September 2024 – Your Financial Pharmacist

YFP 378: 10 Questions for Early Retirement

Posted on by YFP Media

Tim Baker, CFP® tackles 10 questions for those considering early retirement from sources of income, handling market volatility, health insurance options and more.

Episode Summary

This week, Tim Baker, CFP®, RLP®, RICP® and Tim Ulbrich, PharmD tackle 10 questions for those considering early retirement. They discuss sources of income in retirement, handling market volatility when no longer working, health insurance coverage options, timing to draw on Social Security, and much more.

About Today’s Guest

Tim Baker is the Co-Founder and Director of Financial Planning at Your Financial Pharmacist. Founded in 2015, YFP is a fee-only financial planning firm and connects with the YFP community of 12,000+ pharmacy professionals via the Your Financial Pharmacist Podcast podcast, blog, website resources and speaking engagements.

Tim attended the United States Military Academy majoring in International Relations and branching Armor. After his military career, he worked as a logistician with a major retailer and a construction company. After much deliberation, Tim decided to make a pivot in his career and joined a small independent financial planning firm in 2012. In 2016, he launched his own financial planning firm Script Financial and in 2019 merged with Your Financial Pharmacist. Tim now lives in Columbus, Ohio with his wife (Shay), three kids (Olivia, Liam and Zoe), and dog (Benji).

Key Points from the Episode

Early Retirement Goals and Challenges [0:00]
Defining Early Retirement [6:02]
Questions to Consider for Early Retirement [8:42]
Replacing Pharmacist Paychecks [17:41]
Health Insurance Coverage [24:17]
Dependents and Social Security Timing [31:08]
Inflation and Tax Planning [34:57]
Partner and Spouse Alignment [37:20]
Long-Term Care Planning [39:56]
Conclusion and Resources [44:58]

Episode Highlights

“I think there’s this misconception, or this illusion of control that we have over our retirement age. I think around 40% of people retire earlier than expected. It’s usually due to a medical issue with themselves or a family member, or could be something like a layoff. There is this illusion of control. Now, there are things that you can do to help with that. But a lot of the time we don’t have that.” – Tim Baker [4:59]

“Define retirement. I think for a variety of reasons this question is important, because for a lot of people, we think that retirement is the destination, but it’s really just the next chapter in the journey, right?” -Tim Baker [10:32]

“I think it is really important when we talk about this question: are we accounting for inflation? I think the best way to do that in a retirement setting is, as much of your dollars can come from Social Security as possible is great. But then also taking intelligent risk in the market, where the market is kind of performing in a way that kind of keeps pace or outpaces inflation is what we want.” – Tim Baker [36:25]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

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, Tim Baker and I are tackling 10 questions regarding early retirement. We discuss sources of income in retirement, handling market volatility when no longer working, health insurance coverage options, timing to draw on Social Security and much more. And to supplement this week’s episode, we have a free resource for you to download: Retirement Roadblocks: Identifying and Managing 10 Common Risks. Because here’s the reality, when planning for retirement or early retirement, as we’ll discuss on today’s show, so so much attention is given to the accumulation phase, growing your assets. But what doesn’t get a lot of press is how to turn those assets into a retirement paycheck. And when building a plan to deploy your assets during retirement, it’s important to consider various risks to either mitigate or avoid altogether, and that’s what this free resource and guide is all about. It’s available for you to download at yourfinancialpharmacist.com/retirement risks. Again, yourfinancialpharmacist.com/retirementrisks.

Tim Ulbrich 01:11

Now, before we get started with the show, I want to let you know about our next YFP webinar coming up on October 7, at 9pm Eastern: Aliquot Investing: Small investments in Big Real Estate Investing. This free webinar led by YFP Real Estate Investing podcast co-hosts Nate Hedrick and David Bright explores how syndications fit into a well rounded real estate investment strategy, especially for busy pharmacists who don’t have time to source, vet and manage real estate investments. In this webinar, David and Nate will be joined by Alex Cartwright, PhD, and economist who has also led syndication projects, including one in which both David and Nate have invested themselves. You learn more about this webinar and register at yourfinancialpharmacist.com/syndication. Again, yourfinancialpharmacist.com/syndication.

Tim Ulbrich 01:59

All right, let’s get started with today’s show. Tim Baker, welcome back to the show.

Tim Baker 02:06

Yeah, good to be back. How’s it going, Tim?

Tim Ulbrich 02:07

It is going well. I’m excited. This week we’re talking about early retirement, which is something that I keep hearing more and more pharmacists expressing as a goal. And so Tim, I’m curious to hear from you before we get into the details of our discussion, is that something you’re hearing a lot of as you talk with pharmacists that are engaging with us to learn more about our services? Is early retirement coming up as a frequent goal? And what do you suppose might be driving some of that?

Tim Baker 02:37

Yeah, I think, I think for a lot of people, there’s a there’s this notion of, like, I’ll never be able to retire, you know, and a lot of it’s because of the student debt burden. I do hear on, you know, refrain of, I want to get to a point where I work because I want to, not because I need to. I only, I hear that almost verbatim a couple times a month from a prospective client. So the the notion of early retirement, I don’t, I don’t want to say it’s kind of in the forefront. Obviously, we do, you know, work with a lot of people that are interested in kind of the FIRE movement and what that looks like. But I think that there’s this shroud, maybe, of student debt, that it’s like, how do I even overcome this? And, you know, in a way that puts me in a place to retire, let alone retire early. So I think those that don’t have that, or have kind of navigated a plan for the loans. I think there’s a little bit more of like, sunny skies, but I wouldn’t say there’s a lot of people that are saying, like, I need to retire by, you know, this age. I think that that’s kind of few and far between.

Tim Ulbrich 03:50

And for those that aren’t familiar with the FIRE term, we’ve talked about it on the show before, financial independence, retire early. Lots of resources out there that folks can learn more more about that. But I’m glad you mentioned, Tim the work because I want to not have to. That’s something I hear a lot as well. And, you know, I think for some people, they love the work that they do, and it brings them a ton of value. It brings them a sense of purpose and meaning. Perhaps others, you know, maybe early retirement is, hey, I want to get out of the stressful environment that I’m working in, and I don’t necessarily love the work that I do, but regardless of those desires, that work because I want to not have to is a thread that I think often comes out and within that I typically will hear, hey, I want to have flexibility. I want to have options. So, you know, maybe I get to a point that, hey, I’d like to work part time, or maybe something happens, you know, health wise, or with a family member, or something unexpected, or pursuing a passion project or hobby, whatever would be, the reason that their financial plan is in a position that, whether it’s something they can see or not see at this moment, that they have options if they need those options in the future.

Tim Baker 04:59

Yeah, I think there’s this, this misconception, or, like, this illusion of control that we have over our retirement age, which is, and I think it’s something like 40% I don’t have that stat in front of me, but I think it’s like 40% of people retire earlier than expected. It’s usually due to a medical issue with themselves or a family member, or could be something like a layoff, that type of thing. So there is this illusion of, like, I have control now, there are things that you can do to help with that, and to, you know, to build, you know, whether there’s something like really to consult in that you have that flexibility, or things like that that gives you a little bit more control. But a lot of the time we don’t have that. And that’s kind of an illusion that we think we have.

Tim Ulbrich 05:44

Since we’re going to use the term early retirement throughout the episode that that implies that there’s an accepted norm, maybe, of what retirement means. So when you hear early retirement, that term and throughout the discussion today, what? What are we referring to? What assumptions are we making? What defines early retirement?

Tim Baker 06:01

Yeah, to your point, Tim, I don’t know if there is an accepted, like, when we say early retirement, this is the age that we’re talking about. Yeah, if you look at it from like, Social Security, early retirement, as defined by Social Security as 62. So there’s really, there’s really a couple ages related to Social Security. It’s your early retirements at 62, your full retirement age, which is different for a lot of people. Most people, it’s going to be 67 and then you have delayed retirement a that’s typically 70. So early retirement in the Social Security system is 62 and you can’t collect the benefit before that. The age that I think of like if you were to say, hey, I want to retire early. The age that I think of is 59 and a half years old. So why do I think of 59 and a half years old? The reason for that is all those retirement accounts, a 401K, an IRA or Roth IRA, they they’ll have basically guidelines to say if you take money out before 59 and a half years old, you’ll be, you know, penalized. Unless there’s, there’s exceptions to that, but you’ll be penalized by 10%. So that’s typically the the age that I’ll use. So like, if you were to say, Hey Tim, I want, you know, I want to retire early, and I would say, Well, what is that? If you say 55 then between 55 and 59 and a half years old, we have to figure out an income stream that’s probably not going to come out of your 401K or, you know your other retirement accounts. So that’s what I typically will use in my brain. I think you know, if you talk to people in the fire community and you say 50-59 and a half? That’s probably not early retirement for them. So those are kind of the few, the few dates, or the few ages that jump out to me when we have this discussion. But I think for all intents and purposes, it’s 59 and a half for me.

Tim Ulbrich 07:55

I think the same thing. And I agree. I think some of the FIRE enthusiasts, although there’s many different flavors of FIRE, right? But the FIRE enthusiasts, a lot of people might think a early retirement, you know, late 30s, early 40s, right? Type of ages that you typically see. But I think 59 and a half, for the reason you mentioned is, is what often comes up. The other one 62. You mentioned social security. When could I draw Social Security? 65 Medicare, that often comes up. You know, we’ll talk about health insurance. So the point being is, as we say all the time on the show, we’ve got to have intentionality on like, what’s the goal? What’s the purpose? Why is this a goal? If it’s a goal for you, and then we can start to plan around that, like, what does that mean to you? You know, is it 59? Is it 54 and for what reason? And then what does that mean in terms of various savings accounts? So let’s jump in. We’re going to talk about 10 questions that we think are important questions to consider for folks that are thinking about early retirement. And that could be someone listening and says, Hey, I know I want to early retire and I’ve set that date. Or it could be folks that are just thinking about this as something that they’re they’re curious about and want to learn more. As we go through these 10 questions, the intent is not that we’re going to cover each one of these areas in a significant amount of depth. We’ll reference other resources that we have on each one of these topics as we go throughout but really to introduce the question and get you thinking about these different areas as it relates to early retirement. So Tim, the first question that I think is important for folks to consider is, Will I work at all during retirement? Right? And as obvious as that sounds, I think if, if people are thinking of very traditional retirement, it’s, hey, we work for 30, 40, years, and then we don’t work at all. But for others, it may be that we work part time. And pharmacists, I think, are in a unique position where they have more of the opportunity to work part time, work as a contractor, versus other professions out there. So why is this question, will I work at all during retirement so important?

Tim Baker 09:52

And I think, like, if we’re defining early retirement, I think you can even define like retirement. I think so many people, in a traditional sense, they. Think of retirement as, you know, you punch the clock the last time, and then the next day, you’re sitting on a beach or you’re up somewhere, and that’s it, right? And, you know, a lot of people, especially in the fire movement, when they talk about, you know, financially independent, retire early, I think the retire, I think that’s what rubs people the wrong way, is because they overlay that traditional picture of retirement into that paradigm. And a lot of people are saying like, Well, we are still working, we’re just working our on our own terms, right? So I think for, I think for a variety of reasons, like this question is important, because I think for a lot of people, we think that retirement is the destination, but it’s really just the next chapter in the journey, right? And so much of our, for a lot of people, so much of our identity is wrapped up into our role as a pharmacist or whatever we’re doing, and once that like is gone, that can be jarring for a lot of people. So it’s not just a monetary thing. So to me, I think this is where some life planning really gets in, gets you know, it would be really important is, you know, okay, if we don’t have to work, we truly don’t have to work. What are we doing? You know, are we volunteering? Are we taking care of grandkids? Are we getting into hobbies? Are we traveling? You know, there’s a lot of stats that say, if you work, the longer that you work, the more you know, the better your retirement will be. In terms of, like, the financial planning part of it, because you’re just delaying a lot of the things that work, you know, for you, whether that’s health insurance or whether that’s income, things like that. But it’s also like, you know, your social circles are often connected to your work in a lot of ways, like if that goes away. So to me, this is really important to kind of, I think, look at it both from a dollars and cents perspective, Tim, but also like the social aspect of who are you post, you know, full time pharmacist, you know, and looking in the mirror and doing some deep digging of, like, what does what does this actually look like? So I think it’s an important question to ask.

Tim Ulbrich 12:14

I agree, and I’m glad you mentioned, you know, what does this look like? But how I be spending my time? It’s actually not one of the other questions we had. So we’ll kind of knock both of those out, knock both of those out together. But this is one of those things that we, myself included, we have this idea of what retirement might look like. That could be how our parents have gone through that phase, or grandparents, maybe what we see on commercials, whatever. But taking it to the next step of, what does a day look like? I’ve heard people go through this exercise. You mentioned the life plan, which I thought was great, and having some clarity there, but going through the exercise of actually, like mapping out for a month, like, what would I be doing on a Monday at 11 o’clock, right? On a Tuesday at four o’clock? And you know, not that you have to get that granular per se, but the idea is a good one, that right now you think about the percentage of your schedule that is occupied by work, and especially, I think about folks, Tim, in our phase of life where it’s work, and young kids like, that’s a big chunk of our time, right? And if you fast forward to a date and time where we’re not working, and the kids out of the house, Whoa, that is a big gap of time. So what are we doing with that time? What are the goals you mentioned? You know, is it travel? Is it volunteering? Is it spending time with with the grandkids? Like, what does that rich life look like in retirement? And the second layer I would add to that, Tim, is, if there’s a partner, spouse, significant other involved, like, what does that look like for the individual and then for the we. You know, Jess and I were joking recently that, like we love spending time together, but we also have individual things that we love to do. And I very much see in retirement that we’ll have things that we want to do together, whether that be volunteering or traveling or other things, and then we’ll have other things where it’s like, she’s doing her thing, I’m doing my thing. So, yeah, I think that discussion of, what does this look like for I and what does this look like for we as well?

Tim Baker 14:06

Well, especially in retirement, as you age, like, one of the things that you know, often doesn’t get talked about, and it’s a risk in retirement is loss of spouse, and a lot of it’s it comes from the perspective of, like, loss of a social security check and things like that. But what about like, you know, I look at my parents, love my parents, but my dad doesn’t have his own interest, like, he just kind of does what my mom wants to do. So like, if he were to lose my mom, like, like, what happens, you know? And so I think, like, that’s, that’s a big thing. And, yeah, in the, in the life planning, we go through an exercise called ideal schedule. So you go through and you say, Okay, what’s the ideal day, from the moment you wake up, from the moment that you, you know, put your head on the pillow, then what’s the ideal week? So Monday through Sunday, like, what are we doing? And then it goes out to the ideal year. Like, are you spending, you know, the summertime up North, or are you, you know, are you visiting family, those types of things? And I think that for a lot of people, you know, they realize how much of their day is tied into work, and then once, once that’s gone, like, what happens? So, yeah, those are the exercises. I mean, we’ve talked about, like, the three questions, and I think those are all, you know, important things to kind of reference back to and revisit, especially as you’re going through the next, like, phase of your life. But I think really put pen to paper and I’ve talked about this, I think with you. I don’t know if I’ve ever talked about on the podcast, but like, when I did my sabbatical, I had a month off where I did not touch work, and I kind of had a little bit of like, what am I doing? Like, like, how am I gonna, like, fill the day, which sounds crazy, but like it was a struggle for me, and like I wanted to make the best use of the time, but I also felt like I had some constraints here and there, but like that, that little window was, like, important for me to kind of put myself in someone’s shoes who’s kind of going through that transition. And it sounds silly, but it’s it’s not.

