YFP 385: Networking Reimagined: Insights from David Burkus


Tim Ulbrich revisits his 2019 conversation with David Burkus, author of Friend of a Friend, to explore how we can rethink networking and build relationships that unlock new opportunities. This episode is brought to you by First Horizon.

Episode Summary

In this week’s episode, YFP Co-Founder Tim Ulbrich revisits a 2019 conversation with David Burkus, best-selling author of Friend of a Friend, to explore how we can rethink networking and build relationships that unlock new opportunities. David, an expert in organizational behavior and network science, challenges traditional networking advice and highlights the surprising value of “weak ties”—connections we interact with less often but that can open unexpected doors. 

He also explains the power of “dormant ties,” structural holes, super connectors, and the importance of authentic engagement. Tune in for an insightful discussion on leveraging your network to drive success, both professionally and personally.

About Today’s Guest

David Burkus is a best-selling author, a sought after keynote speaker, and Associate Professor of Leadership and Innovation. In 2017, he was named as one of the world’s top business thought leaders by Thinkers50.

His book, Friend of a Friend, offers readers a new perspective on how to grow their networks and build key connections—one based on the science of human behavior, not rote networking advice. He is also the author of Under New Managementand The Myths of Creativity. David is a regular contributor to Harvard Business Review and his work has been featured in Fast Company, the Financial Times, Inc magazine, Bloomberg BusinessWeek, and CBS This Morning.

David’s innovative views on leadership have earned him invitations to speak to leaders from a variety of organizations. He’s delivered keynote speeches and workshops for Fortune 500 companies such as Microsoft, Google, and Stryker and governmental and military leaders at the U.S. Naval Academy and Naval Postgraduate School. His TED talk has been viewed over 2 million times.

Key Points from the Episode

  • Introduction to the Podcast and Sponsor [0:00]
  • Sponsor Introduction and First Horizon Home Loan [1:27]
  • Interview with David Burkus: Background and Motivation [3:09]
  • The Concept of Strong and Weak Ties [13:39]
  • Engaging with Dormant Ties [22:05]
  • Operationalizing Networking: Tools and Systems [26:08]
  • Addressing Concerns About Systematic Networking [29:21]
  • The Concept of Structural Holes [31:23]
  • The Role of Super Connectors [35:42]
  • Connecting Networking to Personal Finance [40:59]

Episode Highlights

“The goal is to make weak ties like your old friends, those people who you could pick up the phone and call and it just feels like no time has passed since the last time you’ve talked to them.” -David Burkus [17:52]

“The big lesson is, whatever is unique and authentic for you, that is a system where you’re regularly checking back in with these dormant ties that will work. You’ve got to be comfortable doing it, but once you do it, stay consistent with it.” – David Burkus [25:27]

“If you think about Facebook, for example, if you pull up a list of your friends on Facebook, it’s already sorted by how frequently you interact with those people, right? And in a lot of other places, you can ask for it to sort your existing connections that way, right? So scroll all the way down to the bottom, boom, we’ve already found some of your dormant ties.” – David Burkus [22:01]

“What I tell people, if you get all the way to the end of the day and you haven’t thought of something, you can send a three sentence email that will, believe it or not, jump start a conversation, and the three sentences are: “I was thinking about you today. I hope you’re well. No reply needed.” – David Burkus [24:11]

Links Mentioned in Today’s Episode

Episode Transcript

 

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First Time Homebuyers: Top Considerations Before Making Your Purchase

Paid Partnership with Tony Umholtz, First Horizon

This is a paid post as part of a sponsorship agreement with Tony Umholtz, a mortgage loan officer at First Horizon.

Before embarking on your homebuying journey, it’s essential to understand the key factors that will influence your decision. From assessing your financial readiness to understanding your mortgage options, knowing what to consider beforehand can make your first home purchase a smoother and more informed process.

Financial Readiness

Before you start browsing listings, it is crucial to understand how much house you can afford.  A good rule of thumb is that your monthly housing costs (including mortgage, property taxes, and homeowners’ insurance) should not exceed 32% of your gross monthly income. Additionally, your total monthly debt payments (including your mortgage, car loans, student loans, and credit card payments) should not be more than 43% of your gross monthly income.  With our Pharmacist loan, First Horizon can go up to 50% in certain circumstances. 

Your credit scores will play a significant role in your rates and qualification for mortgage programs. Saving for a down payment and closing costs can be a big hurdle. First Horizon’s program offers a low-down payment requirement of 3% for first-time homebuyers and 5% down for non-first-time homebuyers. This can help with the out-of-pocket cost of purchasing your new home. At First Horizon, we offer several different programs as we know each borrower has unique circumstances, so please feel free to reach out so we can place you in a mortgage that is best for you.

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Understand Your Home Wants and Needs

Once you know what your budget for your new home is, your next step is to define your wants and needs.
 
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Location

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Type of Home

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Must Haves vs Nice to Haves

It’s important to distinguish between features your new home must have and items that would be nice to have, including the number of bedrooms, yard size, garage, swimming pool, and fireplaces.

Working With a Professional Realtor

Working with a professional realtor could help with finding the perfect home for you.

Realtors can be a great asset in finding your home with their knowledge of the area and can help you sort through your options to view the best homes for your situation. The realtors will be able to make informed offers and negotiate for you.  If you need assistance in finding a professional realtor, please let us know as we work with a lot of great realtors who could be essential in your home buying process.

Conclusion

In conclusion, buying your first home is a significant and exciting step, but it requires careful planning and consideration.
 
By assessing your financial readiness, understanding your mortgage options, defining
your needs and wants, working with professionals, considering long-term implications, and making informed offers, you can navigate the home-buying process with confidence.
 
Take your time, do your research, and don’t be afraid to ask for help from experts along the way. Your dream home is out there, and with the right preparation, you’ll be well on your way to finding and securing it.

Find the Best Home Loan for You

Regardless of the type of property you want to purchase, finding the right loan requires a lot of research and expertise. Fortunately, you can turn to the professional loan officers on the Umholtz Team at First Horizon Mortgage. Tony Umholtz leads a team of experienced loan officers that provide you with high-quality home loan programs, tailored to fit your unique situation with some of the most competitive rates in the nation. Whether you are a first-time homebuyer, relocating to a new job, or buying an investment property, our expert team will help you use your new mortgage as a smart financial tool. Tony and his team can be reached at 813-603-4255 or by email at [email protected] 

You can learn more about the Pharmacist Home Loan offered by First Horizon here.

YFP 384: Beyond Salary: Negotiating Your Value in the Workplace


YFP Co-Founders Tim Baker and Tim Ulbrich discuss essential negotiation skills inspired by Chris Voss’s book, Never Split The Difference, covering key strategies to boost your financial plan, mindset, and confidence.

Episode Summary

In this episode, YFP Co-Founders Tim Baker and Tim Ulbrich have a valuable conversation on negotiation—an essential skill that impacts not only finances but also mindset and confidence. Inspired by Chris Voss’s book, Never Split The Difference, Tim and Tim explore negotiation techniques drawn from Voss’s experience as a former FBI hostage negotiator and break down why negotiation is vital for your financial plan, key goals, and practical strategies for navigating each step.

About Today’s Guests

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).

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

  • Importance of Negotiation in Financial Planning [0:00]
  • Introduction to Negotiation and Its Role in Financial Planning [1:23]
  • The Process and Importance of Negotiation [6:45]
  • Employer Expectations and Employee Responsibilities in Negotiation [13:07]
  • Strategies for Effective Negotiation [17:09]
  • Counteroffers and Leveraging Non-Salary Terms [32:18]
  • Tools and Techniques for Negotiation [37:19]
  • Applying Negotiation Strategies in Financial Planning [46:54]
  • Conclusion and Final Thoughts [47:08]

Episode Highlights

“Negotiation is really a process of discovery. It really shouldn’t be viewed as a battle. It’s really a process of discovery.” – Tim Baker [5:58]

“I think there is often a sentiment and I know I’ve felt it myself, where, you know what, I’m glad to have a position. I’m glad to be making a good income. But that can be true, and you still can be a good person, and you still can negotiate and advocate for yourself and the value you bring to the organization.” – Tim Ulbrich [6:20]

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. Negotiation. That’s what we’re talking about today, an important skill that many of us were not taught, and one that can move the needle significantly, yes, financially, but also in terms of mindset and confidence. One of my favorite resources on this topic is the book never split the difference by Chris Voss. I first heard this book on a podcast interview several years ago where Chris was demonstrating his quote late night DJ voice, which is one of the fun techniques he describes in that book. Now, if you haven’t read the book before. In addition to listening to today’s episode, check it out and make sure to do the audio version. It’s fantastic and really drives home the examples used throughout. Chris is a former FBI international hostage negotiator who took what he learned from high stakes negotiation and brought it to us for everyday use. Now, considering that effective negotiation can have a big impact on your financial plan. This week, we’re hitting replay on an episode that Tim and I recorded back in August of 2020 during the show, we discussed why negotiation is important your financial plan, the goals of negotiation and tips and strategies for different parts of the negotiation process that you can implement in your own negotiation. Make sure to listen all the way through as I’m confident in saying, there will be a positive return on your time investment. One last thing, unlike traditional financial planning firms, our team of certified financial planners at Yfp is experience in helping our clients through negotiations, whether that be negotiating within an organization for a new position or to increase salary or for someone looking for a new job, if we can help with your negotiation, head on over your financial pharmacist.com click on book a discovery call so that we can learn more about your situation and see whether or not our services are the right fit for You. All right, let’s jump into our conversation on effective negotiation. Tim Baker, welcome back to the show.

