Caitlin Boyle

YFP 301: On FIRE with Riley Protz, PharmD

Posted on March 30, 2023March 20, 2023 by Caitlin Boyle

Riley Protz, PharmD, MBA, a pharmacist on the FIRE journey since completing pharmacy administration residency training, discusses his career journey, student loan philosophy, and pathway to financial independence while living a rich and fulfilling life.

About Today’s Guest

Riley Protz, PharmD, MBA is a pharmacy leader and an industry expert on the 340B drug pricing program. He is the Director of Optimization at SpendMend Pharmacy. He consults with clients on opportunities to decrease their pharmaceutical drug spending and increase revenue-generating services through the 340B program. Prior to his current role, Riley was the Pharmacy Inventory Manager and 340B Program Manager of a health system in Salem, Oregon.

Riley earned his Doctor of Pharmacy degree and Masters of Business Administration from Oregon State University. He then completed a PGY1/PGY2 Health System Pharmacy Administration & Leadership (HSPAL) residency with Providence Health & Services.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, discusses FIRE and the pathway to financial independence with Riley Protz, PharmD. Riley is a pharmacist on a FIRE journey since completing pharmacy administration residency training. During this episode, Tim and Riley delve into Riley’s career journey and what drew him into the profession of pharmacy, his student loan philosophy and strategy to tackle $80,000 in student loans given the climate with the pandemic and PSLF extensions, and how he is planning out his pathway toward financial independence. Riley speaks on his motivations for pursuing FIRE as a new practitioner with competing financial priorities, the various FIRE subcommunities, why he doesn’t identify with any specific group, the challenges of working towards FIRE, and how Riley manages to balance the importance of financial freedom with living a rich and fulfilling life now. Listeners will hear the strategies Riley has employed to reach FIRE, including having a financial plan, continuing to live like a resident, using high-yield savings accounts, not carrying a car payment, renting over buying a home, and mitigating early retirement risks through flexibility in investing. Stay tuned until the end of a library of FIRE resources, blogs, podcasts, and books that Riley recommends for those beginning their FIRE journey.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

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

Today, I welcome Riley Protz, a pharmacist who has been on the FIRE journey since completing his pharmacy administration residency training. In this episode, we’ll delve into Riley’s career journey, his student loan philosophy, and repayment strategy, and his pathway towards achieving financial independence. We’ll also discuss the challenges of pursuing FIRE and how Riley balances his desire for financial independence with living a rich and fulfilling life today.

If you’re new to the concept of FIRE, Riley will explain what it means and why he has chosen to pursue it. We’ll also hear from Riley about the resources that have been most helpful for him on his journey including books, websites, and podcasts. Whether you’re on the FIRE journey or taking a long, steady approach saving for retirement, at YFP Planning, we’re here to support you along the way. YFP Planning is a fee-only financial planning firm that is customized to the pharmacy professional.

The team at YFP Planning includes five certified financial planners serving over 280 households in 40-plus states. If you’re interested in learning more about working one on one with a certified financial planner, may help you achieve your financial goals, you can book a free discovery call by visiting yfpplanning.com. Again, that’s yfpplanning.com. Okay. Let’s jump into my interview with Riley Protz.

[INTERVIEW]

[0:01:29] TU: Riley, thanks for joining the show.

[0:01:31] RP: Yes. Hey, Tim. Thanks for having me.

[0:01:33] TU: Before we jump into your FIRE journey, which is going to be the topic at hand for today, tell us about your career journey in pharmacy, where you went to pharmacy school, and what ultimately drew you into the profession.

[0:01:46] RP: Sure, yes. I mean, I honestly wish I had a better way pharmacy story. but I went to Oregon State University for undergrad, enjoyed the science classes. When it was time to choose a major, I had a friend that was doing pre-pharmacy and I thought, “Hey, Oregon State has an advanced degree program, maybe I’ll go and do an advanced degree. That kind of makes sense.” I chose pre-pharmacy as a major and thought, “You know what, something will come up that I want to do more, something more compelling.” Really nothing ever, you know, piqued my interest more than pharmacy did. I liked those pre-pharmacy classes I took. I got into pharmacy school on the first try at Oregon State University. It was a very easy transition.

I kind of stuck with it ever since. I didn’t really have any experience prior to choosing pharmacy, and kind of navigated those waters as I got into school. It luckily worked because I kind of didn’t have a great plan going into the process.

[0:02:34] TU: You and me both, Riley. I think sometimes, we have people on the show that have very motivational, very inspiring stories around how they entered the profession. I’ve shared before on the show that I liked science, I like math, I was undecided. From a major standpoint, I had a guidance counselor said, “Hey, why not think about pharmacy.” I did one shadowing experience. I think it was an independent pharmacy and made a commitment for six years and a whole lot of money from that advice. Sometimes that’s how the story goes.

But you decided, Riley, “Hey, I’m going to get the PharmD, but I’m going to go as well and do a PGY1, PGY2 MBA combined program.” For many of our listeners, they may be familiar with these as a PGY1, PGY2 MS. Some do an MBA program, where you’re doing all that two-year period. Why did you choose that pathway? Then what is the work that you’ve been doing since completing that?

[0:03:26] RP: Yes, I chose to do – around P3 year, I had an internship in community pharmacy. I worked in hospital pharmacy a little bit and I kind of decided that I wanted to do something around leadership and administration. Then the career trajectory and platform, there’s a lot less opportunities in community pharmacy than there is in health systems and hospitals. There’s just a lot more opportunities to be a manager director, whatever it may be in the administration realm. When I kind of looked okay, I have to go towards hospital. Residency just made sense and if I want to fast forward that pathway. The dual PGY1, PGY2, it’s HSPAL now, which is too many letters, but Health System Pharmacy Administration and Leadership residency seemed like the correct option for me. I was very fortunate to match with that, and it had a dual MBA tagged onto the residency, so I completed the MBA in the middle of residency.

Ideally, you’re supposed to have a lot of good opportunities, completion of residency, especially doing administration residency, getting that additional MBA. I graduated in the summer of 2020. Very early on in the pandemic, when everyone’s pulling back. There were almost zero job opportunities. But I had a great mentor who had left the organization I was at for residency, became a chief pharmacy officer somewhere else, and was able to create a position that I was lucky to have.

I was a pharmacy manager for a couple of years at a health system focusing on their 340B program, as well as their hospital purchasing. Then the last year, I’ve switched to the consulting realm, which has been super exciting. Still around 340B, so I kind of consider myself a subject matter expert around optimizing 340 programs for clinics and hospitals. The company is called SpendMend Pharmacy. My clients now are our hospitals and we help them around finding more savings, and helping with their possible purchasing in general, NDC optimization, really anywhere around decreasing their huge drug expense in hospitals. That’s usually one of your top three expenses for health system.

[0:05:21] TU: Riley, let’s talk about your student loans before we jump into the FIRE journey in more detail. Since 2018, so you graduate 2018, $80,000 when you came out. For those that have graduated since 2018, it’s really been a whirlwind, right? We’ve had the pandemic pause that’s now been going on for more than three years. We’ve had the expansion of PSLF eligibility. We’ve talked about that on the show. Then right now, this week, at the time of recording, the supreme court is deciding what they’re going to do related to the Biden administration debt cancellation program. Not looking too favorable in the moment for that program going through, but we’ll obviously provide updates as we get some final news there.

My question is, $80,000, that is substantially less than what we see as the national average today for pharmacy grads, right around 160. What was your philosophy and strategy related to your student loans, especially knowing some of the wrinkles that have come in over the last couple of years with the pandemic and with some of the PSLF extensions and waivers?

[0:06:24] RP: Yes. I was lucky to have graduated with $80,000. I went to in-state tuition. I lived at home for two of the four years of pharmacy school, worked every summer and I think that helped with getting that number low at the very end. But once I graduated pharmacy school, I was like, “Okay.” Well, there’s a lot of decisions to make, right? Do you want to go through income-based repayment, there’s repay, there’s PSLF, which in 2018, people were less likely to see that it would go through, but now it looks like it’s a great strategy. There’s refinancing loans as well. I think I probably pulled up multiple calculators, maybe the YFP calculator o your guys’ website. And said, “Hey, what makes sense with my five, five and a half percent interest rate to do?”

Financially, it made sense to pay it off sooner rather than later, and not to go through the income-based repayment method. That’s what I started doing. I was paying off my loans throughout residency. I was about to refinance my loans when I completed residency when the pause took place. I was like, “Hey, 0% interest rates are a lot better than what I could have gotten, maybe three and a half percent.”

I just took that as an opportunity to pay them as fast as I could. My strategy completing residency was, live like I’m still resident, right? That’s what we tell people. Don’t let lifestyle creep come into play, and so I just paid those off as quickly as I could. I did end up stopping a little bit and saying, “Let’s just hold on to the money. I don’t really need to pay it off. There’s 0% interest.” Once I think I had around, maybe $30,000, $35,000 left, I did refinance it just to get that cash bonus, and then paid it off.

I didn’t told you this last time we chatted, Tim. I had tried to do this student loan forgiveness, get a refund back. Not [inaudible 0:07:52].

[0:07:52] TU: I remember that. Yes. Yes.

