing in terms of, for people that are pushing price point, that maybe is x% above market value? Like how tight is the appraisal of the market value right now?

[0:27:34] NH: Yeah. Appraisals, unfortunately, are just still so subjective. Typically, what I’m seeing is that if you get a home that is over market value, but there are multiple offers on that home, the appraiser is at the point where, and again, this is not actually how they work, but what it feels like is that they’re looking at it and saying, “Look, this is an arm’s length transaction.” That’s a real estate word for basically, it’s on the market and anybody can buy it. This is an arm’s length transaction. There are multiple people interested at 380, and it’s probably worth 380, right? If lots of people want it, I don’t have –

[0:28:05] TU: Yeah. That becomes the market value.

[0:28:06] NH: Yeah. I don’t have the empiric evidence to say it’s worth more than 350, but I do have six people who all threw an offer at this house at 380 and near it. Maybe that is the value, right? I don’t think that’s actually how appraisers are doing it, but that’s how it feels. They’re supposed to base it on comps. They’re supposed to base it on recent home sales. Ideally, it’s based on homes within a mile or less radius, really even less than a half a mile within the last six months. There are certainly times where it doesn’t feel like that’s being followed, good or bad, right? Negative or positive, they’re picking other homes or whatever, but that’s the ideal state.

[0:28:39] TU: Yeah.

[0:28:40] NH: It’s also a tough job. Not every home is built the exact same way, right? You don’t have just the same cookie cutter house across every block. It’s not an easy way to determine. That can make it difficult.

[0:28:51] TU: Yeah. That’s a good point, right? We all know that a four bedroom, two to four bedroom, two thousand square foot homes can be very different.

[0:28:57] NH: Absolutely.

[0:28:57] TU: So, if you’re just looking at those bones for comps, that may not be a fair comparison. I’ve been in those situations where you’re in areas that aren’t as populated, and they’re trying to draw in comps within a reasonable geographic range. You just know like, “Ah, that’s so different.” Right? Now, if you’re in an area where you’ve got multiple subdivisions and the same type of home and thousands of them, maybe that’s not as significant of a difference. All right. Number five on our list of tips for sellers is understanding buyer versus seller costs. Who is typically paying for what? Tell us more, Nate.

[0:29:35] NH: Yeah. This is a big point of when you get a house when someone’s actually buying your home and get it under contract, there’s going to be a lot of negotiations about who’s paying for what. This can be state-specific. Some states lay out exactly how it’s supposed to be. Then you can deviate from that. Others are just up in the air, right? You determine what’s normal for your market.

It can be everything from the taxes, right? How are you splitting the taxes? It can be the title fees. The actual process of transferring that title, who’s paying for that. Typically, it would be split 50-50, but maybe in this market, you want the buyer to cover everything or whatever, right? That’s all part of the negotiation. There are some things that I think typically fall on one side of the other, so things like inspections typically fall on the buyer. I can’t think of a single transaction I’ve ever done with the seller, helped to cover inspection fees, but I suppose it’s out there.

Then closing costs. Closing costs are usually split, except for the buyer-specific stuff, like down payment and rate lock fees, and all that other stuff. There are a lot of different ways you can slice that up, but typically things are cut 50-50 and then anything that’s very buyer-centric is going to be covered by the buyer and vice versa. That’s what I typically see, but you can certainly build it any way you like.

[0:30:48] TU: We were talking before the show, that’s all when things go as planned, right? But there’s situations where once someone’s under contract and then a problem’s identified, right? Typically, under inspection or something else comes up, major, right? Septic tank, roof types of things. Tell us about your experiences here and how that may impact this item.

[0:31:09] NH: Yeah. So, one of the items that typically comes up is a seller’s credit, is what it’s called. Typically, if you are selling a home, you might be providing some credit back to the buyer. The most common version of that is what’s called a closing cost credit, where you’re basically saying “Here, I’m going to give you $3,000 toward your closing costs to help you with some of the cash that you’re going to need to buy the house.” What I often will see is somebody that says, “Hey, look, if the house is listed at 340 and we’re close and we’re negotiating down to 335, maybe we can agree on 340, but you give me 5,000 back in the form of closing cost credit that will reduce the cash that I need as a buyer.”

The seller still makes the same amount, right? The net value is still 335, but it’s helping the buyer out quite a bit. That’s very common, but what you mentioned where we’ve got a problem that might come up down the road or someone’s trying to push that seller’s credit beyond the typical amount, that’s where you can start to get into some issues. I had a deal a couple of years ago. I was actually representing the buyer. During inspection, we determined that the house needed a new septic tank and it was way out in the woods. It was a five-bedroom home. It was pretty large. It needed a huge new, I mean old type of tank dugout, new one put in $10,000 fixed. Easy. Yeah.

It became a question of like, “Well, how do we do that? When do we do that? Right? Is it before closing? Is it during after? Like what does that look like?” There are a lot of different ways that you can build that in. For this particular deal, what we ultimately determined was, we had two companies come out, give quotes. We basically all agreed that this was the company we were going to go with. Buyer and seller agreed to that. The seller provided a $10,000 credit toward that septic system to be installed after closing.

There are certainly risks to the buyer to doing that. There are risks to the seller to doing that, but it was what we landed on. It’s something where if and when those problems come up, you want to talk to your agent about, “Hey, what does this look like if I do X, what are the ramifications? If we do Y, what are the outcomes?” Then you can make the best possible determination. There are lots of different ways that you can build that.

[0:33:14] TU: Great stuff. Another example, right? We’re a good agent with experience. Where it really comes in, right? I have been through this scenario. I’ve seen how this is done, multiple ways this has been done. Seeing how all of this ties together. Well, there you have it. Five tips for those that are selling a home and also for things to be aware of that those that are buying a home and to have the helpful insights. Nate, as always, really appreciate your time, your insights, your expertise, and for coming on the show.

[0:33:39] NH: Yeah. Thanks for having me, Tim.

[0:33:41] TU: Nate and I have covered a ton of information in this podcast. Imagine working with Nate one-on-one through your home-buying journey and having his support to give you much-needed peace of mind. We know many pharmacists want to feel confident about big financial decisions, including a home purchase.

If you have fears of being house poor, concerns about the impact a home purchase might have on your other financial goals, Nate and his home-buying concierge service can help all at no cost to you. You can visit realestaterph.com or click on the link in the show notes to schedule your free 30-minute jumpstart planning session with Nate.

[DISCLAIMER]

[0:34:20] 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 material 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 Pharmacists, unless otherwise noted, and constitute judgments as of the dates published. Such information may contain forward-looking statements, which 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 322: Checklist for First-Time Homebuyers

Posted on August 24, 2023October 5, 2023 by Tim U

Mortgage loan officer Tony Umholtz joins the show to discuss available loan options (including the pharmacist home loan), why a preapproval matters, and things to consider when choosing a lender. This episode is sponsored by First Horizon.

About Today’s Guest

Tony Umholtz graduated Cum Laude from the University of South Florida with a B.S. in Finance from the Muma College of Business. He then went on to complete his MBA. While at USF, Tony was part of the inaugural football team in 1997. He earned both Academic and AP All-American Honors during his collegiate career. After college, Tony had the opportunity to sign contracts with several NFL teams including the Tennessee Titans, New York Giants, and the New England Patriots. Being active in the community is also important to Tony. He has served or serves as a board member for several charitable and non-profit organizations including board member for the Salvation Army, FCA Tampa Bay, and the USF National Alumni Association. Having orchestrated over $1.1 billion in lending volume during his career, Tony has consistently been ranked as one of the top mortgage loan officers in the industry by the Scotsman’s Guide, Mortgage Executive magazine, and Mortgage Originator magazine.

Episode Summary

If you’re a first-time home buyer, this episode is for you! This week’s episode, sponsored by FirstHorizon, features Tony Umholtz, a mortgage loan officer at First Horizon Bank with over 20 years of experience in the industry, and he is here to share important factors that you should be taking into consideration before purchasing your first property. By the end of the episode, you will understand how banks decide whether or not to approve a mortgage application, the pros and cons of the various loan options that exist, the difference between preapproval and prequalification, things to look out for when choosing a lender, and more! Buying your first home isn’t something to be taken lightly, and Tony’s insights will leave you feeling well-equipped to make decisions that are going to serve you well, now and in the future.

Key Points From the Episode

Tony shares a number of current market trends that are important to be aware of.
Factors that are putting huge pressure on housing affordability (particularly for first-time homeowners)
What a debt-to-income ratio is and how banks use it to determine which mortgage applications to approve.
Why Tony recommends an income-based repayment plan for student loan debt.
A question you should ask yourself before applying for a mortgage.
An overview of the traditional lending options that are available to first-time home buyers.
Advantages and disadvantages of taking out an FHA loan.
Benefits of the Fannie Mae and Freddie Mac conventional loan programs.
Examples of additional loan programs.
Details about First Horizon’s pharmacist home loan.
Factors to take into consideration when choosing a lender.
The difference between preapproval and prequalification.
Advice for choosing a real estate agent to work with.
Implications of a ruling that is likely going to be passed by the Supreme Court.

Episode Highlights

“We’re in an environment of higher interest rates than we’ve seen in a long time. We haven’t seen rates like this since the early 2000s.” — Tony Umholtz [0:02:13]

“Just because the lender says, ‘We can give you this loan,’ it doesn’t mean it’s what is best for you.” — Tony Umholtz [0:15:43]

“There’s a tremendous amount of liquidity for first-time home buyers. So I would ignore a lot of what you hear in the media.” — Tony Umholtz [0:16:59]

“It’s a good time to buy because the inventory levels are low, prices are stable, you can get a better deal than you could a few years ago when the market was so hot you couldn’t even order an appraisal sometimes.” — Tony Umholtz [0:24:05]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00.8] TU: Hey everybody, Tim Ulbrick 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 welcome back on to the show, Tony Umholtz, a mortgage loan officer with First Horizon Bank. During the show, I tap into Tony’s 20-plus years of experience in the industry to form a checklist for first-time home buyers. We discuss how to determine how much home you can afford, the different types of loan options to consider, what to look for in choosing a lender, and much more.

Okay, let’s hear it from today’s sponsor, First Horizon, and then we’ll jump into my interview with Tony.

[SPONSOR MESSAGE]

[0:00:36.6] TU: Does saving 20% for a downpayment on a home feel like an uphill battle? It’s no secret that pharmacists have a lot of competing financial priorities, including high student loan debt, meeting that saving 20% for a downpayment on a home may take years.

We’ve been on a hunt for a solution for pharmacists that are ready to purchase a home loan with a lower down payment and are happy to have found that option with First Horizon. First Horizon offers a professional home loan option, AKA, doctor or pharmacist home loan, that requires a 3% down payment for a single-family home or townhome for first-time home buyers, has no PMI, and offers a 30-year fixed rate mortgage on home loans up to USD 726,200.

The pharmacist home loan is available in all states except Alaska and Hawaii and can be used to purchase condos as well. However, rates may be higher and a condo review has to be completed. To check out the requirements for First Horizon’s Pharmacist Home Loan, and to start the preapproval process, visit yourfinancialpharmacist.com/home-loan. Again, that’s yourfinancialpharmacist.com/home-loan.

[INTERVIEW]

[0:01:48.5] TU1: Tony, welcome back to the show.

[0:01:50.5] TU2: Tim, thanks for having me, great to be here.

[0:01:52.1] TU1: Excited to have you back and I’m going to start with my standard question to you, given the ongoing volatility that we’re seeing in the mortgage landscape. What are the market trends and realities that you’re seeing right now that our listeners should be aware of?

[0:02:06.9] TU2: Well, there’s a lot to digest right now with what the federal reserve has done this past year and you know, we’re in an environment of higher interest rates than we’ve seen in a long time. We haven’t seen rates like this since the early 2000s and, you know, a couple of things to watch right now, the big news last week was that our US treasury needed to borrow an additional 275 billion that they didn’t have in the budget. So that kind of pushed rates a little higher across the board. It does help fixed-income investors because rates are higher for investments but for mortgage, mortgages, and borrowers, especially if you have variable rate like credit card loans and things like that and home equity lines, those rates are really taking a hit here recently.

[0:02:51.9] TU1: Yeah, 275 billion, small details, right? That we need to be planning for, you know, we talk about a balanced budget on the personal side. We don’t have that luxury, right?

[0:03:00.5] TU2: That’s right, that’s right. You know, I was teasing my wife about it too. I said, “You know, look, it’s important that we keep a good budget because we can see what’s happening in our national debt,” but I think, you know, it’s funny. Back to that point you know overall, I’ve seen – this is – I’m going into my 21st year of this industry, and people on average I feel are better stewards with their money than they used to be.

Like I look back in the mid-200s, it was a lot different. People were always coming to me very indebted, not that everyone’s perfect now but it just seems like people are better educated and better stewards overall from what I’ve seen. It’s been a choppy market and I think we could be in for higher rates for some time unless we see some big global macro event.

You know, a bank failure or unemployment spike or, you know, GDP really collapse, those sort of catalysts would cause rates to get worse. On the bright side, most markets around the country, inventory levels are low and there’s just not enough homes. So home prices have continued to go up in most areas and that’s been a challenge too because you have higher interest rates and higher home prices.

I don’t think home prices are going to fall, given the inventory levels, because that’s how you measure price stabilities, inventory. I mean, there’s always areas that are going to be suffering more than others. So we can’t generalize that every city is the same but the majority of the cities in the US right now have a lack of inventory and that’s causing prices to be stable and even going up despite the headwinds.

[0:04:40.0] TU1: Yeah, and it feels like there’s several factors, you know, we’ve talked about this before on the show about inventory being an issue. Obviously, rates where they are, which I think is putting a lot of pressure on first-time homebuyers.

We’re going to talk in a little bit about student loans here coming back online and the impact of that for first-time home buyers and then I think there’s the reality of, you know, Jess and I talk about this often, so many of us that locked in homes at the high twos and low threes pre-pandemic and the beginning of the pandemic, unless there’s a significant reason to move, a lot of people are saying, “I don’t want to give up that rate,” right? “Why would I give up you know, 2.8, 2.8, 3% to take on a 7% plus rate?” So I suspect that probably is worsening, you know, some of the supply and demand as well, is that fair?

[0:05:26.1] TU2: Absolutely, I think that’s a big, very fair, big driver of why inventory’s tight, right? Because people, even though they may need a bigger home, their family’s grown, they don’t want to give up that interest rate. But it’s interesting, we’re starting to see, and it’s just a few cases, but I’m starting to see people that have so much equity. They have that 30-year at 3% but they have so much equity and they built up other debts. So you know, credit card debt mainly. Other liabilities, auto loans that are higher interest rates than that, where even if you took a rate in the sixes to cash out, refinance it, and pay off your debt, you’re saving a thousand dollars a month in cash flow.

So I think, at some point, you know, being married to that super low rate on a small loan balance, even a higher mortgage rate could pay off for some people to consolidate because cash flow is the key, right? Payments, what you’re paying. And it’s not all about rate one mortgage, you gotta look at your whole debt profile but there are a lot of people with those low rates and it’s just one of those things, right? You know, you don’t want to move when you’ve got a payment like that and even though you have but you are sitting on a lot of equity.

[0:06:36.3] TU1: Yeah, it’s interesting. I appreciate the comment about looking at the whole portfolio. You know, something like debt consolidation may be a factor or you know, to your point, where at one point in time, especially as you’re getting started and you don’t have a lot of equity, that low rate can be a huge advantage but at some point, you’ve got a lot of equity that’s sitting in your home, right? And depending on what else is going on in the financial plan, there may be other options to consider.

So today, Tony, we’re going to cover a checklist for first-time home buyers that includes determining how much one can purchase. We’ll talk about affordability, evaluating the loan options that are out there, factors in choosing a lender, and also in selecting a real estate agent. So let’s go through this one by one. First on our checklist is the determination of affordability, right?