Tim Baker  02:08

Yeah, happy to be here. How’s it going?

Tim Ulbrich  02:09

Tim, it’s going excited to talk negotiation something we discuss a lot, a lot in presentations, a lot. I know that you discuss with clients as a part of the financial plan, but we haven’t addressed it directly on the show before. So I’m excited that we get a chance to dig into this topic. And we know that negotiation can carry a lot of power, and can be used across the board, really, in life, right? Could be negotiating terms for a new or existing job, position, buying a car, buying a house, negotiating with your kids or spouse, kidding, not not kidding, as we’ll talk about here in a little bit, so we’re going to focus predominantly on salary negotiation, but really, these techniques can be applied to many areas of the financial plan and really life as a whole. So Tim, I know that for you, negotiation is a key piece of the financial plan, and you and our CFPs over at Yfp talk about negotiation in the context of financial planning, which I would say is probably not the norm of the financial planning industry and services. So let’s start with this. Why is negotiation such an important piece of the financial plan?

Tim Baker  03:14

Yeah, so I think you know, if we, if we look at why, if peace mission, you know why? If he’s mission is to empower pharmacists to achieve financial freedom. So I think the building blocks of that really is kind of what we do day in and day out with with clients at Yfp plan. And what I what I typically, or the way that we typically approach a financial plan, is we really want to help the client grow and protect their income, which is the lifeblood of the financial plan. Without income, nothing moves. But we know that probably more importantly than that is grow and protect the balance sheet, the net worth, which means increase in assets efficiently and decrease in liabilities efficiently and ultimately moving the net worth number in the right direction. So those are, you know, both quantitative things, but then qualitatively, we want to make sure that we’re keeping all the goals in mind. So grow and protect income and net worth while keep the goals in mind. So to me, that’s, that’s our jam, you know. So you know when I when I say, you know, when somebody asked me a question, like we do the ask a wife, pcfp, and I’m like, I always say, Well, it depends. A lot of it depends, really, on those, those foundational like, where are we at with the balance sheet, and where do we want to go? Meaning, what? What are our goals? What’s our why? What’s a, what’s the life plan? You know, what’s a wealthy life for you? And how can we support that with the financial plan? So to go back to your question, you know, my belief is that the income is a is a big part of that. And you know, what I found with working with many, many pharmacists is sometimes, and sometimes pharmacists are not just, you know, not great at advocating for themselves. You know, most of the people that I talk to, you know, when we talk about salary negotiation, they’re like, um. You know, I just thankful I have a job, and I’m in agreement with that. But, you know, sometimes a little bit of negotiation and having some of the skills that we’ll talk about today to better advocate for yourself is is important, and it’s in a lot of this stuff is not necessarily just for salary. It can be for a lot of different things. But to me, what I what I saw as a need here. You know, same thing, like most financial planners don’t walk, walk you through kind of home purchase and what that looks like, because most financial planners are working with people in their 50s, 60s and 70s. So a lot that was a need for a lot of our clients were like, Hey, Tim, I’m buying this house. I don’t really know where to start. So we, we, you know, provide some education and some recommendations and advice around that. So same thing with salary. It’s like I kept seeing like, well, maybe, you know, maybe I, you know, I took the job too quickly, or, you know, I didn’t advocate for myself. So that’s really where we want to provide some education and advice, again, to have a better, better position from it, from an income, income perspective, yeah. 

Tim Ulbrich  05:58

I think it’s a great tool to have in your tool bag, you know? And I think, as we’ll talk about here, you know, the goal is not to be an expert negotiator. There’s lots of resources that are out there that can help with this and make it tangible and practical, one of which will draw a lot of the information today. I know that you talk with clients, a resource I love, never split the difference by Chris Voss, but I’m glad you mentioned. You know, I think there is often a sentiment. I know I felt it myself, where, you know what, I’m glad to have a position. I’m glad to be making a good income. But that can be true, and you still can be a good person, and you still can negotiate and advocate for yourself and the value you bring to the organization. Yeah, so I hope folks will hear that and not, not necessarily think that negotiation is bad, and as we’ll talk about here in a moment, I think really can have a significant impact when you think about it as it relates to earnings over your career and what those additional earnings could mean. So Tim, break it down for us. What is negotiation? And really thinking further, why is it important?

Tim Baker  06:57

Yeah, so, so negotiation, you know, it’s really a process of discovery. You know, it really shouldn’t be viewed as as a battle. It’s really a process of discovery. It’s kind of that awkward conversation that you’re you should be obligated to have, because, you know, if you, you know, if you don’t want to advocate for yourself professionally, who will, and maybe you have a good mentor or something like that. But to me, the the negotiation again, is really to discover, you know, what, what you want, and kind of what you’re the counterpart you know, which might be a boss or a hiring manager or something like that. And it’s an it’s really important, because, you know, settling for a lower salary can have really major financial consequences, both both immediately and down the road. And you know, you you typically raises that you receive are typically based on a percentage of their salary. So we’re, hey, we’re going to give you a, you know, 3% raises here, a 5% raise if you start off with a salary that you’re not happy with. You know that then obviously, that’s, that’s a problem. Accrue less in retirement savings. So that TSP, that 401, K, 403, B, again, you typically are going to get some type of match in a lot of cases, and then you’re going to put a percent in. So again, that could potentially be lower, but it’s, it is. It’s not just about salary. It can be, you know, I think another mistake that sometimes people make is that they’ll say, oh, wow, I was making, you know, 125 and, you know, I’m taking a job that’s paying me 135 and they take a major step back on some of the non salary, things like benefits and flex scheduling and time off and things like that. But you know, you really want to make sure that the compensation package that you have, you know you’re happy with, because being overpaid, being underpaid, really can make you feel resentful over the long run. So you want to make sure that you’re, you know, again, you know, right now, we’re filming this in the midst of a pandemic, and you know the economy and the job market is tough, but you know, you still want to, you still want to advocate for yourself and make sure you’re getting the, you know, the best compensation package that that you can.

Tim Ulbrich  08:56

As we’ll talk about here in a little bit, I think If we frame this differently than maybe our understanding or preconceived beliefs. You know, you mentioned it’s not a battle, you know. I think the goal is that you’re trying to come to an agreement or an understanding. And as we’ll talk about here, many employers are likely expecting this, and that number, in terms of those that are expecting versus those that are actually engaging in the conversation, from an employee standpoint, is very different. So I think that might help give us confidence to be able to initiate some of those. And we’ll talk about strategies to do that. I do want to give one example, though. Tim, real quick, you mentioned, you know, obviously, if somebody earns less and they receive smaller raises, or they accrue less in retirement savings, that can have a significant impact. And and I went down the rabbit hole, prepping for this episode of just looking at a quick example of this, where you have two folks that, let’s say they both start working at the age of 28 they retire at their 65 so same starting point, same retirement age. Let’s assume they get a 3% cost of living adjustment every year for their career. Just to keep it simple, you. The only difference here is that one starts at 100k and one starts at 105k so because of either you know what, what they asked for negotiations, whatever be the case, one starts $5,000 greater than the other. And if you play this out, same starting age, same ending age, same cost of living adjustments, one starts at a higher point when it’s all said and done, one individual has about $300,000 more of earnings than the other. And this, of course, does not include differences that you’d also have, because a higher salary, if you have a match, that would increase, that would compound, that would grow, if you were to switch jobs, you’re at a better point of now negotiating from a higher salary. All other benefits that aren’t included. But the significance of the starting point, I think, is something to really look at those numbers that often where you start can inform where you’re going, not only from cost of living adjustments, but also future employment, right? So we know that where you start, if you get a 3% raise, it’s of course, gonna be based off that number. You decide to leave that employer and you go to another one, what do they ask you? How much did you make? You’re using that number. So that starting point is so critical, and I hope that new practitioners might even find some confidence in that, to be able to engage in discussions knowing how significant those numbers can be over a career. So in that one example, that starting point is a difference of about $300,000 Crazy, right? 