[0:07:54] RP: Yes. I think it was back in October, I tried to get a $10,000 refund back because my loans are at zero percent now, but I would have qualified for the student loan forgiveness. Because my income in 2020, I was a resident for half of it, so I didn’t reach that income limit. Literally yesterday, I got the check in the mail about $10,000. You know what, who knows if it’s ever going to come into play, but now I have a student loan balance of $10,000, which if forgiveness happens, that’s great. If not, I’ll take a zero percent free-interest loan, and I’ll put that in my savings account for a little bit of time. Literally, I didn’t even think it was going to come. It was a request I put in. Four to five months later, literally yesterday, I had the check.

[0:08:34] TU: I say, what timing, right, with us recording the episode here today. I think your story is a really good. One thing I’m sensing, which I love Riley, and I hope other listeners will take from it is just the intentionality around understanding the nuances of student loans. There’s lots of different pathways that go. You mentioned some of those – whether it’s forgiveness, non-forgiveness, refinancing. It’s more complicated of a system than it probably needs to be, but that’s the hand we’ve been dealt, whether we like it or not. It’s really up to the borrower to take the time to understand the nuances, and really get into the optimization, which is what you’re doing, right? You’re putting yourself in a position to optimize, obviously, see what comes to be of the Supreme Court decision when payments are going to kick back in. I love the intentionality behind the strategy.

I’m sensing that’s going to be a good segue here as we talk about FIRE because that also relies on the strategy of one being intentional. Let’s go there. Riley, when you and I talked last year, what really excited me was talking to a new practitioner who is really on the front end of their journey towards financial independence. I think sometimes, it’s new practitioners. I just talked with a new practitioner this week. He’s been out about seven, eight years. They’ve been working through student loans, they got married, they started a family. That concept of retirement planning. It’s like, yes, it’ll be there, something I’ll worry about a little bit later. I think for some folks that are planning a very traditional timeline to retirement, that pathway of savings may certainly work. Obviously, we’ll talk here today more aggressive, early investing in your career type of a strategy.

I think for many new practitioners, it’s hard to reconcile this idea that I can accelerate and optimize the wealth-building part of my financial plan, while I’m being saddled by student loan debt, getting started with my career and all these other competing priorities. I’m really excited to dive in with you, as you’re on the front end of the journey of the FIRE, why did you go this pathway? How are you employing strategies on the FIRE journey? What are some of the resources that have helped you along the way?

Before we get too deep, though, for folks that have not heard us talk about FIRE on this show before, and we’ll link to some of those episodes in the show notes as well. What is FIRE? From your perspective, what does it stands for or what does it mean? What’s the purpose? What’s the goal?

[0:10:57] RP: I don’t think there’s a true definition of FIRE. I think it’s whatever individual to each person, what they think it means. I think of it as a maybe a money philosophy or a life strategy. It stands for Financial Independence Retire Early. At the heart of that, I really think it’s, if you hit a point, there’s really a threshold where your passive income supersedes your living expenses. Passive income can include a lot of different things. Traditionally, people are thinking their retirement accounts, the 401(k). But you’ve got potentially rental income, you have Social Security, you have maybe a side hustle. I even put in PRN and part-time work. It’s definitely more passive than thinking about your classic W2 jobs.

If you hit a point where let’s say, it cost you $40,000 to live each year, and you have a point where your investments, and all of your other passive income, supersedes that number, then you really don’t have to work at your job anymore. That’s where that second half of retire early comes into play.

[0:11:54] TU: Let’s give an example, Riley. I’d love for you to chime in here about what you do and don’t like about this example. To your point, there’s no uniform, accepted definition of what it means to be financially independent. But as you’re alluding to, you get to this point of either assets diversifying your income, other sources of income, such that you really reach financial independence. Meaning that you no longer rely on your W2 income, but you can build essentially a retirement paycheck or an early retirement paycheck, however, you define that based on these other revenue streams or savings that you’ve built up.

The rule of 25 suggests that, hey, if you take your annual household expenses, we can talk about whether or not you include taxes and that. You multiply by 25. Once you get to that point in terms of savings, you’re able to get to that point of financial dependence. If our annual expenses are $100,000, multiply that by 25, $2.5 million. Really, this comes from the research on the 4% rule, which two and a half million dollars, if I safely withdraw, we can debate that 4%. I can replace that $100,000 and that becomes the source. Now, you start to get a little bit more wrinkles in that when you talk about, okay, is it coming from only your savings? Is it coming from rental income? Is it incoming from Social Security? But without getting too far in the details there, what do you and don’t you like about kind of that back-of-napkin math?

[0:13:22] RP: Yes. I think if someone’s going to Google FIRE financial independence today, at least in the first three paragraphs, they’re going to mention rule 25 or 4% rule because it’s simple, it makes sense. First things, people are like, “I don’t know if that’s true if I trust it. It almost seems too simple, right? But you know, the numbers don’t lie is a great point to make. Truly, we’ve seen people do it, it does work.

But as you mentioned, someone – I’m sure a lot of listeners have yearly expenses around $100,000. They plug that real 25 in, they say, “There’s no way I’ll ever get to $2.5 million.” They immediately dismiss the idea and say, there’s just no possible chance that I’m ever going to hit that point. They say, forget about it, I’m going to retire when I’m 65 years old. That’s my real hiccup with the 4% rule, is I think it dissuades people who might be interested in the idea. Of course, I’m not trying to push this this idea on folks, but I think it quickly dissuades people because they think there’s no way that’s ever going to occur for them.

But this rule puts a lot of assumptions in place, like number one, is they assume that you’ll never make another dollar again. Which, let’s say you’re retiring 10,15, 20 years early. The odds of you never making another dollar is probably pretty – I don’t think that’s going to happen. They assume that your nest egg, your 401(k), your Roth, everything, that meets at $2.5 million is all you have. But you could have a side gig, a side hustle. Let’s say your, for example, your expenses are $100,000 per year, but you’re still making – you’re working a little bit, you’ve got a side hustle going on, you’re doing maybe PRN work. That’s the benefit of being a pharmacist, is we can work one day a week, right? That’s a great aspect of our job.

You’re making $40,000 per year, much less than the average pharmacist makes. But then that decreases your yearly expenses to 60k. So your actual real 25 number becomes $1.5 million, so much more easily ingestible number to take. Another assumption, your expenses are going to remain constant throughout your entire life. But data shows that the older you get, especially at your 70s and 80s, you’re not going to be spending as much as you are in your 40s, 50s, and 60s. You take that in consideration as well. I think my last one is, compound interest is just really hard to visualize, and the amount of time and how it actually works.

If you’re telling somebody, “Hey, really, you should see that extra $2,000 because it’s going to grow to whatever it may be in 20 years.” I don’t know if that’s actually going to work. I can’t see it, but I can see a TV today, or I can see a new car today, and I can get those benefits now. I think it’s a great initial, just quick back-of-the-napkin math on how this works. But I think, too many people are just waiting and say, “Oh, there’s no way I’m going to get there.” A lot of those factors I just described, all of them would lead to a lower number. Potentially, if you can shave off five years of retirement, that’s great as well, right, because you can enjoy those years while you can.

[0:16:02] TU: Yes. I think that’s such a great point, Riley because you’ve highlighted well already that everyone’s plan is going to be different. I think that’s where we need to make sure we’re not falling into the trap of, that there’s one way to do FIRE. Are we talking about a retirement age of 40 or 55, or just a little bit earlier? Late 50s or 60? Is it more of an aggressive timeline, or just a little bit earlier than more of a traditional retirement? Might there be some side additional income? Are we interested in looking at real estate investment? Obviously, post-retirement. What about Social Security? What about health risks and health care. I mean, there’s so many layers to consider. But your point of the rule of 25, I think, often being overwhelming, especially to folks earlier in the journey is a really good one.

I can tell you the number of sessions or presentations I’ve done with folks where, when you talk about saving or investing for the future and compound interest, eyes gloss over. I mean big numbers, $3, $4, $5 million. One of things we really try to do at YFP, is how do we discount that back to today to make that a meaningful number, right? We can run an estate calculation and show that FIRE or not, you need three point, whatever million dollars. Okay. That’s scary. That’s overwhelming. I’m more depressed now about achieving long-term financial independence.

But what does that mean today, in terms of how much I need to be able to save, and what assumptions go into place. That number is probably still going to be big, maybe bigger than we want in terms of, maybe it’s going to take 800, 1,200, 1,500, 1,800 month, whatever, but we can start to put our arms around that. I think these big, huge numbers are like, “All right. Might as well just give up. I’m early in the journey. I’m just going to kind of focus on the here now. Point well taken. I think that can be a challenge.

Riley, let’s take a step back to your FIRE journey. What was the motivating factor or factors in terms of why you wanted to go down this pathway?

[0:17:56] RP: Yeah. I think I reflected on this a little bit recently on why I was so hooked on it when I when I first found FIRE. I think my reasoning has actually changed in the short years since I found it. I’ll take you back to, let’s see, I think it’s 2019 now when I was a PGY1. We have a big cohort of co-residents. There were 16 of us. I think we were talking about what to do with our 403B. As you can probably tell, I have a passion for personal finance, so I knew a little bit more than everyone else, and just trying to provide a little bit of guidance, but didn’t feel super confident, especially talking about that topic.

In residency, we spend so much time talking about certain disease states, and we had antimicrobial stewardship conferences, and ethics conferences, and professionalism. We didn’t spend a single second on personal finance, I remember going to my RPD and asking, “Hey. Can we have someone come in and just talk to us for an hour or two?” There really wasn’t an option for doing that. I thought, you know, why don’t I do it? It was during that, I was trying to treat it like a topic discussion and doing – trying to find empirical and objective data, which I’m sure, you know, it’s very hard to find on the internet.