Relevant topic just given what we talked about here over the last few minutes. I think as we’ve seen, as you mentioned, escalation or at least stability of home prices, rising interest rates, we talked about that and for many of our first-time home buyers, federal student loan payments are going to be coming back online for the first time in over three and a half years.

All of this is putting pressure on affordability, especially again for those first-time home buyers that may not have equity built up in a previous home. So let’s start with how the bank determines affordability, AKA, how much mortgage they will approve, and then we can talk about how the individual may also determine affordability. So give us the rundown. I know this is fluid in some cases but how does the bank look at the affordability of how much home one can ultimately afford?

[0:08:08.9] TU2: Sure. Well, you know, for the majority of the products, Tim, the debt-to-income ratio that we look for is 43%. So what that means, debt-to-income ratio, is your total income, total debt, your debts cannot be higher than 43% of your income. Now, that’s gross monthly income, okay?

So if you’re W2 wage earner, then it’s going to be before tax, right? So that’s going to be – a quick example, if you make USD 10,000 in household income per month, your total liabilities including that new mortgage payment cannot exceed 4,300. So that would be the basic calculation of a debt-to-income ratio. That’s what the majority of lenders look at. Now, there’s ways to get like, we do have the ability, especially for those who are putting more money down like more than putting 20% down for example, we do have the ability a lot of times to go up as high as 50% debt-to-income ratio.

But you typically have to have compensating factors like, you know, 20% down or more, higher credit scores, you know, liquidity, things like that. So that’s normally when you see some of the higher debt-to-income ratios but I would say 43 is where you want to be at for a safe number. That’s what the majority of the lenders in our country are going to look at.

[0:09:33.4] TU1: And just to reinforce what you said, that’s not just mortgage payment, that’s total debt loads, right? So if there’s debt commitments, that could be credit card, debt commitments to car payments.

[0:09:43.7] TU2: Right.

[0:09:44.1] TU1: Debt commitments to student loans. Let’s talk about that for a moment. So we, again, we’re coming back online here in the fall. Many of our listeners, especially first-time homebuyers, may have upwards of USD 200,000 or more of student loan debt.

Now, depending on how they pay that off, they could very aggressively pay it off if they want to. The standard repayment is a 10-year default option, in that case, they would be looking at monthly payments, 1,800 to USD 2,000 a month, or they could take that out over a longer period of time, which is probably most common, on something like an income-driven repayment plan, which will lower their monthly payment.

So lots of nuances in student loans and I’m curious to hear from your perspective as a lender, someone who has had a lot of experience in this industry, working with pharmacists as well, how do they look at the student loans?

[0:10:31.5] TU2: Well, it is, it’s a great question. I mean, the first thing is normally, I find that the income-based repayment plan is going to give you, especially now, it’s going to probably give you the best ratios for most of our listeners, for most of our potential clients here. There is a factor we use.

For example, if there was no payment, right? Or if you’re in sort of deferment, we’re going to use a factor of the student loans, which is better than like Fannie Mae, Freddie Mac, and FHA would use but that factor can still be higher than what most have as an income-based repayment, I find.

But there is the factor that we use for the student loan payments that we’ll use to kind of generate a payment that will service that liabilities monthly obligation, and that factor again is less than like, for example, Fannie, Freddie are 1% of the balance per month. So if it’s a USD 200,000 balance, you’re at USD 2,000 per month.

[0:11:30.4] TU1: Yeah.

[0:11:30.8] TU2: Which is pretty unaffordable. This product is 0.5%, which is still high. I mean, at 200,000, it will be a thousand a month. So it’s a more generous way but it’s not, I find that the income-based repayment is typically better. So that’s normally what we recommend.

[0:11:50.9] TU1: I’m glad you brought that up because we do have people that may be deferring for whatever reason. Obviously, we’re in the pause period right now. So understanding again, we talk about all the time that we can’t be thinking about one part of the financial plan in a silo. This is a great example where how you approach your student loan may certainly have an impact on affordability and determination on the mortgage side.

Tony, you mentioned just a few moments ago that something like a higher credit score or greater down payment may be able to push that percentage upwards from 43%. Can the opposite be true? So, you know, a low down payment, and we’ll talk about different financing options here in a little bit, or a lower credit score, could that ultimately work in the opposite direction where maybe it’s not 43% but it’s a lower percentage?

[0:12:38.9] TU2: Sometimes yes. Yeah, there is such scenarios where it might need to be – if the credit score is rocky, although I mean, when we have a little bit of a credit challenge with low down payment, I always look for FHA loans because conventional the answer would be yes, there would be some challenges with Fannie Mae, Freddie Mac, conventional loans.

But with FHA, that serves as a good niche there and FHA serves that market really well. A lot of times, the interest rates are much better too for that borrower that has a little bit of a credit ding for conventional style, will pivot to that product but yeah, that is exactly right. If you have a higher debt-to-income ratio, low down payment, it’s going to be a more challenging situation for sure.

[0:13:26.5] TU1: So we’re talking here about you know, affordability. What the bank is going to determine that they are comfortable lending you with, and it’s important to call out and remember that the bank’s calculation ultimately is a CYA for the bank, right? It’s to minimize their risk on you as the “lendee” for closing on that loan.

So they’re trying to determine the likelihood of being able to repay that loan but it’s certainly not a calculation to determine what is or is not ultimately in your best interest with looking at the whole of the financial plan, right? It’s really on the individual borrower to determine what the monthly budget can afford with other goals and priorities in mind and that is a huge piece to consider.

We often say, Tony, that someone really should start with their own budget, and then obviously, there’s going to be most often, maybe a bigger number in terms of what the bank will determine as affordable and to be able to reconcile that as they go out and search homes. What we’re trying to really do is prevent a situation where someone gets into a home and then pay cut, temporary job loss, something happens and they feel like they’re really strapped month to month. So I would really encourage people, when they look at personal affordability, to answer the question, how much of your monthly take-home pay do you want to be taken up from a home purchase? And being able to feel comfortable with that.

And this is really a place to mention, you know, principle interest, taxes, and insurance is certainly a portion of that but there’s a lot of other things that we need to be thinking about, right? It could be association fees, it could be maintenance, it could be upgrades. We all know getting into home, things break, we want to upgrade things and so making sure we’ve got margin in the budget to be able to do that as well is really, really important.

[0:15:09.1] TU2: HOA fees are going to be included so if homeowner’s association fees, something else called CDD fees, which are community which developers pass along to the new homeowner in a lot of parts of the country for new construction communities and those can be, they’re like a non-Ad Valorem tax that gets added on to your property taxes.

Those are another cost that’s factored into the debt ratios and so that’s something to consider but again, yes, home repairs, furnishing, all that has to be considered. Just because the lender says, “We can give you this loan,” it doesn’t mean it’s what is best for you.

[0:15:51.6] TU1: So that’s number one on our checklist. Number two for our checklist for first-time home buyers is evaluating the different loan options. Tony, something we’ve talked about before in the show and we’ll link in the show notes to some of those previous episodes where folks can dig in in more detail but it’s worth revisiting as it’s an important part, a really important part for a prospective homebuyer to understand the various options and products that are out there.

You’ve already mentioned a couple of these, FHA, you mentioned the conventional loans offered through Fannie Mae and Freddie Mac. Give us a brief overview of the traditional lending options that are available for our first-time home buyer, and then we’ll also talk in more detail about the pharmacist home loan option available through First Horizon.

[0:16:33.0] TU2: Sure. So there are a lot of programs available for first-time home buyers and for residential financing in particular. I mean, you’ll hear some things in the media about financing tightening up, lending tightening up. It’s primarily on the commercial side and some of the high-end bank portfolio side, whether they’re, you know, you have two million dollar loans, stuff is tightening. But there’s a tremendous amount of liquidity for first-time home buyers. So I would ignore a lot of what you hear, you know, in the media regarding that.

The first product I’ll mention, which I mentioned earlier, FHA is a very common program for first-time home buyers, especially if your credit is a little lower, if it’s under 680. A lot of times, that’s the best product option from a rate perspective. The benefits of it is you can put as little as three and a half percent down and the loan limits are going to differ by county. So it’s going to depend on what county you’re buying in and that will determine the loan limit, the max loan limit available.

The downside of FHA is it’s got permanent lifetime mortgage insurance. You cannot get rid of the mortgage insurance for the life of the loan. It’s always going to be on the loan and it’s something that gets added on to that monthly payment every month. So that’s the downside of FHA but one of the positives of FHA, and I write a few of these a year, is that it’s the best primary multi-family loan program out there.

I have some really good success stories over the years of young professionals buying triplexes and fourplexes and duplexes, living in one unit, renting the rest of them and it becomes this great lifetime asset. So there are some benefits to FHA financing. There are some good things, some flexibility on down payments and you can get gift funds and so forth, so there are some good things there.

The other is Fannie Mae and Freddie Mac, which are conventional loan programs. They have, again, some really good programs here as far as you know, 3% down, 5% down options. The PMI on those loans is not lifetime, it can be removed, typically after two years of paying it and even sooner if you come up with the down payment.

Like for example, I’ve had clients that put 10% down, and then literally, six months later they say, “Hey, you know, we ended up coming up with another 10% and we want to put it down and get rid of that MI,” and you can do that, you can do it within that two years. It’s based on the original purchase price but you can get rid of the MI that way too.

And then the other side of that is, we’re starting to see and this is, again, I gotta be careful how I say this but I’m based in Florida so I’m really familiar with these programs in Florida but there’s some state-based programs for first-time home buyers.

Like, we have one in Florida right now where you can essentially get 100% financing. We’ll do a Fannie Mae first mortgage or Freddie Mac first mortgage, and then the state will give you a second at 0% and there’s income caps on that one and the majority of your listeners, Tim, are probably not going to qualify for these interstates because there’s income caps. Like, you can’t earn over a certain limit. The Florida one is very generous, it’s 130,000. So that’s one of the highest I’ve ever heard of but that we’ve got some loans we’re working on here for that down here in Florida but there’s some nichey programs that can fall on our conventional with certain states.

Then the other – I say, the last one is going to be sparingly used, but VA loans. If you have someone that’s a first-time homebuyer or even if their spouse served in the military, VA is a great program for buyers. I mean, it’s just tremendous. No PMI, 100% financing, and some of the best interest rates on the market. We have no lender fees for them. It’s a very, very good program for that audience.

And then lastly, you know, the nichey programs like the one we offer for pharmacists and professionals with no PMI and again, you have to be a pharmacist or be in a certain field to qualify. But that can be as little as 3% down with no PMI if you’re a first-time home buyer and 5% down if you’ve owned before and that loan amount will go all the way up to USD 727,000. So it really covers the majority of first-time home buyers, maybe except those in California, you know, it is still pretty expensive there but for the majority of our audience, that will satisfy that need.

[0:21:17.9] TU1: Great overview Tony, I think that highlights well, you know, we’ll talk in a moment here about choosing a lender but when working with a lender, especially one that’s well-versed in all the options and nuances especially, you know, you’ve referenced several times here different cases where, you know, in working with many pharmacists, people have maybe done a house hack. That might be really attractive for an FHA. Or got a low credit score, maybe an FHA or availability of down payment or access to a VA loan and I’m not from there, it’s the first time I’m hearing about some of the state-based programs. So you know certainly, your expertise in Florida, although you work with pharmacists and others across the country as well.

So I think that’s an interesting one for our community to look into further and I know we do have folks that are listening in Florida that may be just hovering around that one, you know, 30 mark. So depending on applicability, I think that would be worth reaching out to inquire more about as well. I want to make sure our folks are well aware of the pharmacist home loan option via First Horizon.

You just covered some of the basics in terms of down payment, maximum loan amount. One of the reasons that we’ve been excited about this collaboration over the years is the national availability and the lower 48 of this product, knowing that our community is based all across the country. Tell us just a little bit more about that eligibility. You know, I’m thinking about things like credit scores.

So you mentioned no PMI, you mentioned the down payment, you mentioned the loan limits but are there folks where credit score may become an issue here that would point them to an FHA loan? Any other details that individuals need to be aware with this product?

[0:22:49.3] TU2: Sure, sure, good question. The minimum credit score, there’s no maximum but the minimum credit score is 700. So 700 is going to be the minimum credit score for the product and then if you’re under that, we do have ways to help boost credit scores. We have a technology where we can evaluate credit and we can actually see what your score can get to by certain activities, paying certain debts down, maybe a percentage of your credit card, and we’ve helped numerous clients with that. You know, it is almost on a monthly basis. That’s a good tool to get the credit scores higher but 700 is kind of that line in the sand. We can’t go below that for the no MI product, so it’s going to be your minimum score.

You know, as far as the overview of the product, what I love about it is there’s no reserve requirements. A lot of these products have hefty reserve requirements and we don’t have that for it because that really helps first-time home buyers that may not have a lot of savings built up yet or investments built up yet. There’s also no prepayment penalty, which I think is very important because I really believe in the next two years that we’re going to see some really good opportunities to refinance.

That’s why I still think it’s a good time to buy because the inventory levels are low, prices are stable, you can get a better deal than you could a few years ago when the market was so hot you couldn’t even order an appraisal sometimes. It’s still one of those times where I think you’re going to have a chance to get the home you need, build that, and actually have a chance to lower your payments in the future.

I do think we’re going to see that happen. The other variable would just be, we only offer a fixed rate on the product, so it is only a 30-year fixed on this particular option, there’s no 15-year. The last thing I will mention too is it does a lot of duplexes, the three and the fourplexes are allowed but it requires a pretty hefty down payment, it’s usually 20%, where the duplex is only 15% with no MI.

So we’ve used that a few times for pharmacists that want to get into their first property and utilize this program. Quick high level of it. To me, the biggest factors are the no MI, no prepayment penalty, and the flexibility on reserve.

[0:25:10.2] TU1: I’m glad you mentioned the reserve requirement because I think that’s something we’re going to be seeing as more of an issue. You mentioned first-time home buyers naturally that is but especially with student loan payments coming back online that are going to eat into the ability to be able to save up those reserves. Over time, I think that is going to be an important factor that individuals are looking for.

We’ve got some great information on the website, we’ll link to in the show notes as well. You can to yourfinancialpharmacist.com/home-loan, click on “get started,” we’ve got a brief form that you can fill out, and then we’ll get you connected with Tony so you can learn more about that product.

Tony, third on our checklist for first-time home buyers is choosing a lender and getting pre-approval. Obviously, you’re biased in terms of the work that you do for good reasons and the value that you provided to many pharmacists out there that are listening, but from your perspective, what are some of the top factors that one should be looking for when choosing with a lender that they want to move forward with?

[0:26:06.9] TU2: Sure. You know, I would say communication is one of the biggest pieces. Being able to communicate is critical in this process because there’s a lot of questions, there’s a lot of things that come up in the home-buying process, so I say communication is number one. The other piece would be service.

You know, I think a mistake a lot of people make is they kind of chase interest rates on the Internet and it can backfire because a lot of times, that’s how they get you in the door to call them and things change once you get in the door and get the application in and the, you know, I think that the service side, being able to close on time, meet the milestones of your contract is really important.

So finding a lender that communicates well but also can meet all those timelines, can close quickly if you need to because if someone – you can close in three weeks or under 30 days. Sometimes, you can go back to the seller and save five, USD 10,000 on the purchase price of the home. It’s a big deal, so I think having bid.

I think in service of meeting the commitment letter date, making sure you use local appraisers. Because some of the bigger lenders will actually use an appraisal management service, where you can have more challenges with the appraisal process than some of the smaller local lenders. So I think that again, it’s a comfort feeling, it’s communication, it’s service, and then having a competitive product I think is important too. You know, having a product that’s a good fit for your needs is important as well. I think those three.

There are a lot of good lenders out there. There really are. It’s getting hard. It’s tough on the lending industry, the volumes have dropped 40% from last year. A lot of lenders are leaving the business, so it is a much tougher environment for the mortgage market right now but there are still good lenders out there for sure.