Tim Ulbrich 14:34

That’s a good point, though. I’ve actually heard people talk about, I’m thinking back to the interview that I did on episode 291 with Dave Zgarrick, who is has made that transition in retirement. And he talked about redefining retirement, really thinking about as like a half time to kind of reassess where are we going. Why are we going here? What does this look like? But I think some of those break periods, you know, you mentioned the sabbatical, other people talk about mini retirements. I think it’d be really helpful to having some of these experiences where we get a feel for what this might look like. And you know what? What are some of the ahas of how I do want to spend my time, or what the gaps are in time? I mean, joking aside, we’re just in a phase of life, both of us right now, we’re really sun up to sundown. You know, it’s work, kids, that’s the schedule.

Tim Baker 16:08

I made the comment like, hey, we haven’t, like, Shay and our kids haven’t really hung out with you and Jess and your boys in a while. And I think I would just look at our schedule and it’s like, soccer, football, swim, soccer, football, swim. Like, it’s just, it’s just so many things that are going on, but eventually that’s going to go away, right to your point, like, that’s, that’s going to be in our rearview mirror. And that’s why, I think, like, even, even couples, sometimes, because they’re so in their, you know, in their kids, you know, activities in their lives that they almost forget about each other. You know, spouses and that can be, you know, I think there is a pretty high level of, you know, divorce and things like that as you, as you age, because you kind of lose that connection with your spouse. And I think that’s important to make sure that you’re continuing to kindle so all these things kind of play into it.

Tim Ulbrich 17:38

So that’s our first two questions, will I work at all during retirement? How I be spending my time? The third question, Tim is, how will I replace my pharmacist paycheck? Again, seems like an obvious question, but for decades, we have a an employer that’s paying us on a monthly basis. And if we were to stop work altogether, again, that may or may not happen, but if we’re to stop working, we’ve got to make our own paycheck at this point. So we’ve talked about this on the show show before. We’ll link to that in the show notes. But thoughts on this question of, how will I replace my pharmacist paycheck?

Tim Baker 18:10

Yeah, I don’t really think, I don’t really think a lot changes here. I think what, what is, what does change in terms of, like, the sources, I think what does change is kind of like, where in early retirement? Where do they come like, where does the money come from? So, you know, if we’re retiring at 55 the the sources of your income is probably going to be from part time employment. It could be from your traditional portfolio, but from, like, a brokerage account that doesn’t have the 59 and a half, you know, 10% penalty, which you have to build, right? So lot of people, they’re really set on, you know, they’re 401, K and their Roth IRA and things like that, which is really important. But the third bucket, so that we have the pre, pre tax after tax. The third bucket is the taxable, which is going to be in an early retirement bucket. So I would say probably those are the two big things for most people. Would be part time employment, and then, like a brokerage account, or like traditional savings. If you’re in the real estate, it could be rental income or liquidation of like a rental property. But then as you age, you know, the things that kind of get the green light are Social Security. You know, if you decide to collect that at 62 or you wait to 67 or even later to 70, and then getting into, once you’re past 59 and a half, you know, the traditional portfolio where you don’t get that 10% haircut, you know, you can start, you know, distributing from a 401K, IRA, etc. There are other things out there, like annuities. It could be, it could be a pension. You know, if you have a company or government pension, which we know aren’t necessarily, you know, a thing that a lot of people have, but that’s typically based on an age that you can, you know, get to that. It could be, you know, tapping into the value of your home, things like reverse mortgages, which get a nasty reputation, or selling a business, or could be cash value life insurance. But I would say the heavy hitters here, especially early on, it’s going to be part time employment. It’s going to be things like a brokerage account savings, and then, you know, potentially, you know, real estate, things like that.

Tim Ulbrich 20:08

And as you mentioned, especially with the brokerage account, especially with real estate, there’s planning that has to be done there, right, for us to be able to accrue those savings, to tap into those in early retirement. So, you know, early planning, of course, really important here, and when we talk about priority of investing, this is always the one asterisk, right? Hey, if you’re if you’re thinking about early retirement, you know this sequence changes when we think about more the traditional buckets, like the 401K, 403B’s, IRAs, etc, because of that 59 and a half restraint that you mentioned earlier. Tim, number four on our list is, hey, what if there’s a market downturn early on in my early retirement? So I’ve decided to retire early. You know, let’s say there’s a market downturn and we experience some of that volatility, that that can be disruptive to the nest egg. Always a problem, but maybe more of a problem here if we’ve got a longer runway of years that we need those funds in retirement.

Tim Baker 21:06

Yeah. So what we’re talking about here is sequence risk, or sequence of returns risk, which, which is the potential negative impact that the order of your returns, your investment returns, on your portfolio due to the market, is heightened, especially in the withdrawal phase. So if you take and I’ll run through this, I know we don’t have a ton of time, but I wanted to kind of, I feel like we’ve talked about sequence risk, but I haven’t really talked through, like a scenario. So I actually did a scenario where we have one where it’s favorable returns, so like double digit returns, like the second that you retire. And then one that is like negative returns. So, and then what does the, what does the outcome look like at the end of I did it for like a 10 year period. So if you look at, if we start with a million dollars, and you have an annual withdrawal of 50,000, which is 5% and we have a, you know, we’re doing this over 10 years. If we go into the first year of favorable the favorable scenario, the first year, we get a 15% return, 12% return, 8% return, even taking out 50, you know, and over the 10 years, it’s like 4.7% in aggregate, a return. At the end of the 10 years, you’re gonna have $1.2 million. So early on we’ve got, you know, the first, you know, three years, you know, 30 some odd percent. If we look at the same thing, instead of getting positive 15, we get negative, you know, negative 15, negative 12. That same portfolio, even over the 10 years, which is going to get a 4.7% return, is going to end with 361,000. So it’s almost a million dollar swing. So it’s the same aggregate, you know, 10 year, you know, return. But after the first year, for the favorable, you end with 1.085 million. After the first year, you end with $800,000. So you’ve taken off 15% because that’s your that’s basically the market downturn, but you’ve also withdrawn $50,000. So that’s what we’re talking about here with sequence of return risk is that the timing of when you retire is probably one of the most important things related to the market. So what we’ve always said is like flexibility here. So if the market is tanking, it might be worth to, like, work another year, and most of the time, like, you know, in this scenario, we have, you know, four years minus 15, minus 12, minus eight, minus five. Typically, the market doesn’t do that. You know, we don’t have, you know, consecutive years, maybe two, maybe three of year. But like, this is where, you know, pushing that out and having flexibility of like, okay, maybe I’m not going to retire at, you know, 53 I’m going to retire at 56. I’m going to retire at 57. That type of thing. So that, to me, is really important, and that, and that speaks to the the timing of the investment returns that you’re getting. Now, the ways to combat this is, which is really hard, is, is really to kind of be more conservative, take your money from, you know, equities to bonds or even cash. But the problem with that is, you know, nobody has, like, a, you know, a crystal ball to say, like, when’s the best time to do that? So that’s, that’s kind of sequence, risk at play.

Tim Ulbrich 24:20

Number five on our list, Tim, I alluded to this a little bit earlier, is what will I do for health insurance coverage? We’re not yet at the age of 65 we can’t necessarily put Medicare into play. We no longer have employer coverage if, if we’re working part time or not working at all. You know what options are we thinking about here and and obviously we’ve got to factor this in as a cost as well.

Tim Baker 24:42

Yeah. So I mean, unfortunately, and we’ve kind of bemoaned this fact being business owners, there’s not a great option here. You know, I think you know, looking at employer sponsored COBRA coverage, but that only typically lasts 18 months, and that’s really expensive because you’re paying the full premium. If you have a spouse that you can ride his or her coattails, that’s one way to do it. It could be private health insurance. So looking, you know, at the exchanges, things like healthcare sharing ministries like that, that might be something. I know you looked at those in the past. It could be, you know, there are some, and I don’t know if Starbucks still does this, but I remember a lot of people. I think my sister worked for Starbucks, you know, when she was in college, just to get in, you know, insurance through them, she was working part time. It could be Medicaid if you don’t have assets, like, if, you know, I would say that you probably shouldn’t be retiring if that’s the case. Or just, like, short term plans that provide, like, temporary coverage. So probably, for most people, it’s going to be looking at the exchanges and trying to trying to find the best, you know, probably catastrophic plan that they can. But unfortunately, there isn’t really a great, you know, a great solution here to kind of bridge you before you get to 65 to get to Medicare, you know, yeah, it’s, it’s kind of, you know, pick your poison, so to speak.

Tim Ulbrich 26:00

You know that you mentioned the Starbucks, there’s actually a FIRE pathway, barista fire that’s named after that, that play, right? Which is, you know, working part time at a place like Starbucks or a place that has those benefits to be able to get access to those. You know, the other other comment I’d make here, Tim is, I think while these costs are very real, like, we have to put them as objectively in play as possible. What I mean by that is, like, if you’ve done a good job and the dollars are there, like, even if this feels scary or you don’t want to spend money on it, like, if the math supports it, like you just factored into the plan, right? I’ve seen some people, I think, talk about this as like, Oh, I’ve had employer coverage my whole life. I’m three years away from Medicare. I’m done working. I’m over it. Don’t need it, you know. Don’t want to be working anymore, but I’m gonna wait till I get to 65. And maybe that’s the play. But if the nest egg is there, like, we just need to factor this in as an expense and consider it. I mean, the other note and comment I’d make here, back to our discussion of early planning with something like a brokerage account. This would be another play of early planning with something like HSA contributions, where, you know, can we be accruing and saving money in HSA throughout our career, such that one of these instances here, we’re talking about early retirement. We’ve got some dollars that are earmarked specifically for that, that we don’t have to have to necessarily draw separately from our portfolio.

Tim Baker 27:21

That’s right, yeah. HSA would be a great bucket for this, because it has the triple tax benefit, but the flexibility to be able to use for you know, now and later. So yeah, that’s a great bucket for that.

Tim Ulbrich 27:34

Number six is, are my dependents independent? And if not, have I factored that into my planning and assumptions? Tim lots to think about here, kids and elderly parents, but looking at dependence and cost of dependence.

Tim Baker 27:48

Yeah, this is, um, this is, this is kind of hard too, because, you know, I always joke with my with my kids, that, you know, they they need to move out so I can, you know, turn their room into a a whiskey room. And, you know, my kids are 10 and five or whatever. Obviously, Zoe’s always younger, but I think this is hard, because I think we are all trying to prepare our kids to kind of launch, right? But, you know, oftentimes they come back. And you know, we have to kind of figure out what that looks like. So that could be, you know, it could be for kids managing, like, their college and expenses related to that. But then after, like, if they don’t get a job, or if they’re not, you know, able to support themselves. Like, what are the, what are the rules around rent and things like that, and just, how does that affect your overall financial plan? And then elderly parents, there’s a lot of, you know, pharmacists that we work with that they say, I am my parent’s retirement plan. Like, that’s the thing, right? And, and I respect that, you know, a lot of it’s like, Hey, I’m a first generation immigrant. You know, they’re you know, they’re sacrificed to get over here. And my sacrifice is kind of making sure that they’re okay, you know, in retirement. So, you know, we have this term called the sandwich generation. It typically is, you know, people in their 40s and 50s that are taking care of, like adult children, but they’re also taking care of, like elderly parents. That’s a big thing. And again, like, I would say, it kind of goes back to when we talk about, like, education planning, like you have to put your mask on first and then put on the mask of your child. I don’t think that ever goes away. So I think that, you know, this can be an unexpected thing for a lot of parents, but you know it can, really, especially like elderly plant parents, if you’re the one that’s kind of, you know, caring for them, and these are often the things that kind of force can force a retirement early for you is that you’re taking care of other people, right? So I think having these conversations with, you know, your kids, with your elderly parents and and come up with a plan and kind of ground rules. I think is really important. So we can kind of include this in the plan and know, you know, when does zig and zag?

Tim Ulbrich 30:06

Yeah, Tim, anytime we talk about this topic, always comes to mind conversation we had with Cameron Huddleston on the show a couple times, who wrote the book, Mom and Dad, We Need to Talk. And, you know, in the context of elderly parents, this is where those conversations are so important, as uncomfortable as they may be, right? Because, you know, I’m thinking about even discussions I’ve had with my parents about, you know, what does their financial position look like? What are their retirement goals? What are their desires for, you know, staying in the home versus other living arrangements. What is their long term care insurance policy look like? And, you know, part of those conversations, obviously, is focused in a genuine care and desire of what, what do my parents want? But there’s also a reality of like that may impact our financial plan, and that’s not being selfish, like we’re just trying to be responsible. And I think you know, if we can get into those open conversations, we can start to plan around that a little bit, to understand what the impact may or may not be of that situation with parents on our financial plan.

Tim Baker 31:05

That’s right.

Tim Ulbrich 31:06

Number seven, we touch on this a little bit. Tim, but when will I draw on Social Security? We talked before in episode 294 about common Social Security mistakes to avoid, and a big part of that discussion was around when we opt into starting Social Security benefits. For someone who’s saying about early retirement, you know, and building that retirement paycheck, a Social Security benefit might, might be an important part of that, and the temptation, perhaps could be there to start those benefits early and just understanding what the impact of that could be versus a delayed benefit selection. So thoughts here on this question of, when will I draw?

Tim Baker 31:41

I think a lot of financial planners are, you know, coming around to the fact that, like, if you can delay your Social Security benefit as long as possible, the better knows for the the overall plan. And I know this, to your point, it can be if you’re, if you’re working for or if you’re, if you’re retired for, you know, 10 years or whatever it is, and your funds are dwindling in some of those, you know, brokerage accounts or savings. I think it can be tempting to to draw earlier, right? But I think if you look at the math, and I have, you know, I think I pulled, I think this is from my Social Security statement. If you look at my Social Security statement. If I were to retire at 62 my monthly benefit would be $1,826. if I were to retire at not full Social Security age, but 65 it would be $2290. If I then go to 67 which is my full retirement age, it goes to $2662. If I delay it till age 70 so I’m getting those deferment credits, it goes to $3,306. So the spectrum of early at 62 is $1826, to delayed is $3307. But the big thing here, Tim, that doesn’t get enough press, is that it’s inflation protected, which there’s no other pension or annuity out there that you can get that does that. So one of the big hang ups for for retirees is like, I’m working on a fixed income. I’m working on a fixed income. But once you know inflation takes over, as we’ve seen in recent years, that really, like, you know, provides pressure on, okay, how am I going to let you know, how I’m going to make this, you know, these dollars last. So that would be the thing that I would implore, you know, people, when they’re looking at their, you know, their, their benefit for Social Security is, you know, if we’re planning this, can we plan to at least get the full retirement age, or, you know, can we delay it from 62 to 67 at least, to get from, you know, an $1,800 benefit to a almost $2,700 benefit because this will pay you out for the rest of your life, which we don’t know what that is, inflation protected. And that’s where you see that exponential benefit versus, you know, if you, if you, if you peg it at $1,800. So it’s still inflation protected, but I think you want that, that percent of your paycheck to be as high as possible that is covered by, you know, the Social Security and Inflation. So it’s really, it’s a really important discussion to have.

Tim Ulbrich 34:21

Tim, it’s a good plug and a reminder for folks, if they’re not already doing this, to check out their My Social Security account ssa.gov just to dig into that report, what are the expected benefits? Always a good thing to build into. I typically try to check it in just once a year, kind of see what’s going on. So since you mentioned inflation, Tim, let’s jump down to that one, and that question being, have I accounted for inflation? You mentioned social security being inflation protected, but really nothing else beyond that. So, you know if we think of inflation as of late, which has been higher than historically, although that’s come down, you know, more recently, but even the historical rate of inflation, if we’re retiring, let’s say, in our early 50s and were afforded the opportunity to live into our 90s, like costs are going up right significantly over that time period. So the question here is, have I accounted for inflation when I’m looking at these early retirement numbers?