But I did stumble upon the concept of FIRE and was immediately hooked. I think in the midst of PGY1, I probably should have been spending a lot more time on residency and MBA classes. But all I wanted to do was read about this concept, and like, it doesn’t make sense. There’s no way it’s actually real. Does the numbers line up? There’s a lot of blogs online, that I just kind of took up as much as I could. I think the reasons why – I think there were two main reasons why there were motivating factors for me to pursue. Number one being, I’ve always been a natural saver but didn’t really have a reason for why I was saving, ever since I was a child. I filled a piggy bank up when I got money for my birthday but didn’t know what I was doing. I just felt like, “Yes, I’ll just save it.”

Financial independence was kind of became a Northstar. Whenever I’m making a decision, being very intentional with every dollar. If I’m not going to spend it on one thing, I’m not just saving it, actually. I have another reason. I’m putting it towards another purpose, which was a big idea. Then the second reason, which I think is a big pushback of people who pursue FIRE is, I was once again in the midst of PGY1, probably not loving life at the moment. It’s not sustainable way to live and work. The idea of not working, I think, I was probably drawn to. That’s what a big pushback is. You shouldn’t be pursuing this idea because you want to escape your job and retire early. But you know, now, I absolute love what I’m doing. You think that my desire for financial independence would wane, right? But I’m still – I have a different reason, I guess for pursuing it. Bear with me as I make this point.

I have kind of a strategy now of maximizing overall life happiness, and fulfillment, and meaning, whatever that may be. If I’m trying to solve for maximum happiness, then treating, bringing that down into like every day, what would that look like in different buckets on things that would make me happy, so that’d be a strong social life. Today, there’s spending time with parents and friends, but let’s fast forward 15 years, we’ve got a plan for the future, right? Probably spending time with future children. I don’t think I’m going to have five boys, – sorry, four boys like you do. But if I do, then that’s going to be a higher percentage of my time is me spending with children. That’s one bucket.

Second bucket being health. If I work out today, there’s benefits. But main reason I’m working out is for future me. I want to have as many healthy days as possible, maybe two more buckets here. One of them being philanthropy, giving back in some way, whether that be resources or money. That’s going to skew much more later in life. The last one here, curiosity or learning. I love to travel internationally, read, whatever it may be. I stick with my current W2 job. That satisfies probably three of those four buckets. I got to get sense of social life. Definitely, a sense of philanthropy. It’s a great thing about being a pharmacist, is we have very fulfilling jobs.

Then definitely fulfilling that, that learning bucket. But I spend 45, around 45 hours of my waking life per week on this job. So it’s not filling everything, every single bucket. There’s plenty of other buckets that I’m not going to go into. If I’m trying to solve for maximum fulfillment, and happiness, I’ve just got a pretty high degree of confidence that in 15 years, or 20 years, or 10 years, I’m not going to want to spend 45 hours per week on this one job. I’m going to have a lot more other pursuits that are going to help me lead fulfilling and happy life. Let’s fast forward, let’s say 15 years. Maybe I want to spend 20 hours per week at my job, maybe at zero. If I’m lucky, maybe it’s 60, maybe I absolutely love what I’m doing, then that’s great.

I want to give myself the ability, and flexibility to make that decision when the time comes. That’s where financial independence comes in. If you save a little bit more now, that gives you the ability to make that decision down the line.

[0:22:24] TU: Riley, that’s beautiful. I’m glad you address this equation of solving for maximum fulfillment, maximum happiness. Actually, the research on this topic is fascinating, around deriving happiness from money, and how we connect the two. I think that it’s a natural evolution to be thinking about that, especially when you build a strong financial foundation. It’s hard to see that when you’re in the thick of all these decisions when you’re, obviously, you work through the student loans, you’re making a good income, you’re working full time, you’ve got a lot of places you can optimize a plan. I think that’s when you can really start to have some of that peace of mind, and be worried about things like solving for maximum happiness and fulfillment. Because you’ve got a strong foundation of what you’re growing from. I think that, too often, when we talk about investing, or savings goals, we leave out the so what. What’s the purpose? What’s the point? What’s the why? I think pharmacists, especially very analytical folks, I think we can get all excited sometimes about the spreadsheets. Hey, I’m on path to save $2.4 million. What’s the purpose?

If we ask that question of what are we trying to accomplish, what are we trying to achieve, and how do we reconcile taking care of our future selves while also living a rich life today? Both are important. I think one of the knocks, and I’d love to hear your thoughts on. I think one of the knocks of the FIRE community would be, typically we’re looking at very aggressive saving rates, right? There’s all different types of FIRE and we’ll talk about that here in a moment. But usually, we’re defining FIRE, and aggressive pursuit of financial independence by fairly high savings rates, more than the typical 10% to 20%.

So one of the knocks may be, well, are you giving up living a rich life today for a future point, that may or may not be what we envision that to be, right? I’m thinking about this, because I just finished the book, Die with Zero by Bill Perkins. He talks beautifully in a very non-traditional, non-financial planner way about ultimately, the goal being that we die with zero. He makes a strong case, I think that in your 20s, and 30s, and 40s, there is spending that needs to be done towards what you’re talking about this maximum fulfillment.

How have you reconciled this poll between aggressive saving? I can punch that in the calculator. I see the compound interest growing, but I’m also at an age where I can and should experience some of these beautiful things in life. I’d love to hear your thoughts.

[0:24:50] RP: Well, you beat me to it. I actually also did – I also finished Die with Zero recently within the last couple months. I’ll be honest, has shifted my mentality a little bit as I was someone that can delay gratification, right? That was kind of my philosophy. If I want to do something today, let’s wait. I can double it in 10 years. It’s going to be just as much benefit or more benefit when I’m so saving for my 40s, is kind of a mentality I’d had.

But what Bill Perkins says in that book is very good idea, and something I’ve taken into consideration is, let’s think about, “Yeah, think about our life as a whole. If my goal is to maximize happiness today, but also in the future, there’s a balancing act because you need to spend more money today. You need to spend some money today in order to enjoy your life today. I was, let’s say, for the last couple of years, I was probably a little low on that end. I was saving a lot more money, and decreasing my expenses, and focusing on student loans, and maybe sacrificing a little bit. I will shift and have shifted a little bit in that regard towards enjoying life today.

I will say, a benefit for myself and maybe other listeners is, we have above-average income. When you’re looking at financial independence, and decreasing your expenses, and having that difference in what you’re able to save, because you’re spending less than what you’re earning, it’s a lot harder for somebody with an income of $60,000 per year. But as a pharmacist, I really don’t even feel like we have to sacrifice as much as others, because we just – as long as you’re intentional with your spending, and you’re cutting out unnecessary things, then, you’ll be able to achieve some sort of savings goal. You’re not depriving yourself and eating rice, and beans every day.

For myself, as I mentioned, being early on, I’ve been able to reduce lifestyle as much as possible, so I don’t live a lavish life. If someone else has an expensive $100,000 per year, it’s going to be a lot harder to cut out. Let’s say $40,000 out of that budget, or $20,000. But I never allowed myself to reach that level. I’ve never really felt that I’ve been sacrificing anything on this journey.

[0:26:46] TU: Let me prod a little bit more here, Riley, because this to me is a fascinating topic where I can talk with two pharmacists making the same exact income. Let’s assume they’re living in the same cost-of-living unit type of situation. But one can be living 95% to 100% of their income as their expenses, and a lot of that even being fixed expenses. Someone else maybe has find a way for that to be, I don’t know, 25%, 35%, 45%, or even, let’s say 50% or 60%.

I think often, what you see is, the home, or the car, those are probably two of the biggest things that you see that might be contributing to that. Sometimes private education would be a big contributor, as well. Saving for kids college, things like that. But two pharmacists, same income, same position in terms of cost-of-living area, but very different in terms of cash flow margin that they created. I think it would be helpful for our listeners to hear, for you and your situation as much as you’re willing to share, what has the strategy been. You mentioned before, continuing to try to live like a resident while you’re paying on your student loans. I sense you’ve probably have pulled off of that a little bit. But have you intentionally kept down on house, or you’ve decided to continue to rent, not carry carpet? What has been the strategy that has allowed you to keep those fixed costs low?

[0:28:05] RP: I think first and foremost, financial confidence is important, knowing reasonable – knowing why you’re investing something, you’re saving in the correct location. For example, high-yield savings account. Just making sure that you know you’re doing correctly with where your money is going, has been important for myself. I’m not scared to look at my checking account, right? I think there’s a lot of people who say, “I don’t want to look at it.” If you can spend a little bit of time to just be confident in what you’re doing, and have some sort of strategy in place, and be intentional with – you don’t need to track every single dollar, but just the big things.

I think low-hanging fruit, is what I tell clients. Let’s not make 100 little decisions, let’s make two or three big decisions. For myself, yes, I don’t carry a car payment. I did actually upgrade from a beater of a car that probably I could – I did sell for $1,000, so I’ve upgraded in that realm, but I had drove that car throughout pharmacy school. I do still rent for housing. I live in the Pacific Northwest. So yes, housing a little bit more expensive, but it makes sense financially. I looked into purchasing. I was actually going – shout out to the real estate podcast with David and Nate. I was with the first cohort of the None to One Program. I was looking at actually purchasing a condo and house hacking didn’t make financial sense. It made sense for me to continue renting there.