[0:28:00.3] TU1: Once somebody choose a lender, quickly after that is going to become a preapproval so they can go out there seriously look at homes, be ready to make offers and I think this is an area we see a lot of confusion on partly because of the online shopping of rates and quick access and easy solutions and that being the preapproval versus the prequalification. So tell us briefly about the difference and why the preapproval process is so important.

[0:28:24.3] TU2: So when you go looking for homes, a lot of the real estate agents will ask you, and now we’re going to talk about real estate agents shortly, but they’re going to say, “Do you have a preapproval letter?” You know, that’s going to be the first thing before they even want to engage with you, they’re going to want to make sure you have that and the difference between the preapproval and prequalification are that the lender has checked your income, and checked your credit report.

Those are the two major factors, right? We verified the income, we verified your credit. The prequalification, which a lot of us can get online, is pretty simple. It’s more verbal than anything, right? So verbal verification, where a preapproval, you are actually providing the information to the lender and they’re reviewing it and making sure that from a high level, your income is accurate and your debt-to-income ratio works.

A lot of listing agents won’t even allow you into the property unless you first get that preapproval. It’s either, “Can you pay cash or do you have a preapproval?” Because they call us. We get calls from the listing agents all the time, “Is this client qualified?” And that’s a big factor when you make an offer, is what does that preapproval letter say? And because there’s still multiple offers and sometimes, you know, multiple buyers looking at a home, we still get those phone calls and that I think is very important to have a strong preapproval. That’s going to be the factor in a lot of times, moving forward and it gives you peace of mind.

I understand, you know, “Hey, I don’t want my credit run,” things like that and you know an inquiry on a credit report, having one or two lenders look at it is going to have no impact on your report. It’s when you have multiple types of creditors looking at one time. So if you come to our team and get your credit run and then you go to Bank of America and have them run your credit for a mortgage but then you have Dillard’s run your credit for a credit card, you have Macy’s run your credit for a credit card, and you have a car loan, well, those are different types of creditors all at one time that will impact for sure, but it still won’t be much, it will be a few points.

Where I find people get confused on this and start to go off on a credit tangent is, you know, you can go to a Best Buy, right? And buy a TV and they’ll say, “Okay, here’s that USD 2,000 TV with no interest for a year if you take this credit” and so many people will do that. That will whack your score 40 to 50 points immediately because it shows up as a maxed-out credit card.

[0:30:51.3] TU1: Yep, high utilization.

[0:30:52.7] TU2: Those are misconceptions, I see a lot of borrowers, especially first-time home buyers, will come to me so concerned about an inquiry and they have things like that or their credit card been up to – much more impactful and on [inaudible 0:31:09.0] but yeah, it is a critical thing to have a preapproval in my opinion especially your first time out.

[0:31:17.6] TU1: So glad you mentioned about credit. I remember you saying that on a previous episode and I think that’s just a lot of ways in there, right? Because we often think about it, you know, if you’ve got a personal credit card with a max of 20, USD 25,000 and you’re charging on average three or USD 4,000 a month, you’re at a reasonable percentage of utilization that’s not going to have a negative impact on your score.

In fact, you know, utilization and timely path of credit can have a positive impact on your score but if you go out and buy a piece of furniture, a TV, or whatever, that essentially looks like a maxed-out credit card so that can have a negative impact, great point there. So we’ve talked about affordability, we’ve talked about evaluating loan options, we’ve talked about choosing a lender and getting approval.

And fourth on our checklist is choosing a real estate agent and I would certainly want to give a shoutout here to Nate Hedrick, who is a frequent guest on the YFP Podcast, cohost of The Real Estate Investing Podcast, who has a home buying concierge service intended to connect folks with an agent local in their area. We’ve got more information on the website that we’ll link to in the show notes.

I’m certainly interested, Tony, in your experiences over two decades now, where you regularly work with agents. What are the characteristics that make up a good agent that someone can be looking for when choosing who they want to ultimately go forward with?

[0:32:33.1] TU2: Yeah, a great question and I’m going to bring up something else about agents here in a minute that could change the framework of the industry here very soon but a couple high-level points. I think, you know, the first thing would be, obviously, back to the same thing as the lenders is communication, right? Communication and that rapport is very important and the other piece is just doing their homework, right? What you’re looking for.

I mean, some agents will come to us, and I’ll just give an example real quick when we do conventional loans for 20% down through Fannie Mae and Freddie Mac, oftentimes we’ll get an appraisal waiver. So that means there’s no appraisal needed. Now, you could still do an appraisal as a buyer but oftentimes, when they get that, they want to waive it because they save the appraisal fee.

A lot of the good agents will do so much work on comping the home out and the offer price and knowing what the comps are, those borrowers will feel comfortable moving forward without the appraisal, right? Because of the work that agent has done. So I think just knowledge of the area, knowledge of the process, communication, do they have a good reputation with other listing agents?

That is huge, I mean, I find that some of the – I work with a lot of realtors just around here in Tampa especially but I have some in other states. It’s amazing, even not where I can see them face to face all the time. In fact, I had a Zoom call with a great friend of mine in Miami that has a big team and we would talk this morning to his team at nine just about the market and what we’re seeing.

But I think just seeing these agents that I have worked with around rather for a long time, ten-plus years, is the ones that play well with everyone else and have a good reputation, when they bring a buyer to that other list, that other realtor’s listing, guess who gets, “Hey, this guy, he knows he’s bringing a qualified buyer. He’s not playing games, he negotiates the right way.”

So I think having a good reputation is really important and that brings me to something else which I’m kind of following from a distance but it is going to be huge for the real estate industry, and I think for the entire residential industry is right now, the Supreme Court is reviewing a case with the National Association of Realtors and basically to summarize this case is it’s going to eliminate most parts of the country.

When you as a buyer go buy a home, the commissions are paid from the seller’s proceeds, right? So the [inaudible 0:35:03.5] who represents the seller will get 3% or 2%, whatever it might be for that area and then the buyer’s agent will get the same, right? Two and a half, 3%, whatever it might be. Well, under this new rule, it would be more like the commercial market, where a buyer of a commercial piece of property in a lot of cases pays their broker out of their own pocket, right? So they pay the 3% out of their own pocket.

Well, this is really significant for the entire industry, because however you’re going to source business as a real estate agent, your buyers are going to have to be educated now because they’re going to be responsible before your pay because of this new Supreme Court ruling not allowing the listing agent. So there is a lot of moving parts here, I don’t want to speculate.

[0:35:50.0] TU1: Wow.

[0:35:50.2] TU2: But it is a huge thing that I think not a lot of people know about. Some of the big real estate companies are talking about it but it’s a huge deal because in my mind, I’m looking at it I’m like, “Well, what do we do?” So you know, we do allow 3% seller concessions, can we increase the loan amount to cover part of it? I mean, is that going to still be allowed? Because a lot of first-time home buyers are going to be impacted [inaudible 0:36:14.4] either agent two and a half, 3% of the sales price, right?

So I think in the end, it’s going to be net-net the same day everyone because it’s going to mean, “All right, so the price is a little lower because you are paying that extra 3% directly,” but it could end up being, “Hey, you have to come up with more money at closing.” So this is a moving conversation.

I haven’t followed it close enough to know exactly when it’s going to come out. I don’t think the industry knows when the ruling is actually going to come out and which way it’s going to go but it’s like a lot of really smart people in the real estate business I’ve spoken to have told me that they think it’s going to pass or it’s going to change the dynamics of the industry.

So it’s just something to watch and if you’re kind of on the fence now buy, I would say, you’re going to buy and you’re going to be – you know, kind of my thoughts on buying is if you’re going to be in a city for five years or more, it’s almost a no brainer to buy. I mean, even if property values fail by 5% or 10% or whatever, between amortization, tax deductions, escalations annually, it’s hard to lose.

I mean, home ownership in the long run is just one of the best wealth-building tools, probably a good idea to do it before that ruling, right? If it does end up going the other way and you gotta come up with that additional 3% for your agent because it’s really going to change a lot of dynamics.

[0:37:39.3] TU1: Certainly a lot to follow there and a couple of thoughts are coming to mind, Tony, was one, you know the implications of a buyer now having to come forward with those dollars, right? Already – especially first-time home buyers, you know bringing cash to the table can be a challenge, and then I thought about the characteristics you listed off of a good agent.

You know, excellent communication, experience I think is one that is really significant. You see a huge range of experience and expertise and agents in terms of how many homes are they selling or working with the buyer-seller throughout the year, and for how many years? And then reputation in terms of reputation with other agents, are they kind, do they do business in a good way? But those characteristics I think, especially with that responsibility, potentially falling on the buyer. You know, anytime somebody has skin in the game now, they’re going to be looking for more of that, right? Whereas, I think right now, the bar of entry and to somebody choosing an agent is probably pretty low because they’re not necessarily feeling the financial transaction of that.

So great insights, that’s something we’ll be following as well and really appreciate your perspective as we went through this checklist as well. For folks that want to get connected with Tony and learn more, make sure to check out, yourfinancialpharmacist.com/home-loan. You can click on “get started” and we’ll make sure to get you over to Tony. As always, Tony, I really appreciate your perspective and having you on the show.

[0:39:00.5] TU2: Thanks for having me, always great to be here. Thank you.

[END OF INTERVIEW]

[0:39:04.2] TU1: Before we wrap up today’s show, I want to again, thank this week’s sponsor of the Your Financial Pharmacist Podcast, First Horizon. We’re glad to have found a solution for pharmacists that are unable to save 20% for a down payment on a home.

A lot of pharmacists in the YFP community have taken advantage of First Horizon’s pharmacist home loan, which requires a 3% down payment for a single-family home or townhome for first-time home buyers and has no PMI on a 30-year fixed-rate mortgage.

To learn more about the requirements for First Horizon’s pharmacist home loan and to get started with the preapproval process, you can visit, yourfinancialpharmacist.com/home-loan. Again, that’s yourfinancialpharmacist.com/home-loan.

[DISCLAIMER]

[0:39:48.9] TU1: 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 it is not intended to provide and should not be relied on for investment or any other advice. Information on 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 post, and podcast 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, which 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 321: Navigating Financial Conversations with Aging Parents

Posted on August 17, 2023August 15, 2023 by Tim U

Award-winning journalist and author Cameron Huddleston joins the YFP Podcast to talk about navigating financial conversations with aging parents.

About Today’s Guest

Cameron Huddleston is an author, speaker and award-winning journalist with 20 years of experience writing about personal finance. Her work has appeared in Forbes, Kiplinger’s Personal Finance, Chicago Tribune, MSN, Yahoo and many more print and online publications. She is a mom of three awesome kids and was a caregiver for her own mom, who had Alzheimer’s disease. SHe is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.

Episode Summary

Money talk isn’t always easy to initiate, but in some cases it’s essential. Today, we are joined by award-winning journalist and author of Mom and Dad, We Need to Talk, Cameron Huddleston, to discuss the often-overlooked topic of navigating financial conversations and decisions with aging parents. Cameron shares key insights into why these discussions are crucial, how to approach them with love and respect, and practical strategies to initiate meaningful dialogues. We discover the importance of estate planning documents, ways to involve siblings harmoniously, and the significance of long-term care planning to ensure a secure future for both parents and their adult children. Tune in to gain valuable advice and actionable steps to foster open, productive conversations that empower families to address financial matters and caregiving needs with confidence and compassion.

Key Points From the Episode

Introducing award-winning journalist and author, Cameron Huddleston.
Insight into her book Mom and Dad, We Need to Talk.
The importance of talking to aging parents about their finances and long-term care planning.
Key fears preventing people from having these conversations.
Strategies to initiate conversations with parents about their finances.
Why it’s important to involve siblings in these discussions.
The basics you need to cover in these conversations.
Cameron offers listeners a free In Case of Emergency (ICE) Organizer.
What to discuss with regard to long-term care planning.
The emotional toll of being an unpaid family caregiver.

Episode Highlights

“The benefit of having these conversations sooner rather than later is that you can avoid some of the emotional reactions that can crop up.” — @CHLebedinsky [0:08:34]

“If you wait until [your aging parents] are no longer mentally able to make decisions on their own, then they’re not going to be able to sign the document and you have to go through the court process of becoming their conservator.” — @CHLebedinsky [0:15:18]

“It’s a good idea, when talking to your siblings, to talk a little bit about what roles each of you is willing to play in your parents’ financial lives as they age.” — @CHLebedinsky [0:21:00]

“More than half of adults 65 and older will need long-term care at some point.” — @CHLebedinsky [0:25:46]

“If you make a plan, you have more options available to you. If you wait until that emergency — you can’t get long-term care insurance once you already need it.” — @CHLebedinsky [0:28:37]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00.8] 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 welcome back onto the show, Cameron Huddleston. Cameron is an experienced award-winning journalist and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents about Their Finances. We talk through why it is important to have these conversations with your parents, how to start the conversations, and what to do if your parents are reluctant to talk.

Before we jump into my interview with Cameron, let’s hear a brief message from YFP team member, Justin Woods.

[YFP MESSAGE]

[0:00:37.5] JW: Hey, Your Financial Pharmacist community, it’s Justin Woods, director of business development at YFP. I’m curious, have you taken a pulse on your financial health lately? It’s so easy to get swept away by the day-to-day of careers, family, and life in general but now is a great time to hit the brakes and check in to see how financially fit you are. Are you heading in the right direction to meet your financial goals?

Is your retirement planning on track? Do you have adequate insurance in place? We created a five-minute financial fitness test so that you can learn about the areas of your financial plan that you may need to work on, maybe where you’re crushing it, and resources that could help you along the way. So head on over to yourfinancialpharmacist.com/fitness, to see how your financial health is tracking.

Again, that’s yourfinancialpharmacist.com/fitness or click the link in the show notes below.

[INTERVIEW]

[0:01:31.3] TU: Cameron, welcome back to the show.

[0:01:33.0] CH: Thanks so much for having me.

[0:01:35.1] TU: I’m so glad to have you back and today, we’re going to be doing a deep dive into a difficult, yet very important topic and that is navigating financial conversations and decisions with aging parents, and Cameron, for our listeners that didn’t previously catch you on the YFP Podcast several years back, tell us why this topic is so important to you, such as it has led to you to speak and write extensively on this topic, including the work that you did in your book, Mom and Dad, We Need to Talk.

[0:02:05.5] CH: You know, it’s funny, I never set out to be an expert on having family money conversations, yet, I have found myself in this position largely because of personal experience. I have been a personal finance journalist for more than 20 years and when I was 35 and my mom was 65, she was diagnosed with Alzheimer’s disease and I found myself having to get involved with her care and get involved with her finances.

But we had never had any detailed conversations about her finances and you know, looking back, I think, “Oh gosh, I should have known better, I was a financial journalist, I should have had these conversations with my mom” but it never crossed my mind that I needed to talk to my mom about her finances and so then, I found myself having to play detective to get the details I needed about her finances as she was forgetting those details herself.

So that experience prompted me to write a book, to help people realize the importance of having these conversations before there’s an emergency. You know also, my dad’s story played a role on this too. He died at 61 without a will and he was in a second marriage and he was an attorney. He should have known better. He should have had estate planning documents and it came as a huge shock to me that he didn’t.

You know a lot of times, we think our parents are on top of things or they might tell us that they are but are they really? And then you start to ask questions and you find out that they’re not as prepared as you think they are and so I just really want people to realize that these conversations are so important because there will come a point when you have to get involved with your parent’s finances, either if they need care or help as they get older or when they pass away and you have to manage what is left behind.

[0:04:04.1] TU: Yeah, Cameron, your story really resonates with me and I suspect that our audience as well. One of the things I shared with you before we hit record is that we’re seeing more and more folks in our community that are challenged, you know, with being stuck in terms of having, obviously, their own financial situation, perhaps young or growing family that is presenting financial needs and now there’s this component with aging and elderly parents that you know, may not only be difficult conversations but also there may be really real financial impact on their own situation as well.