Tim Baker 35:13

Yeah, and one of the best ways to account for inflation as retire is to be in a you know, is, have some of your your assets in equities, right? Which gets scary, because then we talk about, you know, the sequence of return risk. But I think, really, for a portfolio to endure 30, 40, 50, 60, years is, is to make sure that you’re taking, you know, intelligent risk in the market. So you know, we just got news of the rate cut yesterday, and immediately, you know, you’re seeing like our cash account at our custodian went from 5.1% which is really solid, to 4.6%. So savers, and often, you know, people that have reached you know that are in retirement have a good amount of cash, or they should, because, you know they’re they’re basically taking slugs of cash out to basically build their paycheck. That’s going to affect them potentially negatively. Now, you know interest rates, you know in inflation, sometimes, you know we’ll see interest rates go go down, but we won’t see like the cost of goods go down because they’re pegged that we talked about that in previous episodes, they’re kind of pegged at that high watermark. So I think is really important, you know, when we talk about this question is, you know, are we accounting for inflation? I think the best way to do that in a retirement, you know, setting is, again, as much as your dollars can come from Social Security as possible is great. But then also taking, you know, intelligent risk in the market, where, you know, the market is kind of, you know, performing in a way that kind of, you know, keeps pace or outpaces inflation, you know, is what we want. So, you know, on the so that’s, that’s kind of on the asset side, but then on the debt side, you know, just making sure that, you know, we’re, we’re efficient, you know, there with with rates and where inflation is as well. So I think it’s important to, you know, for retirees that are potentially living on a fixed income to account for, and a lot of people this, and really, taxes. Tim, it’s kind of like, can be a second, you know, an afterthought.

Tim Ulbrich 37:20

Good point on the taxes, probably a whole separate episode, yeah, around like, tax planning and early retirement. Um, number nine on our list is, is my partner spouse significantly now they’re on the same page. We already talked about this in the context of, hey, what does that, you know, schedule look like? What does that ideal life, that rich life, look like in retirement? And, you know, what’s the I? What’s the we? But I think it’s also just a bigger question of, like, are we on the same page with this concept of early retirement, and maybe, if one spouse wants to work longer than another and one’s having to draw down from their assets, like, are we good with that? You know, does that jive?

Tim Baker 37:55

And I think, I think this kind of starts with, you know, where are we at and where are we going? So you know, when we do this with clients, we we call the first meeting, Get Organized where, you know, we’ve plugged everything into our client portal, checking, savings, credit cards, student loans, investment accounts, value, the house, the mortgage, all the things, right? And for a lot of people, it’s the first time they’ve seen their stuff all in one spot, right? Because we bank over here, we have debt over here, we have investments over here, and then for spouses, that’s also true, right? Because I don’t necessarily see everything that Shay has, you know, if I’m not tuned in. So if we plug that all into one platform, we can kind of see the landscape of where we’re at, and then I think from there, once we establish where we’re at, we talk about where we where we’re going. And then I think this is some of these questions that come up is like, okay, Shay, if I retire and you’re still working for 10 years, like, Are you cool with that? Probably not, right. So I think those that’s the space to have the conversation again. I’m biased, Tim, right? Because, you know, we’re planners, but sometimes these are hard to have with your spouse. So having that third party, like the independent third party that has your best interest, that can ask questions, is, I think, a safe place so to speak, to have these conversations. Because, you know, if Shay says I’m going to retire early and you can keep working. I’m going to say, Yeah, that’s cool, whatever. But maybe I have some resentment about that, you know, and I think if you’re in a in a place where, you know, it’s safe, and we can kind of talk these out and get on the same page, it’s really important because, you know, we’re trying to row this boat in the same direction. And if, you know, if we’re just, you know, having these service conversations and not really getting, you know, into depth, then we’re just kind of spinning in a circle. So I think it’s really important to to make sure you know, and this goes back to life planning, to make sure that you know your vision of early retirement, you know, overlaps. It doesn’t have to be the same, yeah, but it overlaps with your spouse or with your partner to make sure that you know your needs are taken care of, but also your spouse’s needs are taken care of.

Tim Ulbrich 40:08

What came to mind, Tim, as you’re talking about, is my I think my parents, to their credit, have done a really good job of this. My mom’s been retired now for a few years, and my dad has no plans in the near future retire. He just loves his work. It’s energizing, and he acknowledges maybe that will change at some point in the future when it does, and maybe it looks part time or consulting or whatever, but they have kind of figured out like for them individually. My mom, you know, has a ton of joy that she gets from just the daily rhythms and routines that she has, and it doesn’t mean my dad has to be doing the same thing. So I don’t think there’s a right or wrong here. It’s more about what works for you as a couple. And as you mentioned, having some of those conversations to avoid, or try to avoid, as much as you can, some of the resentment or other feelings that might come up along the way. All right, our last question, number 10 on this list of 10 questions to consider for early retirement is, am I prepared for potential long term care expenses? Tim, we talked about Medicare already briefly, but here we’re talking about some of the significant expenses that can come beyond what Medicare may cover, and specifically here thinking about long term care insurance, we talked about this on episode 296, we’ll link to that in the show notes. Your thoughts here on, am I prepared for potential long term care expenses?

Tim Baker 41:25

Yeah. So I think the stat is, is that you know, a person that’s age 65 is going to spend $157,500 on health care and medical expenses, you know, throughout the course of their life, a couple of $315,000. So you know, and this doesn’t necessarily include the cost of, like, long term care. So when we talk about long term care, this is really, you know, help with kind of the the daily living thing. So like being able to get out of bed, you know, move around your house, use the bathroom, dress, feed yourself, but also kind of more like, you know, cognitive things like being able to pay bills, or, you know, shop so, you know, oftentimes, and actually one of the biggest, the biggest cause for, like, you know, a long term care policy to get triggered, is Alzheimer’s. But the second one is, the second biggest is arthritis, Tim, believe it or not. So, you know, a lot this is one of those things. It’s like, Ah, this will never happen to me, or I don’t got to worry about that, or I’ll figure this out later. But you know, it’s, it’s one of those biases that we have that, you know, it often can come and bite us in the rear end. So what we talk about with long term care is, there’s, there’s really two ways to prepare for this. One is to self insure. So just like we’re talking about being able to, like, pay our own health care and things like that, this is kind of, this is not that. This is where we’re basically saying we’re going to forego a policy. We’re basically going to, you know, if this comes up, we’re going to reach into our own pocket, reach into our own portfolio, and pay for the care that we need. The alternative, and what I would recommend, is purchasing a long term care insurance policy where it really affords you access to benefits that allow you, at a minimum, to age in place. So these, you know, there’s studies that show that, you know, couples are willing to spend, you know, $2500 to $3,000 a year on a long term care policy. And you can get a policy that you know can kind of get you a basic, a basic policy that will have, you know, someone come in the home, or things like that. I think a lot of people, when they think of long term care, they think of like, of like a nursing home and things like that. This is really trying to, you know, get, get a policy that provides benefits that can bring people into your home to assist you as you age. So, you know, there’s typically a Goldilocks zone. Is that you should start, you know? So we talk about early retirement, you should start discussing this, probably in your 40s and 50s, start really assessing it in your 50s. And the kind of, the sweet spot the purchase of policy is, like, early 60s, yeah. So this is really important, because, again, like the once you once you kind of go into, like, a facility, if that, if that’s the case, like, that’s where expenses can get really astronomical. So the longer that you can stay in place and have the help that you need, the better, I think it is for you from a psychological perspective, but also from a financial perspective. And again, this is one of the ones. It’s like, like, not going to happen to me, Tim. I think important to look at. And I think we look at these policies as almost as like a a coupon for future care. So, like, hey, you know, if I get a benefit, that’s $3,000 a month, but you know what I need is $4000 then I’m only reaching in my pocket $1000 bucks to kind of cover down on the difference.

Tim Ulbrich 44:54

Again, episode 296, five key decisions for long term care insurance recovered that topic in depth. We’ll link to that in the show notes. Tim, great stuff. And one thing I would say to our listeners, early retirement or not, we touch on a lot of areas of the financial plan. We talked about the importance of having a life plan, having the vision for where we’re going, why we’re going there. We talked about building a retirement paycheck. We touched on insurance, Social Security, investing priorities and decisions to make around investing and how to prioritize different parts of the investing plan. And at YFP, this is what our team of certified financial planners and tax professionals do. We support pharmacists at every stage of their careers to take control their finances, reach their financial goals and build wealth through comprehensive – looking at all the different areas we discussed – fee only, financial planning and tax planning. And we’d love to have an opportunity to talk with you, to learn more about your situation, to learn more about our services. Determine if there’s a good fit. You can book a free discovery call with Tim by visiting yourfinancialpharmacist.com top of the page there, you’ll see an option to book a discovery call. Thanks so much everyone for listening. We’ll catch you again next week.

Tim Ulbrich 46:01

As we conclude this week’s podcast an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts, is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyzes 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.

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YFP 377: 10 Moves to Make to Become Financially Fit

Posted on by YFP Media

Gathering wisdom from his own journey and those of many other pharmacists, Tim Ulbrich, YFP CEO, shares ten moves that are key in building a strong financial foundation.

Episode Summary

YFP CEO and Co-Founder, Tim Ulbrich, distills the lessons learned from his own financial journey and from speaking with thousands of pharmacists about their financial plans into a list of ten moves that are key in building a strong financial foundation.

Whether you’re just getting started and have the opportunity to build a strong foundation from the beginning or you’ve been at it for a while and sense the need to reinforce that foundation, this week’s episode is for you.

About Today’s Guest

Tim Ulbrich is the Co-Founder and CEO of Your Financial Pharmacist. Founded in 2015, YFP is a fee-only financial planning firm and connects with the YFP community of 15,000+ pharmacy professionals via the Your Financial Pharmacist Podcast podcast, blog, website resources and speaking engagements. To date, YFP has partnered with 75+ organizations to provide personal finance education.

Tim received his Doctor of Pharmacy degree from Ohio Northern University and completed postgraduate residency training at The Ohio State University. He spent 9 years on faculty at Northeast Ohio Medical University prior to joining Ohio State University College of Pharmacy in 2019 as Clinical Professor and Director of the Master’s in Health-System Pharmacy Administration Program.

Tim is the host of the Your Financial Pharmacist Podcast which has more than 1 million downloads. Tim is also the co-author of Seven Figure Pharmacist: How to Maximize Your Income, Eliminate Debt and Create Wealth. Tim has presented to over 200 pharmacy associations, colleges, and groups on various personal finance topics including debt management, investing, retirement planning, and financial well-being.

Key Points from the Episode

Financial Moves to Build a Strong Foundation [0:00]
Commitment to Living Off Less Than You Make [4:05]
Building an Emergency Fund [5:59]
Developing a Plan to Eliminate High-Interest Debt [10:17]
Determining the Best Student Loan Repayment Strategy [12:07]
Tracking Net Worth and Understanding Insurance Needs [14:53]
Starting to Invest Early and Often [19:03]
Refusing to Accept a Fixed Income [20:04]
Implementing Systems and Automation [21:30]
Conclusion and Encouragement [24:51]

Episode Highlights

“As I truly believe everything else we talk about, right the X’s and O’s, whether it’s investing, insurance, debt repayment, tax planning, whatever it may be, all that stems from understanding and improving our own financial IQ.” – Tim Ulbrich [4:07]

“Life happens, and you want to be prepared. I want to be prepared so that those bumps don’t derail momentum and progress in other areas. The last thing we want is that we feel like we’re finally making progress towards building wealth, saving, investing for the future, achieving the goals that we’ve desired to achieve, and all of a sudden, we haven’t prepared for an emergency, and something sets us backwards and disrupts that momentum.” – Tim Ulbrich [5:00]

“Your six figure income – it’s a great tool, but it is not a financial plan. Without a vision and a plan, that good income is only going to go so far.” – Tim Ulbrich [27:51]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

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’m flying solo with an episode that is short and to the point. One that distills a lot of learning from my own journey and from speaking with 1000s of pharmacists about their financial plans. I’ve taken those experiences and narrowed it down to a list of 10 financial moves that are key in building a strong financial foundation. Think of these as the prerequisites to building wealth and living your rich life. So whether you’re just getting started and have the opportunity to build a strong financial foundation from jump street, or perhaps you’ve been at it for a while, and sense the need to reinforce that foundation, this week’s episode is for you. And if you’re looking to identify areas within your own financial plan that could use some love and attention, we’ve got a great free resource for you. 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, where you’re doing well, and resources that can help along the way. So head on over to yourfinancialpharmacist.com/fitness and see how your financial health is tracking. Again, that’s yourfinancialpharmacist.com/fitness will also provide the link in the show notes.

Tim Ulbrich 01:25

All right, let’s jump right into our list of 10 moves to make to become financially fit. Number one on our list is be a sponge. Be a sponge. This is intentionally number one on the list as a consistent commitment to learning, I believe, is going to yield the greatest return on your investment. The earlier you learn, the higher the return on investment of your time. At most, some pharmacy schools offer a personal finance elective but the vast majority have little to no personal finance that’s embedded in the curriculum, whether that’s at the graduate or the undergraduate or even the K through 12, although we see that expanding more recently. While you don’t need a master’s degree in finance to be successful with your money, you should have the basic knowledge that helps you make good decisions and develop good habits. Read books, listen to podcasts, watch YouTube videos, whatever works for you. Some of my favorite personal finance books that have had the most impact on my journey include Rich Dad, Poor Dad by Robert Kiyosaki; I Will Teach You To Be Rich, by Ramit Sethi; The Millionaire Next Door, by Tom Stanley; Money: Master the Game by Tony Robbins; and of course, I’d be remiss if I didn’t mention the book that we wrote, Tim Church and I co authored, Seven Figure Pharmacist. These resources, as well as many other podcasts for me in my own journey, were instrumental to just developing that hunger and habit to learn, recognizing that there’s always an opportunity to grow, right? This is a journey. This is a marathon. This is not a sprint when it comes to long term financial success, and we have to put the work in to make sure that we’re upping our financial IQ over time. So be a sponge. When I think about some of the guests that have been on this show recently, right Brandon Gerleman on last week’s episode 376, that shared his debt free journey paying off about $160,00 of debt. Or Dr. Manny on Episode 375, a new practitioner that has opened up his own community pharmacy, is building his business. Or Mike Beyer from 365 who shared his story, going from a net worth of zero to becoming a Seven Figure Pharmacist. These are just a few of the stories, but one consistent theme and thread that I think of from their journeys is that they really believe there is no arrived. There is no arrive. When it comes to the financial plan, they are hungry to learn, to grow, despite the success that they have, they recognize there’s always an opportunity to learn, to improve and to grow. So that’s number one on our list. As I truly believe everything else we talk about, right the X’s and O’s, whether it’s investing, insurance, debt repayment, tax planning, whatever it may be, all that stems from understanding and improving our own financial IQ.

Tim Ulbrich 04:22

Number two on our list is make a commitment to live off of less than you make. Make a commitment to live off of less than you make. Outside of learning, outside of being a sponge, this is at the top of the list because other goals require cash flow. It’s that simple, right? If we want to pay off debt, if we want to save and invest for the future, if we want to invest in experiences and travel, whatever goals we have, they’re dependent on cash flow. And cash flow comes from living off of less than we make now, easier said than done. Many of you know that firsthand, but until we figure out ways to take off the cap on our income. We’ll talk about that here in a little bit. The cash flow will come from the difference between what you earn and what you spend. The financial plan is this simple and this hard right. Executing, of course, is the hard part. But without cash flow and without a monthly system, we’re going to talk about that here in a little bit as well. We’re going to find ourselves spinning our wheels financially long term, right? We want to implement a system that from the breathing room and the cash flow that we create, we’re able to fund our goals each and every month, and know that we have a process in place for those goals, the dreams that we have to become a reality. So that’s number two on our list. Make a commitment to live off of less than you make.