[0:29:16] TU: Riley, let me just interject here because I hear weekly if not daily, that, Tim, what do you mean like equity and homeownership? It’s always better to own than it is to rent. I think this is one of the stories that we’ve just accepted without running the numbers. Don’t get me wrong, there are scenarios where certain parts of the country, owning based on the market, based on what’s happening, based on interest rates, based on cash you have, based on appreciation. That makes sense, but I think we blindly accept this, especially higher cost of living areas. We tend to vastly underestimate the cost of homeownership on an ongoing basis. So we look at rent value, we look at mortgage payment, and we stop there. I would just love for you to help me make this case, that sometimes, renting makes sense over homeownership, and I think we really got to run the numbers.

[0:30:11] RP: The problem is, it’s the numbers. Humans are humans, right? They feel – you take into consideration, “Oh, I’m much more safe. I’ve been told by my parents, and my parent’s parents that buying is, you have to go as soon as you can. That’s the way to go. Once again, it’s a lot easier to see a house value go up in five to 10 years, rather than really knowing exactly how much would I have put in if I’d invested in it. You can run those numbers as well, right? The numbers, once again, numbers aren’t lying to you. I think it’s just tough because yes, that’s what we’ve been told to do. It doesn’t make sense everywhere. Sometimes, that’s the caveat, as well, as you know, it does make sense maybe in the Midwest. But for other folks, it’s not the case. If we’re all robots, then I think a lot more people would be renting, but it’s just unfortunately not the case.

[0:30:56] TU: That’s good. Now, you can get the hate mail as well as me.

[0:30:57] RP: Exactly.

[0:31:00] TU: Hey, I want to ask you a question. Actually, I hadn’t planned on asking you, which is interesting. Something I’m picking up on as we’re talking here, is I sense that you’ve used some words around the emotional side of money. Confidence, I can tell you have a confidence around your money. I can tell that there’s not a fear associated with money. You obviously have more of an analytical mindset, but you’re also considering – we talked about living a rich life, and kind of balancing the two of those out. So often, myself included, and it’s true for everyone listening. How we approach our money today, is a conscious or subconscious reflection of how we grew up around money.

In some cases, we grew up in an environment where it’s a very open conversation, it’s one that’s not only talked about, but it may not be a stressful, relatively even emotions, more of an abundance type of mindset. Other situation, I talked with folks where it was a very hostile environment or an environment where you just don’t talk about money, whatsoever, and you see those patterns carry out. So I would love for you to just give us a sneak peek as I pick up on the themes of confidence and security around money and more of a positive emotional approach towards money. Can you attribute? Did you raise up in an environment where it was a safe emotional landscape for learning about and growing your knowledge around personal finance?

[0:32:22] RP: I would say it was definitely a safe environment, but it was not – I did not grow up with parents telling me how much money they made. Oh, you need to – I did – I mean, for example, I chose a state school, I knew enough to know about the cost of private school versus public school, and what that would be down the line. That wasn’t – told, “Hey, it makes a lot more sense for you to make a decision by peers, or my parents, or anything. I don’t really attribute a lot of it to them being extremely open. But for example, I did have a Roth IRA, I think when I was 18 years old, so my mom helped me with that. I’ll give her credit there.

[0:32:55] TU: [Inaudible 0:32:55] a tuner.

[0:32:57] RP: Exactly. That was all her, so I’ll give her all the credit there. But anyway, I also had a financial advisor that she put me in touch with who had me investing in a taxable brokerage account when I clearly could have put more money in my Roth and stuff that didn’t make any sense. So I had to pull away once I felt more confident in myself a few years after that. We weren’t experts, but I definitely – I think it’s rare for somebody to have a financial advisor in a Roth account in their teams. It will attribute some of it to that. Yes.

[0:33:22] TU: It’s something I’m thinking a lot about Riley with my four boys, and I would encourage the listeners. I’m fumbling through it, I don’t have the answers. I’ve read books on teaching kids about money. I’m convinced, I think, and maybe I’ll tell you otherwise in three years if I screw it all up. But I’m convinced that 80% of it is just what they are experiencing, they’re hearing. It’s not the intentional teaching. I think there’s a place for that, like, “Hey, let me sit down. We can talk about compound interest and investing in Roth IRAs. But I think it’s more of what they’re picking up on around the emotional cues, the stress or lack thereof, whether or not it’s an open conversation. I think that is so foundational to their relationship with money.

What’s so hard about that, I guess it can be encouraging or discouraging depending on how you approach money is like, that stuff tends to come out. We’re, again, carrying that on generationally. Often, the stress or the positive environment, if it’s the opposite around money, that just is the undertone of the house, and you’ve got to be really intentional to shift it. Another topic for another day, but I think around emotional relationships, how we grew up with money. Even hearing you talk about your mom, and a Roth, and experience with an advisor clearly had an impact on you and your journey.

Let me shift gears and talk about the types of FIRE. Again, I think for folks that are just learning about FIRE for the first time, they may read a few blog articles, look at very aggressive saving rates without realizing there’s a wide range of how you may approach this. Whether it’s more of a traditional FIRE, a lean FIRE, a fat FIRE. Tell us about that these different terms and the path that you are choosing as it relates to your own FIRE journey.

[0:35:05] RP: In my mind retirement is a number of value, not a date, or an age, right? But everybody’s going to be different, and your FIRE calculation takes into consideration mainly how much you’re going to spend each year. So someone who spends $40,000 in a year versus someone who spends $150,000, in a year is going to lead completely different lifestyles, and probably take different actions to hit that point of financial dependence throughout their lives. That’s where these different names come from is, you know, FIRE’s become big enough that there’s been subcommunities of people, lean FIRE. I don’t know the definition. It’s maybe less than $40,000. Fat FIRE is, people got five plus million dollars.

I’m happy that that makes sense because people can be like – like-minded folks can learn from each other in that realm. I’ll be honest with you, I don’t really look at – consider myself in any of those categories. I’m early enough along the pathway that I don’t really spend time stressing over it, because I know enough that I know that things are going to change on the future. We’re great at acknowledging how much we’ve changed in the last five years, but we still think we’re going to be the same person in the next five years, which doesn’t make any sense. I know I’m going to be different enough in ten years. I’m going to change a little bit enough to know that my expenses can change, my family situation is going to change.

But for myself, I kind of have just general numbers. I’m probably going to spend more than $40,000 in a year. I know myself well enough that I’m probably going to spend less than $120,000 per year. Do that rule of 25. I’ve got a pretty big wide margin, but there’s enough time that’s going to pass. There’s really just no point in stressing over and running the numbers, and some people love running these calculators and saying, “Oh, this is exactly. That’s my point.” That’s going to change so many times. There’s going to be so many factors that I don’t really bother myself with it.

[0:36:41] TU: Let’s shift and talk more about the strategy of getting to that number. You mentioned early on in the episode that often, people run a rule 25, or some type of FIRE calculator. They see a big number, they get overwhelmed, they shut down the computer, and they say, “All right, let’s move on. I think, even if folks can work through that, the next step can be just as overwhelming, which is, “Well, how do I get to that number, right? I mean, when I get the chance to talk with groups about investing, what I often say is, yes, we’ve got to know where we’re going, but then we’ve got to know how we’re going to get there. Then we’ve got lots of wrinkles to consider, 401(k), 403(b), Roth IRAs, brokerage accounts, HSAs, all types of vehicles to achieve that. Then within those accounts, we’ve got to choose how we’re going to allocate that. That would be the asset allocation part of the plan.

Again, eyes gloss over at that point of, “Wow, this is a lot to consider.” Tell us about, not advice for everyone listening, but tell us about how you approach your investing strategy as it relates to not just identifying that number, but how you’re going to get there.

[0:37:47] RP: Yes. Tim, we’ve used the word optimize quite a bit, but I’m definitely not – I’m not going to optimize as much as possible in this category, I like to keep things pretty simple. Yes, my strategy myself is, I’m actually currently 100% stocks, all broad-based index funds, keep the expense ratio as low as possible. That’s every account. All my 401(k)s, or HSAs, or my Roth IRA, everything is – different custodian will have a different five-letter or three-letter process, but as long as it’s US stock market or international stock market, that’s the process.

I know that numbers-wise if my investing timeline is, let’s say, 50-plus years, but the time to actually sell a stock is more than 10 years. To me, just the numbers, I just kind of try to pretend I’m a robot and don’t look at the stock market in the last year because I know that odds are, it’s going to go up in the next 10 years. And you want to hit the point where, let’s say, within five years of cutting back or selling any of stocks, and switching add bonds. You can do bond 10 to whatever it may be. But I keep things pretty simple now, just a handful of different low-cost, broad-based index funds.

Then the strategy around what accounts to put them in. Of course, prioritizing your tax-advantaged accounts. Kind of have a mental, financial order of operations, I guess what I would call it that I’ve been using, as I’ve gone through the process. For example, student loans is pretty high up on the list, and I’ve been able to cut that out. But first and foremost, think about this as an emergency fund, and then getting your 401(k) match. Then I put HSA up there at the top, because it’s your dual tax-advantaged account and my student loans filled in that slot there, and pulling that out, then it’s to a Roth IRA.