And so I think you know, your story and what you mentioned about you know, your father being an attorney, somebody that knows the importance of these documents and not having them in place really speaks to just how emotional and challenging this topic can be and that’s really where I want to start, right? Because I think that for those that have aging adult parents, very common situation where the fears that surface when we consider talking about money with our parents.

I know it’s something that I have felt myself and so much so that in the book that you wrote, Mom and Dad, We Need to Talk, you referenced a study from a care.com survey, showing that more than half of parents would rather have the sex talk with their kids than talk to their parents about money and aging issues. What are some of the fears that are holding people back from having these crucial conversations, right? After all, we know that they’re essential ones to have.

[0:05:32.1] CH: One of the big ones is that we are afraid if we have these conversations, our parents might think we’re being greedy, especially if you want to ask about those estate planning documents. We’re afraid if I ask Mom and Dad if they have a will or a trust, they’re going to think that I’m just trying to find out what I’m going to get when they die and so it’s a logical fear for sure.

You know, we might be afraid that our parents are thinking we’re being nosey because most people are pretty tight-lipped about their finances. We might be afraid that our parents are going to get angry with us and it’s going to create a rift in our relationship. I think though if you approach these conversations out of love and respect.

[0:06:18.0] TU: Yes.

[0:06:19.7] CH: Then you’re not going to make your parents angry, they might be a little surprised initially that you want to address this topic but if you let them know that you are looking out for their best interest, that you want to know what their wishes are so that you can honor those wishes, they hopefully will recognize the value in having this conversation and they’re not going to think that you’re just trying to figure out how much money you’re going to get when they die, especially as long as you don’t start the conversation that way.

You know, you don’t want to say, “Hey, do you have a will? I want to know what I’m getting.” Of course, they’re going to think you’re being greedy at that point but if you let them know, “Hey, I want to know what your wishes are so I can honor them” then you’re opening the door to having a productive conversation.

[0:07:16.5] TU: Yeah. You know, what really stands out to me there, Cameron, is honor, love, and respect, three words that you use there and I think if that’s the backdrop and the intention of a conversation, it doesn’t mean it’s going to be an easy conversation, right? We still may stumble through it and it’s challenging but I think the outcome of that is likely to be much more fruitful, fit in the spirit of that.

And as I shared with you previously, that is something I have struggled with personally, is that fear and sometimes it’s a story I tell myself but that fear that out of initiating these conversations, there could be a perception of greed, and while I know my heart is not in that place, you know, that is a concern, and I think some of the strategies that you talk about in the book to initiating these conversations.

I think, really, coming at it from a perspective of honoring their wishes as you said, and to be fair, there’s also a personal responsibility that I feel to my family and our financial plan, why I think both of our parents have done a phenomenal job in planning, you know, depending on long-term care, a topic we’ll talk about here in a little bit, and the expenses that may or may not come that could be a financial burden and implication on our family, on our personal finances and so I think there is a responsibility to lean into this conversation from that end as well.

[0:08:32.0] CH: I was going to point out that the benefit of having these conversations sooner rather than later is that you can avoid some of the emotional reactions that can crop up if you wait until an emergency. If you were talking to your parents about their estate planning, their retirement planning, their long-term care planning while they’re still relatively young and healthy, you’re talking about “what if” scenarios.

“What if this were to happen, what do you want?” As supposed to waiting until there has been that diagnosis of dementia or a cancer diagnosis or whatever. At that point, you are in a crisis, and trying to sort out the financial side of things is going to be a lot more difficult because you’re not talking about a “what if” scenario. You’re talking about, “Hey, you probably need my help now we don’t have a plan, I need to get involved” and that makes it a lot more challenging to have constructive conversations at that point.

[0:09:41.1] TU: Yeah, that’s such a great point that you bring up because one of the traps, and you talk about this in the book, is assuming that a conversation can wait, right? And I think that’s another reason where, you know, having the conversation as early as possible before those situations are live and real and you’re in the moment, I think can really help with managing that conversation in a much more effective and productive way.

Cameron, one of the things I was thinking about is I find this cycle very interesting, right? When I think about the generational patterns that you often see with how we handle our money, right? So I talk with many pharmacists that grew up in a household where money is a taboo topic, right? So there is from the parent to the child relationship where maybe they’re not given the financial vocabulary or it’s a common place to have an open conversation about money and then you see this pattern repeat in reverse, child to parent, later in life or maybe they’re not comfortable initiating that conversation.

And so I think for our listeners, I share that as hopefully some encouragement to break some of these cycles, right? That might be running generationally as it relates to how we handle our money but it’s so important. One of the implications we see often when we’re working through the financial plan is, it’s not just the exes and O’s, it’s not just the objectives. So much of this topic is emotional.

So much of this topic comes back to how were we raised, what are the money scripts and stories that we grew up with and what are the implications of that on our financial plan.

[0:11:06.0] CH: I agree 100% and I think it’s a really good idea before you start having these conversations to spend a little time thinking about why your parents might be reluctant to have the conversation if you think that they will be reluctant. If money has been a topic that your family has addressed, you know since you were little, then you have a lot less story about and I don’t mean to say that you have a lot to worry about if it wasn’t a topic of conversation in your family but I do think it’s a good idea to think, “Why might my parents be reluctant?”

“Are they embarrassed about their financial situation, do they simply believe that money is a taboo topic? Do they not like the idea of talking about aging in death?” If you can pinpoint the reason they might be reluctant, then you avoid approaching the conversation from that angle. So let’s say, Mom and Dad don’t like to think about death, they never talk about it. So you don’t start by asking them about what sort of estate planning they’ve done.

You choose a different approach, you know, “How’s retirement going for you or what are your plans for retirement?” Something along those lines so that you don’t start the conversation off on the wrong foot because you don’t want them to shut down immediately.

[0:12:24.2] TU: Yeah, such a good point and that’s one of the things that I love about the book is I feel like you give very tangible, practical strategies such as conversation starters, right? Because I think that in theory, a lot of people hear this topic and they’re like, “Yes, I know I need to have these difficult financial conversations with my parents and I can understand why but how do I actually engage?” right?

“How do I begin some of these conversations?” and you give very tangible examples all throughout the book. So I highly encourage our listeners to check out that resource, if they haven’t already done so. One of the things Cameron, you mentioned in the book, is when talking with reluctant parents, how important it is to start with the basics, the must-haves, and then to work from there and then to build upon that.

What do you mean by the basics? What are you referencing there?

[0:13:14.7] CH: I think it is so important to find out if your parents have estate planning documents and I know some people think, “Oh, an estate plan, that’s something only wealthy people do. My parents don’t have a lot of money, I’m sure they haven’t bothered to draft a will or a trust” but all adults, all adults need estate planning documents. Of course, a will or a trust is important to spell out who gets what when you die because, without one, state law is going to determine who gets what and I don’t think a lot of people realize this.

So many adults think, “Well, my family can just sort it out” and that is the worst, the absolute worst approach you can take because you might think everyone gets along but as soon as money comes into play, the dynamics change so quickly. I mean, I’ve heard this from estate planning attorneys, I’ve learned this from personal experience and so, you need to make sure your parents have a will or a trust that spells out who gets what when they die and you need to know where that document is.

Again, you know, say, “Look, we just need to know what your wishes are so that we can honor them and honestly, so we can avoid any fighting down the road.” I think, more important though than that will is a financial power of attorney. The best type to get is a general durable power of attorney, this lets you name someone to make financial decisions and transactions for you if you can’t. General means you’re giving someone broad powers.

Durable means that that power remains in effect once you are no longer mentally competent and so this allows you to plan for dementia and capacity. If it’s not durable, it’s really not going to do you any good and so your parents need to have named someone as their agent under power of attorney. This has to be in place while they are still mentally competent because if you wait until there is a stroke if you wait until they are no longer mentally able to make decisions on their own, then they’re not going to be able to sign the document and you have to go through the core process of becoming their conservator.

It can be very lengthy, it can be very expensive, you know, and I was lucky with my mother because she had some estate planning documents but when she was showing signs of memory loss, I was like, “Let’s go in and get them updated” and fortunately, she was still competent enough to sign those documents. So don’t assume if your parents are starting to show some signs of memory loss that it’s too late.

Meet with an attorney, don’t, please don’t use those inexpensive or no-cost forms that you can get online. If there’s any document that you meet with an attorney to draft, it is that power of attorney document because if you run into issues down the road, you can always get that attorney on the phone with the financial institution to say, “Yes, this document is legitimate, the person was competent when he or she signed it” and so meet with an attorney or make sure your parents meet with an attorney.

But they also need to have a medical power of attorney to name someone to make medical decisions for them if they can’t and they need an advanced directive. It’s also called a living will to spell out what sort of end-of-life medical care they do or do not want. These documents are so important, parents need to have them and you need to know where they are because it’s not going to do you or your parents any good if you can’t find them. Start there, then get more information.

You know, how do they pay their bills, this is part of the emergency planning. If Mom and Dad end up in the hospital and you want to make sure the bills are getting paid while they were in the hospital, you need to know how they’re paid. Are they set up to be paid automatically or are they writing checks? If they’re writing checks, someone else is going to have to be able to sign those checks for them, at least temporarily while they’re in the hospital.

You know and then keep digging, what are their sources of income? You don’t have to know exactly how much money they have but you need to know, are there retirement savings, are they relying solely on social security benefits, is there a pension, you know, is there debt? Again, you don’t need to know down to the last penny how much debt they owe but are they still paying for a mortgage?

Are they still paying for student loans that they took out for you or for themselves or for the grandkids? Whatever, just you know, a general idea is a good start. Of course, the more information you can gather the better because if you end up in a situation like I did where you have to manage your parents’ finances, then you’re going to have to know everything.

[0:17:57.2] TU: So much there to take away and as you talk about in the book, those more advanced types of things, right? You talked about how you’re paying your bills, sources of income, bank accounts, outstanding debts, you know what I think about as like the day-to-day execution, right? You put yourself in the shoes of your parents and you’re responsible for managing that as you mentioned in your own situation, what are the things that you would need to know.

But the importance of starting with the basics and when they are ready to share and when the time is right to be able to come back to those topics. So I think the progression here is a really important thing to highlight and I would just encourage our listeners, you know, Cameron, as you were talking through the estate planning documents, a reminder not only to our listeners for their aging parents but also for them.

Many in our community have a young family, they may not have taken this important step and I think because there often could be fear and emotions around this as we see with many of our financial planning clients this isn’t the most exciting part of the financial plan to be thinking about but it’s so important to consider and it’s something that we’re also not just going to set once and forget but we need to come back throughout time and make sure that those documents are updated.

We talked about the estate planning part of financial planning in great detail in episode 222, we’ll link to that episode in the show notes. I do want to ask you about the sibling component, right? One of the things you just shared is how money can become challenging when you think about the family dynamics, right? That we often hear those horror stories and so that got me thinking as you’re sharing, “Wow, how can even my brother and I prevent some of that?”

How can we get on the same page? And for us, it’s only him and I and I would expect this becomes more challenging with more siblings, more personalities, you know, more brothers and sisters-in-law and so forth, they’re involved. What advice would you have to our listeners that are trying to think about, “How can I best navigate this relationship with my siblings so we are collectively on the same page in these conversations with our parents?

[0:19:54.2] CH: I’m so glad you brought this up because sometimes the sibling dynamic can be more complicated than having the conversations with your parents and so I encourage people to actually talk to their siblings before talking to mom and dad so that they can get on the same page. If you have siblings and you decided to go to mom and dad and have these conversations and you don’t include them, then that can create resentment.

It can create suspicion, “Oh, you talked to Mom and Dad about their finances, what were you trying to do? Get and go with them so that you get all their money when they die?” You don’t want that to happen and so call a family meeting with your siblings, whether it’s in person, whether it’s on Facetime, you know, better to talk but if you have to send a series of emails back and forth that’s certainly better than nothing.

But you want to let your siblings know that you think it would be a good idea to talk to your parents. You want to figure out who is going to initiate the conversation. Is it one of you, is it all of you, when is going to be the best time to have this conversation? And I also think it’s a good idea when talking to your siblings to talk a little bit about what roles each of you is willing to play in your parents’ financial lives as they age.

Now, at the end of the day, it’s going to be up to your parents to make those decisions who is going to be the executor of their estate or their trustee, who is going to be the financial power of attorney, the medical power of attorney but if you have had these conversations beforehand with your siblings and then you sit down with your parents and they can see that you’re on the same page, it can make it easier for the parents to open up.

Because often times, parents are reluctant to have these conversations because they don’t want their kids to fight. I would caution though, if you have a sibling who is likely to sabotage the conversation for whatever reason, maybe the sibling doesn’t get along with you, doesn’t get along with your parents, there are mental health issues, you know, financial, legal problems, then you might not want to include that sibling in the conversation.

You know, if you have siblings who simply don’t want to participate, it’s okay, don’t force them but I would encourage you to just keep them in the loop because you never know down the road if you do get involved with your parent’s finances, they might want to start getting involved and if you’ve kept them onto the loop all along, then you’re going to run into some issues there and so try to keep an open dialogue as much as possible with your siblings.

[0:22:29.5] TU: Cameron, in the book one of the things you reference is the “in case of emergency” organizer and I think some of what you previously covered probably falls in here as well but tell us more about what is the purpose of this organizer, what should be in this, and how our listeners could get started with this for their own family or with their parents.

[0:22:47.2] CH: So I actually created this downloadable file, you can find it on my website at cameronhuddleston.com, it’s free. You can use that or you can create your own. It’s essentially a way to get organized, to help your parents get organized. You can print it out and give it to them because sometimes parents are more willing to write down information rather than tell you directly. This allows them to maintain control over the information.

So if they don’t want to talk, just say, “Hey look, I get it. This is a sensitive subject. Do me a favor though, here is this “in case of emergency” organizer, fill it out. Fill it out as best as you can, put it in some place safe, and tell me when and how to access it.” I mean, it asks for all sorts of information, social security number, Medicare number, health insurance number, military ID if you served in the military.

All of your financial accounts, your usernames, your passwords, locations of lockbox keys and deeds, and marriage certificates. I mean, I try to cover everything and so it is a great way to get organized. It is a great way to get your parents organized. You know, if you are in a relationship yourself, I mean, this is information that your spouse or partner is going to need if something happens to you.

So you know, like I said, if your parents don’t want to tell you information, you might have some luck getting them to write it down.

[0:24:17.1] TU: Yeah, I really like that strategy and approach and I think also you know, to having a third-party resource can be really helpful. So you know if I, for example, I’m talking to my mom and dad. If I send them a checklist of, “Hey, these are the things I’m asking for, these are the questions that I have” you know, to your point about being intentional and strategic and how we have this conversation in an honoring and loving and respectful way.

I think sometimes the third-party resource expert such as yourself, having that come from them can be certainly a powerful approach and strategy to consider as well. Cameron, I want to wrap up our time by talking about long-term care planning. In a recent version of your newsletter that you sent out, you talk about the financial and emotional toll that can come from being an unpaid family caregiver, something I’ve seen in my own family.

With my parents caring for their parents and I suspect this is a conversation that many avoid but has massive implications. So talk us through why this conversation is so important and the strategies that folks can use to open up the dialogue around long-term care planning.

[0:25:25.0] CH: It is so important to talk to your parents about what sort of long-term care planning they have done because I can tell you most likely they haven’t done any planning. Only 11% of adults have long-term care insurance, which will help pay for the cost of long-term care services but the thing is, more than half of adults, 65 and older will need long-term care at some point, you know?

This is assistance with what are called the activities of daily living, bathing, getting dressed, eating, getting in and out of bed, long-term care can be provided in your home obviously by family members or paid help you bring in. It can be provided in an assisted living facility, adult daycare centers, memory care facilities, and skilled nursing and so it doesn’t necessarily mean a nursing home, which is a lot of people assume, you know?