Tim Ulbrich 05:48

Number three, you’ve heard me say it many times on the show before, build an emergency fund. This is not just about the dollars in the account. It’s about the breathing room that this creates in your financial plan, getting out of the day to day, month to month, year to year, mindset, and ensuring that we can have the peace of mind. So if you haven’t already done this, open up a high yield savings account or money market account that is separate – keywords – separate from your checking account, and label it as your emergency fund. One of these, my partner, Tim Baker, often says is, hey, if you’re doing the mental accounting, do the actual accounting. What does he mean by that? He means that if we’re looking at our funds, let’s say you’ve got 20, 30, $40,000 that’s sitting in a high yield savings account, or perhaps in a checking account. Hopefully not the case. But if we know that, hey, about five or 10 of that is for an emergency fund. About five or 10 of that is for an upcoming trip, about 10 of that is for a future roof replacement in the home, right? That’s the mental accounting. So if we’re doing that, let’s create the buckets here. We’re talking an emergency fund, label it and do the actual counting of putting it in a fund that is earmarked specifically for the emergency fund. Now we’re going to want to work towards saving three to six months of essential expenses. That’s our goal. That’s our target, general rule of thumb. But don’t let that number overwhelm you if you’re just getting started, or perhaps you’re doing some cleanup work in other parts of the financial plan, because here’s the reality, if you’ve never had an unexpected car or medical expense or another emergency, it’s only a matter of time. Life happens, and you want to be prepared. I want to be prepared so that those bumps don’t derail momentum and progress in other areas. he last thing we want is that we feel like we’re finally making progress towards building wealth, saving, investing for the future, achieving the goals that we’ve desired to achieve, and all of a sudden, we haven’t prepared for an emergency, and something sets us backwards and disrupts that momentum. Now here are five questions that I think you need to answer for your emergency fund, just to get you started and hopefully to get you on track. Number one is adequately funded. We talked about that general rule of thumb, three to six months of essential expenses, not all expenses, essential expenses. So what does that mean? Housing, food, transportation, clothing, minimum debt payments, things that you would continue to fund, even in the event of a short term job loss or emergency add those up. Multiply them by three to six. That’s a general target we’re shooting for with an emergency fund. So that’s question. One, is it adequately funded? Number two, a problem, but a good problem to have is, do you have too much saved in an emergency fund? I’ve talked with several pharmacists that have done a great job saving, but big numbers in an emergency fund, and ideally, we would put these funds, probably elsewhere, to use in the financial plan now, right now, because of where interest rates are at, it’s not a terrible option to have money sitting in an account earning four to 5% in high yield savings account. But if we have other high interest rate debt, or we’re looking to build up our long term investing or savings, there is an opportunity costs that can come from having too much saved in an emergency fund. So that’s question two. Number three, are you optimizing your emergency fund? So what I’m talking about here is making sure it’s not sitting in a checking account, that we have it working for us, especially with where interest rates are at right now. Whether that be a high yield savings account or money market account. You know, right now, at the time of this recording, most of those are in the four to 5% range. So are we optimizing that fund. Number four is, does it need a boost? So this is something that we can set it but forget it, and we have to come back and look at this, right? So, you know, especially for those that are earlier in their career, where expenses creep at a rapid rate, right? Perhaps when you when you graduated, maybe you didn’t have a home, or you didn’t have a family, all of a sudden you wake up in 3, 4, 5, years, our expenses have gone up significantly. So we want to visit this, revisit this at least once a year, and maybe at one point you hit that target of three to six months. But do we need to look at it again? And finally, our fifth question here. Is, as I mentioned already, is it separate from our everyday checking account? Right? If we’re doing the mental accounting, let’s do the actual accounting. So that’s number three on our list, build an emergency fund.

Tim Ulbrich 10:11

Number four on our list of 10 moves to make to become financially fit, develop a plan to eliminate any high interest rate revolving credit card debt, or any high interest rate revolving consumer debt. Now, if you don’t have any revolving, high interest rate consumer debt, credit card debt, high interest rate, car loans, etc, great, right? Let’s move on. But if you do, baby steps, baby steps, this, along with the emergency fund, is really a top priority, given the interest rates this debt often demands, right, especially when talking about credit card typically north of 20% we have to plug this hole before we can start playing offense with other parts of the plan. Now, I know that sounds obvious, but I see this mistake commonly made, where because student loan debts there’s there’s an emotional burden there, or because there’s a feeling that I need to catch up and save and invest for the future, we can often get these priorities mixed up, right? So if I have high interest rate credit card debt that’s accruing interest north of 20% but I’m paying down debt at 5% 6% whether that be student loans, or I’m trying to save and invest in various retirement accounts. I may have those out of order, right? So we got to look at that. Now. Last thing I want to say here is, if you have credit card debt, know that you aren’t alone. Okay? We often think that, hey, all my other pharmacist friends have this figured out. They’re making a great income. I’m the only one with credit card debt, I can assure you that is not the case. This is a fairly common struggle that we see, especially with new practitioners. Although others are not immune to this, but there’s a lot of expenses that ramp up in that final year of pharmacy school, or those that transition into residency or fellowship. High cost of living areas. There’s a tendency to accrue some credit card debt at the end of that training program. So know that you’re not alone doesn’t mean or minimize that we have work to be done. Of course we do, but you aren’t alone, and we got to really start to begin to tackle this. So that’s number four, develop a plan to eliminate any high interest rate revolving consumer debt.

Tim Ulbrich 12:15

Number five is we have to get clear on determining what is the best student loan repayment strategy for you. Now, if you’re listening and you have no student loans, you’re further along in your career. Great. Keep moving on, right? But for those that do have student loans, this is often a huge piece of the puzzle that we have to figure out, given the magnitude of it so that we can then plan around it. Because what you’ll notice, if you’re not already aware, especially when it comes to federal student loan repayment, there are a variety of options that can result in either big, big, big monthly payments or much smaller monthly payments, depending on which repayment plan you choose. And so we have to understand what fits into the budget. What is ideal, what is optimal for your situation, so that we can then plan and budget around it. Now, the median debt load for a pharmacy graduate here in 2024 covering right around $160,000 and for many grads, this is one of the most important and overwhelming decisions that they’re going to make. And to be fair, this is way more complicated than it needs to be, both on the federal and the private side. For those of you that have private loans. And to make that worse, this is just a hot mess right now, right. There’s a lot of changes that are going on with student loan repayment, a lot of uncertainty. The Save program has been held up. We don’t know what’s going to happen with that in the future. And by the way, we’re in the midst of a presidential election where student loans are often discussed and used in terms of political jockeying, so there’s a lot of unknown, which means for a lot of borrowers, it’s kind of a wait and see. Right now, it’s a wait and see for many people. So if you’re not already plugged into Studentaid.gov, make sure you get plugged in. We’ll link to that in the show notes so that you can stay up to date. We’ll also try to bring information here on our channels with what’s happening with student federal student loan repayment. But again, given the size, given the magnitude, notice, I didn’t say debt free, and I was intentional there, because for some of you, this is going to be a loan forgiveness pathway. But what I did say is we have to get clear on what our strategy is. We don’t want to be wandering when it comes to how we’re approaching our student loan. So once we can determine what is the optimal repayment strategy, we can then figure out what does that mean for a monthly payment. And then, as I mentioned, we can begin to build around that. So that’s number five, determine your student loan repayment strategy. Number six is, start tracking your net worth. Start tracking your net worth now if you’re early in your journey, especially if you have student loan debt or credit card debt, you’re not going to like this number, right? Because it’s a number that’s going to highlight especially if we have a high amount of debt that hey. We make a good income, but we’re probably not at the point we would like to be in terms of our overall financial health. Net worth is your assets or what you own minus your liabilities or what you owe. And I believe this is a much better indicator of your financial health than is your income, right? Because your income a six figure income. It’s a tool, but it’s not a financial plan, and it’s a tool that we can leverage to grow our net worth by paying down our debts and growing our assets that are hopefully compounding over time, but net worth is really going to shine a light on are we or are we not making progress. And so understanding and respecting this calculation can propel your financial plan. I really think about this as the 20,000 foot view on what’s going on for Jess and I in our own financial plan. So this is something that we’re tracking monthly. Very easy to do. I’ll share with you the template that we use. If you go to your financial pharmacist.com/toolbox. You’ll see a network tracking sheet there. You can save a copy for yourself, edit it. Nothing complicated. You can set up your own sheet as well. It’s a simply a listing of all the accounts that we have, checking savings, retirement accounts, real estate accounts, etc. Add up all the assets, subtract the liabilities. Amount that’s due. That’s our net worth. We’re tracking that over time to make sure that we’re heading in the right direction. If you’re not already doing this, even if you don’t like the number implement a system a recurring task to track your net worth each and every month. That’s number six on our list of 10 moves to make to become financially fed.

Tim Ulbrich 16:36

Number seven is determine what insurance policies you do and do not need and do not need is perhaps equally as important. And while there are a lot of different types of insurance to consider here, I’m talking in specifically about three that I see get overlooked most by many pharmacists: professional liability and having your own professional liability insurance policy independent of your employer. Term life and long term disability. With the latter two, term life, long term disability, we’ve got to be thinking about what coverage we need in addition to what our employer policies are providing, not only to plus those up if they’re not enough, but also we got to remember that those policies aren’t going with us when we transition jobs, right and so as time goes on, as we get older, these policies typically become more expensive. So if we can lock these in in terms of our own independent Term Life policies, long term disability policies, while we’re younger and we can get the coverage we need, that’s probably going to be the best action that we can take. Now, when it comes to long term disability, you put a lot of time, energy and effort to be able to become a pharmacist and make a good income, and that’s why it’s so important to protect it. Disability Insurance for pharmacists is really income insurance. It’s addressing what would you do and the event that you’re unable to work as a pharmacist, right on the term life insurance side, what we’re trying to do there is especially if we have dependents or someone else that relies upon our income, in the event that you were to prematurely pass away, and that income is needed. What is that term life insurance policy going to produce? What expenses is it going to cover both short and long term now, we’ve got more information and resources on all of this. You can check those out at our website, yourfinancialpharmacist.com, I’ll link to a couple resources we have specifically on term life and long term disability in the show notes; guides that we’ve written specifically for pharmacists, what you do need, what you don’t need. Make sure to check those out. That’s number seven on our list. Determine what insurance policies you do and do not need.

Tim Ulbrich 18:54

Number eight is we have to start investing as early as we possibly can. Now I know we’ve all been told this, but again, as with many of these items easier said than done, because when you’re flooded with things like student loans and other debt, it can be hard to balance prioritizing investing, and it’s easy to fall into the trap and perhaps feel that you can put off retirement savings for a few years, but the reality is that you want to take advantage of compound interest, time, value of money, and the earlier you start contributing, the better. And your investing strategy, it’s going to evolve over time. It’s going to get more complicated. But don’t succumb to inaction, because you’re overwhelmed with all the options. Start typically, what we’re focused on is starting with the employer match to a, 401K or 403B, 401 k, for those that you work work for a for profit, 403B for those that you work for a non profit, assuming that you’re there long enough to be vested, that’s a key factor we have to look at. And then we’re going to build from there, right? We’re going to look at things like IRAs Traditional and Roth IRAs, typically. Roth IRAs for pharmacists. HSAs health savings account and other investment vehicles along the way as well. We have talked extensively on the show about various investing strategies, long term retirement plan strategies, so make sure to check out those episodes for more information.

Tim Ulbrich 20:17

Number nine on our list of 10 moves to make to become financially fit is refuse to accept your income is fixed. Now, common misperception I see among many pharmacists is that there is a ceiling on their income, and that mindset can lead to stagnation. Stagnation. It can lead to career dissatisfaction, and it can really limit on what is possible. So whether it’s pursuing additional opportunities within your organization, or perhaps for some of you, it’s starting a side hustle or business or investing in real estate, these are just a few of the many examples of how pharmacists are taking the ceiling off of their income potential. Bob Berg, the author of the Go Giver, said that your income is determined by how many people you serve and how well you serve them. I believe that to be true, whether it’s people that start their own business, whether that’s people that get started in real estate and develop great collaborations and partnerships, or whether that’s folks within their own organization that really are able to demonstrate and provide the value that then unlocks additional opportunities for them. So that’s number nine, refuse to accept your income as fixed because,

Tim Ulbrich 21:25

as we talked about earlier, all financial goals stem from the cash flow that we create by living off of less than we make. One way to do that is cut expenses. The other way we’re talking about here in our ninth point is growing our income.

Tim Ulbrich 21:37

And finally, number 10 on our list of 10 moves to become financially fit, implement systems and automation as soon as possible. Now, if you’ve listened to the show for a while, you know that I love automation, and Ramit Sethi he talks about this in his book, I Will Teach You be Rich when he says, and I agree that automation can be the single most profitable system that you ever build. And as you’re getting started, it’s the process, not the outcome. It’s the process that’s most important. Remember, this is a marathon, not a sprint, and building and automating a system is ultimately what’s going to allow you to identify and fund your goals. You are directing your financial plan rather than reacting to it. That’s what we’re talking about here with automation. And it’s so apparent, so effective, so easy to implement, but it’s vastly underutilized. It involves essentially scheduling the transfer of funds to predefined goals, and doing so confidently, knowing that you’ve already accounted for it in your monthly spending plan. That’s what we’re talking about with automation. So whether it’s paying down your debt more aggressively through extra payments, whether it’s saving and investing money to an IRA or another type of investment account, whether it’s putting money towards a down payment on a home or investment property, whatever the goal is that we’ve identified and we account for in our monthly spending plan, once we identify that goal, automation, the next step here is to move those funds after we get paid, rather than waiting to see if there’s money left over, right? It’s proactive versus reactive. Sure, it takes a little bit of time to set up, but once it’s set up, it provides a long term return on your time, benefit and peace of mind, knowing that you have thought about, you’ve prioritized and you have a plan that is working itself to fund your goals. Do not underestimate how powerful that can be in terms of momentum and confidence. Now, what does this actually look like? So for my wife and I, we have a high yield savings account. We use Ally for all our online banking, this is not commercial for Ally, but in our high yield savings account within that, we have various buckets, and we name them according to the goals that we’re setting out to achieve. Now, of course, if there’s anything that I want to go directly to an account, not to sit in a high yield savings account, right? Perhaps this would be funding a Roth IRA or a brokerage account, or putting money into 529, those are going to be automated directly to that account. But for anything else, as I mentioned before, the mental accounting and the actual accounting, for example, this year we’re finishing, right now, a basement remodel project. So we have a bucket in our high yield savings account for a basement remodel. It could be a vacation. It could be the next car purchase. It could be gifts that you are funding throughout the year. It could be your insurance, homeowners or auto insurance that you pay once a year, twice a year, that you save up through throughout the year. Right? Any of these goals, we can create a bucket, and we can automate the contribution of the funds to that, and then we can see, and have a visual representation of what our goals are, and whether we’re not or not, we’re on track to achieve those. So this system, it took us about 15 minutes to set up, and could just as easily be achieved, probably through your own bank, or if they don’t have a bucket tool like that, through tracking in a simple spreadsheet. Again, resources I have that you can see more of our system. You go to yourfinancialpharmacist.com/toolbox, feel free to download any of those templates or resources and make them your own.