Tim Baker  11:24

When you look at over a long time period, yeah, it’s not, it’s nuts. And I’d pay the devil’s advocate, you know, on the other side of that is that, you know, again, so much, just like everything else with with the financial plan, you can’t look at it, you know, in a vacuum, we’ve had clients, yeah, take a lot less money, and really was because of the the student loans, and how that would affect their strategy in terms of forgiveness and things like that. So, yeah, it is multifactorial. It’s definitely something that it should really be examined. And I think again, when you look at the overall context of the financial plan, but it to your point, Tim, that that start in salary, and really you know how you negotiate throughout the course of your career is going to be utterly important. And you know, again, what we say is, with, you know, we, we kind of downplay the income, because I think, you know, so much of what’s kind of taught us, like, oh, six figure salary, you’re you’ll be okay. And that’s not true. But then, you know it is true that it is the lifeblood of the financial plan. So I think if you have a plan and you’re intentional with what you’re doing, that’s where you can really start, you know, making moves with regard to your financial outlook,

Tim Ulbrich  12:26

yeah, and I’m glad you know you said that about salary shouldn’t be looked at in a silo. I mean, just to further that point, you you’ve alluded to it already, these numbers don’t matter. If there’s other variables that are non monetary that matter more, right? Whether that be time off or satisfaction in the workplace, opportunities that you have feelings that will come. I mean, the whole list of things that you can’t necessarily put a number to. I mean, I would argue if, if those are really important, you’ve got to weigh those against, you know, whatever this number would be, and there’s a certain point where the difference in money is it worth it? You know, if there’s other variables that are involved, which, which, usually there are, hopefully we can get both right salary and and non salary items. Yes. So interesting stats about negotiation. I’ve heard you present before on this topic, but I’d like you to share with our audience in terms of managers that are expecting hires to negotiate, versus those that do talk us through some of those as I think it will help us frame and maybe change our perception on employers expecting it and our willingness to engage in these conversations.

Tim Baker  13:34

Yeah, and I really need to cite, to cite this one. And I believe, I believe this first stat comes from Sherm, which is the Society for Human Resource Management. So I think this is, like the biggest association for, like HR and human resource personnel in the country. And the stat that that I use is that, you know, 99% of hiring managers expect prospective hires to negotiate. So if you think about that, you know, and you know, the overwhelming majority expect, you know, you the perspective hire to negotiate, and they build their initial offers as such. So, you know, the example, you know, I did the clients, is like, hey, you know, we have, you know, we have a position that we could pay, you anywhere from you know, 110,000 to 130,000 knowing that you know, Tim, if I’m offering this job to you, knowing that you’re probably going to negotiate with me, I’m going to offer it to you for 110 knowing that I have a little bit of wiggle room if you kind of come back with a counter offer. But what a lot of a lot of my clients, you know, or people do that I talk with is they’ll just say, Yes, I found a job. Crappy, crappy job market, you know, happy to get started, ready to get started. And there’s and they’re, they’re either, you know, overly enthusiastic to accept a job, or they’re just afraid that a little bit of negotiation would would, you know, hurt their, yeah, you know, hurt their outlook. So. So with that in mind is that you, you know the the offers, I think, are built in a way that you know you should, you should be negotiating and trying to, again, advocate for yourself.

Tim Ulbrich  15:09

Yeah, and so if people are presenting positions often, you know, with with a range and salary, expecting negotiation, I hope that gives folks, you know, some confidence and okay, that’s probably expected, and maybe shift some of the perception away from this whole thing could fall apart, which it could right at any given point in time, especially depending on the way you conduct yourself in that negotiation, which I think is really, really important to consider. But I think what we want to try to avoid, Tim, back to a comment you made earlier, is any resentment, right as well. I mean, if we think about this from a relationship standpoint. We want the employee to feel valued, and we want the employer to have a shot at retaining this individual long term, right? So it’s a two way, two way relationship,

Tim Baker  15:50

And it kind of, it kind of comes up to where, you know, we were talking about, what is, you know, what is the goal of negotiation? And really, the goal of negotiation is, is to come to some type of agreement. Yeah, the problem, the problem with that is, is that people are involved in this, and we as people are emotional beings. So if we feel like that, we’re being, you know, we’re treated unfairly, or we don’t feel safe and secure, or if we’re not in control of the conversation, you know, our emotions can get the best of us. So that’s that’s that’s important. So there again, there’s some techniques that you can, you know, utilize to kind of mitigate that. But you know, to allude to your point about, you know, negotiating the fear to kind of, you know, potentially mess up the deal. You know, there’s a stat that says 32% don’t negotiate because they’re too worried about losing the job offer. Yeah, I know Tim, like we can attest to this, because, you know, with our growth at Yfp, we’ve, we’ve definitely done some, some human resource in use that as a verb, and hiring and things like that of late. And I gotta say that, you know, the I think that some of this can be unfounded, just because there’s, there’s just so much, you know, blood, sweat and tears that goes into fire, you know, to fight finding the right people, to kind of surround, you know, yourself with, and bring into an organization that, to me, a little bit of back and forth is not going to ultimately lose the job. So typically, most, most jobs, there’s, you know, interview, you know, obviously there’s, there’s an application process, there’s interviews, there’s second interviews, there’s maybe on site visits, there’s kind of, you know, looking at all the candidates and then extending offers. If you get to that, that offer stage, you’re, you’re you’re pretty, you know, they’ve identified you as they’re the, you’re the person that they want. So, you know, sometimes a little bit of back and forth is not going to, you know, derail any such deal. So that’s, it’s really, really important to understand that, yeah, and

Tim Ulbrich  17:45

As the employer, I mean, we’ve all heard about the costs and statistics around retention. So as an employer, when I find that person, I want to retain them. That’s my that’s my goal. Right now, I want to find good talent on a retain good talent. So I certainly don’t want somebody being resentful about, you know, the work that they’re doing, the pay that they have. And so I think if we can work some of that out before beginning and come to an agreement, it’s a good fit for us, good fit for them, I think it’s also going to help the benefit of the, hopefully the long term relationship of that engagement. So it’s one thing to say, we should be doing it. It’s another thing to say, Well, how do we actually do this? Well, you know, what are some tips and tricks for negotiation? So I thought it’d be helpful if we could walk through some of the stages of negotiation, and through those stages we can talk as well as beyond that, what are some actual strategies to negotiation? Again, another shout out to never split the difference by Chris Voss. I think he does an awesome job of teaching these strategies in a way that really helped them come alive and are in our memorable Yeah. So, Tim, let’s talk about the the first stage, the interview stage, and what are some strategies that that those listening can take when it comes to negotiation in this stage.

Tim Baker  18:56

Yeah? So, so I kind of, when I, when I present, you know, these concepts to a client. I kind of said that the, you know, the four stages of the of negotiation are fairly, are fairly vanilla, you know. And the first one is the, you know, that interview. So when you get that interview, you know, what I say is, you know, typically you want to talk, talk less, listen more and learn more. Typically, the person that is talking the most is, is, is not in control. The conversation, the one that’s listening and answering, asking good questions, is in control. And I kind of, I kind of think back to, you know, some of our recent hires, and, you know, the people that we identify as, like, top candidates, I’m like, Man, their interviews went really well. And when I actually think, think back and slow down, it’s, it’s really, I think that they went really well, because there’s, it’s really that person asking good questions, and then, and then me just talking, and and, and that’s, and that’s like the perception, so in that, in that case, like the, you know, the candidate was asking us good questions, and we’re like, yeah, these, this was a great interview, because I’d like to hear myself talk, or I just get really excited. About, you know, what we’re doing at Yfp. So I think if you can really, you know, focus on your counterpart, focus on the organization, you know, whether it’s the hospital or whatever, whatever it is, and learn, and then the, you know, and then really pivot to the value that you bring. I think that’s going to be important, you know, most important. So, you know, understanding, you know, what, what some of their maybe pain points are, whether it’s retention or, you know, maybe some type of, you know, care issue, or whatever that may be, you know, you can kind of use that to your advantage as you’re as you’re kind of going through the different, you know, stages of negotiation, but the more that the other person talks, you know, the better. I would say, you know, in the interview stage, you know, one of the things that often comes up, you know, that can come off fairly soon, is the question about salary. And, you know, sometimes that is, you know, it’s kind of like a time saving. So it’s a Hey, Tim, you know, what are you looking for in salary? If you throw out a number that’s way too high, like, I’m not even gonna, you know, waste my time. And what I tell clients is, like you typically, you want to, and we’ll talk about anchoring. You really want to, do? You really want to avoid, you know, throwing, throwing a number out and for a variety of reasons. So one of the deflections you could use is, hey, I appreciate the question, but I’m really trying to figure out if I’d be a good fit for your organization. You know, we let’s talk about, you know, negotiate, or let’s talk about salary when the time comes. Or the other, the other piece of it is, it’s just, you are not, you’re not in the business of offering yourself a job. And what I mean by that is it’s, it’s their job to basically provide an offer. So, you know, hey, my current employer, you know, doesn’t really allow me to kind of reveal that kind of information. What did you have in mind? Or we know that pharmacy is a small business, and I’m sure your budget is, you know, is reasonable. What did you have in mind? So at the end of the day, it’s, it’s their job to extend the offer, not you, to kind of negotiate your against yourself, which can happen, you know, I had a, I had a, we signed on a client here at Yfp planning yesterday, and we were talking about negotiation. I think it was kind of had to do with that tax issue. And, you know, he he basically said this is what he was looking for. And then when he got into the organization, I think he saw the number that was budgeted for, and it was a lot more so. Again, if you can deflect that, and I tell a story, when I first got out of the army, I kind of knew this. But when I first got out of the army, I was interviewing for jobs, you know, I was in an interview, and I deflect it. And I think the guy asked me again, and I deflect it. I think he asked me for, like, maybe that asked me for like, four times, and I just wound up giving him a range that was, like, obnoxious, 100 to 200,000 or something like that. But to me, you know, that in the interview didn’t go, go well after that. But to me, it was, like, it was more about, you know, clearing the slate instead of actually learning more about me and seeing if I was a good fit. So you never want to lie about your current style. If they ask about your current style, you never want to lie, but you definitely want to deflect and move to things of like, okay, can I potentially be a good fit for your organization? And then go from there? Yeah. And