With my income now, very fortunate that doing the backdoor Roth IRA option. Then it’s back to the 401(k), and maxing out the 401(k). Those are pretty much all your tax-advantaged accounts. If someone’s gotten to that point, and they’re still able to invest in money, which I’m fortunate to be able to do it now is pretty – I think, if you look online, there’s a lot of people who say, yes, those are probably your top five categories, and list to go through in different orders, depending on each person. Especially if you have student loans, and you’re doing PSLF, it’s going to be completely different. You might prioritize your 401(k) first because you want to reduce your adjusted gross income.

But once you’ve hit all those tax-advantaged accounts, that’s why I did the None to One Program with the YFP Real Estate with David and Nate. Because you know, I was thinking, “Okay. Let’s look into real estate.” Since that didn’t pan out currently, and it probably will in the future, I just put the rest into a taxable brokerage account in the same low-cost, broad-based index funds. So keeping it simple once again.

[0:40:22] TU: Riley, address for me a common objection, which people have is, “Hey, I want to retire early.” I don’t know exactly when that will be, but let’s say late 40s, early 50s. Kind of a moderate to aggressive timeline versus a traditional retirement age. I’ve got all these assets tied up in retirement accounts, where I’m going to take on a penalty if I take it out before the age of 59 and a half. Insert brokerage account is one way to mitigate that. You astutely mentioned that you’re obviously optimizing your tax accounts before you get to that point. How have you thought through a reconciled what you may need from a point of retirement, which is unknown until you get to that age where you can draw from those accounts, and how you might mitigate some of that risk?

[0:41:05] RP: Yes. I think of them in these three different categories, your pre-tax, your post-tax, and then your tax brokerage accounts. I think there’s – I’m sure there’s an ideal percentage where if you’re going to retire at age 45, for example, you want to have a good amount in your taxable brokerage account, right? Because you can’t get to your tax-advantaged accounts earlier on. But there’s, for example, currently, a Roth IRA conversion ladder is one process that people take in place, and they’re able to do that.

I think a simple strategy is make sure that all of those buckets have someone in there, so then you have the flexibility to do what kind of, whatever you want to do, whatever makes sense to you at the time. In that time, luckily, since I’ve been able to, I started the Roth IRA early on. I think that’s the one that people are going to have less on in life since I had that at age 18. But at times, I’m at a point where I want to scale back, I’ll have enough in the three buckets, and I’ve learned enough about the different strategies in place that I’ll figure it out when the time comes, is kind of my philosophy.

[0:42:01] TU: Awesome, one thing you mentioned Riley as we wrap up here, I think you mentioned during your residency year, you’re out learning about FIRE, you’re on various websites. There’s some great resources out there, blogs, podcasts, books. Anything you’d recommend to our listeners that you found to be especially helpful and insightful in your FIRE journey at least on the beginning as you’re learning more about this topic.

[0:42:23] RP: I quickly moved from – I think that the most resources out there are going to be in the blog space. If you look up different blogs, there’s probably plenty of them. The first one I would recommend is called the mad scientist. That’s where you get into the numbers of it. Of course, Mr, Money Mustache is probably the next one that people are going to find. He’s probably the most well-known and – if anyone’s going to find FIRE, first, they’ll probably going to find him.

Then for podcasts, the first 100 episodes of podcasts called Choose FYI. One of the co-hosts there was a pharmacist. It might be a little bit outdated now since those first 100 episodes are pretty old. Other podcasts I like listening to, Earn & Invest by – he’s called Doc G, Afford Anything by Paula Pant. Then books-wise, there’s some great ones out there, some classic like your money and your life. It’s just great, because it’s learning about the concept of your trading, your life hours to make money, and then you’re spending that money to get more of your life hours back.

Touched a little bit on Die with Zero. I’ll definitely be promoting that. That’s for folks that are maybe learning to, like myself, to maybe spend a little bit more, and enjoy more of life today. If you want to have a stress-free confidence on index funds, Simple Path to Wealth by J. L. Collins is a great book as well.

[0:43:30] TU: Great stuff. Library of information that you recommended. We will link all of those in the show notes. For folks that are listening, trying to write that down, don’t worry, go to the show notes. We’ll link those out. Great recommendations. Riley, really appreciate your time, your insights, your perspective. I love your intentionality around this topic. I love your financial IQ. I appreciate you sharing your journey, especially on the front end of this, and look forward to seeing, and track you along the way.

[0:43:52] RP: Yes. Thank you. This was an absolute blast. I love talking about this topic. Thanks for having me.

[OUTRO]

[0:43:56] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and it’s not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding material should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

Furthermore, the information contained in our archive, newsletters, blog post, and podcast is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of your financial pharmacist unless otherwise noted and constitute judgments as of the dates publish. Such information may contain forward-looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward-looking statements.

For more information, please visit yourfinancialpharmacist.com/disclaimer. Thank you again for your support of the Your Financial Pharmacist podcast. Have a great rest of your week.

[END]

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YFP 300: Celebrating 300 Episodes of the YFP Podcast!

Posted on March 23, 2023March 23, 2023 by Caitlin Boyle

On this episode, sponsored by APhA, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, and YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, RICP®, celebrate the 300th episode of the Your Financial Pharmacist Podcast! From student loan repayment strategies and investment planning to wealth protection and entrepreneurship, this podcast has strived to provide valuable insights and practical advice to help pharmacists achieve their financial goals each week. Tim and Tim reflect on some of the most memorable moments and guests from the past 299 episodes.

Episode Summary

YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, RICP®, for a special episode of the Your Financial Pharmacist podcast. This week, Tim and Tim are celebrating the 300th episode of the podcast! After taking a moment to express their gratitude for the YFP team, the YFP community, guests, and listeners, they take some time to reflect on the first 299 episodes and just how far the Your Financial Pharmacist podcast has come in the last six years.

Tim and Tim share some of their favorite moments from the show, illustrating the range and breadth of personal finance topics covered along the way and how each relates to the personal finance journey and financial planning for pharmacists. From student loan repayment strategies to wealth protection and entrepreneurship, the podcast has covered it all! Highlights include a snippet from the very first episode of the podcast, how YFP has fostered a community by sharing pharmacist debt-free stories, and stories of pharmacists working towards and achieving financial independence. Listeners will hear Tim and Tim examine common threads throughout the years, including the importance of balancing future financial needs with living a rich life today, entrepreneurship as it relates to personal finance, the emotional and behavioral side of the financial plan, and the importance of philanthropy and giving as part of the financial plan. Tim and Tim close with another sharing of gratitude and hint at plans for the future of the Your Financial Pharmacist Podcast.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[00:00:00] TU: Welcome to a special episode of the Your Financial Pharmacist Podcast. We are thrilled to be celebrating our 300th episode today, and we couldn’t have done it without you, our listeners, and supporters. Over the years, we’ve covered a wide range of personal finance topics tailored specifically to pharmacy professionals. From student loan repayment strategies and investment planning to wealth protection and entrepreneurship, we’ve strived to provide valuable insights and practical advice to help you achieve your financial goals.

To mark this milestone, we have a special episode lined up for you today. Tim and I will be reflecting on some of our most memorable moments and guests from the past 299 episodes. So sit back, relax, and join us as we celebrate 300 episodes of the Your Financial Pharmacist Podcast.

[EPISODE]

[00:00:51] TU: Today’s episode of Your Financial Pharmacist Podcast is brought to by the American Pharmacists Association. APhA has partnered with Your Financial Pharmacist to deliver personalized financial education benefits for APhA members. Throughout the year, APhA will be hosting a number of exclusive webinars covering topics like student loan debt payoff strategies, home buying, investing, insurance needs, and much more. Join APhA now to gain premier access to these educational resources and to receive discounts on YFP products and services. You can join APhA at a 25% discount by visiting pharmacist.com/join and using the coupon code YFP. Again, that’s pharmacist.com/join and using the coupon code YFP.

Tim, episode number 300. Can you believe it?

[00:01:41] TB: I can’t believe it, Tim. It’s kind of surreal, to be honest. I thought when we started this thing way back in the day, that this would be a great project to dedicate some time to, to kind of lend our voices to the topic. But fast forward to today and where the podcast has gone and some of the things that we’ve covered and some of the guests we’ve had on, it’s kind of crazy. What are your thoughts?

[00:02:05] TU: It’s been an amazing journey. We’ll talk about some of the backstory. We’re going to feature some of our favorite moments from the show over the last, what now, six and a half plus years of doing this. Excited to revisit some of those exciting moments and some of the themes of the show. I don’t think you or I would have ever predicted where this would have gone, over a million and a half downloads of the show. But I think more than anything, that number I think certainly is an achievement.

But what gets you and I most excited is what we hear from individuals of the impact that the show is having. Hey, I listened to this episode and I took this action or it ignited a conversation between my spouse and I or connected me with another pharmacist or got me thinking in a different way. That’s the piece that gets me fired up, and I think the reason we started it in the first place and the reason we’re continuing to do it today.

[00:03:02] TB: Yes. I mean, it is such a – we’ve said this before. It’s such a great medium to get out there and kind of have listeners see a certain side of you and be able to educate, but also to share and be vulnerable. One of the surrealist things, and I don’t do them anymore, Justin Woods does, our Director of Business Development, but I used to get on calls with prospective clients that were looking for help on their financial plan. They would say things like, “Hey, Tim. I feel like I know you because I’ve been listening to the podcast for the last two years,” or whatever it looks like. After I – the red kind of drains out of my face. It is kind of quite flattering, and you kind of sit in front of this mic and this camera. You don’t really think that when you hit record that it really has an impact.