Tim Ulbrich 25:06

Now, if you’re someone that’s listening, that’s feeling perhaps financially stressed or stuck or overwhelmed or confused or anxious, whether you’re a new practitioner, mid career, approaching retirement, or maybe you’re wondering, why am I not further along? Right? I’ve earned a good income, or I am earning a good income. Why am I not further along? I want you to close your eyes for a moment, unless you’re driving, of course, don’t do that and imagine a scenario where you are regularly investing in time to enhance your financial IQ, whether that’s reading, podcast, whatever you’re consistently learning and growing in this area. I want you to imagine where you have a fully funded emergency fund, where you have the peace of mind knowing that you have a backstop in place. I want you to imagine a scenario where if you have any high interest rate revolving debt, that that’s gone, and for other debt, you have a plan in place for how that’s going to be paid off and where that fits in the budget. I want you to imagine a scenario where you’re regularly tracking your net worth over time each and every month. I want you to imagine a scenario where you’re saving and investing each month and hopefully growing that each month, taking advantage of compound interest and time value of money. I want you to imagine a scenario where you’re advocating and negotiating for your income to be commensurate with the value that you’re providing and the confidence that can come from that. And I want you to imagine for a moment that you have a system in place that is accounting for and automatically funding your goals each month. And as you imagine those things. How does that feel? What emotions are coming up, and how does that contrast against those feelings of feeling stressed or stuck or overwhelmed, confused, anxious, notice that there is nothing complicated about what I have shared today. Sure, there’s a time and place for more advanced strategies, many of which we have talked about on this show, but first we have to do the foundational work that will put us in the position to take some calculated risk. And this just this isn’t just new practitioner stuff, right? I know many pharmacists, myself included, that sometimes we have to go back to the foundations, whether we’ve been out five years, 15 years or 25 years. And while all of this is pretty straightforward, you and I both know that executing consistently over time is a different challenge. So let me wrap up by saying that if you could use some help and guidance, we have a team of certified financial planners and tax professionals at YFP that can help. Your six figure income. It’s a great tool, but as I’ve said already once on this show, it is not a financial plan without a vision and a plan that good income is only going to go so far. That’s why, in part, I started Yfp back in 2015 because at Yfp, we support pharmacists at every stage of their careers to take control their finances, reach their financial goals and build wealth through comprehensive fee only financial planning and tax planning. Our team of certified financial planners and tax professionals work with pharmacists all across the country and help our clients set their future selves up for success while living a rich life today, both are important. So if you’re ready to see how yp can help support you on your financial journey, you can visit your financial pharmacist.com, and at the top right, you’ll see an option to book a discovery call that will take you to a scheduling page to book a meeting with my partner, a 60 minute meeting. Tim Baker, fee only, certified financial professional, where we’ll talk and learn about your situation, your goals, what’s working, what’s not working. We’ll share more about our services, and from there, we can determine whether or not those are good fit again, yourfinancialpharmacist.com, at the top right, you’ll see an option there to click on book a discovery call. Thank you so much for listening to this week’s episode. If you found this information helpful, do me a favor. Share this with a friend and colleague and leave us a review on Apple Podcasts which will help others find the show. Have a great rest of your day, and we’ll catch you again next week. Take care.

Tim Ulbrich 29:14

As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only, and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyzes 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 376: From Student Debt to Financial Freedom: How Brandon Paid Off $160k

Posted on by YFP Media

Brandon Gerleman, PharmD shares the strategy for how he paid off $160k of debt.

This episode is brought to you by APhA.

Episode Summary

Brandon Gerleman, a 2017 pharmacy graduate from the University of Iowa, shares his journey of paying off $160k of debt through not one, not two, but five refinances along the way. Brandon discusses his repayment strategy, why he decided for a more aggressive loan payoff, and what’s next for him and his family. He emphasizes the importance of living within your means, being aware of finances, and the impact of interest rates on repayment strategies. Brandon and his wife are now looking toward the future and he shares what other financial goals they are preparing for.

About Today’s Guest

Brandon Gerleman, PharmD is a 2017 graduate of the University of Iowa College of Pharmacy. He currently works as a Senior Product Manager on the Pharmacy Product Team at Outcomes, where he manages products to help pharmacists practice at the top of their training and provides tools to help drive pharmacy campaigns and increase efficiencies. After graduating in 2017 with $161,000 in student loan debt, he paid it off in May 2024. Brandon and his wife, Mariah, have 2 children and live in a rural community in Iowa. He enjoys spending time with his family, golfing, and watching Iowa Hawkeye football.

Key Points from the Episode

Brandon’s Passion for Personal Finance 1:36
Career Journey and Student Loan Debt 6:08
Refinancing Strategy and Financial Discipline 9:29
Balancing Financial Goals and Family Life 19:48
Future Financial Plans and Legacy 28:59

Episode Highlights

“Within that entire last seven years, though, I’ll say that we lived within our means, but we weren’t crunching pennies. We’re not in some fancy house. We’re within our means here. We still go on vacations with the kids. We still do fun things with the kids.” – Brandon Gerleman [20:59]

“For me and my wife, it was just like, how can we tackle the student debt and take that off our shoulders to then enable us to do more things? And it’s all about the family, and it was like trying to prepare for the future that way.” – Brandon Gerleman [21:38]

“At the end of the day, the math is the math, and we weren’t so aggressive, where we couldn’t do things. And we weren’t so passive, where the dollars kept loading on. So I think it was finding that right balance.” – Brandon Gerleman [22:34]

“We want to be able to live in the moment and celebrate and do things with our kids. I love the word intentional. Be very intentional about what we’re doing. We can still splurge on a Starbucks every now and then, right? You can still do things while living within your means and being intentional about how we’re how we’re approaching our student loan debt payoff.” – Brandon Gerleman [24:50]

“We’re always learning, I feel like the more aware we are around what’s happening. That’s why I was listening to all these Your Financial Pharmacist Podcasts back in pharmacy school, on fourth year rotations, and ever since, it’s just being aware. It’s always learning. It’s asking questions and trying to put ourselves in the best position for success.” -Brandon Gerleman [30:25]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

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 Brandon Gerleman onto the show, a 2017 pharmacy graduate from the University of Iowa and longtime listener of the YFP Podcast, to share his journey paying off $160,000 of debt through not one, not two, but five refinances along the way. We discuss his repayment strategy, why he decided for a more aggressive loan payoff, and what’s next for him and his family. Today’s episode of the YFP Podcast is brought to you by The American Pharmacists Association. APHA has partnered with YFP to deliver personalized financial education benefits for APHA members. Throughout the year, APHA will be hosting a number of exclusive webinars covering topics like student loan debt payoff strategies, home buying, investing, insurance needs and much more. Join APHA now to gain premier access to these educational resources and to receive discounts on YFP products and services. You can join APHA at a 25% discount by visiting pharmacist.com/join and using the coupon code YFP. Again, that’s coupon code YFP at pharmacist.com/join. All right, let’s jump into my debt free interview with Brandon Gerleman.

Tim Ulbrich 01:26

Brandon, welcome to the show.

Brandon Gerleman 01:28

Hey. What’s going on?

Tim Ulbrich 01:29

Super excited to have you on. It’s been a while since we’ve done a debt free story and celebration. So I’m certainly looking forward to that. And you and I connected back in 2023 although, as we discussed before the interview, we had some connections before that we weren’t necessarily aware of. And at the time, I saw a post that you shared on LinkedIn of a pharmacy personal finance talk that you were giving to Iowa pharmacy students. So let’s start there. Where does your passion for personal finance come from?

Brandon Gerleman 01:59

Yeah, no, I appreciate that. Definitely comes from being aware, and that, you know, just being aware of your situation, and it kind of spurs from my parents really having that instilled, instilled that at a young age, and just being aware, you know, living within your means, having the ability to kind of see everything that that has come in and coming out, and yet again, just just that awareness issue and a little bit of that pharmacist, hey, I need to control a little bit of something here.

Tim Ulbrich 02:31

I love that. And you shared with me, you know, 2017, year you graduated, you were on APPE rotations, and you ran across the YFP podcast, which helped, in part, light a spark that you certainly took and ran with, and you’ve done the hard work, but I love that you’re now giving that back as well as you’re sharing with other students, and as you and I both know this is such a topic of interest and need among pharmacists at large, but certainly students and new practitioners. So thank you for your commitment to this topic, and as you continue to share the good news with students and others as well. Before we get into the weeds on your student loans and your Debt Free Journey, how you paid them off, why you paid them off, tell us about your career path, what led you into the profession, and what’s the work that you’ve been doing since graduating 2017.

Brandon Gerleman 03:18

Yeah, for sure. For sure. Graduated in 2017. Prior to even getting into pharmacy school. I live here in a small town of 5,000 folks here in South Central Iowa, and really that independent community pharmacist and seeing the impact on what they did to the community. That sounds super cliche. You probably hear that a lot. I’m sure pharmacists talk about that a bunch. But the pharmacist at the independent community pharmacy uptown, like they were the, know it all for anything. It was, you know, drug related, it was, you know, any ailment related. It was, when’s the next bus come in? I mean, it was any question, you know, community events like they were just that go to resource. And I just, I just admired that and thought, gosh, I just, I like talking to people, love science. I think this could be a really good fit. Started working there as a pharmacist, you know, technician, tech and training prior when I was an undergrad and just ran, ran from there and never looked back. So graduated from the University of Iowa College of Pharmacy in 2017 and immediately ran back home, right. Came back to my hometown and was overseeing a lot of the clinical operations within the small pharmacy chain that we had here. And that was a really nice, fulfilling, you know, giving back to the community. Being involved in the community; was there for about two and a half years, and really had the mindset of wanting to impact more than just 5,000 in my community. So made the transition over to Outcomes MTM, where I could really help impact millions upon millions of patients. Patients, and help them with outcomes for about five years now, so been there ever since, worn a number of different hats within outcomes, been on the clinical team, been on the payer product team, and most recently, I’m on the pharmacy product team. So I’ve got a little bit of a non traditional pathway, A, B, current position, so I’m a senior product manager, and I oversee all the clinical pharmacy products for Outcomes, and so that that that involves or brings in anything from looking at our collaborative practice agreements and being on the clinical lens to review those, to writing pharmacy sponsored opportunities on the outcomes platform, to also writing clinical workflows that enable the pharmacist to, you know, to practice at the top of their license and submit as a medical bill. So really, anything clinical in the pharmacy, in pharmacy land from outcomes I oversee, and I absolutely love it. I sit with software engineers every single day, and they’re a tremendous group of folks and provide that clinical lens on a lot of what we’re doing. And it’s a very fulfilling position, a need position, and the ability to not only impact patients, but to increase efficiencies and provide more tools for pharmacists to impact even more patients and truly get that fulfilling, that point of patient care, that great, we’re in a state we can do test and treat. But what does that mean? Where do I start? What do I do? You know, how can I decrease my my risk of, you know, DIR fees, you know, how can I practice, you know, practice at the top of my license. So it’s a fun, fun position that I’m at. And been there, been been there, five years, five years now.

Tim Ulbrich 06:48

Outcomes holds a special place for me, and I didn’t share this with you in advance, and I’m dating myself a little bit. And our listeners may not know this about my career path, but I graduated back in 2008 and I spent a year residency in community practice, and then my first job out of community practice was a shared academic role with the university up in Northeast Ohio. And then I was practice component was with a local community regional chain. Giant Eagle is the name of the chain, and we were implementing medication management services across the region. That was my job to go to various stores and help them think about the clinical workflows and how to embed this into patient care models. And it was a really exciting time, right? This wasn’t too long after the passage of the Medicare Modernization Act, and this was for us in Ohio, there was a huge Medicaid contract that landed, and through outcomes was really the ability that we had to do many of these services at the time, so just really fun memories and and really being able to help expand practice at the time. So feels like it’s coming full circle as you’re talking here and sharing your career journey as well.

Brandon Gerleman 07:55

Yeah, definitely it’s that next, that next chapter, right? And now we’re just, we’re beyond just traditional MTM, and now we’re trying to help pharmacists just do more on that same platform.

Tim Ulbrich 08:05

So let’s get into the student loans. Give us the juicy details. How much debt did you have when you graduated in 2017 and what was the average interest rate on your debt at the time?

Brandon Gerleman 08:17

Yeah, did some math here, and kind of added things up. And I still have, when I first graduated, just kind of memory of seeing the number in my head there. But just shy $161,000 in student loan debt from both undergrad and grad and pharmacy school. So I’ve got twoundergrad degrees. I went the four and four route, and they averaged across all of them about 6.75% so remember, just graduated and be like, Oh, that’s a kind of a tough pill to swallow.

Tim Ulbrich 08:51

Yeah. And as you and I were talking about before we hit record, you know, the the interest rate matters a lot, and we’ll talk about how that played into your repayment journey. Unfortunately, we’re seeing those rates – I graduated again, 2008 6.8% a lot of my loans were fixed. You mentioned in the six, sevens. We’re actually seeing now rates on those unsubsidized graduate loans, you know, north of 8% so those are tough interest rates. We talk a lot about the number right, 161, 170, 180, 190. And actually the the average debt load is, we just got the latest data from the class of 2024, hovering around that hovering around that $170k mark still. So it has flattened off over the last several years. But we don’t give enough attention to the interest rate, and I think that’s going to come to life as we talk about your repayment strategy, because for you, as I understand it, it was refinancing your loans, not once, not twice, but five times, ultimately, getting your rate down to 2.24% now, before our listeners, you know, are just like, what in the world, those interest rates don’t exist today, right? So talk us through that decision to refinance. What was it primarily or only based? Based on that 2.24% because there are some considerations, right? When people take their loans from the federal system to a private lender, which is what you’re doing through a process of refinance, there are some things that you might be giving up. Oh, and by the way, when something like a global pandemic happens and there’s a freeze on interest and no payments are required, right, that was something we never could have seen coming as a potential negative impact and consequence of refinancing. So tell us about that decision to refinance and how you ultimately got to the point that that was the best plan for you.

Brandon Gerleman 10:33

Yeah, yeah. Definitely didn’t have global pandemic and halt on student loan payments in my in my Uno cards there. But yeah, for me, it was the aspect of I knew I was never going to, I shouldn’t say never, never say that you never know where the career is going to take you. But highly unlikely for me to go to a another career that kept me in that student loan forgiveness within the federal sector there. So knowing that it just came down to math, and at the end of the day, it wasn’t a jump from 6.75% directly to 2.24% it was refinancing. And I would just always got in the habit of, every three months checking, and I actually always go on on Your Financial Pharmacist and go over to see what deals were going on, right? You know what was the bonus for refinancing? What were the rates at playing around? And never, you know, never hurt your credit score by checking. And you don’t know what you don’t know. And so I would just continue to chip chip, chip away, and eventually got that down to that 2.24% with that auto pay, you know, the rate reduction there by a quarter percent. But it just came down to math. And at the end of the day, what we’re doing is, is math here. And I hate to pay in interest, oh my gosh, just to think that I’m like, giving, like, somebody giving money, and I’m paying them back, and the interest payments are, you know, what’s killing you. I just wanted to that was just a fire in the belly. Wanted to reduce that as much as possible.