Tim Ulbrich  22:55

I think deflection takes practice, right? I don’t think that comes down to many of us. Totally, yeah. Yeah, this, this reminds me. So, you know, talk less, listen more for for any Hamilton folks we have out there, which is playing 24/7 in my house these days, the soundtrack, I’m not gonna, I’m not gonna sing right now, but talk less. Smile, smile more. Don’t let them know what you’re against or what you’re for. So I think that’s a good, good connection there to the interview stage. So next, hopefully comes the good news. Company wants to hire you makes an offer. So Tim, talk us through this stage. What? What should we be remembering when we actually have an offer on the table? Yeah, so

Tim Baker  23:30

I think you definitely want to be appreciative and thankful again when, when a company gets to a point where they’re extending you an offer, that’s, that’s, that’s huge. I remember when I got, again, my first offer out of out of the Army, because, again, you don’t really have a choice when you’re in the army. Well, I guess you do have a choice, but you know, they’re not like, here’s a here’s a written offer for your employment in this platoon somewhere in Iraq. But I remember getting the first offer. I’m like, Man, this is awesome. Shows your salary and the benefits and things like that. So you want to be appreciable and thankful you don’t appreciative and thankful. You don’t want to be you want to be excited, but not too over excited. So you don’t want to appear to be desperate. What I tell clients, I think the biggest piece here is make sure you get it in, write in, yes, and I have a, you know, a story that I tell him, because if it’s not in writing and what essentially says it didn’t, didn’t happen. So again, using some personal experience here, you know, first job out of the army, I had negotiated, you know, basically an extra week of vacation because I didn’t want to take a step back in that regard. And I got the offer, and the extra week wasn’t there. So I talked to my, my, you know, my future boss, about it, and he said, You know what, I don’t want to go back to headquarters and, you know, in ruffle some feathers. So why don’t we just take care of that on site here, and this was the job I had in Columbus, Ohio. And I said, Yeah, okay, I don’t really want to, you know, ruffle feathers either. The problem with that was when he got replaced, when he was terminated, eight months later, that currency burned up fairly quickly. Be so I didn’t have that, you know, that that extra week of vacation. So, you know, if it’s not written down, it never happens. So you want to make sure that, you know, you get it in, right in, and really go over that written offer extensively. So some employers, they’ll, they’ll extend an offer, and they want to, you know, a decision right away. I would walk away from that, you know, to me, a job change, or, you know, something of that magnitude, you know, I think warrants a 24 if not a 48 probably a minimum of 48 hour, you know, time frame for for you to kind of mold over and this is typically where I kind of, I come in and help clients, because they’ll say, Hey, Tim, I got this offer. What do you think? And we go through it, and we look at benefits, and we look at, you know, the total compensation package and things like that. But, you know, you want to, you know, ask for, you know, ask for a time, you know, some time to review everything and then agreed, you know, definitely adhere to the agree, agreed upon deadline to basically provide, you know, an answer or counteroffer, or, you know, whatever, whatever the next step is for you.

Tim Ulbrich  26:01

Yeah, and I think too, the advice to get it in writing helps buy you time. You know, I think you asked for it anyways. And I think the way you approach this conversation, you’re setting up the counter offer, right? So the tone that you’re using, it’s not about being arrogant here. It’s not about, you know, acting like you’re not excited at all. I think you can strike that balance between you’re appreciative, you’re thankful. You know, you’re continuing to assess if it’s a good fit for you and the organization you want. Some time you want it in writing, and you’re beginning to set the stage. And I think human behavior, right? Says if, if, if something is either on the table or pulled away slightly, the other party wants it a little bit more, right? So yes, if I’m the employer, and I really want someone, and I’m all excited about the offer, and I’m hoping they’re gonna say yes, and they say, Hey, I’m really, really thankful for the offer. I’m excited about what you guys are doing. I need some time to think about X, Y and Z, or, you know, I’m really thinking through X, Y or Z, like, all of a sudden, that makes me want them more, you know. So I think there’s, there’s value in in setting up, what is that, that counter offer? So talk to us about the counteroffer. Tim, break it down in some strategies to think about in this portion. Yeah.

Tim Baker  27:10

So, you know, the the counter offer is, I would say, you know, the majority of the time you should counter in some way. I think you’re expected to make a counter. And again, we kind of back that up with some stats. But you also, you need to know when, you know when not to kind of continue to go back to negotiating table, or when, when you’re asking or over asking. So, you know, I think research is going to be a good, you know, part of that, and I, what I tell clients is like, I can give them a very nice, non scientific I’ve worked with so many pharmacists that I can kind of say, oh, that sounds low, you know, in this for community pharmacy or industry, or whatever, you know, hospital in this area. So, you know, it’s, it’s, it’s your network, which could be someone like me, it could be a call, you know, colleagues. But it could also be things like Glassdoor, indeed, salary.com, so you want to make sure that your, you know, your offer, your counter offer, it is backed up in some type of, you know, fact, and really, you know knowing how to maximize your leverage. So if you are you know if you do receive more than one substantial offer, you know, you know from multiple employers, negotiating may be appropriate if the two positions are comparable and then, or if you have tangible evidence that the salary is too low, you know you have a strong position to negotiate. So I had a client that knew that new, newly hired pharmacists were being paid more than than she was, and she, you know, she had the evidence to show that. And basically they went back and did a nice adjustment. So, but again, I think as you go through the way that we kind of do this, you know, with clients, is we kind of go through the the entire letter, and, you know, the benefits and and I basically just highlight things and have questions about, you know, match or vacation time or salary and things like that. And then we start constructing it from there. So if you look at again, the thing where most people will start a salary is, you know, you really want to give. When you counter, you really want to give a salary range, rather than, like a number. So what I say is, if, a if, if, if, if you say, Hey, Tim, I really want to make $100,000 I kind of said it’s almost like the big bad wolf that blows the house down like all those zeros is, it’s not, it’s there’s no substance to that. But if you said, Hey, I really want to make $105,985 the the Journal of experimental social psychology says that using a precise number instead of a rounded number gives it a more potent anchor. So your homework, right? Yeah, you know, you know what you what, you know, what you’re worth, you know, what the positions worth? It’s given the appearance of research. So I kind of like, you know, it’s kind of like the gap the Zach Galifianakis, me, that has all the equations that are flowing. It’s kind of like that. But the the $100,000 you can just blow that house over. So, and I think so. So once you figure out that number, then you kind of want to. Change it so, you know, they say, if you give a range of, you know, you know, of a salary, then it opens up room for discussion, and shows the employer that you have flexibility, and it gives you some cushion. In case, you know, you think that you’re asking for a little bit too high so that’s, that’s going to be, that’s going to be really, really important is, is that to provide kind of precise numbers in in a range, and, oh, by the way, I want to be kind of paid at the upper, upper echelon of that. So

Tim Ulbrich  30:28

real quick on that you mentioned before, the concept of anchoring. I want to spend some time here as you’re talking about a range. So dig into that further. What that means in terms of, if I’m given a range, how does anchoring fit into that. Yeah.