Their parents might say, “Don’t ever put me in a home, don’t put me in a nursing home” and I encourage people if your parents say that to you to not make that promise, to not say, “I promise.” I think the better strategy is to say, “You know, I understand that the idea of going into a nursing home seems really scary. Let’s talk about what sort of care you would want if you need care. Where do you want to receive care?”

Most likely, they’re going to say in their home because that’s where most people want to receive care and then you say, “Okay, well, if you want to stay in your home, let’s think about whether your home is set up for you to age and place. You know, Mom and Dad, you got a two-story house. Your bedroom is on the second floor. You have a bathtub that you have to step into to take a shower.”

“Maybe it would be a good idea to start thinking about downsizing to a smaller home with a bedroom on the first floor and an accessible shower with a smaller yard or no yard, a house that requires less maintenance. If we can start putting these plans in place now, then you can stay in your home” and you know, “Do you have a way to pay for someone to come in and provide care? I want to be able to help you in any way possible, however, I have a job.”

“I have kids, I might not be able to take time off my job or to quit my job to provide care for you. You know, I’m going to do whatever I can to help you but let’s make sure there’s a way to pay for professional care” and maybe Dad says, “Well, you know mom is going to take care of me.” “Dad, can Mom take care of you if you’re both in your 80s? Can she get you up and down the stairs? Can she get you in and out of bed?”

“Can mom really do this? Does she have the physical and emotional strength to do it?” People don’t think about these things because honestly, it’s depressing. It is but if you make a plan, you have more options available to you. If you wait until that emergency again, you know, you can’t get long-term care insurance once you already need it. That has to be in place, you have to buy long-term care insurance.

You can get it in your 50s, your early 60s as long as you’re still healthy. You know maybe, they don’t like the idea of paying for long-term care insurance because they might never need it. There are now these hybrid life insurance products that include a long-term care benefit, maybe they have whole life insurance that has accrued cash value and so they can tap into that cash value of their life insurance.

Maybe it’s a reverse mortgage, maybe they have enough retirement savings to cover the cost of care but you want to talk to your parents about what sort of resources they have and it is really important to discuss who is going to provide that care and to gently make them aware that they might not be able to rely solely on family to provide that care.

[0:29:44.5] TU: Yeah and as you articulate it so well, I mean, there’s all of these financial considerations but there’s the emotional consideration inside of this as well and I think that’s the piece that often gets overlooked, especially with family caregivers. You know, I’ve seen this right now of my grandmother where certainly, the family’s involved but it’s gotten to a point where she needs daily around-the-clock professional help with the home.

And while that’s been very beneficial and in fact, if it’s very, very expensive and it also provides a different dynamic, you know? In terms of obviously, you got different people coming into a home, it’s not the family that’s taking care of her at certain times, and so there’s just so much to consider here and I think more and more reason to have these open conversations as soon as possible, right?

Before the event comes to be and this becomes even more challenging and more emotional and I think as with many things in life, right? The path to peace of mind and the path to feeling good about the outcome and solution is through the difficult conversations and so I think just huge credit to you Cameron and the work that you’re doing, not only through your book but through your newsletter, your blog, and the impact that you’re having on such an important topic.

I’m so grateful for your time and the contributions that you have made to our community, which I know is going to be inspiring in their own journeys to make sure that they’re taking action on this topic. As we wrap up, Cameron, what is the best place in addition to folks getting a copy of the book, Mom and Dad, We Need to Talk, what’s the best place for our listeners to go to connect with you and to follow your work?

[0:31:13.1] CH: My website is cameronhuddleston.com and so as I mentioned, I’ve got that free downloadable “in case of emergency” organizer. I’ve got a couple of other resources there. Another good place is to follow me on Instagram. If you’re on Instagram, it’s Cameron K. Huddleston. I share a lot of tips on financial caregiving, having these family money conversations.

[0:31:38.5] TU: Great, we will link to both of those in the show notes and thank you again so much for taking time to come on the show.

[0:31:44.9] CH: Of course, thanks for having me.

[DISCLAIMER]

[0:31:46.7] 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 it is not intended to provide and should not be relied on for investment or any other advice. Information on 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 320: How One Pharmacist Paid Off $345,000 in 5 Years

Posted on August 10, 2023August 9, 2023 by Tim U

Stacie Moltzan Loescher, PharmD paid off $345 000 of student loan debt in just five years and she joins us today to share her incredible journey to becoming debt free!

About Today’s Guest

Dr. Stacie Moltzan Loescher is a Pharmacist currently working in central processing for Albertsons Companies and is currently appointed as the Assistant Grand Vice President for Collegiate Affairs of the Phi Delta Chi Professional Pharmacy Fraternity. She attended Rosalind Franklin University of Medicine and Science where she received her Doctor of Pharmacy degree in 2017. During her career as a pharmacist, she has worked as Staff Pharmacist and Pharmacy Manager at multiple retailers throughout Wisconsin, Indiana, and Illinois. She has also served in multiple regional and national positions at Phi Delta Chi. She enjoys traveling, fishing, and fitness.

Episode Summary

Stacie Moltzan Loescher, PharmD paid off $345 000 of student loan debt in just five years and she joins us today to share her incredible journey to becoming debt-free! Tuning in, you’ll hear about the hard work and clear vision that led Stacie to the financial freedom she enjoys today. We unpack her process to aggressively repaying her loans, from working throughout pharmacy school and undergrad to paying off a car alongside her student debt. Stacie touches on how her childhood experiences impacted her approach to financial management as an adult, and reveals how she could sustain the momentum necessary to pay off the debt, before sharing powerful advice for graduates as they choose how to approach their own student debt. In closing, Stacie offers a glimpse into her future plans which are focused on building a net worth through side hustles and real estate investment.

Key Points From the Episode

An introduction to Stacie Moltzan Loescher and her story of becoming debt-free.
Her introduction to pharmacy growing up with two sisters with intensive medical needs.
Stacie’s career in pharmacy starting at CVS in Wisconsin.
A summary of her process to becoming 100% debt-free.
How Stacie celebrated her achievement by traveling!
Working throughout pharmacy school and undergrad.
What motivated her to choose an aggressive repayment strategy.
The desire for financial freedom behind her efforts to clear all debt.
How Stacie’s childhood experiences impacted her approach to paying off debt as an adult.
The car note she paid off in two years while erasing her student debt.
Sustaining the momentum in the midst of an aggressive payment plan.
Advice for graduates as they choose how to approach their student debt: start planning now!
What’s next for Stacie: building a net worth, considering real estate, investing, and picking up a PRN position to earn extra income.

Episode Highlights

“I’m just not a fan of paying interest. I’d rather be earning interest.” — Stacie Moltzan Loescher [0:11:48]

“I wanted to be able to have financial freedom sooner in my life. I feel like if I was paying off for ten years, I would have been strapped down to those loans for ten years, living paycheck to paycheck to try to pay them off.” — Stacie Moltzan Loescher [0:13:14]

“I didn’t like seeing debt behind my name because it’s not something that I heard growing up or in my family. My parents didn’t have debt.” — Stacie Moltzan Loescher [0:15:49]

“Don’t wait to approach your student debt. Start planning now, if you haven’t already.” — Stacie Moltzan Loescher [0:23:06]

“Start looking at what’s going to be the best loan repayment strategy for you, because there are different options that are better for different people.” — Stacie Moltzan Loescher [0:23:12]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00] TU: Hey everybody, Tim Ulbrich here. 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 welcome Stacie Moltzan Loescher onto the show to talk about her debt-free journey, both how and why she paid off $345,000 of student loans in just five years. We discussed her motivations behind aggressively paying off the student loans, how she was able to do it, strategies she employed to keep her momentum and motivation and lessons that she learned along the way. Before we jump into this inspiring interview, let’s hear a brief message from YFP team member Justin Woods.

[MESSAGE]

[0:00:38] JW: Hey, Your Financial Pharmacist community. This is Justin Woods here, Director of Business Development at YFP. You may be one of the 13,000 pharmacists that have already signed up for YFP Money Matters, which is our weekly newsletter. But if you’re not, what are you waiting for? I want to invite you to subscribe. We send financial tips, recommendations, the latest podcast episode, and money resources, all specifically for pharmacists. It all comes straight to your inbox every Friday morning, so visit yourfinancialpharmacist.com/newsletter or click the link in the show notes to subscribe today. Again, that’s yourfinancialpharmacist.com/newsletter. See you there.

[EPISODE]

[0:01:23] TU: Stacie, welcome to the show.

[0:01:26] SML: Thanks for having me.

[0:01:28] TU: Before we jump into your incredible debt-free story and your journey, let’s start with your career journey into the professional pharmacy. Where did you go to school? What led you into the profession, and tell us about the work that you’re doing right now?

[0:01:41] SML: Sure, so I’ll start with what led me into the profession. I grew up with two disabled sisters, one older, one younger. They were both born with cleft palates. My older sister growing up, she couldn’t swallow pills. She still can’t swallow them to this day. That meant that we would often find ourselves at the pharmacy. They would have capsules ready and she couldn’t take them. We had to work with the pharmacist to get it changed to like a liquid form or sometimes the pharmacist might say like, “Oh, it can be open, and put into apple sauce.” Or what have you. But we often found ourselves working closely with the pharmacist to get it resolved.

Sometimes there would be insurance issues with that, because they don’t like to cover suspensions for 14-year-olds. We’ve had to work together with the pharmacist to get that resolved, whether it was a PA changing it, or taking it and crushing it up. Then putting it in liquid or apple sauce. Then my little sister, she was born when I was eight years old and she was born with what you call an esophageal atresia, which for those that don’t know what that is, that is where your stomach and esophagus isn’t fully connected.

After she was born, she was life-lighted to children’s hospitals. We had to undergo a surgery and that meant that she would be fed through a G-tube for the next 10 to 12 years of her life. She had to have everything liquid form and a lot of times with like amoxicillin, that’s like a different viscosity than a PediaSure is. We would have to dilute that before we could give it to her through the tube or else it would, the amoxicillin would like get stuck and clogged in the tubing.

If we gave her too much volume, she would like get sick, have side effects. We often found ourselves crushing medicine, too. Then suspending it in water to give it through the tube. Then she also had asthma. We were doing nebulizer treatments several times a day. Those experiences growing up really sparked my interest in pharmacy. Then I went to North Dakota State to study pre-pharmacy after I graduated high school. Then from there, I found myself in North Chicago, Illinois, at Rosalind Franklin University and after I graduated pharmacy school, I took a job at CVS as a pharmacist in Wisconsin.

[0:04:32] TU: Okay.

[0:04:33] SML: From there, I worked at different retailers, grocery chain retailers, big box retailers throughout Illinois, Indiana, Wisconsin. Up until recently, I took a job with a grocery chain pharmacy as a central processing pharmacist. I’ve been there about four months now. In that role, we check prescriptions for their grocery stores in about 30 different states.

[0:05:02] TU: Oh, wow.

[0:05:03] SML: That’s where I’m at today.

[0:05:04] TU: Awesome. Well, thank you for sharing your career journey and the motivation behind getting into the profession. I’m going to read to kick off you sharing your debt-free story and for us to dive into this a layer deeper. I’m going to read a post that you shared on LinkedIn that really caught my attention and let me to reach out to you where you said.

“Last month, I made my last student loan payment, and my loan balance hit zero. After five years of working as many hours as my body would allow and living like a resident, I paid off $345,000, $235,000 of that was principal. My goal was aggressive as a first-generation and a single-income household to have it paid off in five years. I paid it off in five years, three months. I could have paid it off by the end of 2022 to meet my goal, but it actually made more sense to just pay the minimum payment over the past year since high yield savings account was currently earning more interest than I was paying an interest on my student loans. Cheers to being 100% debt-free now.”

Wow, just incredible Stacie. When I think about that dollar amount, we’ll talk here in a moment about some of the motivation and the why behind this journey. My first question for you is, what have you done to celebrate this accomplishment? Have you done anything yet to celebrate this accomplishment?

[0:06:20] SML: Not really. I believe I was like went out with like friends, Friday night. They were just like, “Congrats.” But I did a lot of travel over the last year since I wasn’t as aggressive as paying off in my last year. I did a lot of travel that last year, so I was celebrating that the end was near.

[0:06:43] TU: Yeah. Yeah. I asked that Stacie, because I think for myself included many pharmacists, we can be so focused on getting to the goal that really taking the time to celebrate. I’m glad to hear you did that with friends and also through some travel. It’s such an important part of the financial journey, right? This is a huge accomplishment, but you are just getting warmed up, right, with achieving many financial goals throughout your career. I think especially if you’re a goal-oriented, achievement-focused person, really taking time to slow down and treasure these moments along the way is really, really important.

My first question for you, Stacie. If we look at the median debt load today of pharmacy graduates, it’s hovering around 160 to $170,000. 345 is a big number, right? 235 in principle, so we can see the balance there that’s an interest, but even that 235 is substantially above the median debt load of a graduate. Why the higher balance? What do you attribute to that?

[0:07:40] SML: Yeah. Before I went to school, I was always looking into going to schools with lower tuition, and almost all that is from grad school. I only took out 5,500 in undergrad. I didn’t even need that, that was just because it was subsidized.

[0:07:58] TU: Yeah.

[0:07:58] SML: So, I wasn’t going to get any interest while I was in school. It’s a very low interest rate, so I took that undergrad loan, just off the advice that my aunt had given me that, “You need to take that, because it’s going to be the lowest interest rate you will ever get in your life.” She’s like, “Just put it in a savings account.” That’s what I did. That’s part of my emergency fund today, actually.

Then, so I didn’t get into those – my like preferred school with the lower tuition rates. What I ended up getting into was a school that I was very interested in, and that’s why I had applied, but it was a private school, Rosalind Franklin University. They do have a little bit higher tuition expense since they’re private, but pharmacy was my dream. I always knew that’s what I wanted to do. I went with it. I figured that I will figure out the student loans and pay them off as quickly as I can when I’m done.

[0:08:59] TU: Was the 235 all federal or was some of that private?

[0:09:03] SML: Everything was federal. I took out like the max amount that they would let you do, which was like $35,000 for tuition and then plus like another $20,000 on top of that for living expense, which really isn’t a whole lot to live off of. I did work like throughout all of pharmacy school and undergrad. Then, so that was all federal that was like just about the maximum amount they would let you take out. I did return some while I was in school, because they would let you borrow and then if I didn’t use it, if I worked and I made the money, I would actually return it. I could have borrowed. I think about 20,000 more would have been the max. Then that all capitalized, of course, after I graduated. I believe that capitalized to be $267,000.

[0:09:53] TU: Here. Here. New grads. Yes. Yes, super important to understand that. Yeah. When I look at that number, Stacie, 345, rough math. You paid off 345 over five years. It’s just shy of $70,000 a year. I think of a typical pharmacist income after taxes, maybe taking home 7-ish thousand dollars per month. Obviously, depends on tax situation. A whole host of other factors in terms of where their paycheck may be going.

Nonetheless, that is a massive percentage of ones take on pay, right? $70,000 a year on average. So, my question is I certainly have talked with a handful of pharmacists that have gone through an aggressive repayment period. Many others may look at this and say, “Hey, I want to take this over a longer time period, less restrictive on the monthly budget.” Allowing additional funds to achieve other goals, other financial goals or other life goals, right, that people have. You mentioned travel as one example. Why did you decide on an aggressive repayment strategy versus a longer, slower payoff that perhaps would have been less restrictive? What was the motivation for you?