Tim Ulbrich 12:05

Yeah, you know, I gave a presentation just a couple weeks ago to a group of student pharmacists, and I walked them through how interest accumulates, right? Because when we’re talking about unsubsidized loans, which you know for most pharmacy students, that’s going to be all of your federal student loans. When it comes to your pharmacy education, there’s the principal, which is the original amount that you’re borrowing, and then there’s the interest which accrues while you’re in school. I often say, Well, when I’m presenting, hey, not to scare you, but while we’re sitting here, the interest is accruing, right? That’s just a matter of fact. And then when you get an active repayment, that separate pot of interest gets added to your principal, and that grows interest. What I say is baby interest, which is referred to as capitalization. So the result of that, why that matters, is that most borrowers, myself, included my own journeys, you vastly underestimate how much you’re actually going to pay off when it’s all said and done, because you’re looking at as a pharmacy student saying, okay, you know, I’m borrowing 15, $20,000 a semester. I’ve got so many semesters, that’s the number, right? And what we’re leaving out there is the interest that accumulates in school, and then the interest that accumulates all the while in the repayment period as well. So such an important lesson, whether we’re talking about student loans, credit card debt, mortgage, car loans, anytime you’re borrowing, right? Interest is the cost of borrowing anytime a bank is lending someone money that that’s a risk they’re taking, and obviously you’re going to pay for that in the form of interest. We have to understand how that interest accumulates and how we feel as well, which is an important one that you mentioned in terms of your hate of that interest. I also want to highlight Brandon, you said something important, which I don’t want to overlook for our listeners that are thinking about their own situation. You said, Hey, I first determined that something like Public Service Loan Forgiveness wasn’t going to be my pathway. Once I made that decision, it really came down to a math, the math. And I want to highlight that, because that’s how I think about it, in terms of a decision tree, right? If there is a pathway to be considered, and it makes sense. And there’s some pros, cons, things that we gotta factor in before you ultimately make that decision. Let’s have that discussion first, if that is not a possibility, then we’re looking at, how do we maximize our repayment options and strategies? And for some people, that might be a refinance. Now, Brandon, I know our listeners are listening to say, is anybody refinancing anymore, right? Given where interest rates are at, and the answer is, actually there are, it’s certainly not anywhere to the point of what you did when you got this all the way down to the low twos. We saw that right before the pandemic. A lot of people, flurry of activity into refinancing below threes. You know, that has largely gone away for the most part, but there are many people out there who have existing private loans that may be at eight, 9, 10, 11, 12, plus percent, which is crazy to say out loud, that certainly should be considering whether or not they can move that private loan and get a better deal on that. So I just want to kind of pause for a moment and make sure we address that. So when you look at the math, clearly, you know, 6.7% down 2.24%. That looks good. What did that actually mean in terms of how much time that took off the repayment period?

Brandon Gerleman 15:11

Oh, I should have written this down! Every single time I would use the some of the calculators that that are on the Your Financial Pharmacist website and and every time I would, you know, crunch it. If I’m here, here’s where I’m at, bringing it down, here’s where I’m at. I have to dig in there. But I know it was of the 10s of 1000s of dollars, and then as far as a time, I think that’s where, that’s where I compounded and snowballed things. So like my wife and I were incredibly comfortable paying when I first graduated this, you know, unsightly amount that was more than our house payment and and thinking, Okay, well, if we’re comfortable paying that, we’re going to refinance from, you know, from A to B, and that reduced my interest rate. Well, I’m going to continue to pay that because out of sight, out of mind, but I’m going to add that extra because my payment went down. My monthly payment went down. I’m going to add that extra as principal only. And so by the time you did that five times you’re you’re knocking it down. It is dollars that you’re not even used to seeing because you haven’t seen it yet that are just snowballing toward that principle. And then every time I would refinance, I’d play around with the calculators as well. Can I, you know, decrease the duration, you know, of my student loan as well? And the last one that we did in 2021 that got me to that 2.24 I also cut it from at that point would have been seven years down to five years. And so that also helped me, you know, really snowball. And then I’ll say that anytime we had a, you know, a tax return, or any, you know, any type of dollars that we felt, hey, let’s, let’s start throwing, throwing additional dollars that way. We throw it as a lump sum, and we’d, we chase it, you know, chase a traditional payment with a principal only. Payments would only go toward that principal, and that was, you know, the combination of refinancing, reducing that, the length of that loan, continuing to pay what we were used to paying, and have it go to our principal, and then the lump sums, kind of, you know, along the way doesn’t have to be much. Can be 500 bucks. This one month can be, you know, $1,000 you know, this other month can just be adding on. Hey, let’s, you know, just add on a little bit. Add 20 bucks a month toward principal. Those small things added up where all of a sudden you became much more manageable. And every time I was very aware, I’ve said that a couple times, I’m very aware, I would always be checking, you know, you know, what’s the balance? Now, you wouldn’t check every single day. That would just drive about, you know, a person crazy. But you know, as you’re checking, then you’re noticing that your payments going more towards principal and less toward interest and and then you can start breathing a little bit, right? And then there, you know, there’s that light at the end of the tunnel and that snowball. And just continue to snowball and snowball and snowball.

Tim Ulbrich 17:58

Yeah, what I hear there is momentum and energy that is coming, which, which is really defined by that snowball approach. And we’ll talk a little bit more about that. But you know, often people will refinance to potentially save on a monthly payment, and then that frees up cash flow to do other things, no right or wrong there. That’s just an option that people choose. Others kind of take the approach you did, which is, hey, we’re going to refinance, get a lower rate, but since we’re used to this monthly payment, even though we only have to now pay 1100 bucks a month, but we’re used to paying 1500 or whatever the number is, let’s keep paying 1500 we’re going to make these principal only payments, and by doing that, we’re going to jump down the amortization table, right? And for those of you that haven’t geeked out on an amortization table, it’s important to understand these things. Again, it’s not just student loans, it’s house payments, car payments, any other type of debt. To really understand what percentage of your payment is going toward principal, what percentage of your payment is going towards interest, and after you make that payment, what’s the balance due? Oh, and by the way, if we make an extra payment, what does that mean, right, in terms of where we’re at, and so depending on your goals, what you’re trying to achieve, interest rates, all these factors are going to determine how aggressive you may or may not be in that debt repayment to that point. And you mentioned Brandon that you know, when you first started, you were paying this unsightly amount. I remember that feeling very well, and that for you, it’s Hey, I hate interest these need to be gone as quick as possible, as what I’m gathering from you, and that’s a decision point that people have to decide, right? We talked about the first branch of the decision tree, which was, Hey, are you going to pursue loan forgiveness or not? If not, then it’s a mathematical decision. Now, once you go to the next decision point, it is, how quickly do I want these gone? And what does that mean for our monthly cash flow and potentially being able to do X, Y or Z. That could be a myriad of things, right? It could be that, hey, we’re looking to save up for a home. We’re looking to buy a second investment property. We want to invest in more in our retirement. We want to have experiences. We got kids on the way. There’s a million other goals that could be coming. But ultimately, you decided that, sure. Or more cash flow would be nice, but we want these gone, you know, tomorrow. And so how did you and your wife get to that decision, that despite the rate arguably being pretty darn low when you get to that point, 2.24 and even before that pretty low, that even though those rates were coming down, you really wanted to go that aggressive repayment. What was the philosophy behind that for you guys?

Brandon Gerleman 20:20

Yeah, yeah. Great, great question. I would say it wasn’t hard to not even going to use the word convince. My wife is already on the same page. So just more of demonstrating, showing the math, and saying, you know, by doing this, you know, semi aggressive plan, instead of being done in 2027 we can be done in 2024 so that freed up, you know, three years of more than our house payment worth of student loans that then will allow us to do more things. And so I’ve got two young kids under the age of four. And, you know, now all of sudden we can, we can go out and we can maybe do something. And, you know, go on a vacation here, and within that entire last seven years, though, I’ll say that we lived within our means, but we weren’t crunching pennies. We’re not in some fancy, fancy house. We’re within our means here. We still go on vacations with the kids. We still do fun things with the kids. Went and saw Caitlin Clark play in Minnesota last week, right? So, yeah, you know, so we’re, it’s from, for me and my wife, it was just like, how can we tackle the student debt and take that and just, you know, a big relief off our shoulders to then enable us to do more things? And it’s all about the family, and it was like trying to prep for the for the future that way. Also say that the snowball doesn’t doesn’t just stop with with my student loans. We We’ve now taken what we’re used to paying for my student loans, and we’re snowballing into other things, a truck payment. My wife student loans are almost done, you know, yeah, so, like, by the end of 2024 you know, really being able to breathe. And then you know that that allows you, and I’m sure I’m leading on to the next question. You know that that allows a person to do a little bit more. And now I can start putting dollars for a 529, plan for, you know, for the kids. And I can start, you know, and add a little bit more in the 401K, which can then reduce my, you know, my taxable income. So there’s other things that that that we can consider while, you know, we have a, you know, freed up a little bit of monthly cash, you know, when it comes to looking at the cash in and out, but it’s really having that supportive spouse who, at the end of the day, the math is the math, and we weren’t so aggressive, where we couldn’t do things, we weren’t. So, you know, passive, where the, you know, the dollars kept, kept loading on. So I think it was finding that that right balance,

Tim Ulbrich 22:49

I suspect that balance was really important for the two of you to get on the same page. And it’s something I see often. It was true in our own journey as well, that, I think, where people run into some issues, especially if you have two different money belief systems. And I’m not suggesting that was the case here, but when that is the case, you know, when one person’s like, hey, we want to go all in and I want these gone tomorrow, and we’re not going to do anything. Like, obviously, there’s going to be friction there, right? And I think we often have this perception of, hey, I would love to be debt free, like Brandon’s debt free, but I’m not willing to sacrifice everything. And what I hear you saying is like, Hey, we’ve lived within our means. We’ve done hard work. I’m not going to minimize that. We’ve been intentional, but we haven’t been, you know, to the point where we’re not also enjoying things and living this rich life that we so often talk about on the show. And what I often see, and I’m confident I will see here as well, is that when someone is as intentional as you have been, and you and your wife have been for for as long as you’ve been, then when you go to the next decision point, when your wife’s loans are done, and you’re like, hey, we were putting x per month between our loans. Now what? That’s the question. Now, what? Right this money isn’t going to go off into the ether and you’re going to be like, what happened? We used to pay loans, and now we don’t know where that money went. Like, you’re going to be intentional about, hey, it’s the 529 account. Maybe it’s putting a little bit more towards investing for retirement. Maybe it’s being intentional if we’re going to take another vacation a year or, you know, do whatever it means for you guys to be living the rich life. So I love that, and I think we don’t talk often enough about that that there are benefits that come long term from how we approach our decision making and how we live today, that even when the debt’s gone, you’re gonna see the fruit of that well beyond that.

Brandon Gerleman 24:35

Definitely. And you know, I’ve seen other folks that have been on your podcast that have paid off way more in a shorter amount of time. And I think that is phenomenal. It’s kind of driving your own, you know, your own why? And for me, it was in my wife. It was like we want to be able to live in the moment and celebrate and do things with our kids. And as you know, before we had kids as a couple, but also be and I love the word intentional. Be very intentional about what we’re doing. You know, we can still splurge on a Starbucks every now and then, right? You know, you can still do things while living within your means and being intentional about how we’re how we’re approaching our student loan debt payoff.

Tim Ulbrich 25:15

As you and your wife look towards that finish line of her loans coming in the not so distant future, and obviously, as aggressive as you’ve been there, there’s going to be some cash flow available, which is exciting. And you’ve, in part, answered this. You mentioned the kids college savings of 529, accounts. I’ve heard kind of the family experience aspect of it as well. What else? What else is? Is a priority for you guys as you look towards, say, the next decade or so?

Brandon Gerleman 25:42

Man, hard to look past the next decade. When you’ve got two kids running around, doing everything every single week, there’s something new! I would say, you know, free enough to be able to start investing more, right? So because, I’m because we were so intentional about paying down debt, we weren’t as heavy on on investing. And so I would say, you know, investing personally, as well as investing in my children’s future with, you know, 529 plans. I’m that’s probably my biggest thing is, like paying it forward. I will say, here’s the nice little asterisk that I’ll throw with my 161,000 in student loan debt, my folks took care of my undergrad. So that includes, you know, around just shy or about $35,000 out of that $160k my mom and dad were very intentional to pay off for my twin sister and I, to allow us to then kind of pay it forward. So I’m really looking forward to being able to pay it, forward to my to my children. So I’d say, you know, between 529 some investing, some decreasing my taxable income, as well as saving for retirement. And then I, I think the biggest thing is, like taking a breath and just saying, Hey, we did it. Let’s just kind of, you know, relax, enjoy it for a little bit and and really enjoy the family and start doing more things and really getting those, those family experiences involved. We’re not anytime we’re doing presents for kids or anything we’re not big on, like a product or an item, like, for all those that are parents out there, Tim, yourself, included, like, man, like you, for you, the kid forgets about it maybe in two weeks, or plays with the box instead, right? Or and so those are replaceable, the the memories and the experiences are what we’re really trying to pass on, I think that’ll allow us to do a little bit more, you know, travel, and just be even more involved with our kids.

Tim Ulbrich 27:38

I love to hear that Brandon, and I’m intentionally asking the question, you know, to encourage our listeners to be thinking about this as well, and to encourage you and your wife to continue these conversations as well, because they’re so important, right? You’ve done incredible hard work with the student loan debt. You’re going to do great work with saving but, but there’s a bigger story here, right? And that’s what I’m asking about, because there will be a day. I call it the rocking chair exercise. There will be a day when I look back, when you look back and, you know, yeah, oh yeah. Remember, we paid off all that debt, yeah, we did that. You know, remember when we got to the point of financial independence because we saved for the future, and we don’t have our mortgage anymore, and our kids are taking care of, yeah, yeah, we did that. What do we remember, right? What’s the So, what? What’s the vision? What’s the engine behind all of this? And at the end of the day, money is a tool. Money has value because we all agree it has value, and as long as that’s true, it will have value, but it’s what we’re able to do with that money. And getting clear with that no right or wrong answer is really what this whole financial plan is about. So I hear a strong why of family experiences. You know, that’s something I often hear when I ask this question. You know, for other people, it might be a dream they have of starting a business, or it might be, you know, some type of giving aspect of time, reminding you’re having an option to work part time. Or it could be a myriad of things, and really getting clear on that, I think, for those that are listening, that are in the middle of the weeds of going through a journey like this. You know, it’s not a hey, I’ll think about that tomorrow. It’s, let’s think about this now, because that’s going to propel and give us some motivation while we’re in the midst of this journey. And we don’t want to wait till we get to the finish line, because this is something we constantly want to ignite the fire in the flame with. And for those that are doing this with a significant other, partner, spouse, so important, so important. We’re having these conversations because all the strategy is somewhat noise. If we aren’t clear on where are we going or why are we going there? And that really, I think, is where we see so much of the joy come and the opportunity. So I love what you shared there, Brandon, I’m so excited to see where you and your wife go into the future, and congratulations on the success that you’ve had so far.

Brandon Gerleman 29:43

Very much appreciate that. And I will say one more thing, and that is, you know, nobody pretends to be an expert in this area, right? We’re always learning. And so even myself, as I’m going through this last year, learned about, you know, a. 529 you know, Secure Act. And then I was able to, you know, throw some dollars toward that, a 529 plan over last year and this year, that even helped me from a tax benefit that I knew I was going to pay them off this year. So I might as well throw it in an account that I can kind of shelter a little bit through taxes. Had no clue about that. I was just kind of over a beer, discussing with with another colleague, and it’s like, Wait a minute. So I just just want to throw that out there that, you know, we’re always learning, I feel like the more aware we are around what’s happening. You know, that’s why I was listening to all these Your Financial Pharmacist Podcasts back in in pharmacy school, on fourth year rotations, and ever since, it’s, it’s just, it’s being aware. It’s always learning. It’s asking questions and just, you know, trying to, trying to put ourselves in the best position for success, for whatever that why is

Tim Ulbrich 30:50

What I hear there is a curiosity, a desire to learn and grow. I love that example, right? Because there’s a state tax deduction that you’re talking about from a 529 to be able to pay off your loans, and that was opened up, you know, others might be using it to pay for kids private education, you know, K through 12. That’s a relatively new thing as well. And some people might hear that and be like, Well, what actually is the dollar savings, right? And sure, you know, we could look at that and say, you know, are we talking 1000s and 1000s of dollars? No we’re not, but it’s, it’s an important example, because it’s an indication of the curiosity you have, the desire to learn, to grow. And as I often say, there is no arrive at the financial plan, as long as we are hungry to learn and grow and be open to different ideas and strategies and figure out what’s best for our plan, right? There is an infinite number of possibilities for where we could go. So that is such a cool example of what comes from from compounded learning over time. So Brandon, thanks so much for taking time, time to come on the show again. Congratulations to you and your wife. Look forward to following your journey as well into the future.