Tim Baker  30:41

So, you know, we kind of talk about this more more when we kind of talk some about the tools and the behavior of negotiation, but the rain. So when we talk about, like anchoring, so anchoring is actually it’s a bias. So anchor and bias describes the common tendency to give too much weight to the first number. So again, if we’re, if we if we can, if I can, if can, have invite the listener to imagine an equation, and the equation is five times four times three times two times one, and that’s in your mind’s eye. And then you clear the slate, and now you imagine this equation one times two times three times four times five. Now, if I show the average person, and I just flash that number up, the first number that start, you know the first equation that starts with five and the second equation that starts with one, we know that those things equal, the same thing, but in the first equation, we see the five first. So it creates this anchor, creates this belief in us that that number is actually higher. Yeah. So, so the the idea of anchoring is typically that that number that we see really is a has a major influence. That first number is a major influence of where the negotiation goes. So you can kind of get into the whole idea of you know, factor in your knowledge of the zone of possible agreement, which is often called Zopa. So that’s the range of options that should be acceptable for both sides, and then kind of assessing, you know, your side of that, and then your your other parties anchor on that. So there’s, there’s lots of things that kind of going into anchoring, but you know, we, you know, we did this recently with a with a client, where I think they were offered somewhere in like the 110 112 area. And she’s like, you know, I really want to get paid closer to, like 117 118 so we, we basically in the counter offer. We said, hey, you know that, thanks for the offer. And we did something called an accusation on it, which we can talk about in a second. But thanks for the counter offer. But, you know, I’m really looking to make between, you know, I think we said something like 116 five, you know, 98 to, you know, all the way up into the 120s and it actually brought her up to, I think she was just 117 change actually brought her up closer to that 18. So using that range and kind of that, that range as an as a good anchoring position to help, help the negotiation. So there’s lots of different things that kind of go into anchor, in terms of extreme anchoring, and a lot of that stuff that they talk about in the book. But again, that’s kind of goes back to that first number being thrown out there can be really, really integral. And again, when you couple that on top of, hey, it’s, it’s their job to make you an offer, not the, not the other way around. You have to really learn how to deflect that and and know you know how to position, you know, position yourself in those negotiations. But that’s really the counteroffer. And what I would say to kind of just wrap up the counter offer is embrace the silence. Yeah, so Tim, there’s silence there. And I’m like, I want to, I want to feel the voice. And I do this with with clients, when we talk about, like mirroring and things like that, like people are uncomfortable with silence. And you know what he talks about in the book, which I would 100% this is really kind of a tip of the cat to Chris Voss in his book, which I love, I read probably at least once a year, where he talks about embracing the silence. We as people are conditioned to feel silences. So you know, he talks about sometimes people will, you know, negotiate against themselves. If you just sit there and you say, Uh huh, that’s interesting. And then in the in the counters, just be pleasantly persistent on the non salary terms, which can be both subjective and objective in terms of what you’re looking for in that position, yeah. And I

Tim Ulbrich  34:19

want to make sure we don’t lose that. You know, we’re talking a lot about salary. But again, as we mentioned at the beginning, really try to not only understand but but fit what’s the value of those non salary terms. So this could be everything from, you know, paid time off to, obviously, other benefits, whether that be health or retirement. This, of course, could be called culture of the organization, whether it’s that specific site, the broader organization, opportunities for mentorship.

Tim Baker  34:48

Yep, mentorship, yes, yes, all that. 

Tim Ulbrich  34:51

I think what you hear from folks, I know I felt in my own personal career, with each year that goes on, I value salary, but salary means less than those other. Things mean more. And so as you’re looking at, let’s just say two offers is one example. Let’s say they’re 5000 apart. Like, I’m not saying you give on salary, but how do you factor in these other variables?

Tim Baker  35:10

Yeah, well, and I think too, and I’ll this is kind of, you know, kind of next level with this. And I’ll give you some examples to cite it. I think another, thing to potentially do when you when you are countering and when you’re shifting to some of the maybe the non salary stuff is really took a hard look at your potential employer, or even your current employer, if this is a you know, if you’re an incumbent and you’re and you’re being reviewed and you’re just advocated for a better compensation package, is look at the company’s mission and values. Yeah. So the example I give is like, when we, when we, when Shay and I got pregnant with Liam, you know, she didn’t, she didn’t have a, you know, a maternity leave benefit, and when she was being reviewed, we kind of, you know, invoked the company. And I think it’s like work life balance and things like that. And we’re like, Well, how can you say that and not back that up? And again, we do it. We did it tactfully. And because you’re almost like, you’re almost like, negotiating against yourself, right? So I present this to clients like the Spider Man meme, whether you know, two spider mans are pointing at each other, and she was able to negotiate a better you know, I’m attorney, and it actually, and you we look at us, you know? And I, you know, I give these, one of our values is encourage growth and development, you know. So if an employee says, Hey, and they make a case that I really want to do this, and, you know, it’s almost like we’re negotiating against ourselves. So I think, if you can one, I think it shows, again, the the research and that you’re really interested and plugged into what the organization is doing. But then I think you, you’re, you’re leveraging the the company against itself in some ways, because you’re almost, you know, negotiating against, well, yeah, we put these on the wall as something that we believe in, but we’re not going to support it. Or, you know, so or, you know, at the very least, it plants a seed, right? And that’s what I that’s what I say sometimes with clients, you know, we do strike out. We don’t, you know, it’s like, it’s, it is hard to move the needle and sometimes, but at least one, we’ve got an iteration under our belts where we are negotiation. And two, we’ve planted a seed with that employer, you know, assuming that they took the job anyway, that says, Okay, these are things that are kind of important to me that we’re going to talk about again when we get and things like that. So I think that’s huge.

Tim Ulbrich  37:18

Good stuff. So let’s talk about some tools that we can use for negotiation, and again, many of these are covered in more detail in the book and other resources, which we’ll link to in the show notes. I just want to hit on a few of these. Let’s talk about mirroring accusation audits and the importance of getting a that’s right while you’re in these conversations. And we’ll leave our listeners to dig deeper in some of the other areas. So talk to us about mirroring. What is it? And kind of give us the example and strategies of mirroring.

Tim Baker  37:49

Yeah. And I would actually, Tim, what I would do is I would actually back up, because I think one of the, I think probably one of the most important tools that that are there, I think, is, is the calibrated questions. That’s one of the first things that he talked Yeah. And the reason so, what is a calibrated question? So a calibrated question is a question with really no fixed answer that gives the illusion of control. So the answer, however, is kind of constrained by that question, and you, the person that’s asking the question, has control of the conversation. So I give the example. You know, when we, when we moved into our our house after we renovated it. So brand new house, I walk into my daughter’s room. I think it was four. She was four at the time, and she’s coloring on the the wall in red, red, red crown. And I’m from, I’m from Jersey. So I say crown, not crayon. So she’s, and I, and I look at her, and I say, Olivia, why are, why are you doing that? And she sees how, like, upset I am and mad, or, you know, and she just starts crying. And there’s no there’s no negotiation from there. There’s negotiation over if, there’s no exchange of information. So in an alternate reality, in an alternate reality, what I should have done instead. Olivia, what? What caused you to do that? So you’re basically blasting instead of why is, why is very accusatory. You’re like, you know, the how and the what questions are good so, and of course, she would say, well, Daddy, I ran out of paper, so the walls the next best thing. So the use of, the use of, and having these calibrated questions in your back pocket, I think, again, buys you some time. And really, I think, frames the conversation with your counterpart well. So using words like how and what, and avoiding things like why, when, who, so you know, what about this works. Doesn’t work for you. How can we make this better for us? How you know? How do you want to proceed? How can we solve this problem? What’s the biggest challenge you face? These are all how does this look to you? These are all calibrated questions that again, as you’re kind of going back and forth, you can kind of lean on so have good how and what questions to kind of answer the question about mirroring. As you’re asking these questions, you’re mirroring. Counterpart. So what mirror in the scientific term is called ISO praxism, but he defines this as the Real Life Jedi mind trick. This causes vomiting of information, is what he says. So you know, these are not the droids you’re looking for. So what, what you essentially do is you, you repeat back the last one to three words, or the critical words of your counterpart sentence, your counterpart sentence. So this is me mirroring myself. Yeah. Well, you want to repeat back because you want to, you want them to reveal more information, and you want to build rapport and have that curiosity of kind of what is, what is the other person thinking? So you can again, come to come to an agreement, come to an agreement. Yeah. So you at the end of the day, the purpose. So this is mirror, and so I’ll show you a funny story. The you know, I do. I practice this on my wife, sometimes who does not have a problem speaking, but sometimes with counterpoint listening, by the way. Yeah, yeah, exactly. So I’ll probably be in trouble. But so I basically just, you know, for the you know, for conversation, just just mirror back exactly what she’s saying. And you can do this physically. You can cross your legs or your arms, or, you know, whatever that looks like, but, but when he talks about more is with words, and, you know, I’ll basically just mirror back my wife and she, at the end of the conversation, she’ll say something like, Man, I feel like you really, like, listen to me. And I laugh about that, because I’m just really repeating back. But if you think about it, I did, because for you to be able to do that, you really do have to listen so, so mirroring again, if you’re just repeating back, you really start to uncover more of what your counterpart is thinking. Because often, like, what comes out of our mouth, you know, the first or even second time is just smoke, you know, so really uncovering that one of the things he talks about is, you know, is labeling where, you know, this is kind of described as the method of validating one’s emotion by acknowledging it. So it’s, it seems like you’re really concerned about patient care. It seems like you’re really concerned about the organization’s retention of talent. So what you’re doing is that you’re using neutral statements that don’t involve the use of I or we, so it’s not necessarily accusatory, and then you are, you know, same with the same with the mirror. You really want to not step on your mirror. You want to not step on your label and really invite the other person to say, Yeah, I’m just really frustrated by this or that. So labeling is really important to basically diffuse the power then the negative emotion and really allow you to remain neutral and kind of find out more about that. So that’s super important, yeah.