[0:11:04] SML: I did not want to have those loans sit there for that long. If the longer you have them, the more you’re paying an interest, which I saw that like right away with my first student loan payment. My first student loan payment was almost entirely interest with no principal amount taken off, except for maybe $70 a principal. When I saw that, I was like, “This is going to take me forever. I need to put money towards the principal.” Any extra money I can to bring that principal balance down. I’m paying less interest, because the longer it takes to pay it off, the more interest you’re going to pay. I’m just not a fan of paying interest. I’d rather be earning interest.

[0:11:54] TU: Let me dig a layer deeper there. That’s what I’m getting to. Right? No right or wrong answer here. I always, I talk to pharmacist about student loans. One of the questions I like to ask them is, “Hey, where are you at on the student loan debt pain scale?” Right? Ten is the house is on fire. I want these gone yesterday. I would say you’re probably closer to that end of the spectrum, based on what I know thus far. Zero is like, ah, they are what they are. They’ll, they’ll take care of themselves eventually. That’s what I’m really trying to understand. No right or wrong answer, but when you say I hate interest, I want what money working for me. Take us a layer deeper, like what is behind that? Is it simply the stress and the weight of that over your shoulders and having the mental clarity to see forward without it? Tell us more.

[0:12:38] SML: I just, I like for my money to do stuff in the most, like the way where I save the most money, like I don’t want to spend an extra $20,000 towards interest, because I have to do an extra five years of payoff. I’d rather be done early, have that $20,000 and then be able to invest that or travel with that or do what I want with that. I wanted to be able to have financial freedom sooner in my life. I feel like if I was paying off for 10 years, I would have been strapped down to those loans for 10 years, living paycheck to paycheck to try to pay them off. Whereas if I figured if I worked really hard and I paid this off soon, then that 3000 plus a month that I’m putting towards student loans that I can then use that money how I want. If I want to invest it, if I want to travel.

[0:13:41] TU: Yeah.

[0:13:41] SML: I don’t have – I don’t need to be paying student loans. I can just use it how I want.

[0:13:47] TU: Yeah. That makes sense. I see the passion coming out there for you as you share that as well. One of the things I’m curious about Stacie, so often when we look at the financial decisions we make as adults, we can see trends that tie back to childhood experiences. It may not be that we are raised in the same way that motivates a decision to make today. It could in fact be the opposite or we’re trying to move in a different direction. Sometimes it’s affirming the decisions that were made for us or the household that we grew up in around money.

As you think about this strategy of, hey, I want to get to financial freedom. I want to pay down this debt aggressively. I want this money working for me, right? I don’t want to have to worry about interests, and so in the future. I can enjoy that on other things. Is there anything you attribute looking back from how you were raised, money approach in the household that impacts here, the approach that you took with your student loans?

[0:14:41] SML: Yeah, definitely. I grew up, my parents divorced at a young age, but my mom very low income, and that’s what I lived with. I lived with my mom. She was really, really good at like budgeting. I saw that like growing up, because she had a small income to live off of and raised three kids off of, so she budgeted very well with buying groceries to making sure she was getting the right coupons, so we could have food on the table and still live and have money for everything that we needed.

My dad was very frugal with his money. He bought a house when he was like 30 years old for $16,000 cash. Never had a mortgage, bought a fixer-upper. Still lives in that house to this day. It’s like a 125-year-old home, I think now. I think him never having any debt. He never had a credit card. He never had debt. He always paid everything cash. Bought his car’s cash. Bought his home cash. I think that’s why I didn’t like seeing debt behind my name, because it’s not something that I heard growing up or in my family. My parents didn’t have debt. It was like a newer thing for me to hear that and have so much. I just wanted to get rid of it. Throughout this process, I did pay off a car note to a $20,000 car note in two years, because I just didn’t want it gone.

[0:16:13] TU: Yeah. I can certainly see the threads, as you described to those experiences back to childhood. I think that’s something I’m always encouraging my own financial plan. I encourage others to look back as well, so much. Again, as I mentioned of how we approach our financial decisions. Good, bad or indifferent, right? Often ties back to some of the childhood experiences that we had.

Stacie, I’m curious. One of the challenges with an aggressive debt repayment plan, right? Five years, averaging about $70,000 a year, is being able to sustain the momentum and the motivation, right? We can start with good intents. Hey, I want to go aggressive repayment. That’s something I hear from many pharmacy graduates, but actually being able to sustain that momentum can be very challenging. What kept you motivated? What kept you going throughout that five-year period?

[0:17:01] SML: Yeah. I guess like my career itself kept me going. With that, it helped me earn more income. I spent three years, the last three years, like as a manager. I was picking up extra shifts, working extra hours and anything that I earned over my base salary, this over the course of my repayment, I always put the extra money towards my loans. When I floated, I was actually when I like started with my last company. I was brought on as a 48-hour pharmacist. That was like a lower salary, like 72,000 a year.

Anything, and I made my budget based off of that $72,000 which included a, I put 3,000 of that toward my student loan itself, which I was required to pay 2,300. I always did put 3000 towards it. That’s what my budget was based off of. Then anything I worked over that, 48 hours in a two-week pay period, I put towards a student loan. A lot of times I was working a hundred or 120 hours a pay period. All of that, I put to the student loan.

One of the jobs I had, I was getting reimbursed for gas and for tolls. All that gas reimbursement, toll reimbursement. I put all that to student loans. As I was just picking up extra hours and helping people, which is my passion. It’s just the money was coming in where I was able to just keep putting that towards my loans. Then as a manager, I was really, really driven to meet our store goals and such. I was at a store that was challenging, that needed a lot of work. I was able to just use that as my driving force to bring my store, to help my store achieve. Then with that, I was just working extra hours and that would help with my financial.

[0:19:11] TU: Yeah. What I hear there, Stacie, is you had a very clear goal and vision for your financial plan that really fueled the hard work. The hard work, which produced the payments and the additional income was directly going towards your loans, which that momentum would then build upon itself. You said something really important there that I want to make sure we don’t overlook, which was, that’s what my budget could afford, right?

You made extra payments, but you mentioned with the $3,000, that’s a really key, important piece for those that are getting started with their student loan repayment journey, when you have so many different options to consider, especially for those that might work in a nonprofit sector, or have a loan forgiveness option, or choose an aggressive repayment and are looking at these two ends of the spectrum. How much your budget can afford is a critical number to understand to determine which loan repayment option may be best for your situation. Great wisdom there, Stacie, that you shared. I want to make sure we didn’t overlook that.

One of the most common questions I get when I present to new graduates or I talk about student loans is, should I pay down my debt or should I in invest? How do I balance these two? My stock answer is, it depends, right? It depends on a lot of factors. How do you feel about the debt? What’s your repayment plan? What is your budget afford? What’s your timeline towards retirement? How conservative or aggressive are you? There’s just so many components. I’m curious to hear from you, no right or wrong answer again. How did you reconcile this decision towards more debt payment and perhaps delaying that investing for a period of time?

[0:20:45] SML: Yeah. I was fortunate that when I did start my debt repayment, I already had an emergency fund built up when I started working when I was 14. When I was 14, I was putting half of every paycheck away into a savings account to save for college. I never, actually, used that money for any expense. It is my emergency fund today. I already had that set-in stone. Then I did actually work on the other goals while paying this off. I was always taking the employer match from my 401k.

I was always like I always have done a high deductible health insurance plan. I always put the 3,500 is like what it is today, towards my HAS. Then investing within that after I had a thousand dollars in there. I’ve also done just my own investments, just a smaller amount each month. I’ve done Acorns, like Robinhood, but I don’t do as much, because there’s more risk. At one of the jobs that I had actually, I was not eligible for an employer match until one year in. I only worked there for five months, but –

[0:22:03] TU: Okay.

[0:22:04] SML: That job, I actually did not contribute to a 401k, because I was not going to get a match. I decided to put that money towards the student loans at that time, which my plan was to do that until I hit one year with the company and then I was going to start taking the match. So that job, I didn’t contribute to a 401k, anything that would have went to a 401k went to student loans instead.

[0:22:28] TU: It makes sense, especially without having the match component there. Stacie, I’m curious to hear your advice for new grads, right? We have now three graduating classes that have yet to pay on or required to pay on their federal student loans, because of the pause dating back to the beginning of the pandemic. I’m sensing as those repayments are going to start back up, many graduates from last few years are feeling overwhelmed, they’re stressed or discouraged. There’s a lot of uncertainty. What advice would you have for graduates coming out as they look to approach their student loan debt?

[0:23:04] SML: My advice would be, don’t wait. Start planning now. If you haven’t already.

[0:23:09] TU: Amen.

[0:23:12] SML: Start looking at what’s going to be the best loan repayment strategy for you, because there is different options that are better for different people. For some people, it’s going to be doing the public service loan forgiveness. Some people that might have a house and kids and have like those extra payments that they need to make, they might have to do more of an income based, but start having that strategy and that plan now and make a budget if you don’t have one already. Have a budget, so that way you can and start like using that budget now. So that way when those student loans, you have to start repaying them, it’s not a shock and you’re like, “What am I going to do?” So, start planning now.

[0:23:55] TU: That’s great. Great advice. I think that that’s a message I’ve been trying to get out, but because we’ve had several extensions of the pause. I think there’s been – some of this feeling of, hey, when exactly are these going to come back online or will they, might there be another extension. Now that we have some clarity of when these will start back up, to your point, this is the time period, right? This is the time period to make sure that we’re understanding our options.

We’ve got clarity on the best repayment plan for one situation. To your point we begin to weave that and work that into the budget, right? Even if we’re just putting that in a savings account for now, we’re building those reps and those behaviors, so when that turns back on, we’ve accounted for it and we can move forward with the confidence knowing that we’ve already planned for that. Whether we like it or not. There’s a lot of repayment options, and strategies, and nuances.

Fortunately, the system is maybe more complicated than it needs to be, but that’s the hand that we’ve been dealt in. Really, it’s upon the shoulders of the borrower to make sure that they’re understanding those options. We’ve got lots of resources on the YFP website. If you need some help navigating that forward. Stacie, what’s next for you? Right? This is an important milestone, but you’re just at the beginning of your journey. What does success look like for you going forward?

[0:25:12] SML: At this point, I’m looking at like building a net worth, how that looks. I have like several different things in mind. I am interested in real estate. I thought about maybe like a duplex or something, living in one half, like renting out the other, investing, just different things I’ve thought about. I also am potentially looking at picking up a PRN position to earn some extra income, because the central processing job did come with a little bit of a pay cut. I’m looking to see if there’s a way, I can bring more income in different side hustles.

I definitely, want to do a side hustle, because I have a better work-life balance now, where I have the time to do more, because I can’t pick up extra shifts like I was able to do before. This is just a straight 40-hours a week. I really want to use my time to see how I can earn more income. Then decide how we’re going to use it.

[0:26:22] TU: Yeah. This is I often give the analogy of a marathon when my wife and I went through the journey of paying off our student loan debt, which wasn’t quite as large, but it was a big amount. I often had in my mind this visual where, “Hey, once we get to the end of the student loans.” Like, we’ve arrived, right? We’re at the finish line. I often say, it’s like running a marathon where when you get to the point of in this situation, an important milestone of student loan debt paid off or running a marathon. We might be at mile marker three, right? We’ve started the race. We’ve got a long way to go.

I love the vision you’re articulating, whether it’s around real estate, whether it’s around other side hustles. I can sense an intentionality that as you start to evolve other parts of your financial plan, you’ve got clarity on why you’re going to be doing that and where those funds are going to be going towards. Stacie, I greatly appreciate you taking the time to come onto the show to welcome our community into your story and your willingness to share it. I’m really looking forward to following your journey ahead.

[0:27:20] SML: My pleasure. Thanks for having me.

[OUTRO]

[0:27:23] TU: As we conclude this week’s podcast, an important reminder that the content on this show has provided 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 material 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 archive, 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 pharmacists and less otherwise noted and constitute judgments as of the dates published. Such information may contain forward-looking statements which 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 319: Pharmacy Innovators with Dr. Jena Quinn (Perfecting Peds)

Posted on August 3, 2023August 2, 2023 by Tim U

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About Today’s Guest

Jena Quinn, PharmD, BCPPS, is an expert pediatric pharmacist. She developed the vision for Perfecting Peds based on her extensive background in medication management of pediatric population, personal love for children and her desire to optimize more children’s medical profiles. She has 10 years of safe medication management and direct patient care experience in the pharmacy field with a wide-ranging background in developing, enhancing and managing clinical consulting programs. Dr. Quinn earned both her Doctoral degrees with high honors from the Ernest Mario school of Pharmacy. She is a nationally Board-Certified Pediatric Pharmacist. She is also a mom to three adorable little girls, Hadley, Peyton and Avery.

Episode Summary

Today’s edition of our Pharmacy Innovators series is filled with vital information for pharmacy entrepreneurs on how to expertly navigate the risks involved with leaving the W2 world behind. In today’s episode, host Dr. Corrie Sanders sits down with the Founder of Perfecting Peds, Dr. Jena Quinn, PharmD, BCPPS, to discuss Jena’s transition from working 9-5 to running her own consulting business that is focused on medication management in complex pediatric patients. Our guest explains the role that her family played in her decision to take up pharmacy, how and why she made the pivot to pediatrics, what inspired her to break free from her W2 job, and how she benefited from being willing to branch into a new industry (cosmetics sales). Dr. Jena then shares why she is not too concerned about AI in pharmacy before diving into how she built her company’s team, how she uses the various social media platforms, why she chooses to always lead with authenticity, and what it was like for her to take on a new business challenge as a pregnant mother of two. This powerful conversation is filled with advice and strategies for those who are contemplating a non-traditional career path, and Dr. Jena explains everything she loves about being a business owner and pharmacy entrepreneur!

Key Points From the Episode

Introducing Dr. Jena Quinn as she explains her family’s role in how she got into pharmacy.
How she made the pivot to pediatrics.
What inspired her to leave her W2 job and what she was expecting from becoming a founder.
How she benefitted from being brave and willing to take on a non-pharmacy-related job.
Why AI could be both damaging and useful for pharmaceutical dispensary roles.
How long Dr. Jena worked solo, and what it looked like when she started building her team.
What her first business contracts looked like compared to how they look today.
Assessing her social media profiles and why she chooses to be authentic across all platforms.
Exploring her mindset when she started a new business venture as a mother of (almost) three.
Dr. Jena’s favorite characteristics of being a business owner.
Her advice for anyone who is contemplating a non-traditional career path.
What she loves most about being a pharmacy entrepreneur.

Episode Highlights

“I just knew at that moment [of helping my epileptic sister] that whatever I did in life, it would be taking care of these children in some capacity, whether it was [as] a physician, a nurse, [or] a pharmacist.” — Dr. Jena Quinn [03:33]

“I started in a multi-level marketing company selling skincare, and it was probably the best thing I’ve ever done, as silly as it sounds.” — Dr. Jena Quinn [07:45]

“Pharmacists are the crappiest salesmen. Because of that, our profession has taken a hit. We have to be a good salesman to show our worth, and push and advocate for our profession to go into a more innovative direction.” — Dr. Jena Quinn [14:48]

“My husband is in IT, in cybersecurity. He’s always in my head, he’s like, ‘Whatever you’re doing, you better not be able to be replaced by AI.’ It’s so true that it is going to drastically affect our profession, but that’s okay.” — Dr. Jena Quinn [15:52]

“Sometimes I don’t even understand what I’m doing until I do it.” — Dr. Jena Quinn [23:05]

“We [pharmacists] have this unique knowledge. I mean, daily, we make these life-changing interventions, and we don’t get any compensation for it. How is that okay? Long story short, it’s just not.” — Dr. Jena Quinn [28:34]

“I just try to keep it real. I have three kids; I understand that everything gets messy.” — Dr. Jena Quinn [31:28]

“Being a business owner, I wake up every day with a fire in my belly; I have control to change patients’ lives.” — Dr. Jena Quinn [38:32]

Links Mentioned in Today’s Episode

[INTRODUCTION]

[0:00:00] CS: Hi, YFP community. Corrie Sanders here hosts the Pharmacy Innovator segment of the YFP Podcast. Pharmacy Innovators is designed for pharmacists navigating the entrepreneurial journey. In this series, we feature founder stories and strategies that help guide current-inspiring pharmacy entrepreneurs. Today we feature Dr. Jena Quinn, a board-certified Pediatric Pharmacist that established Perfecting Peds, a consulting business focused on medication management in complex pediatric patients.