Brandon Gerleman 31:49

I appreciate it. Thanks for having me on.

Tim Ulbrich 31:51

Before we wrap up today’s episode of The Your Financial Pharmacist Podcast. I want to again thank our sponsor, the American Pharmacist Association. APHA, is every pharmacist ally advocating on your behalf for better working conditions, fair PBM practices and more opportunities for pharmacists to provide care. Make sure to join a bolder APHA to gain premier access to financial educational resources and to receive discounts on YFP products and services. You can join APHA at a 25% discount by visiting pharmacist.com/join and using the coupon code YFP. Again, that’s pharmacist.com/join using the coupon code YFP.

Tim Ulbrich 32:33

As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyzes 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.

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YFP 375: Breaking New Ground: Emmanuel Ayanjoke’s Vision for Altev Community Pharmacy

Posted on by YFP Media

Tim Ulbrich interviews Emmanuel Ayanjoke, PharmD, on his journey to opening an independent pharmacy in Avondale, tackling challenges with vision, risk-taking, and community care.

This episode is brought to you by First Horizon.

Episode Summary

In this inspiring episode, Tim Ulbrich interviews Emmanuel Ayanjoke, R.Ph, PharmD, MBA, a third-generation pharmacist with a passion for community care. Emmanuel shares his remarkable journey to opening an independent pharmacy in Avondale, Cincinnati. Driven by a desire to make a difference, he pursued a pain management and palliative care fellowship, gaining invaluable entrepreneurial experience along the way. Through the support of Project Oasis, a McKesson initiative aimed at addressing pharmacy deserts, Emmanuel was able to turn his vision into reality.

Despite facing significant financial challenges, including high student loan debt, Emmanuel underscores the importance of calculated risk-taking and the power of strong relationships. Emmanuel offers insights into the future of independent pharmacy and how he has strategically aligned his personal and business financial plans to achieve his goals. This episode is a must-listen for anyone interested in the evolving landscape of independent pharmacy and the bold steps required to succeed.

About Today’s Guest

Dr. Emmanuel (Manny) Ayanjoke, R.Ph, PharmD, MBA is the proud owner of Altev Community Pharmacy in Cincinnati, Ohio. A graduate of University of Toledo College of Pharmacy, Dr. Manny has spent over 5 years serving various communities as a dedicated pharmacist. Before opening Altev, he worked at Ziks Family Pharmacy, honing his skills, and understanding the vital role of pharmacists in community health. His work as a clinical pharmacist at Ziks had notable success and he was featured as a keynote panelist at the American Pharmacist Association (APhA) 2022 conference. Alongside his clinical role at ZIKS Family Pharmacy, Dr Manny completed a fellowship in pain management and palliative care fellow at Cedarville University where he engaged in teaching, research, patient care, as well as creation of innovative ways to advance pharmacy practice.

Key Points from the Episode

Opening Remarks and Sponsor Introduction [0:00]
Emmanuel’s Career Path and Family Background [2:28]
Pursuing a Fellowship and Entrepreneurial Vision [4:58]
The Decision to Open a Pharmacy [10:45]
Challenges and Support in Opening a Pharmacy [19:51]
Intersection of Personal and Business Finances [27:30]

Episode Highlights

“I wanted to pursue something that allowed me to be an entrepreneur in some way; I knew it had to be something that would leverage my school as a pharmacist, and with my experience, I was like, well, in every other you know, area of pharmacy practice, they’re already really the people that are dominating. I want to sort of create my own niche.” – Dr. Emmanuel Ayanjoke [5:53]

“I wanted to sort of carve out a niche for myself in pain management, to be able to be an entrepreneur, be a consultant, pharmacist, and do all these things until the point that I was able to actually stop my pharmacy so it was still in line with my overall vision of being an entrepreneur and being able to self, direct, direct my destiny, and not, you know, be beholden to a paycheck.” – Dr. Emmanuel Ayanjoke [6:24]

“I think your biggest asset to success, for anyone, any successful person, is people.” – Dr. Emmanuel Ayanjoke [20:43]

“I’m not saying this because I’m anywhere yet, but I’m saying this because I’ve seen other people, and I learned from a lot of people, but what I found is people that tend to be successful often go against the grain, go against what the crowd typically does.” – Dr. Emmanuel Ayanjoke [23:17]

“My vision and the way I see things and my general approach to life and business is sort of like planting trees, right? And what I mean by that is, yes, you might not have the perfect nutrients for a tree that’s several feet high, but you can at least plant something for now. And that that is kind of has been my approach to everything. You might not feel like you have the financial capacity to do certain things, it’s still important to plant the tree. – Dr. Emmanuel Ayanjoke [28:37]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

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 sit down with Emmanuel Ayanjoke to discuss his decision to open an independent pharmacy as a new practitioner, his perspective on the future of independent pharmacy and the intersection of his personal and business financial plans. Let’s hear a note from today’s sponsor, First Horizon, and then we’ll jump into my interview with the Emmanuel.

Tim Ulbrich 00:29

Does saving 20% for a down payment 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, meaning that saving 20% for a down payment on a home may take years. For several years now, we’ve been partnering with First Horizon, who offers a professional home loan option, AKA a doctor or pharmacist loan that requires a 3% down payment for a single family home or townhome for first time homebuyers, has no PMI and offers a 30 year fixed rate mortgage on home loans up to $766,550 in most areas. 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. While I’ve personally worked with First Horizon before and had a great experience with Tony and his team, don’t just take it from me. Here’s what Molly from New Berlin, Wisconsin, had to say about her experience with First Horizon: “The communication and always being available to talk over the phone was great for us. It also made an impact getting an initial overview and education on the process from Gail. Being able to submit everything electronically made it more efficient.” So if you want to check out the requirements for pharmacists Home Loan from First Horizon and to start the pre-approval process, visit yourfinancialpharmacist./home-loan.harmacist.com/home-loan.

Tim Ulbrich 01:58

Emmanuel, welcome to the show.

Emmanuel Ayanjoke 02:00

Thank you, Tim. I’m delighted to be here today.

Tim Ulbrich 02:03

Me as well, and I’m looking forward to the opportunity to talk to you about your experiences opening up in independent pharmacy. We crossed paths through the Ohio pharmacy circles over the past few years, and once you announced the grand opening of your store, Altev Community Pharmacy and the Avondale, Cincinnati area, I reached out to invite you on the show so we can learn more about your entrepreneurial journey. And before we get into that, let’s talk about your career path into pharmacy, Emmanuel, what led you into the profession and to the University of Toledo, where you completed your PharmD in 2020

Emmanuel Ayanjoke 02:38

Absolutely. So I, you know, I’m Nigerian. Grew up in Nigeria. That was born in Nigeria, till I was I grew up left Niger when I was about 15 years old, and I was fortunate enough to grow up in the family of that pharmacy is a thing. So my dad was a pharmacist and a pharmacy owner, and his dad was a pharmacy, pharmacy owner. Now, back then, they refer to them as chemists, because this was way back then in the days, but they were, you know, I come from a long line of pharmacists, and I would never forget when I was about seven years old, because I think that’s the age where everyone kind of starts to pick up on things. And, you know, observe our parents doing different things, and I remember so vividly, so many moments where patients will just come in. And, you know, one of the things I always like to say is pharmacists. Pharmacy in Niger is very different than here. Pharmacy is much more front line of healthcare. You went to the pharmacy first before going to the doctor, they actually the pharmacist referred you to the doctor in things that were too complex to be handled in outpatient. So I grew up in that setting, seeing my dad as a pharmacist, business owner, taking care of his family, but also taking care of the community. And people just come into the pharmacy asking questions, having their needs, health needs met. You know, it was a different way to impact people’s lives, and that resonated with me very deeply. I, you know, grew up in that environment that I knew I wanted to direct my own destiny and own a business. And what dawned on me over the years is what’s more important in owning businesses, doing something that impacts lives. So put it short, I’ve always been in pharmacy. I grew up in a pharmacy, and I didn’t see myself doing anything else, because that was what was just in front of me.

Tim Ulbrich 04:33

So third generation chemist, then, right?

Emmanuel Ayanjoke 04:36

Yes.

Tim Ulbrich 04:38

So after you finished your PharmD at the University of Toledo, you went on to pursue a pain management and palliative care fellowship. And some might be looking at that and saying, All right, so you grew up in a pharmacy environment, independent ownership, owning your own business. And this seems like a different type of an opportunity. So tell us more about the pursuit of that fellowship, and what were some of the experiences and things that you took away from that?

Emmanuel Ayanjoke 05:04

Yeah, so the reason why I went to pursue a fellowship was at the time when I was in Toledo, I was an intern, and I because I knew I wanted to own a pharmacy at some point, I decided to only work in an independent pharmacy, and that so me served me really great, because I started to experience first clients, what it took to run a business, run a pharmacy business in the United States. And I was fortunate enough to have a great pharmacy owner who showed me so many things. But you know, unfortunately, what that did to me was kind of give me a very bad perspective of how pharmacy should what pharmacy is. And I thought that, well, pharmacy is what I want to end up doing, but I don’t think it’s the time. I don’t think it’s the right time. But knowing that I wanted to pursue something that allowed me to be an entrepreneur in some way, I knew it had to be something that would leverage my school as a pharmacist, and, you know, with my experience, I was like, well, in every other you know, area of pharmacy practice, they’re already really the people that are, you know, dominating. I want to sort of create my own niche. I don’t like to follow the general trends and what people do, you know, go to AMK and those things, and those things are great, and I do a lot of that, and I did a lot of that in my career so far, but I wanted to sort of carve out a niche for myself in pain management, to be able to be an entrepreneur, be a consultant, pharmacist, and do all these things until the point that I was able to actually stop my pharmacy so it was still In line with my overall vision of being an entrepreneur and being able to self, direct, direct my destiny, and not, you know, be beholden to a paycheck. I just that idea just just doesn’t sit well with me, so that, that was why I pursued the fellowship, and was a great, great experience for me.

Tim Ulbrich 06:58

So what I hear there, Emmanuel, is there was this throughline of entrepreneurship that’s always been there, not surprising, right? Multiple generations in the family. And so you had this thought pretty early on, of, hey, I would like to own my own business, own pharmacy. Had some real life experience in independent pharmacy working for someone else, which I always recommend people that are thinking about, Hey, open up a business, get that experience, kind of see it firsthand, see what you like, what you don’t like. But through that experience, it sounds like you you butted up against the real challenges that we’ll talk about, you know, in the profession, and maybe that tampered down some of that interest, at least temporarily. And so you pursued this other pathway all the while, this through line of entrepreneurship, was there of, hey, I’m not sure exactly what it’s going to look like or when it’s going to happen, but I want to continue to pursue opportunities that are going to put me in a position in the future when I’m ready. Is that right?

Emmanuel Ayanjoke 07:49

Yep, that’s perfectly that’s that’s accurate. That’s exactly what happened.

Tim Ulbrich 07:53

One thing you said I’d love to hear more from you on is, you know, I knew that I didn’t want to be beholden to a paycheck. I sensed some emotion in that statement of just, you know, I know myself, right? I know that that’s not for me. Tell us more about you know that realization and why that was important to you?

Emmanuel Ayanjoke 08:12

Yeah, I think that realization has always been there in the one thing I didn’t also say was, my mom was also an entrepreneur. She had her home business, and she, you know, used to run convenience stores and couple gas stations back at home then. So I knew for a fact that, you know, that that’s just what I wanted to do. But, but one of the things that I’ve also learned about the system of America is the reality that, unfortunately, those who you know pay for everything is the middle class. And when I say middle class is those you know who are professionals, and you know, you’re hit with so much taxes and so many there’s so many downsides to being a W2 earner. So I realized that real, that part, but also the quite honest reality is that you’re never paid what you’re worth as a W2 earner. That’s just a reality down. There’s no two ways around it. If you were paid your worth, no one would create companies, right?

Tim Ulbrich 09:15

It wouldn’t make any sense.

Emmanuel Ayanjoke 09:17

Yeah, it wouldn’t make any sense, right? So I just didn’t like that idea. I felt like there was a lot more I need to do in this world than to have my, you know, my impact kept by being by working at a place. But that’s just what drives me, you know, again, it’s okay for most people, and that’s, that’s fine. There’s nothing wrong about it. I just didn’t, I don’t think that aligns with me, internally and throughout my life experiences.

Tim Ulbrich 09:43

Yeah, it’s interesting. And we’ll talk about the challenges of owning your own business. You know it’s real. I know it’s real. There are highs, there are lows, but it certainly does take off the ceiling. It also takes off the floor, right in terms of, you know what could go wrong, but you know what you’re sharing is very real. There’s no knock whatsoever to the path of a W2 you know, for many people, that is what makes the most sense, for a variety of reasons, but it is a reality that in the US, from a tax standpoint, the tax code is very much written in favor of people that own a business and own real estate. Those are really two things. And you know, it’s interesting we think about a lot of independent pharmacy owners, despite the challenges. You know, they’re really tapping into both of those things, and I can really sense how it was important you have that autonomy to be able to pursue not only the decision making in the business, but also to have some of the financial upside flexibility. But I want people to hear this loud and clear, like there is real downside as well when it comes to owning the business. And both must be considered, and we’ll talk about that here in a little bit. So take us back then you open the doors of the pharmacy in the Avondale, Cincinnati area in April of this year. And so at some point, you know, while you might have temporarily went away from Hey, I’m ready to open my pharmacy, it came back, right. So what was the moment where you said, All right, I’m ready to do this. And what led, what was the spark to really get into that place of alright, let’s go.

Emmanuel Ayanjoke 11:11

Yeah. So this was in 2022 which feels like last year, but two years ago, when I was in the middle of my fellowship, and I, you know, one of the things I value is network and having people around you that always look out for you. That is the value of that has just been immense in my life. But, you know, I was in my fellowship at the time, I was working part time, sort of, I mean, I wasn’t the official pharmacy manager, but I was basically the manager at the independent pharmacy that I worked at. So I was quite busy, you know, being the fellowship, doing research, and doing all these different things, and still fully commit, you know, helping out at the retail pharmacy. And I remember it was Stu Beatty, actually, from OPA.

Tim Ulbrich 12:04

Oh, no way.

Emmanuel Ayanjoke 12:06

Yeah, yes, yeah. He sent me the flyer to Project Oasis, which is the program that I got the opportunity to open the pharmacy through. And I started to learn about it. And initially I brushed it down. I was like, Well, this is some national program. There’s no chance that I’ll even get anywhere close to this. And I sort of didn’t even, you know, want to, I knew that’s what I wanted to do, but I really didn’t think I would get anywhere. And then, you know, two weeks later or so, Antonio Ciaccio who have gone to me, you know, through different experiences, and we’ve connected very well, he’s forwarded that same flyer to me, saying, Hey, I think you’d be a good candidate. I think you should apply to this. I was like, Oh, my so I guess the stars are aligned, and everyone thinks that I’m, you know, I tend to think of myself more humbly, and I didn’t think I would get anywhere. But you know, was these two folks that believed in me and encouraged me to go out and apply, and I took on the process and started doing my due diligence, drawing from my knowledge, and really leaning in on people that I know. Again, once I started to digest and understand what Project Oasis was trying to accomplish, it was almost mirror of what I wanted to do in every way right, make an impact in a place that doesn’t have a pharmacy, be the pharmacy, be the pharmacy shepherd, quote, unquote, in that community and helping address the needs and concerns of the community. So that just resonated with me on a very personal level, and it just aligned. And the biggest part of all that was that you got to open a pharmacy, but not just by yourself. You had the back end support of so many people that are committed to seeing this successful. So to me, was like, a no brainer, to at least pursue it. If it didn’t pan out, at least I learned a thing or two about writing a business plan that needed to be presented in like, you know, really, really hire people in McKesson, and so I applied for it, and that’s basically all where the story started.