Tim Ulbrich  42:39

And I think with both of those, Tim, as you’re talking, it connects well back to what we, we mentioned earlier, of of talk less, listen more like you’re Yeah, you’re really getting more information out, right from from a situation that can be guarded. You know, people are trying to be guarded. And I think more information could lead, hopefully, to a more fruitful negotiation. What about the accusation audit?

Tim Baker  42:59

Yeah. So the accusation audit is, um, is it’s one of my favorites. Kind of same, same with calibrated questions. I typically will tell clients, I’m like, Hey, if you don’t, you know, if you don’t learn anything from this, I would say, have some calibrated questions in your back pocket and have a good accusation audit at the Reddit at the ready. And we typically would, typically will use the accusation audit to kind of frame up a counter offer. So, you know, it kind of, it kind of, so, so what? Before I give you the example, the accusation audit is a technique that’s used to identify and labor label, probably like, the worst thing that your counterpart could say about it. So these, this is all the, like, the head trash that’s kind of going on, yes, what of why? I don’t want, don’t want to negotiate. It’s like, Ah, they’re gonna think that, you know, I’m over asking, or I’m greedy, like all those things are that you’re, you’re thinking, so you’re really, you’re really just pointing to the elephant in the room, and you’re just trying to take this thing out and really let the air out of the room, you know, where a lot of people just get so nervous about this. So a good accusation audit is, Hey, Tim, I really appreciate the offer of, you know, $100,000 you know, to work, you know to work with your you know, with your organization. You’re probably gonna think that I’m the greediest person on planet Earth, but I was really looking for this to that, or great line, great. Or you’re, or you’re probably thinking that I’m gonna, I’m asking way too much, or you’re probably thinking that I’m way under qualified for this position, but here’s what I’m thinking. So you’re so again, like, no. Tim, right, right? So when someone says that to me, I’m like, No, I don’t think that. And what often happens, and again, this, this, clients have told me this, what often happens is that the person you know, the counterpart that they’re working with, like, they’re they, they’re recruited as, like, you know, one person said one client was like, Oh, we’re gonna find you more money. We’re gonna figure it out. So they like, you know. So when someone says that to you, you know, just think about how you would feel, you know, I don’t think that at all. And then it just kind of lets the the air out of the room. So you basically preface your counter offer with like, the. The worst things that they could say about about you, and then they typically say that’s not, that’s not true at all. So I love the accusation on it’s so simple, it’s kind of easy to remember. And I think it’s just, it just lays, I think, the groundwork for just great conversation and hopefully resolution.

Tim Ulbrich  45:16

That’s awesome. And then let’s wrap up with a goal of getting to a, that’s right. I remember when I was listening to interview with Chris Voss, this is a part that I heard, and I thought, Wow, that’s so powerful. If you can get in the midst of this negotiation, if we can get to a, yeah, that’s right, the impact that that could happen in the outcome.

Tim Baker  45:33

So, so he kind of talks about it like, you know, kind of put in all of these different tools together, so it’s, um, you know, mirroring and labeling and kind of, you know, using, I think, what he calls minimal encouragements of, uh huh, I see, kind of paraphrasing back what you hear from your from your counterpart, and then really wait for it’s like, Hey, did I get that? Did I get that right? Or am I tracking and what you’re really looking for is that that’s right. And he said, that’s even better than than a yes. So, like, one of the examples I give is, you know, when, when I speak with prospective clients, you know, we’re talking about, like my student loans and my investment portfolio and my, you know, I’m not doing real budgeting, and, you know, I got sold a life insurance policy that I think isn’t great for me. And so we go through all these different parts of the financial plan, and I basically am summarizing back what, you know, what they’re saying, and I say, you know, at the end of it. So I’m summarizing, you know, 30 minutes of conversation, and, you know, I’m saying that, did I? Did I get that right? And they’re like, Yeah, that’s right. You’re, you know, a great listener, which I have to record for my wife sometimes because she doesn’t agree with me. So that’s what you what you what you’re looking for is, is, yeah, that’s right. This person has heard, you know, message sent, heard, understands me. He says, if you get a, if you if you get a, you’re right. So sometimes, again, I keep talking about my wife. I’m like, Hey, Shay, we have to do a better job of saving for retirement. She’s like, you’re right. That’s really code for Shut up and go away. So it’s a, it’s a That’s right, is what, what really what we’re what we’re looking for. So that’s, that’s, yeah, very powerful.

Tim Ulbrich  47:08

That’s great stuff. And really just a great overall summary of some tips within the negotiation process, the steps of the negotiation process, how it fits into the financial plan. We hope folks walk away with that and just a good reminder of our comprehensive financial planning services that we do at yp planning. This is a great example of when we say comprehensive, we mean it so it’s not just investments, it’s not just student loans, it’s really every part of the financial plan, anything that has $1 sign on it. We want our clients to be in conversation and working with our financial planners to make sure we’re optimizing that and looking at all parts of one’s financial planning here, negotiation is a good example of that. So we reference lots of resources. Main one we talked about here today was never split the difference by Chris Voss. We will link to that in our show notes, and as a reminder to access the show notes, you can go to yourfinancialpharmacist.com/podcast, find this week’s episode. Click on that, you’ll be able to access a transcription of the episode as well as as the show notes and the resources. And last but not least, if you like what you heard on this week’s episode of the podcast, please leave us a rating and review on Apple podcasts, wherever you listen to the show. Each and every week, have a great rest of your day.

[DISCLAIMER]

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 pharmacists, unless otherwise noted, and constitute judgments as of the dates published such information may contain forward looking statements which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit 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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YFP 383: 5 Overlooked & Undervalued Areas of the Financial Plan


Tim Ulbrich, YFP CEO explores five often-overlooked areas of financial planning from credit, tax planning, emergency funds, insurance, and estate planning.

Episode Summary

Tim Ulbrich, YFP CEO, dives into five critical—but often overlooked—areas of financial planning that deserve more attention. While these topics might not be as thrilling as investing, making big purchases, or debt reduction, they’re essential for a strong financial foundation. Tim covers the importance of: building and maintaining credit; proactive tax planning; establishing an emergency fund; reviewing health, life and disability insurance policies; and estate planning. 

Learn how to give these areas the attention they deserve, helping you create a more resilient and well-rounded financial plan.

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

  • Importance of credit in the financial plan [0:00]
  • Shifting mindset from tax preparation to tax planning [3:30]
  • Setting up an emergency fund [9:51]
  • Reviewing insurance coverage [13:31]
  • Estate planning [19:51]
  • Invitation to consider YFP’s financial planning services [24:57]

Episode Highlights

“[Life insurance] is especially important for those that have a spouse, a partner, a significant other, or dependents that are reliant upon your income or partially reliant upon your income.When we think about the purpose of a life insurance policy, one of the main purposes is income protection.” – Tim Ulbrich [13:31]

“I really want you to shift your mindset to think proactively and strategically about your tax situation. And I recognize that sounds obvious, but I used to view, as perhaps some of you may, tax very much to be as something in the rear view mirror.” – Tim Ulbrich [6:30]

“According to a 2023 caring.com survey, two out of three Americans do not have any type of estate planning documents in place, and that makes sense, right? It’s not super fun to be thinking about, but the whole purpose of the estate plan is that we want to have a process to arrange the management of our assets.” – Tim Ulbrich [22:57]

“What we should also be doing practically here is making sure that we check our beneficiaries on our various accounts, and as we have talked about before on the show, updating or implementing a legacy folder, which is an important one stop shop where you have all of our financial documents and information.” – Tim Ulbrich [24:00]

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, on flying solo, to talk about five areas of the financial plan that are often overlooked and undervalued. Now, to be fair, none of these areas are very exciting to think about, especially if you’re focused on more inspiring goals, like investing, making a large purchase, giving or paying down debt, where you can feel the progress, or in the case of something like giving, you can see the impact that that may be having in the area that you’re giving or in your community. But with these five areas, what I’m referring to here are estate planning, the emergency fund, insurance coverage, tax planning and credit that isn’t necessarily the case. And there are instances where, when we are doing well in these individual areas, we might be able to see or reap the benefits of that. But for the most part, this is some of the boring work of the financial plan that we’re really playing defense in several of these cases and making sure that we’ve got that strong base and foundation in place. 