But I do think that what YFP has done, and I think the major tool in which it has done this is through the podcast, is really moving the needle for financial education, financial literacy, hopefully, wellness in the pharmacy profession. I still think that we have a lot of work to do. I’d be interested to ask you what you think is next maybe at the end of the podcast and where we’re taking this thing. But, yes, I’m just super excited. I’m super grateful. I think I’m kind of like – I guess I’m technically listed as the cohost, but I kind of just show up, Tim, to be honest. I do my research on what I need to do.

But I know you and Caitlin and Rose, so I want to give them flowers, just do such a great job of prepping. There’s so much work that goes into this that is kind of behind the scenes. Really, without you guys, we’re not at episode 300 in it. From my perspective, it seems seamless, although I know it is not. So I just want to make sure that I express my gratitude to you and Caitlin and Rose over the years because I think it’s been a team effort. As a fan of the show, as a cohost of the show, so to speak, I don’t take that lightly.

[00:05:01] TU: Yes. I’m glad you mentioned that here, Tim. I had wanted to say some thank yous at the end. But this is a great place to do it. Because when we started the show July 2017, we had talked about what would be the frequency, right? It’s going to be weekly? It’s going to be monthly. It’s going to be every other week. We had several folks tell us like, “Man, don’t do weekly. That is a huge commitment.”

I think in the only style that Tim Baker does, it’s like, “Hey, let’s jump in the deep end and figure it out.” We were doing A to Z, right? Editing, content planning, topics. But that would not be possible. We would not have been able to sustain that rhythm of weekly episodes here now at episode 300 without Caitlin’s help, without Rose’s help, without the team’s help, without your engagement, without the guests that have come on the show, the people that continue to listen, the folks that ask questions. So it really has been a community effort, and it’s been an incredible honor to be able to sit in the seat.

One of my favorite parts of the show, we’ll talk more about this throughout the episode, is I hadn’t really thought about like, hey, 300 episodes means 300 conversations that we get to be a part of, right? Sometimes, that’s a sneak peek into a story, a journey of financial wins. Sometimes, that’s media, another pharmacy entrepreneur, or an investor, or an expert on a topic. I get incredible benefit out of just sitting in the seat and learning from the guests that we bring onto the show each and every week. So I also want to give a shout-out to the many, many guests that we’ve had on the show. That’s something that we’re certainly looking to do in the future as well.

Tim, I want to bring back a little bit of humor as we get started here. But I was going back through some email in prep for this episode and found a string of emails from you and I back and forth, fall 2016. This would be before we officially partnered on the business or even making the decision on the podcast. We were talking about what are some name ideas. What are some taglines? What are some topic lines or topic ideas as it relates to the show? Some of the ones we threw out there are Pills and Bills Radio with Tim and Tim, Scripting Financial Freedom, Tim and Tim and the money, Your Financial Script.

Then all of a sudden, I remember this vividly, I was on vacation with my family in Hilton Head. You and I were talking on the phone, and you said, “Why don’t we call it the Your Financial Pharmacist Podcast?” As simple as it sounds, like that was a very pivotal moment in the journey.

[00:07:26] TB: I think – I don’t know this for sure. But like we both kind of had two separate brands. We were doing very similar types of things. Obviously, you with education and the blog, and me with kind of working more one-on-one with pharmacists on their financial plan. But I think a lot of the underlying beliefs and kind of vision and direction was there. You’ve never said this, but maybe it was more obvious to you because like I think you had –

[00:07:54] TU: It wasn’t. Yeah. It wasn’t.

[00:07:56] TB: Yes. I don’t know. For me, like I love Script. I love Script Financial. That was the original name of my firm when I launched. It’s funny how much time you spend on kind of trivial things like logo and colors and things like that, which are they’re important. But you kind of overweight that. It’s kind of the same thing with this when I’m like, “Tim’s done a really good job of like developing a following in a very short time, and I don’t think I have much of an ego.” I’m like, “Why don’t we just use your banner and use kind of the goodwill that you’ve created?”

I kind of think you’ll remember because you were at, yes, Hilton Head. I think – I don’t know. Was it a phone call that I – because I kind of remember you sitting on like a back step or a front step, and I was having this conversation.

[00:08:41] TU: Yes.

[00:08:45] TB: It was kind of like that aha of like, “Duh, why didn’t we think of this 40 emails ago?” Yes, it is kind of funny. Sometimes, it’s like Occam’s razor, right? It’s simplest thing that’s in front of your face, so yes. But some of those names. I think we were kind of trying to trade a little bit on like the Mike and Mike, the ESPN tandem that they’re not together anymore. But I think using the YFP brand just made the most sense in every facet of what we’re trying to achieve.

[00:09:18] TU: So as we celebrate episode 300, as I mentioned, we’re going to go back to some of the most memorable moments from the show and highlight the various themes that we’ve covered over the past six-plus years. It all started with episode one back in July of 2017. Let’s take a listen where we talk about the origins of the show.

Hey, everybody. Welcome to the very first episode of Your Financial Pharmacist Podcast. We are so excited to be here. It’s been a long time in the making, and we can’t wait to get started on this journey. In this very first episode, we’re going to discuss the origins of this podcast coming to life, our individual journeys to the world of personal finance, why we care about this topic so much, and what we have coming up and planned for future episodes.

So to the Your Financial Pharmacist community, I know there’s lots of you out there that have been following the blog over the past few years. So I am super excited to be bringing on Tim Baker to this journey. Tim is a certified financial planner, and he’s doing this business of personal finance and advising the right way. He’s a fee-only advisor, and he has a passion for working with pharmacists. He’s going to add tremendous value to this podcast and to the Your Financial Pharmacist community as a whole. So I can’t wait for you to get to meet him and know more about him.

So, Tim, you remember that time we met at Bob Evans off of I-71 in Mansfield, Ohio. How random was that?

[00:10:43] TB: Yes. It was great. It was a magical breakfast. I think we sat down. Back up a little bit, we met each other actually via Twitter. That’s his thing. I think we realized that we were doing a lot of the same things, and we had a lot of the same passion. So, yes, that breakfast then in Bob Evans was great for me. I think it kind of was the first step in this direction of kind of partnering up and really bringing great content under the Your Financial Pharmacist brand and really build out the community. So I am super excited, Tim. I’m really ready to kind of begin this journey with you and get this podcast off the ground.

[00:11:30] TU: Tim, I got to admit. That’s a little bit uncomfortable to listen to. I can hear the nerves and excitement in our voices. We had no idea where things were going to go at that point, as we’ve already mentioned. But we knew that the podcast was a good next step after we had that first meeting. We had this shared passion of personal finance and pharmacy. But that takes you back, right, hearing that?

[00:11:50] TB: It does and it was left out of that. I actually turned on the first episode, and you hear like the intro. It’s so different now. It’s a lot better now. But like, yes, I definitely do not go back and listen to those. But at the time, I’m like, “Hey, this is pretty good.” I’m sure, and given everything, like it’s not bad. But it goes back to that point of, and you’ve been posting this lately on LinkedIn, you just got to start. The more that you get paralyzed in your brain, the less you’re going to learn.

Obviously, 300 episodes in, I don’t know if I’m any more articulate or stutter any differently than I did then. But it was just so unknown. I think 300 repetitions later, I wouldn’t say it’s polished because – I will admit this. I edited, I think, the first 50 episodes of the podcast. I would take way too much time, Tim, to kind of take out like my ums and some of the imperfections. If you go through, like you’ll hear that probably episodes like 10 through 40 or something like that. But it’s just not genuine. It wasn’t really genuine. This is how I talk. I say lots of ums. I don’t say my geez.

So I think that it was kind of a lesson for me. It’s like don’t try to be something that you’re not. In a world where I think everybody can kind of give you praise or give you like criticism, you kind of have to like filter that out. I think sometimes, like we’ll hear something of like, “Hey, you suck.” That sits well like more with you than like some of the other things that we hear that are positive. That’s kind of been part of the journey too, just being authentic. But it’s just kind of crazy to hear that, which I don’t know if I’ve ever listened to that since that episode, outside of doing the editing. I feel like we’ve come a long way.

[00:13:41] TU: Tim, one of the things we focused on very early on in the show, and we’ve continued, is sharing pharmacist stories. We really wanted to do this for a couple reasons. One, the topic of personal finance can be pretty dry. Two, we really wanted to foster and create a community where pharmacists were empowering and motivating one another. It’s one thing for us to teach and preach, and we certainly do that sometimes. It’s another thing to teach concepts and principles through stories. I think it really helps foster that sense of this isn’t just you or I delivering material. This is us as a collective community of pharmacy professionals coming together to help empower one another on the path towards achieving financial freedom.

That was a really intentional decision, and I think we have seen the fruit of that throughout. Let’s listen into one of the many debt-free stories that we have featured. This is episode 31 with Adam and Brittany Patterson, starting with Adam talking about making the mental transition from student to new practitioner.

[00:14:49] AP: I would say throughout pharmacy school, I tried to mentally prepare myself going towards graduation. Listen to everybody tell me, “Hey, you’ll be making six figures. Don’t worry about it.” What a lot of people don’t consider at the time was that we actually don’t bring home six figures at the end of the day. They don’t factor in all the taxes and everything that cuts out of your paycheck.