In just 18 short months, Jena has expanded her business across multiple healthcare systems and hired support staff that is pioneering pharmacy consulting in the state of New Jersey. We discuss how she financially navigated her transition, the unique timing of establishing her business, and plans for the future of Perfecting Peds. I cannot wait for you all to learn from Dr. Jena Quinn.

[EPISODE]

[0:00:52] CS: All right. Jena, we will start things off with a really easy question. For those that don’t know you, tell us a little bit about where you went to pharmacy school and how you got into the profession.

[0:01:03] JQ: Yeah. I went to pharmacy school at Rutgers University, New Jersey. Even at 34, I’m like the biggest baby and I won’t go more than an hour from my parents, so that’s why I landed there. It’s between that and the University of the Sciences in Philly. My parents said, “You’re going with a cheaper school.” So, that was pretty much how I made that decision. But as far as the profession, my grandfather, who has been my lifelong mentor, he was a pharmacist for 60 some years and the later parts of the last 30, he was the director at GlaxoSmithKline, where he patented over 150 drugs.

I always tease that he makes me look really stupid, because he’s just such a wealth of knowledge. He wrote many organic chemistry books, which was my least favorite subject, but really, he is my inspiration. My mom, to be very honest, is a nurse. She was like, “Nurses work too hard and don’t get paid enough, so you’re going to be a pharmacist and that’s what’s going to happen.” So, once I applied to pharmacy school and got in, and my dad called Rutgers to make sure that I really got in, that’s where I went.

[0:02:22] CS: I just had to make sure.

[0:02:24] JQ: Yeah. It’s always something. You can always use it later.

[0:02:27] CS: That’s amazing. A little bit of family inspiration. Then just tying it all together with some of your interests, it sounds like.

[0:02:34] JQ: Yes. Yes.

[0:02:35] CS: How did you pivot specifically into pediatrics? Was that some postgraduate training? Did you get gauge interest with that on rotations? Where does that stand from?

[0:02:44] JQ: Yeah. Historically my little sister, she’s nine years younger than me, had epilepsy knock on one. It’s been like nine years, but growing up, I was always the one who took care of her. I’m sure nowadays it’d be like a DCPP call, but some sort of DIFAS call, but my parents, starting at the age of 12, would just leave me with her and she had epilepsy. So, I got really familiar with how to administer Diazepam, what to do during a seizure and all the seizure precautions.

Then I knew – I always knew I wanted to go into the medical field. So, I dedicated – which is funny, because how life works out. A lot of my patient population is epilepsy, but I just knew at that moment that whatever I did in life, it would be taking care of these children at some capacity, whether it was a physician, a nurse, a pharmacist. She’s really what drove me into the pediatric desire. Then throughout pharmacy school, actually, I just applied to do a couple of research as a student and research opportunities. They were in Peds.

Then during my appies, again, I got partnered with majority pedes. Then I actually, I’m one of those, I would say like older. I got grandfathered in, but I only actually did one year of residency at a local hospital, Thomas Jefferson in Philadelphia, which I know traditionally a lot of pediatric pharmacists do, too. At that time, I was really done with the whole residency thing as far as it’s draining. It was draining me.

I applied and got into Children’s Hospital, Philadelphia, where I started their pediatric patient care program with a couple of other of my colleagues, like the in-between of a true clinical pharmacist and staff pharmacist, where we were on the floor rotating with the providers and then verifying orders. That I did for three years. Then went to another local hospital and started the same program for another eight.

[0:05:06] CS: Wow. Well, it sounds like you had a lifetime of experience on top of the year of residency. I’m sure that maybe the second year wasn’t necessarily needed after starting with pediatric care at age 12?

[0:05:18] JQ: Yes. Yes. That expedited it all, but it was, I was very much sure that that was trying to tell me something. Like I said, a lot of my patients in some way, shape, or form have epilepsy.

[0:05:32] CS: That’s wonderful. That all ties together, so well. It seems like that was just the path that you were meant to be on from the start. Jena, what I want to pivot to now is I think what we’ll spend a majority of our conversation today is talking about establishing your company, Perfecting Peds, and what that ultimately looks like, and some of the steps that you took when making that career transition. Why don’t we start with what were the motives to leaving a traditional W2 job? What were you striving for? What were you expecting when you started your own company?

[0:06:04] JQ: Yeah. I mean, motherhood changes everything. I have three little girls, six, three, and one. When my youngest was one years old, I realized – so I worked the first full year of her life at the hospital. I quickly realized that because I started – I shared with you, I started the program for pediatric patient care, I was the first true clinical pharmacist there, full-time at Cooper. What I quickly realized was that between 40 hours and then additional, I would have the residents unpaid, I would be called all the time for urgent situations that the medical residents needed help with and the PICU and the NICU.

I realized that my quality of life was really taking a hit, especially on my family time, and there was no separation at all. I quickly realized that I didn’t want to be in the hospital fulltime, especially having a little one. I went part time, which then inevitably allowed them to hire a bunch of new people to the hospital. But for me, I was doing a job of a few pharmacists in one. That shone actually a lot of light on that and they’ve hired a lot more people. I was really desperate to be quite honest and to match my income and stay in the luxuries of the pharmacist salary, but I did not like the lifestyle that the full-time job left.

What I did was I started in a multi-level marketing company selling skincare, and it was probably the best thing I’ve ever done, as silly as it sounds, but it actually was how all my mindset hacks, all my sales lessons that they were all encompassed in. It was called Rodan and Fields, but I learned them all from my mentors there. It was awesome. I had some great opportunities. I would travel to different countries on their dime. I got actually, the computer I’m working on. They were actually, they were very good to me.

What I realized was that I was really more obsessed with one, building something. Two, just the flexibility of the job, even though I didn’t have like, yeah, skincare is okay. I didn’t have a passion for it, but what I had a passion for was entrepreneurism, setting my own hours. Really, I like the idea of having a team. I feel like if anything, the people you surround yourself with is who you become. I was like, “You know what?” I – also at the time. I did that for the entire time till my daughter, so for three and a half years. Then I realized like, “Okay, well, what are you passionate about?” Which was pharmacy.

What I started realizing, even part time, the lifestyle wasn’t for me. I didn’t – I was missing things. For example, last week, I was able to go to two things in the middle of the day, to be at my daughter’s school for just one was a race and the other one was field day. I was able to participate and be a volunteer. I realized that I was working a majority of weekends and then a day or two during the week. With the weekends, I started missing my daughter’s soccer practices. I was like –

[0:09:34] CS: Sure.

[0:09:34] JQ: I was like, “This is not happening.” Again, I was – I started transparently, to be transparent, I started looking for other jobs. In that process, I realized that there wasn’t any jobs for pediatric pharmacists outside of the hospital. If they were, they were the really niche, like maybe a rare disease in medical science leaves them, but it wasn’t like – there wasn’t a robust amount of opportunities. I felt like the only way I was going to leave the hospital is if I went into the geriatric or adult population and that literally killed me. I love them, they’re just – my hearts are children. So, yeah. I was like, “They smell bad, I can’t do this.”

I started looking for other jobs. I actually, got offered a job for a geriatric long-term care facility position. That got my wheels spinning, because I was like, “Wait, you need to have long-term cares.” Like acute cares – all these medical days in the area. And I started looking around and asking questions to providers that work there. I’m like, “Who’s looking at these kids? These kids are the sickest kids of the sickest. They have multiple medications.” The answer was that nobody was looking at them clinically. It was the politically correct answer.

I went door-to-door, my salesman mentality, and was just like, “Hey, you’re already paying the pharmacist.” I’m sure you know this. If you’re a consultant pharmacist too, they’re paying pharmacists to do this. I don’t want to put down other pharmacists, but we have this unique training of residency. We’re all board-certified pharmacists that are uniquely trained in peace. It’s very different than adults, right? I couldn’t end geriatrics. I couldn’t turn around and take care of an adult patient. I don’t even know their disease state.

I just said, “Whatever you’re paying them, pay me and my team and we’ll take care of them and we’ll offer them a bunch of unique services on top of the compliance work that they’re already doing.” That’s honestly how it started. I did the prep work and all this sales pitch over six months, until I started getting some contracts. Because I knew I couldn’t take that much of a financial cut. Then once I started getting contracts, that’s when I jumped full-time into this.

[0:12:08] CS: Jena, so many things that you said there that I want to highlight for the listeners that I think are really important. The first one is that you weren’t afraid to take a non-pharmacy related job –

[0:12:19] JQ: No.

[0:12:19] CS: Because it wasn’t worth sacrificing your mental health in the place that you were in. I think a lot of pharmacists can relate to the quality-of-life issues that you spoke of and the work life balance, especially when you’re in management positions. You really do start doing the work of multiple pharmacists many times. I think so highly of you for taking that job and just being not afraid to say, “I’m not going to do something pharmacy related right now.” That’s how confident you felt about yourself and how much you respected yourself. Two, it is great almost that you stepped into a sales job, because many people don’t realize that sales is a lifeblood of business when you are first starting off. If you can’t sell your services, it completely hinders the product or the service that you can provide.

[0:13:03] JQ: Yeah.

[0:13:04] CS: Probably an amazing stepping stone to be where you are today and to have that mentality, like you said, to be able to sell what you want and be able to articulate that to other people.

[0:13:14] JQ: Yeah. I think, too, I’ve gotten such a habit. Social media is such a powerful way to sell. When I was in Rodan and Fields, no one’s going to buy something from you. If you’re – one, this is my opinion. If you’re not authentic and people can’t relate to you, right, or they don’t know you. If I was going to actually make a decent income, it was building authentic relationships and just being myself, so people could get to know me, so that then they’ll feel comfortable buying from me.

It taught me so many life lessons. Part of that was just getting in the habit of posting on social media every day and regardless of what it was, if it was just like whatever – I mean, I was always taught to keep it in three categories, but for me, it was always three things, family, and probably enough, one was pharmacy. I was already posting a lot of things about pharmacy organically. Then it was a more natural stepping stone to start my own business, but as part of that, I just honestly switch from, because I’m focused more on B2B.

I switch just to doing the same thing on LinkedIn to build my pharmacy presence, to build authentic connections and to network. That’s honestly how I’ve been able to meet amazing people like you. That has been the most powerful tool. That was embedded in me from sales. The other thing I do want to say is, pharmacists are the crappiest salesmen. Because of that, our profession has taken a hit. We have to be a good salesman to show our worth and push and advocate for our profession to go into a more innovative direction.

[0:15:07] CS: That’s such a beautiful statement that resonates with me a lot, because I work a lot with legislature and talking to senators and elected officials. They truly don’t realize what a pharmacist does outside of a dispensing role.

[0:15:22] JQ: No.

[0:15:23] CS: Especially, like you just said, as the profession evolves alongside technology, it’s going to drastically change in the next 10 years, we really have to learn to advocate for ourselves. You’re already just ahead of the curve by having your own business and being able to do that independently. It’s a wonderful thing.

[0:15:41] JQ: Yeah. I think AI is going to be a sole crusher for a lot of the dispensing roles. I didn’t even know that AI was on the horizon when I started this. My husband is IT in cybersecurity. He’s always in my head, but like, he’s like, “Whatever you’re doing, you better not be able to be replaced by AI.” It’s so true that it is going to drastically affect our profession, but that’s okay. I think it’s going to put us in, like I just said, before these long-term care pharmacies were doing compliance work, like checking out dates and counting narcotics, that can all be automated.

There’s no reason for a pharmacist to do that. What I quickly realized was I hired pharmacy techs, and pharmacy techs are amazing at this stuff. Why is a pharmacist with eight years of education on top of, maybe residency and all these board certs, why are we doing that? The same goes with the dispensing role. We are too smart when we went to school for too long to be doing that. It really takes away from the angle, which is patient care.

We want as much forward-facing time with the patient as possible to help the patient and advocate for them. Some of the traditional dispensing roles really take away from that. I personally think it’s an exciting time in pharmacy. I think as far as we leverage that and just use our education and sell ourselves accordingly, I think we’re going to have a lot of exciting changes on the horizon.

[0:17:14] CS: I think so, too. I think so, too. It’ll force us to really utilize our clinical skill set across the board in a way that probably hasn’t been forced before.

[0:17:22] JQ: Yeah.

[0:17:23] CS: Jena, I also want to touch on the fact that you’ve said you just hired technicians or that you’ve hired technicians. Let’s talk about the growth of your team. How long were you just a solopreneur really facing everything just by yourself? When did you start to hire? What did that look like? Who was ultimately your first hire? I would love to know that as well.

[0:17:43] JQ: Obviously, because it was such a cluster. This is true Jena fashion. I signed – I started taking private patients just as my beta patients, because I do think, like okay, I wanted to get used to the EHR. I wanted to also get PGX certified, this little like 20 CEs, but I also wanted to really take patients, because there’s not an abundance of pediatric literature in PGX. I wanted to get comfortable on that, because I do think again, that’s the way of the future. We’re going to have to utilize that to take the best care of our patients.

I started just taking like private pay patients. That’s how I got started financially, but also just getting used to everything, as far as the EHR and training. Then I got five contracts all at once. I didn’t understand how medically complex these kids were, until I opened the chart. Of 120 of the roughly growing, I don’t know, so what I’m doing is some quick math in my head, like 300 of them were had a minimum of 23 medications on their chart.

[0:19:08] CS: Wow.

[0:19:08] JQ: I got all these dropped on me at the same time. I was like, “Oh, my God. What did I sign up for?” I quickly realized that I could not do this by myself. If I did, I would be, so to give you again, I’m all about shedding light on things that should have their curtains unveiled. The prior long-term care gave these pharmacists 15 hours for 120 critically ill pediatric patients trait that due to dependent. 15 hours a month at $200. I couldn’t even open and close the chart. Plus, do the compliance work which is go through the med room and make sure, count the narcotics and all that. I quickly outsourced that.

That was, honestly my first hire, was I had a technician that I loved at the hospital that I worked with. I said, “Hey, I need help. Are you looking for like PRN contractor hours?” She jumped on board. She helped alleviate at least, like I said, the doing all the compliance work. But then I realized that proudly for the first year me and my husband were going to be paying to take care of these kids, as awful as that sounds. I think the pharmacy profession is so in need of advocacy and change. I knew that I needed my proof of concept before anybody even listened to me. It wasn’t until I got the numbers of cost savings, cost avoidance. I knew they were going to be like, “This is a really cute idea, little girl.” I’m all but not even five foot.

I know people were not going to take me seriously. My first nine months of this business, which we just got all that exciting data in last month, was just hiring pharmacists and quite frankly, breaking even. It was just breaking even. What we were providing was the comprehensive medication management for all patients who had never had it before. Providing pharmacogenomics, doing calls to parents who wanted to be a part of the care. Also, giving some compliance medication compliance software. We have an app, a med rep that really shows the parents in 50-day print languages called MedActionPlan, but where to draw up on this syringe, what exactly did you expect from an ADR standpoint, when to call us.

All these services were provided out of pocket by me and my husband. I just knew that it needed to be done, this proof of concept, because we’ve never have been outside of the hospital walls with an exception of somewhere like pediatric and care clinics where the hospital was funding it, but there’s never been a true pharmacist consultant role. I knew that in sales, you need to solidify your proof of concept. It took me nine months. Now that we have the numbers, we are in talks of some really exciting big contracts, but it took a really long time.