Tim Ulbrich  01:04

So let’s take a closer look at each one of these areas, starting off with number one, which is credit. Now we just talked about credit on the Yfp podcast not too long ago, episode 380 we’ll link to that episode in the show notes, understanding and improving your credit score. And as we said on that show at the time, credit is one of those threads that touches many parts of the financial plan, and having good credit puts you in a position to take calculated risks in the form of leverage that could be buying a home, that could be buying a second property, that could be starting a business and doing so at the lowest cost possible. And fair or not, our financial system rewards those who can take on and pay off credit. And I know many of us were told at one time or another, probably by a parent or a family member, to build your credit. Right? Build your credit. But how much does building your credit and improving your credit actually matter? Well, let’s take it look at one example, if we assume that we have two home buyers, let’s assume one has a credit score that is considered excellent at a 10, and another home buyer has a credit score that’s considered fair score of 640 well that might end up being the difference of a 6% interest rate on a 30 year mortgage, thinking of the excellent credit versus a 7% interest rate on a 30 year mortgage, that would be for the person with the Fair Credit Score. Now, what does that actually mean per month and over the life of the loan? Well, the individual who got the lower interest rate because the better credit would have a monthly payment of about $2,400 per month, principal and interest only, and the individual had fair credit would have a higher monthly payment of a little over 2660 per month, again, principal and interest only. Now, over the course of the life of the loan, over 30 years, that ends up being a total cost of loan of 958,000 approximately principal and interest for the individual with fair credit, versus 863,000 for the individual that had excellent credit, same house, same situation, but two people with different credit scores, which shows a difference of about $260 a month, or $94,000 over the life of the loan.

Now if you start to apply this concept is securing other debt, right? Credit card, car purchase, investment property, starting a business, taking on a loan, et cetera. That cost of credit adds up in the form of less favorable lending terms. And since your credit score is a key metric that will be used by lenders to determine how favorable or not the lending terms are, it’s really important that we understand what goes in to the credit score, because the more we understand about those factors, the more levers we can pull to improve our score. And as we talked about on Episode 380, the top factors that impact your credit include payment history, so making sure we’re making on time payments and credit utilization, so the amount of credit that we’re using each month alongside the maximum amount that we’re given. Those two alone make up about two thirds of their credit score other factors, and would be age of credit history, total number of accounts and the number of hard inquiries on your credit. So again, check out Episode 380 and this is something we encourage you to be looking at your credit score on a regular basis as well as polling your credit report, not the same thing as your credit score, to make sure that there’s no negative marks, derogatory marks on your credit report that you’re not aware of, and so that you can clean those up and evaluate those further if need be. So that’s number one on our list of five overlooked and undervalued areas of the financial plan, all right. 

Number two on our list is tax planning, with the October 15 extension, filing extension deadline officially behind us. The 2023 tax season is over. I know our tax team is excited about that. There’s a couple outliers because of. Some taxpayers in disaster areas are impacted by the hurricanes that are getting additional time for good reason. Now on that note, did you know that with an extension you have until October 15, right? We typically think mid April, but with an extension you have until October 15 to file your individual taxes, and for those that do that, October 15 extension, which is actually very common for many of our clients at wifey tax, we believe in right over rushed. Extending the deadline does not mean that you are not responsible for payments on any tax due. Incredibly important, right? The IRS expects you will make payments on time, and if not, penalties and interest will be assessed. So the October 15 extension is a beautiful thing. If you’re doing good tax planning throughout the year and don’t have a big balance due, as that would occur, incur a penalty and interest if we don’t pay it on time, or the other side of the equation, if you have a big refund coming, while many of us think big refund equals good, in that case, we just delayed now the time of getting that refund and putting those dollars to work. All right, enough about that. But when we think about tax as one of the overlooked and undervalued areas of the financial plan, similar to credit, right? This is a thread that runs throughout many areas of our financial plan, and I really want you to be shifting your mindset to be thinking proactively and strategically about your tax situation. And I recognize that sounds obvious, but I used to view as perhaps some of you may as well tax very much to be as something in the rear view mirror. Right? We file each year by the mid April, or as you learn here, the mid October deadline to meet the IRS requirements and to account for what happened the previous year. And I remember early on, you know, whether you’re using TurboTax or some software to do yourself, you’re working with an accountant, you kind of hold your breath and wait for the news, right? Am I going to get a refund? Am I going to have a certain amount of due? But we probably didn’t pay too much attention throughout the year, and ultimately, what that led to was either several refunds. That was the case for us early on, that we could have been putting those dollars to use elsewhere throughout the year. So when you go to File each year and we’re finally what happened in the previous year, that’s retroactive, right? And want us to shift our thinking, to be more proactive, and so to move our mindset from tax preparation, that’s important. It’s necessary. The IRS says we have to do it. We have to file our taxes, but to think more in the mindset of tax planning, right? A very important distinction of mindset shift so that we can think proactively and how we can optimize our tax strategy. Now I want to challenge you that if you don’t already know your key numbers, things like your effective tax rate, your adjusted gross income, it’s time to get out the IRS Form 1040 we’ll link to a copy in the show notes, and take 10 or 15 minutes to make sure that you understand the terminology and the flow of dollars. Because when we start to understand how the 1040 flows, we understand these terms, we can really begin to have this concept of tax planning come to life adjusted gross income, just as one example, has very important implications on things like student loan payments for those that are doing an income driven repayment plan, as well as certain phase outs on things like child and child care credits, Ira contribution, student loan interest deduction and so much more. Now on Episode 309 of the podcast, our CPA and director of tax, Sean Richards, cover the top 10 tax blunders that pharmacists have made, as we’ve seen through the filing process. So whether someone has a negative net worth or a net worth of several million dollars, I think you’re gonna find some value in that episode if you didn’t already listen to that. These are mistakes like having a surprise bill or refund at filing. And what are the common causes pharmacists that potentially could be employing something like a bunching strategy for their giving and just not aware of that strategy, those that should be thinking about estimated taxes throughout the year and are caught by a surprise after that, not not optimizing things like the HSA or traditional retirement contributions to reduce our taxable income, and an oldie but a goodie, not factoring in public service loan forgiveness when choosing married filing separately or married filing jointly. So again, make sure to check out that episode. Episode 309. Great time of year to be thinking about that as we’re heading into the 2024, tax season. That’s number two on our list of five overlooked and undervalues areas of the financial plan, tax planning. 

Number three on our list is the emergency fund. Now, if you’ve been listening to the podcast for a while, you hear me harping on the emergency fund every once in a while, and because it’s that important, right? Saving for a rainy day, saving for an emergency it’s not easy. It’s not fun. It takes discipline, it takes patience, it takes trust to save for something you can’t yet, see, feel or experience. In the moment, but we all know that it’s not a matter of if, but it’s a matter of when. And so as we’re putting in other key parts of the financial plan, we don’t want something that is likely to happen, although we don’t know exactly what it will be, right, whether it’s a cut in Job hours, whether it’s a health emergency, whatever it might be, we don’t want that to derail our progress in other parts of the financial plan, as I’ve shared before in the show in the not too distant past, Jess and I have had to dip into the emergency fund for an unexpected knee surgery that we had to pay 100% out of pocket because of our health insurance. We had a dislocated elbow for our youngest, a trip to the ER for our oldest, for the busted lip, right? The list can go on. And so life happens. That’s the point, and we want to be ready to be able to incur those expenses. And when it comes to things like health care expenses and unexpected health care expenses, everyone’s insurance is different, right? So we got to look at what is a deductible, what’s the out of pocket Max, and know that we have to have a backstop of our emergency fund at a minimum to cover those things, as well as other emergencies that will come along the way. So this area of the plan is all about peace of mind, as I mentioned, it’s about making sure we’re not derailing other parts of the financial plan. And my experience tells me that when you have an emergency come up, and you have an unexpected expense come up, and we’ve got the funds that are there to handle it, a really important mindset shift happens. It’s not fun to write those checks, but when we’re able to do that, because we plan for it, we go from playing defense to playing offense. We’ve got breathing room, we’ve got margin, and perhaps we can even take some calculated risk in other areas of our financial plan that might have been unthinkable just knowing that we’ve got this backstop, we’ve got this foundation in place. So we’ve talked about the emergency fund at length on the show before. I’m not going to bore you further on this, but we want to be making sure that we’re answering important questions like, Is it adequately funded? Generally speaking, that’s three to six months worth of essential expenses. Everyone’s situation, of course, is different. We need to be answering questions like, do we have too much saved in an emergency fund? Right? There’s value in having a cushion, but having too much of a cushion comes with an opportunity cost, and so have we grown that to a point that we might be able to use some of that for other parts of the financial plan? We need to answer questions like, Are we optimizing our emergency fund? This is not the place that we’re going to take risk necessarily. We want this money to be liquid and accessible and available when we need it, but we also don’t want this sitting in our checking account earning next to nothing, right? So this, this could be in a high yield savings account, money market account, US Treasuries, something that the money is working for us, or at least coming as close as possible to keeping up with inflation. And as I mentioned, you know, with other parts of the financial plan, we want to make sure this isn’t a set it and forget it. So life changes as we progress. Our expenses change over time. And so each year, I would challenge you to look at this once a year to see what is that amount, what’s that target goal when it comes to the emergency fund, and is there a potential boost that is needed to the emergency fund?