I didn’t really have a plan at how I was going to tackle the debt but knew that I had a grace period, six months, to figure it out before I started making payments. My wife and I always joked about how much it would take us or how long it would take us to pay off our loans. But it wasn’t until close to the end of the grace period that it all started to settle in. I think once we actually sat down and started to think about how much money we would owe in the long run, looking at the debt, looking at how much interest would build up, that we really started to focus on attacking that debt. So at first, I would say at graduation, it really doesn’t set in until that first payment is due.

[00:15:53] TU: Tim, you know the Pattersons well. This journey that was featured on episode 31 was when Adam and Brittany had paid off $211,000 of debt in 26 months. This really was a catalyst for their family and for their financial plan, right?

[00:16:08] TB: Yes. Shout out to Adam and Brittany. I hear Adam’s voice, and I’m like, “Man, I like that guy.” I haven’t talked to him in a while, and I need to reach out and see how they’re doing. They’re the face of our website. So you see their face when you go to yourfinancialpharmacist.com.

Yes, I mean, they were really at the jumping-off point in terms of like, “Hey, what’s next? And how do we transition?” They’re just a great example of some of the behavioral finance that we’ll talk about some more in this episode. But just great – I was more thinking of it of like, as I’m listening to Adam, just some of the great people that I’ve got to work with, got to converse with, got to break bread with. They visited me and my daughter when they came through Baltimore, so just great people.

But, yes, they’re just another great example of, I think, how they’ve approached, again, this mountain of debt and then how they’ve, I think, done a great job of transitioning from that. The big thing from them I think when they started working with me, they were renting a house. Then they bought a beautiful home there outside of Atlanta and Georgia. It’s just kind of awesome to see, to be honest, like the progress. I’m kind of more stuck not necessarily on the numbers but on like the people and the relationships that you develop.

So, yes, I definitely jotted down a note that I got to reach out to Adam and Brittany and see how they’re doing. Hopefully, we can meet up with them soon. But just another great conversation and another great example of just being intentional with your financial plan, which I know is a common theme that we try to hit on.

[00:17:47] TU: Yes. That’s what I really remember from their journey. I’m so glad you’ve mentioned the personal relationship side of it, right? Because, I mean, the numbers on the debt repayment or the savings and investing, we love seeing that progress. But it’s about what does that mean for them and their family and living a rich life. It’s been fun to watch with the Pattersons. We’re going to come back and talk about that through the episode.

Tim, one thing Adam said that really hit me was when he said, “I didn’t really have a plan for how to tackle the debt.” This is something that we hear on the regular. Maybe this is a little bit of a pat on our own back, but it feels like the conversation in pharmacy around student loans has become more nuanced in a good way, right? Pharmacists today in 2023 are asking us questions about student loans that demonstrates a level of baseline knowledge that we weren’t hearing back in 2017.

[00:18:38] TB: There’s a couple of shifts that are going on there. One, back in the day in 2017, 2018, 2019, there was a lot of pain around student loans and a lot of pain coupled with where the heck do I even start? Like, “How do I even take a proper inventory?” Then I think as the years went on, it was a pain. But I have a good baseline knowledge of what I have and what I need to pay back. But like how do I – what are the Xs and Os to do that?

Now, since the pandemic, obviously, one of the things that’s happened since we launched the podcast, among other changes that have happened, the long pause that we’ve had, I think it shifted. We don’t hear a lot of pain around student loans because they kind of been out of sight, out of mind. I think that will shift back when the loans come back online and people are paying. But it’s kind of just been like this hibernating bear. But I would agree with you, Tim. I think I’d like to, hopefully, take some credit of why that shifted a little bit in terms of definitely a more nuanced, a more thoughtful approach to inventory or even like talking about different repayment plans, which were just non-existent before and, be honest, non-existent even in the financial planning world because a lot of this was just so new.

So, yes, I mean, a lot of this is, obviously, Xs and Os. But I think when it comes down to what we’re trying to do is soothe the pain that a lot of our listeners had at the time and I still think will have once the pause basically is over. But, yes, it’s kind of been interesting to see that transition over time to where we’re at today. Then, again, in a couple of months, what that will look like when the payments start coming back on.

[00:20:28] TU: Again, shout out to the Pattersons. Grateful for their contribution, sharing that story. That is one of many debt-free stories that we’ve shared on the podcasts. We’ve covered student loans A to Z. So if anyone’s looking for either content, knowledge around student loans, or debt-free stories and journeys, go to some of the throwback episodes that we’ve had throughout the show.

So student loans we’ve covered in detail on the show, a big part of the early days of YFP. But we’ve also focused heavily on stories of pharmacists that are working towards financial independence and living a rich life today, while taking care of their future selves. Let’s take a listen to one financial independence journey that of Cory and Cassie Jenks that we featured on episode 134.

[00:21:15] CJ: Yes. So you’ve had a couple of great guests talk about their FIRE journey, but it’s essentially financially independent, retire early. So you save enough, and the number that is commonly used is you save enough till you have 25 times your annual expenses. Then theoretically, you can withdraw that indefinitely at a four percent rate. To get there, basically, you’re going to have to really bust it for 10 to 20 years, depending on what your savings rate is, depending on what your own spending rate is.

As Mister Money Mustache and hundreds of other bloggers and people have shown, it’s a very viable path. I think that if we had found that in our mid-20s, before kids, like, okay, we could have sucked it up and both worked full-time hardcore to get there. But then we had a kid and realized we want to have time with him, as much as he can be a little pain. So I came across this idea of CoastFI, and so the FI being financially independent. This says that if you saved enough at a high rate for a short period of time early on in your life and career, you’re going to have the time and compound interest to have it grow to what you need it to be by the time you retire. So that if you hit this CoastFI number, you can scale back the work you’re doing. You can take a job that has a little bit more risk, knowing that you don’t need to continue to contribute to your retirement in order to hit that number.

Now, I love how you like to personalize this idea of personal finance because traditional FIRE people would get angry at you for not just going all the way through. Maybe CoastFI people will get angry at us because our version of it is to try to get to a number. But then still work some in order to save some. I don’t think we want to hit a number and then stop. So our version is to like get to the number we want and then have the freedom to contribute a little bit less as our lifestyle changes with our family.

[00:23:20] TU: Tim, one of the reasons I want to bring back this story is I’ve stayed in touch with Cory and Cassie. Great people, shout out to them. This was really a key pivotal moment for them and their family, this journey that they run towards financial independence and being intentional with the financial plan, just like we’ve talked about with the Pattersons. Since that point, because of the groundwork they had laid, Cory has been able to pursue his entrepreneurial efforts as an author, comedian, speaker. Cassie has been able to shift jobs to be more in alignment with what she was looking to do, which has really given them a lot of the flexibility that they were looking for with a young family, to be able to have that time together but also to be pursuing the things that they wanted to be doing professionally.

So I think that that is such a great example of the combination of the financial plan and what we’re ultimately trying to achieve. One example of many, Tim, of something you often say, which is, hey, we’ve got to find this balance between living a rich life today and taking care of our future selves. Why is this such a central theme for you, personally, as well as for our planning team that works with our pharmacist households all across the country?

[00:24:35] TB: That’s a great question, Tim. So why is that important? I think like before I answer that question, when I was listening to Cory, I was just thinking like it was a little bit of the same conversation we had when we were on a recent road trip because you kind of had mentioned planning for your boy’s college and kind of going all the way to one end of like, “Hey, I had this experience of having a lot of debt, so I don’t want them to experience that.” For me, the thing that was screaming, as I was listening to Cory speak and then kind of relating that to our conversation in the car, was planning is greater than the plan. What I mean by that is like it’s kind of the Mike Tyson quote. It’s like you have a plan until someone punches you in the face, or life happens, or you have a kid, which those are things. Having a kid, those are things that have happened since like we started the podcast, for me at least. I know you’ve added a couple to your crew.

So it’s more about planning and less about the plan because the plan is going to change because change is an inevitable part of our life. I think the better that we can cope with change and plan around that, the better we will be. But the answer to your question about live a rich life today, live a rich life tomorrow, I think that a lot of the – and you’re starting to see it swing back the other way. A lot of the mantra is like save, save, save. Have enough for retirement and make sure you’re doing all these things for like the 30-year older version of yourself.

But then there’s a lot more content and stuff out there. What was the book that you’ve recently read? Die with Zero or whatever. That’s kind of shifted that back. I think like the dangerous thing is that if you follow those kind of rules of thumb, you get to the end of the rainbow and you retire. Say you retire with five million. But if you would have taken that trip or those trips throughout the course of the year, or if you would have taken that one day a week to kind of work on a side hustle or spend time with your family, maybe you retire with two or three.

To me, like the question I would ask the client would be like, “Well, what’s the point? What are we really trying to achieve? Is it to amass a bunch of ones and zeros in a bank account? Or is it to really live a rich life as you age through your 20s, 30s, 40s, hopefully, to your 100s?” I think that because we get so busy, we’re on to the next thing. Pharmacists are very type A. It’s, “Okay, I’ve done this. What’s next? Okay, I’ve done this. What’s next?” But I think what planning really does or I think if it’s done well, it really allows space for a conversation of is this what we really want. Is this a wealthy life?