Tim Ulbrich 14:22

You know, it’s interesting. Back to the through line of entrepreneurship. Emmanuel, I often say that, you know, for people and your story is such a good one, the synchronicity here is not accidental, right? So you might have kind of taken a sidestep or a pause, but it chased you down eventually, right? It chased you down in the form of Stu Beatty, now the Dean at Ohio Northern and Antonio Ciaccio, two incredible individuals in the profession and Ohio pharmacy practice that clearly saw a potential and an opportunity, and really, you know, that was a big nudge and an avenue forward. You mentioned Project Oasis a couple times. Tell us more about that for those that are listening, what exactly is that? How is that helpful to you getting this off the ground?

Emmanuel Ayanjoke 15:03

Yeah, so Project Oasis, was, you know, being that, you know, of course, I’ve been involved in no ins and out. But if you know, McKesson always tries, tries to tell everyone to just, you know, say certain lines. But I’ll give more, more back into how we started. You know, in Avondale here we had one of McKesson employees who lives and doesn’t live in Avondake, but family’s from Avondale here and has a very personal ties with community. This is way back then in 2018-2019 and he started to notice that his community was losing access to so many things. Grocery stores were closing, pharmacies were closing, and a community that’s in the heart of Cincinnati, literally, you see, health is right behind us, doesn’t have these critical things, grocery store, a pharmacy and so many other things that were needed. And there was this general talk within McKesson of trying to do a community impact project, something that would impact lives. And I think every organization of business should always try to do something beyond just their typical mission of whatever it is that they do to impact lives, because that’s where that’s all that matters at the end of the day. So they, you know, he took on the idea with support of folks within his division McKesson, that was a Russo O’Neill, okay? And he pushed his idea that, hey, let’s try to start a pharmacy where it’s needed. And they did an analysis and found that Avondale, Cincinnati, truly was, like, top of the list in terms of, you know, an urban region that doesn’t have a pharmacy, health isn’t where it needs, where it needs to be as a community level, and so many other things, disparities that were going on in Avondale, and that’s where it all started from. And, you know, fortunately, those within the higher ups of McKesson saw the impact that this project could make. And, you know, they dubbed the Project Oasis with the term that, you know, desert, pharmacy desert, and you’re putting the pharmacy there. And so, yeah, that’s what, that’s where Project Oasis started from, but one of the things that I learned through applying to it was the level of commitment that people had, not just as you know workers within this, you know, Fortune 10 company, but also the personal connection that people had towards a Project where people you know, you meet folks, are like, hey, whatever you need to be successful. I am happy to help you out. This is important. We want to make an impact in your community. So that was really, that’s really what Project Oasis is about. Now I don’t know what their what McKesson and their goal is right now with Project Oasis. But the goal was to sort of address this pharmacy deserts that come across, you know, the United States.

Tim Ulbrich 18:07

So we’ll link to that in the show notes for folks that want to learn more about that program. Do you have an idea? Manu, I’m just curious now, how many pharmacies have been supported by Project Oasis?

Emmanuel Ayanjoke 18:19

Oh, so right now, I am the first.

Tim Ulbrich 18:21

Let’s go!

Emmanuel Ayanjoke 18:22

Yeah, I’m the only one so far. And you know, it’s quite, quite a responsibility to be success, to make this successful, because a lot of other communities are, hopefully, maybe might be impacted by this. So failure is not an option. That’s how I see it. So I’m sort of a test run to see, yeah, if this can work.

Tim Ulbrich 18:45

Well, you and I both know, from a business standpoint, there will be micro failures that happen along the way. I hear you in the global failure, right? But, but naturally, for you to see this vision through, you’re going to have to embrace some level of failure along the way and take some risks. One of the things that stands out to me, Emmanuel, is that, you know, I talk with a lot of people on a regular basis, they have an idea, but it often dies at that point, right? The idea doesn’t go forward. It’s a whole nother level to actually execute, take on risk and begin to see that vision through and and I’ve since in your journey, while you’ve always thought about owning your own business, clearly the support and the resources through Project Oasis have been huge for you to say, All right, I’m ready to jump. I’m ready to move this forward. In addition to project Oasis and the team from McKesson that support you, what other resources have been critical to you as you’ve gone through this, this journey of open your own pharmacy?

Emmanuel Ayanjoke 19:41

I mean, if I started to list them out, you provide spend the next hour of this going through it. But I think the most important resource for me, in addition to the things that I try to do personally, like reading a lot of books, listening to a lot of audiobooks, has been people, the people that have gotten to meet. For me, I value relationships at a very high attribute, a very high value to relationships. So people that played a key part in my life, as been my former boss that I worked with in Zik’s Pharmacy. He’s just been a terrific human being to me, and has helped me with the realities of owning the business and how to be successful. So it’s people. I mean, I could go down a list of folks at Cedarville who have helped me personally my personal growth as a pharmacist, helping me understand certain things. It really is just people. I think the big, your biggest asset to success, for anyone, any successful person, is people.

Tim Ulbrich 20:49

Yes, relationships, people, absolutely. Especially in our profession, you know, where that community is is so small, right? Relatively speaking. And one of the things I asked you, before we hit record, I said, Hey, Emmanuel, how you doing? And you said, Hey, I’m going 1000 miles an hour, but I have so much support, so much support, and I think that speaks to the work that you’ve done in fostering those relationships, and the growth that has come from those. Emmanuel, I have to ask the obvious question that I think a lot of probably new practitioners that are thinking about owning their own pharmacy, or anyone, for that matter, that maybe is thinking about owning on a pharmacy, which is Wow, opening a pharmacy in this climate, right? We know the challenges are real. According to a recent NCPA survey, over 30% of respondents reported that they’re considering closing their doors in 2024 because of the financial challenges, and over 90% of them said that they may drop out of Medicare Part D in 2025 if the challenges still persist. So from the outside looking in, it doesn’t appear to be the best time to be launching a new pharmacy. So tell us more about how you’ve been able to, you know, see through that despite those challenges being real, and say, Hey, I’m still going to go at this.

Emmanuel Ayanjoke 22:02

I think the first thing I’ve learned in life is nothing is truly as good as it seems, and nothing is truly as bad as it seems. It’s always all gray. There’s no exactly this is black and this is white. It never is that way. It’s always all gray. And what I mean by that is, will you dive deeper and understand in a specific market the factors and headwinds going on in that market is very different. For example, in Ohio, if you’re in a Medicaid an area that has high Medicaid concentration, you have a fair dispensing fee that covers your costs of operating as a business. So that alone is a huge difference than a pharmacy that doesn’t have a high Medicaid area, right? So, yes, there’s always there. They are real, harsh realities of the pharmacy right now, even as a new business, when I look at my Medicare, you know, scripts, and performance in those scripts, I mean, I want to, I would throw my hands up and just, it’s, it’s horrifying sometimes, you know, but the reality of what I’ve learned is, you know, typically, to be successful in life. And I’m not saying this because I’m anywhere yet, but I’m saying this because I’ve seen other people, and I learned from a lot of people, but what I found is people that tend to be successful often go against the grain, go against what the crowd typically does. And there’s cycles in life. There’s always going to be naders and high points. And I think pharmacy is out of Nader right now. But when you are the Nader, that’s not necessarily negative thing. That’s a good thing when you started a native because it’s only high from there. And there’s a lot of factors and a lot of things and challenges that are going to happen in next 10 years for pharmacy to be where it needs to be. But I think that I am hopeful that we’re at the lowest point, and from here it’s just moving forward.

Tim Ulbrich 23:59

Yeah, I really hear mindset there Emmanuel, which I think is huge as a business owner, but I also hear optimism. I’m an optimist by nature, you know, as well. But I agree with you, actually, you know, it reminds me of Seth Godin talks about this in his book, The Dip, where, you know, often we go through these cycles, could be a project, could be a business, wherever you know, where we have an initial momentum and surge, and then we, you know, for whatever reason here we’re talking about market conditions and factors and reimbursement. You know, we kind of go down right, and we get to this low point, and we start to just come out of the other side of it, but we can’t yet see what’s coming. And that’s the point where a lot of people give up, you know, is when they’re in that low point, in that dip. And I think that it feels, and again, I’m a half glass full person, it feels like all signs are pointing towards some reform and these things, I think you and I look at this just as a common sense business owner, and we’re like, How in the world can this be okay to operate a business with these practices going on right? Now there’s a lot of headwinds that we’re facing in terms of why that’s the case, but I’m curious to hear from you as you look at as an owner and someone who shoulders some of the responsibility to advocate for, you know, the viability of community independent pharmacists to be able to provide the value that we know. The literature is very clear, the positive value and outcomes that a pharmacist can provide in their community, especially in an area where there’s a lack of access to healthcare. The data is clear. It’s there, but we continue to be undervalued and under reimbursed globally speaking. So as you look at this from, hey, I’m a business owner, but I’m also an advocate for the profession, what are some of those key issues that we really have to address?

Emmanuel Ayanjoke 25:35

Oh, where do I start? I think the biggest key issue is, you know, we live in a capitalistic society, and we just have to accept that reality. Our businesses are not, you know, they’re not you know, pharmacies are not nonprofits. They have to be able to make money doing a certain service. And there are two ways to incentivize people to do things. You either use the carrot or use the steak method, right? And to really move the needle on a lot of things in pharmacy practice, to get community pharmacy practice to be where it needs to be, there has to be payment reform. Reform in a sense that it covers us to operate as a business and provide those scripts, but also reform in a sense that we’re actually paid for the clinical knowledge that we provide. So those are, I mean, that sums, encapsulates lots of challenges, but those are the key. I think those are two things that need to happen for pharmacy, community pharmacy, to be where it needs to be. I think the values there. I mean, everyone is the values there. I’ve been opportunity to be on the tables with payers, physicians. I mean, everyone, even patients, everyone agrees that the values there. The challenge now is just getting rid of those barriers that allow us to be able to create a clear path to making these realistic, or, I guess, tactile, changes in the payment models that allow pharmacists to be paid.

Tim Ulbrich 27:08

Yeah, amen, you know, I think we it’s very clear. We don’t need another study to demonstrate the value of what a pharmacist can bring, right? We don’t need another pilot project, you know, to demonstrate that. They’ve been done. We see the value and the reimbursement, I think, is really the issue. And two individuals you mentioned earlier that were pivotal, you know, you started the pharmacy, Antonio Ciaccio, Stu Beatty, have been key advocates of this in the state of Ohio, you know, over the last decade, if not more. So last question I want to ask you is really the intersection between the business and the personal side of finances. You know, I talk with a lot of new graduates, and it’s not uncommon for me to hear something along the lines of, Hey, Tim, I would love to do X, Y or Z. And that could be on a business that could be, you know, do something different, work part time. It could be a variety of different things. But what comes next is my $200,000 of student loans, or insert any other financial challenge that is so common among new practitioners is a barrier to being able to go work towards these other goals that they have, right? And I think the golden handcuffs can be very real when you’re looking at a couple $100,000 of debt, and you can sign up and work for 120 130 $140,000 it’s hard to say no for that, and it doesn’t incentivize a whole lot of people to take risk in the way that you have done. So tell us about your decision, your journey to reconciling your own financial plan as a new practitioner, and ultimately making that decision to take on some risk as a business owner.

Emmanuel Ayanjoke 28:35

Yeah, absolutely. My vision and the way I see things and my general approach to life and business is sort of like planting trees, right? And what I mean by that is, yes, you might not have the perfectly, you know, I guess nutrient swallow for a tree that’s several feet high, but you can at least plant something for now, and that that is kind of has been my approach to everything, and why you might not have the financial capacity to necessarily, you know, you might not feel like you have the financial capacity to do certain things, it’s still important to plant the tree. And that’s, that’s how I see things. So I have about, honestly, have just slightly I’m a little bit better, and in comparison to a lot of pharmacy graduates, I have about $103,000 in student loans, which, which is still a lot of money, quite a lot of money. But it’s not nothing compares, in comparison to others who are just graduating. But the thing I would say is the way I would approach this is, do I have the cash flow to sustain my ability to eradicate those loans in a reasonable way? And if I do, or if I don’t, what ways can I mitigate that, even if I went to going to you know, own a business, that would be how our approach is. Because no matter how you see it, right, if owning a business is your end goal, if that’s where you want to be, time is going to go on. You know, time doesn’t wait for anyone. 10 years down the line, you’re going to be in the same place having, I mean, if you’re lucky, cleared all this debt, but at the end of the day, if this is something you want to do, you have to figure out to make your finances accommodate that in a way that makes sense. Now, again, it doesn’t mean you’re just blindly taking risks, right? Yeah, you actually have to calculate and see, okay, yeah. What is the worst case scenario if this happens, you know XYZ, and be able to be okay with that. If you can’t be okay with it, then maybe, I mean, some people, just maybe, the reality is that they actually are aren’t fit from a mindset perspective, to own a business, and that’s okay because it requires that you’re okay with, like, literally, things burning down. You just being by yourself and being able to weather through storm, you have to be okay with that reality, and that shouldn’t, shouldn’t scare you or deter you from accomplishing what you actually want to do. Yeah,

Tim Ulbrich 31:12

What I really hear there is, is, there is risk. It’s real, but it’s calculated risk, right? You’re not blindly entering into something, but we’re also not being paralyzed, you know? We could wait forever for the stars to align, you know. And I think that’s something I had to reconcile on my own entrepreneur journey. Is sure, could there be a tomorrow where it’s a better time, maybe, but there’s also a lot of things I don’t know that are going to happen tomorrow. And the question I always ask myself, not only in starting a business, but also in making decisions within the business, is, how high is the ceiling and how low is the floor. And I think my mindset, and probably for a lot of pharmacists, that I’ve kind of untrained myself, or I’m still untraining myself over time, is, you know, we tend to overestimate the worst case scenario, when, in fact, if we write it on paper, often it’s not as bad as we think it is, or built it up to be in our heads, and we maybe give we underestimate the potential of where this could go. Now, you got to be careful about that, right? If we have naive optimism, you know that that could burn us, but really assessing risk, you know, I think risk can bring a ton of emotions of fear, and we lose the objectivity of what are we actually talking about, right? What is the worst case scenario, and how can we begin to work through that? So I appreciate you sharing that as it relates to your own journey. Well, this has been fantastic. Dr. Manny, right as your patients call you, so grateful for you taking the time before you open the store today. A lot of inspiration that you provided to me in your own journey. I look forward to continuing to stay connected with you and to see where the journey goes going forward. Thank you so much for taking time to come on the show.

Emmanuel Ayanjoke 32:41

Thank you so much. Tim. Glad to be on.

Tim Ulbrich 32:45

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 and 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 homebuyers 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 pre-approval process, you can visit yourfinancialpharmacist.com/home-loan. Again, that’s yourfinancialpharmacist.com/home-loan.

Tim Ulbrich 33:30

As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment. Furthermore, the information contained in our 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 analyzes 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, action results could differ materially from those anticipated in the forward looking statements. For more information, please visit your financial pharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

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