Number four on our list is insurance coverage. And there is lots to think about when it comes to insurance, but I want to narrow in on two policies in particular, which would be life insurance and Long Term Disability Insurance. Now life insurance, for obvious reasons, is not fun to think about. Right? Nobody wants to consider what a premature death may look like and how the impact of that would be on their family and on the financial plan.

This is especially important for those that have a spouse, a partner, a significant other, or dependents that are reliant upon your income or partially reliant upon your income. Right? When we think about the purpose of a life insurance policy, one of the main purposes is income protection. So in order to determine how much of a policy we may need, we need to ultimately determine what would be the need if you were to prematurely pass away, and what part of your income that is no longer coming in from work do we need to replace in the form of an insurance policy to be able to achieve various goals that could be paying down a mortgage, that could be investing for the future, that could be saving for kids college, right? What are the things that we would need for this policy to fund lots of work to be done there, and why generic calculations shouldn’t be applied when it comes to things like life insurance. Now there are two main buckets of life insurance. There’s a category of life insurance called permanent insurance. These would be things like whole life insurance policies, universal life insurance policies, variable life insurance policies, variable, universal life insurance policies, right? The alphabet soup of whole whole life and permanent insurance, and then the second bucket is term life insurance. And for the sake of this episode and our time together, I’m going to spend our time there, because I believe that for a majority of folks listening, a term life insurance policy is going to be the way to go. That’s not an absolute. That’s not a. Ice that’s not for everyone, but for many folks, that’s going to be the area of focus. And we’ve got a great resource on this, if you want to nerd out. It’s called the life insurance for pharmacists, our ultimate guide to free resource. We’ll link to that in the show notes. But essentially, with a term life insurance policy, what differs it from a permanent insurance policy it is, is that it is insurance alone. It is not paired with an investment product. 

Another important difference is that with a term life insurance policy, as the name suggests, it lasts for a term or a period that could be 15 years, 2025, or 30 years, and you’re going to pay a monthly premium. And for that monthly premium you’re gonna have a set amount that that policy would pay out could be a half million dollars, $1,000,000.02 million dollars, whatever you decide is the need in the event of your death, and once that policy is period is complete, once that term is over, if you’re no longer needing that policy, meaning that you’ve survived or outlived that policy, which is good news, right? There’s no dollars that are coming back to you. So the premiums you’ve been paying each and every month, let’s say you pay 40 bucks a month for a million dollar term life policy over a 20 year period. At the end of 20 years, if we don’t have to enact or use the policy, that’s it. The policy is over. None of those premium dollars are coming back to you, which is the point that is typically used when folks are selling permanent insurance policies that are like, why would you want that money just to go down the drain again? Check out our article life insurance pharmacist, The Ultimate Guide for a more in depth discussion of the different aspects of these policies. This, in my opinion, for most folks listening, why term life insurance coverage is the focus is because this is really meant to be catastrophic coverage, keeping our costs low, so we can use those dollars elsewhere in the financial plan, typically permanent and child policies are much more expensive, typically carry some fees on the investments may not necessarily perform as well as we could invest the dollars on our own, or we’re in working with a professional so with term life insurance, assuming someone is healthy, very much dependent on medical conditions and age of that individual in terms of how much that policy will be, as well as the term or length, but relatively inexpensive for most folks, and is going to allow us to put our cash and dollars to use elsewhere in the financial plan. That’s just a couple key nuggets when it comes to something like life insurance. Now, with long term Disability insurance, one of the greatest assets that you have as a pharmacist is your ability to generate an income. Right?

Think about how long it took you to be able to get that point of becoming licensed, to be able to earn that six figure plus income. And so the focus of long term disability is what would happen in the event that you were unable to earn that income. Now we address the death scenario in something like a term life policy. Here we’re talking about could be a disability, like a chronic medical condition, rheumatoid arthritis, some other condition that would prevent someone from working or working in their position, or it could be something like a car accident, right? Not likely, but these are things that we need to protect if that were to happen, what is the plan to be able to replace your income that you’re earning while you’re able to work as a pharmacist? That’s the purpose of disability insurance. Again, we’ve got a great resource here, disability insurance for pharmacists, The Ultimate Guide. We’ll link to that in the show notes. Lots to think about in terms of how much coverage you might need, the different terms like elimination periods of time, what’s the length of the policy, the potential costs, these are typically more expensive than term life insurance policy.

So make sure to check out that resource from Yfp that we published disability insurance for pharmacists, The Ultimate Guide. We’ll link to both of those in the short show notes. Now, when it comes to purchasing term life insurance and disability insurance, there are a lot of factors to consider. This is one of the reasons why our planning team spends time with our clients individually, going through these policies to make sure they’re customized to the individual. Things like, what’s the goal or the purpose? What are we trying to accomplish with these policies? What employer coverage Do you already have in place, and do we need additional coverage? What are the tax differences between an employer policy that pays out versus a policy on your own? And then, of course, everyone’s situation is different, right? What’s your household income? Is there one income two incomes in the household? What are their goals? What reserves do you have? What expenses are we trying to replace? All these things are going to help us determine what policy is needed, and then from there, we can look to make a purchasing decision that aligns. So that’s number four on our list when it comes to insurance. 

Number five, our final of our five overlooked and undervalued areas of the financial plan is the estate plan. Now if you’re listening and you realize that you’ve got some work to do in getting your estate planning documents in place. Know that you aren’t alone. According to a 2023 caring.com survey, we’ll link to that in the show notes, two out of three Americans do not have any type of estate planning documents in place, and that makes sense, right? Just like we’ve been talking about some of these other areas. Nine. Not super fun to be thinking about, but the whole purpose of the estate plan is that we want to have a process to arrange the management of our assets. The management of our property decisions around dependents could be decisions around child care or assets that are going to dependents or others, and in the case of our health, if we were to become, let’s say, incapacitated. Who’s making healthcare decisions? What are those decisions that we want to have made, and making those from a viewpoint in which we’re able to think about those with a clear mind? So that’s the estate planning process in a nutshell, and especially for those that have dependents and have beneficiaries, these are documents that we want to have in place, and just like we talked about with the emergency fund, this is not a set it and forget it. So yes, there’s some upfront work to be done here, from some upfront costs, typically, as well, to do these documents and do them well with a consultation from an estate planning attorney as well as hopefully working with a financial planner. But things change right? Things evolve over time, and we want to make sure that we have a process to update these documents along the way. So the objective with estate planning, yes, it’s peace of mind, right, knowing that we’ve got plans in place for our family, for our assets, for the stuff, for our health care and the decisions that are being made, but as folks accrue assets over time, there are also some tax planning considerations when we think about the transfer of assets that are really important to be considering along the way as well. So practically speaking, what do we need to do here? Well, check out Episode 310, of the podcast, if you didn’t already catch it, where Tim and I talked about dusting off your estate plan. We’ll link to that in the show notes. These are important documents, like wills and living trusts, advanced medical directives, durable powers of attorney.

And at YFP, our financial planning team is are working with clients, one on one to put a framework in place for what are the estate planning needs, and then working with a solution that relies on estate planning attorneys and legal advice to make sure that those are being executed appropriately for the state in which that individual lives. What we should also be doing practically here is making sure that we check our beneficiaries on our various accounts, and as we have talked about before on the show, updating or implementing if you don’t already have one, a legacy folder, right, which is an important one stop shop where we have all of our financial documents and information in place at our house. We call this the blue folder. Much of it is electronic now, but the original version was a hard copy blue folder. Some of it resides electronically. Some of it resides in our safe but it’s the one stop shop that we know that if Jess and I were in a situation where we weren’t able to access that information or communicate that that our family knows where that information is, like our state planning documents, important insurance policies, tax returns, our various investment accounts, all the information that would be needed to make some decisions along the way. We’ve got a checklist resource here if you want to develop your own legacy folder, you can go to your financial pharmacist.com, forward slash legacy and begin to implement that in your own financial plan. Well, there you have it. Those are five overlooked and undervalued areas of the financial plan. A lot of information and things to be thinking about. These are all areas of the financial plan that our team of certified financial planners are working one on one with our financial planning clients as well as our tax planning clients at Yfp tax and so if you’re interested in learning more about what those comprehensive financial planning and tax planning services look like, we’d love to have an opportunity to talk with you further to learn more about your situation. You can learn more about our services and determine, ultimately, whether or not there’s a good fit there, you can book a free discovery call by going to your financial pharmacist.com, you’ll see at the top of the home page an option to book that call. Thanks so much for listening. Hope you enjoyed this week’s episode. Have a great rest of your week. 

[DISCLAIMER]

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 pharmacists, unless otherwise noted, and constitute judgments as of the dates published such information may contain forward looking statements which are not intended to be guarantees of future events, actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer.

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

[END]

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