[0:22:18] CS: It’s beautiful that you were able to have the mindset and the wherewithal and the experience to be like, “Okay, I’m going to have to do proof of concept.” You were willing to just eat it for nine months. Then be able to put it together. Ultimately, set yourself up for something that’s probably really great long term, just knowing that you had to prove your worth, especially in this new, like you said, this is a new niche for pharmacist in New Jersey.

[0:22:42] JQ: Yeah.

[0:22:42] CS: Realizing, you’ll have to put all that together.

[0:22:44] JQ: Yeah.

[0:22:45] CS: Some of those, maybe the intricacies of the concepts or of the contracts, Jena, what did that look like? What did your first contract look like? Were you all set up to go for billing? Did you have to get collaborative practice agreements? What did that first contract look like? Then, where is it today?

[0:23:02] JQ: Yeah. Again, something, sometimes I don’t even understand what I’m doing until I do it, but I was like, I knew I was going to – whatever I was going to do, I was going to take care of these kids. When we first got the contracts, the collaborative practices weren’t in place, but what I very quickly realized was that these positions or providers, and just like anywhere, they are very, very stretched thin. We were given an average of 10 to 15 recommendations per chart. They did not have the bandwidth to go in and make those changes. That was pretty evident and very quickly.

I was like, this is not going to benefit anybody if we don’t get a collaborative practice in place. We have collaborative practices in place, which are a beautiful thing, I think should be the standard of care for any pharmacist practicing, just because it just builds our autonomy and puts us in the same pedestal, or just honestly, the same building opportunities and capabilities as PAs and MPs who have done a beautiful job in establishing their work. They’re not doing anything automated with dispensing.

I really look at them, those two professions as like, how can we be like them? How can I be like an MP today or a PA? I don’t want to diagnose, but how is there a way that I can use my medical – my medication knowledge to optimize patient care, be in front of the patient, be a part of their team? So, within two months, we got that up and rolling again. It is hard, I had to scramble to find who’s a good health care lawyer in the area, so they can help read my contracts, because you don’t want to do anything blind.

They’ve been an awesome addition to Perfecting Peds, an awesome and expensive addition, but necessary. What that looked like was, we would basically take over what they were doing, but instead, we just did a deep dive of comprehensive men management through a collaborative practice agreement in the pharmacogenomics. As far as we’re our contracts at now, I can’t disclose too much, but we are starting in talks with insurance companies, because in New Jersey, unfortunately, there is no opportunities to build, even incidents, too.

It is very disheartening. I know we were talking about you being in Hawaii and you feel like you traveled back in time. I worked at a hospital where I had so much autonomy, like too much autonomy. Then I came to outpatient lands and I couldn’t even change the concentration of the men. I was like, “What’s happening?” It was like, I just couldn’t believe, I was just so dumbfounded. We were talking about advocacy and legislative, I really admire what you’re doing for the Board of Pharmacy in Hawaii and advocacy. I think it’s just so needed, because I’m not political and so many people get me out of me when I say I’ve never even voted.

I realized real quick, I was going to get political, because this is – how we’re practicing is not okay. Again, proof of concept. I knew if I had that I could take it to insurance companies, I could take it to other facilities, I could take it to home care companies, all these different places. It didn’t have to be in New Jersey, right? Because I had that barrier of billing in New Jersey, but for example, in a couple of weeks we’re launching in Minnesota. We have some opportunities in Colorado. You know what? It’s not the best thing, but it’s like, okay, well then I’ll practice where I can practice until I give you guys enough literature, which we are publishing to understand that this should be the standard of things.

[0:27:02] CS: It’s amazing. So much of what you’re saying really resonates with me, because it’s amazing to realize that pharmacists are some of the only healthcare or the only healthcare professional that’s just taught to give away information for free. That’s not saying we shouldn’t be answering questions when patients come to the counter and they’re receiving a prescription. Ultimately, any other profession is billing for the services that we are already providing. Your proof of concept is just going to hopefully add so much knowledge and leaps and bounds of data of what can be done when we can practice at the top of our license. I think that’s going to be so meaningful.

[0:27:39] JQ: Corrie, to your point, I didn’t realize – this is not an exaggeration, weekly for the past nine – I guess people started catching when I’m a pediatric and maternal health pharmacist about – after I grew more confidence after a job. Then I was talking. I told you about posting, so then I would post tips and tricks. What I realized is that a minimum of 20 to 30 people were coming to me a week for their child or their selves.

I did it for nine years and then I was like, “Damn, I think this is a business.” I’m like, “Why is nobody else doing this?” We’re just mad at pharmacists at our profession, because I’m like, like you’re saying, every other person can build. And coming with all this, we have this unique knowledge. I mean, daily, we make these life-changing interventions and we don’t get any compensation for it. How is that okay? Long story short, it’s just not.

[0:28:49] CS: Exactly. Jena, I want to circle back on something that you just brought up that we didn’t get to touch on before is your social media strategy. Something that I do love about following you is how authentic you are, and you said that that’s always been your intention is to just be authentic across all platforms. What are you using primarily? Are you focused on LinkedIn? Do you use Twitter and Instagram? How do you delineate between the different platforms and where do you put a lot of your time?

[0:29:17] JQ: I’ve been most of my time in LinkedIn, just because like, do you think that as a profession, if we put a lot of our time there, well organically, and over time, educate the not only fellow pharmacists, but other fellow providers, too. There honestly is no strategy similar to my life, but what I do is I try to do one to two real patient cases, things that I saw this week that – or I tried to do the week prior that our team made a huge impact. Oh, and to your – you did ask, we are seven contractor pharmacists, two technicians and an assistant at this moment.

[0:30:00] CS: Wow.

[0:30:01] JQ: I want to flip – I’m starting to explore a few things, people over the full-time, which is an exciting change, but that being said, I have my team. We all – for the perfecting piece, we just revamped it, so that we can streamline how we’re visioning this as my goal. As for perfecting piece to be anything from preconception, I’m thinking about having a kid. What are the things I need to know to add lessons? We just started, because I wanted to revamp and have it organized, as far as the flow goes, but all of us on the team take task at different posts to do the Instagram Perfecting Peds, which close onto our Facebook and then the LinkedIn Perfecting Peds page.

Now we’re consistently posting there, because it was hard to do LinkedIn and all the other things. I just focused on LinkedIn for the first year, which has provided so much opportunities, network and the opportunities have given me more than I’ve given them, but I tried to do at least two real cases to showcase. Again, I’m a salesman, like, “Look, this is what pharmacist can do.” Then I try to do three hot topics or any, or it could be anything, whether it’s related to just entrepreneurs in the general, things I’ve learned, tips and tricks. Again, a lot of them are authentic, not all of them are this positive rainbow. I just try to keep it real. I have three kids, I understand that everything gets messy. That’s for sure.

[0:31:38] CS: There’s no way around that, I’m sure.

[0:31:40] JQ: Yeah.

[0:31:41] CS: Jena, I had said this to you prior to when we started recording the podcast. But something that I really admire about you is that the stage of life that you were in when you started your business. You had already had two kids, your third was on the way. Was that more of a motivator to step away from your job or did that make things scary? What was your mindset going into the transition being in that chapter of your life?

[0:32:02] JQ: Yes. My first two were clomid babies. I was pretty sure I wasn’t able to have children, naturally. Me and my husband had closed that chapter. I bought my LLC and four days later, I found out I was pregnant. I think, like a normal person would have felt like maybe this is my sign. God saying, “Don’t do this.” But then I thought, I was like, “God’s given me nine months to get this bad boy up and running.” So, I did. I used that. I also used leaned into it that the fact that I can’t do this alone.

One of my past mentors, who quite frankly scared the hell out of me, is at [inaudible 0:32:42] you reached out and said, “I’ve been thinking about doing exactly what you’re doing for 10 years of my life and you’re inspiring. Can I basically work for you?” I’m like, “Yeah.” She’s a – she’s so much harder than I ever – again. She teaches me so much. It was a humbling experience to see that, but I knew that I was going to force me not to be the bottleneck of the company in multiple things, because I knew, I needed to take whether it was six weeks or whatever maternity leave.

In order to do that, I needed to build up some systems and standard operating procedures so that I wasn’t the only one that could do it. That was something that I knew from the start of it. I had an implement and had nine months to implement. I did use it as fire, to be quite honest. My hospital gave me six weeks after the birth of my second daughter. It really pissed me off. They’re going to do the same shit again. So, I used that as, even though I loved everything about my job, the people, but it was just like HR. They were adamant that even though I’d only worked 960 hours, I needed 1000 to get an additional six weeks. They were only going to give me that six weeks and family time for me and my employees is non-negotiable. It really did not sit well with me. I knew if I could build this up enough that most likely, I’d be able to leave right around then and that’s one of us.

[0:34:21] CS: That’s amazing. I actually just had goosebumps when you were saying that one of your old mentors reached out to you saying that she’d been thinking about it for so long, because most people really will choose being in an uncomfortable place over uncertainty and taking a leap that they don’t know where they’re going to end up. I’m sure that was just an amazing sign from your end of being like, okay – I’m doing the right thing. I have people supporting me. I feel like, especially in the entrepreneur community, it’s not uncommon to have that support.

[0:34:51] JQ: Oh, yeah.

[0:34:52] CS: It’s great that you – yeah. It’s great that you were able to get that immediate gratification almost from someone that you respect. That’s an amazing way to start.

[0:35:01] JQ: Yeah. Like I tease, but she was just one of those people that her intelligence was so intimidating. Yeah, it was humbling to say the least. And then just a couple of days ago, I was on the call with another past pharmacist I worked with. Again, because I came from just one-year residency and these girls were no BS. If you’re going to touch a patient, you better know what you’re talking about. I only had one, I was one of the few, if not the only, that only had one year. They were hard on me. It was just weird talking to her the other day and she’s like, “Are you hiring?” Who would have thought that my mentors would be asking one day if I’m hiring.

It’s humbling, but just another reminder of just how life works out. Yeah, I mean, there wasn’t any certainty to be a 100% honest, my husband would kill me. I knew, I was going – I just wanted to do this full-time. I quit and then the next day I told my husband. It wasn’t like – because I knew I had to do this and he was always going to tell me, he’s so supportive, but he’s not a risk taker. I knew he was going to keep telling me, “Just keep doing the weekends. Just keep doing the weekends. It’s an extra $600.” But he wasn’t appreciating how much that was taking away from my business and my attention. Yeah, I don’t advise wives to do that. I was like – I’d would rather tell you that I cheated on you. He’s like, “Oh, God. This is not—“

[0:36:37] CS: Let me set the stage here.

[0:36:40] JQ: I did something worse, I cheated on you. I quit my job without telling you. He knows me enough that he was like, “All right, well, you’re going to figure it out. You’re going to figure it out.” Yeah, it was just like nobody – it’s just such a hard thing to actually, you’re never going to be ready to be like, all right, I’m just doing this. It’s just like, man – I was like, “I just have to do it.” I felt I was slowly dragging it out and that was actually causing me a lot of anxiety, too. I’m like, “No, no, no, you have to do. This is what your heart said on, just do that.”

[0:37:18] CS: There certainly becomes a point when you are developing your business on the side where your job becomes more of a detriment than an asset to your new business. The fact that you were able, you were feeling that and you knew this is, I need to make the job, I need to make the cut. There’s certainly an element of sink or swim to leaving your job, but there’s also a very large element of planning and making sure that you’re ready and that you have something up and running, so that when you make that transition, it’s not as scary.

[0:37:46] JQ: Yeah. I knew. I’m like, all right, at the minimum, I have these facilities at least for a year and that will give you enough time to show our work, essentially. It’s what I knew. I started the clock.

[0:37:58] CS: That’s right. All right. Jena, I’m going to wind this up with just three easy questions that I think will really resonate with the listeners and maybe give them some inspiration to starting something new or maybe pursuing a non-traditional pharmacy career path. What is the most memorable aspect of being a business owner and why?

[0:38:19] JQ: I would say, honestly, when I was in the hospital some days, it sounds so dramatic. I just didn’t look forward to going to work, right? I think being a business owner, and I wake up every day with a fire in my belly. I have control to change patients’ lives. So, that’s really where, because I’m in the driver’s seat and quite transparently as I start looking for different investors and stuff to really build this up, it’s just a non-negotiable for me that clinical comes first and then we’ll figure out a way to get reimbursed and everything, secondarily.

I think my being able to apply my own values instead of relying on my bosses, even though my own boss is not, she’s amazing, but instead of relying on somebody else, I think that was really what gets me fired up is I can create this, I can make it so that patients get the best care, and that really fires me up every day.

[0:39:25] CS: It benefits you. It benefits the patients. It keeps you going. It’s just wonderful once you’ve felt that. It’s great motivation to continue what you’re doing. What is one piece of advice for anyone that’s contemplating a non-traditional career path?

[0:39:39] JQ: I think, go for it. The worst case when you go back to your traditional job, right? That’s the question my husband – I have 12 years of pediatric experience. I can easily find another job if I need to or I ended on such great terms, like my boss said, “Come back whenever you want.” So, worst-case scenario, you go back to where you were, right? I mean, I’m going to give it a good try, I think you need to at least do it for a year to see if you’re gaining an attraction.

I do think – I’m always like the worst-case scenario, if we were drowning and I couldn’t pay my bills and give my girls what they need, I would just go back to it. I’ll go walk in the CVS and apply and get a stupid bonus. That might be miserable, but you know what I mean? But that’s the worst-case scenario is you go back to a traditional job. We’re needing it now, so leverage it.

[0:40:35] CS: That’s right. I mean, COVID has shined a light on the profession in a way that hasn’t been shown before. It’s great that pharmacists are using that to their advantage to finally advocate for the profession. It’s a beautiful time for you to be making this transition and have a company that’s so successful in such a short amount of time. It’s wonderful.

[0:40:52] JQ: Oh, thank you. Definitely –

[0:40:54] CS: Then last question for you. Your favorite part about being a pharmacy entrepreneur.

[0:40:59] JQ: Advocating on the behalf of our profession. Like I said, before we started this. I lived in this really ignorant bubble of, “Oh, my God. Pharmacists are awesome.” I worked in hospital settings. I had basically collaborative practices. It felt even more than a collaborative practice, especially with the medical residents and the attendings, because you got to know them so well and they were such a trust factor. I quickly realized when I tried to make some changes, when I first started pre-collaborative practice with a lot of my kiddos, you couldn’t even change concentrations of medications.

I’m like, if we’re not equipped to do that, who is? It’s really, again, I admire what you’re doing. Getting involved in like the legislation change. That’s my – after five years, after I build this up, that is the next step for me is getting involved, because – of course, I’m involved in associations and everything. Again, I wasn’t active in a single association before entrepreneurism.

Now, I think I’m a serial association person. I’m in 10 pharmacist associations. Then a couple other just random entrepreneur ones. It really, again, if I’m in a position where I can advocate for the profession that I didn’t know we needed this much advocacy in the outpatient world, because just like you, I’d been in hospital the whole time. I didn’t realize that it was – I didn’t realize it was an issue.

[0:42:33] CS: Well, that’s beautiful. I hope that in a couple years, you’re the state of New Jersey pharmacy practice and sitting at the Senate and pushing things forward. That would just be such a full circle moment and benefit everyone in the state. Yeah. That’s wonderful. Well, Jena, thank you for taking the time to be here today. This was such a powerful interview. I feel like you were so authentic, so many life lessons. You’re an inspiration to so many. I know just starting this business and making it so successful going across multiple states with multiple hires. I’m excited to see what Perfecting Peds does in the future. Thanks for being here.

[0:43:08] JQ: Thank you for having me.

[OUTRO]

[0:43:11] ANNOUNCER: As we conclude this week’s podcast, an important reminder that the content on this show has provided 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 material should not be construed as a solicitation or offered 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 archive 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 Pharmacists unless otherwise noted and constitute judgments as of the dates published. Such information may contain forward-looking statements which 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 Pharmacists Podcast. Have a great rest of your week.

[END]

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