I think we can – this was me completely. I was raised, and I love my parents. But I was raised that the key to success or happiness, if you want to intertwine those two, is, Tim, you have to get the best grades that you can get to get into the best college that you can get into, to then graduate with the highest GPA, to get the best job, to make the most money. I realized in my first probably 30 years of life that like that didn’t necessarily add up to me, that I was often happiest when things were simpler, when I wasn’t making a lot of money. I had a lot more control of my time. I think it really forced me to kind of question and to evaluate what were the important things in my life.

Unfortunately, especially if you kind of get into that trap of, man, I’m working 40, 50, 60 hours, there’s no capacity to really question am I on the right track or not. Sometimes, like it takes you to do that. Sometimes, it’s you and a partner. Sometimes, it’s a third party, an objective person like a therapist, like a financial planner, maybe a priest or a minister or whatever to kind of ask those pointed questions and to challenge the paradigm in which you are in.

I’m happy to see that a lot more of the content or some of the discussion around this is not to – again, I kind of think about corporate America. Right or wrong, but corporate America is running a marathon at a sprinter’s pace, and it’s really not a sustainable thing. So whether that’s your profession, whether that’s the way that you’re spending money, the way that you’re spending your time, I really think that question of are we living a wealthy life today or are we living a wealthy life tomorrow. I think having balanced between those is such an important question to ask yourself, as you are kind of proceeding through life.

Because I know, for me, like there’s been parts of my life where I’m like – it’s kind of like, all right, when you’re little, you kick your soccer ball into the sticker bushes, and you just stick your head down. You’re running and you get out as quickly as you can. Then you take some lumps. But sometimes, we just get stuck in those thorny bushes. You wake up and you’re 40 years old, 50 years old, 60 year olds. You’re like, “What the heck am I doing?” So I think being self-reflective, it’s really about that more than anything.

[00:30:02] TU: Yeah. Tim, you’ve role-modeled this firsthand. Let’s take a listen back to episode 227, where we discuss this further, right? How much is enough, the importance of balancing experiences today with the future. This included your decision to buy your motorhome. Let’s take a listen.

[00:30:19] TB: One of the things I say to prospective clients, we might go through the wealth-building stage of the financial plan, and we’ll do a nest egg calculation that says, “Hey, Tim. You need five million dollars to retire.” That’s typically where they look at us like we have five million heads, right? Because it’s a big number that’s in the future that doesn’t really mean anything to me. So we go through the process of kind of discounting that back to a number that says, “Okay, if you’re putting this into your TSP or this into your IRA or this into your 401(k) a month, you’re on track, or you’re off track, right?” So we can kind of break that down into more of a digestible number to see if we’re trending to that goal, given a handful of assumptions.

But the point of this story is if we do work together for the next 30 years, and you don’t have five million, you have 7 million, 8 million, 10 million, whatever that is, that’s great. Those numbers are bigger than five million. But if you’re miserable because you look back at that list of all the things that you wanted to do over 30 years, 20 years, 10 years, whatever that is, and you haven’t done anything, and you’re miserable because of it or you’re disappointed, the question I would ask you is what’s the freaking point?

[00:31:31] TU: That’s right.

[00:31:33] TB: Why get this education? Why earn this money? Why pay down this debt? Why invest or whatever if we’re not going to intentionally direct it to the things that matter to you most? I don’t think that I’m going to be on my deathbed. I’m going to say I wish I would not have bought that RV. I just don’t think that in my heart of hearts because I just think about the reaction that my daughter and my niece has had, just when we pulled that up. Even the two camping trips that I had, I think I snapped a few pictures and texted them to you, Tim, even in our first camping trips. It’s going to be an adventure.

To extrapolate that out, like that’s our lives, our lives, our adventures. But we have to be willing to take it and seize it. I think that’s what life planning really tries to get to the surface is what is that adventure and taking that road and not necessarily adapt to a paradigm that’s not yours.

[00:32:29] TU: Tim, that was great stuff. It has been a memory maker for your family.

[00:32:33] TB: Yes. I was getting a little teary-eyed listening to that because it’s also like a good reminder for me to be completely honest. Sometimes, Shane and I will look at it. I’m like, “Man, is this worth it because they say it’s just a money suck?” But then when you look at it in totality, like just the things that in the short time that we’ve had it, it’s been a game changer. I don’t know, it’s – listen to that. The two things that were kind of evident to me is when I repeat myself a lot. So I say a lot of the same things over and over again, which I don’t think this is necessarily a bad thing. It’s just kind of like part of my messaging.

But also, like it’s a reminder. Because sometimes, like – and again like we’ve asked the question, even since we got it. Man, is this worth it? It’s a lot of money. Gas prices have gone up and all that kind of stuff. But it is. I mean, we recently changed where we store it, and I’m driving it from one to the other, and I’m just getting so jacked up. My son will see it parked out front. He’s like, “Oh, are we going camping?” He just lights up. He’s like, “I want to go camping.” I’m like, “No, buddy. We’re not going to go camping until it’s a little bit warmer.” He’s like genuinely upset.

So, yes, we have a lot of plans for it. Obviously, we have to make sure that we budget and we have our plan built around it. But I would reiterate the same thing that I had said is like I don’t think that I’m going to be on my deathbed saying like, “I wish I wouldn’t have done that.” I think it’d be the opposite. I wish I would have done it sooner. I wish I would have done it longer or did more trips. So, yes, I think it’s just so important too.

That’s the thing that I really enjoy about the work that we do after the podcasts turns off, and people say, “Hey, I want to work with you guys.” I think our planners do a really good job of like bringing forward, yes, we got to do the Xs and Os and the technical stuff. But bringing forward like that trip that you want to take or this goal that is not necessarily – it’s money-adjacent, right? Because a lot of the things we have to like plan the dollars for, but it’s not necessarily like traditional investing or an insurance policy.

I think those things are just as important. I don’t know if a lot of planners feel that way. But to me, if you have that trip to Paris or the Pacific Northwest out there, I’m like, “Where’s the money for that? Let’s get this going. Let’s do this, and let’s cross it off the list and then move on to the next one.”

[00:34:57] TU: Great stuff. One of the things I mentioned earlier, Tim, is the joy that it’s been to get to know some of the guests that we’ve had on the show. Many of which have led to some awesome friendships and collaborations and just a ton of fruit that has come from that. Most of our guests have been pharmacists. But we’ve had the opportunity to interview several New York Times bestselling authors, gurus in personal finance. This has been an honor. I mean, it’s been a ton of fun just to learn from these folks. I’ve been amazed at how gracious people can be with their time.

Let’s take a listen back to my interview, one of these with Rachel Cruze, episode 215, where she discusses the emotional and behavioral side of the financial plan, including how we can write our own financial story.

[00:35:42] RC: When there’s so much hope, and I think even the money piece of my message that I communicate with people, it’s like no matter what mistakes you’ve made, yes, maybe you do have a ton of debt. So on a more logistical side, yes, you have a deeper hole to dig out of than the person next to you. But no matter what, you get to make decisions to say, “No, I actually want to change how I view something or the habits around money.”

The same is true with your classroom. Some people – a lot of people, I would say, grew up in a hard environment when it came to money with their parents. But, yes, but you don’t have to just mirror that story, right? You can take charge of your life to say, “You know what? I’m not going to sit here and bash my parents, but I’m also not going to defend them. I’m going to just tell the truth and what happens. Here’s the truth. Okay, there’s some good stuff, and there’s some bad stuff. The bad stuff I can forgive, and I’m going to move forward, though, to choose something different for my life and my family.”

I think it’s powerful, and I think we have to do that in all our parenting. I’m not a parenting expert, by any means. But I’m like, my husband and I have said, “Okay, this is our family. What are we going to choose to do in this? So the money piece is part of that.

[00:36:44] TU: Tim, I felt like this episode was oozing with wisdom, and I loved her authenticity. But one of the things she really hit on, we spent most of the conversation talking about, is really the behavioral side of the financial plan, the emotional side of the financial plan. She was alluding there to the money classroom that we grew up in, the money scripts that we hear growing up, and how much of an influence, whether we realize it or not, that that has on how we approach our finances today.

So, Tim, from your perspective, either individually or also what you see with clients, like how important is that money classroom, is that money script in understanding what perspective you’re bringing into the financial plan to ultimately achieve the goals that you want to achieve?

[00:37:28] TB: Yes. I mean, we all have these money scripts. It could be money is the root of all evil, or money solves all your problems, or there’s – don’t trust people with money. There could be a lot of different things that based on your parents, their upbringing, and how they imprint that on you. It’s a big factor. I always kind of point to the Advisor’s Alpha Vanguard study, and that highlights if you work with a financial advisor. They’re supposedly returning three percent per year on your assets. Half of that is really attributed to not technical or any type of special analysis. It’s really like the behavioral coaching.

That’s significant. I think that whether we want to believe it or not, like we all have these scripts, this baggage. It could be a positive thing. It could also be something that’s a limiting factor for us to really kind of achieve the goals that we have. I think that I’m dabbling more into it. I don’t think I’ve even told you this, Tim. But I’m dabbling more into like stoicism, so reading some books on stoicism and Marcus Aurelius. One of the big things that I’m pulling out of that is like you can really only control what you can control. A lot of our thoughts and a lot of the things that preoccupy us are things that are completely out of our control.

It’s kind of what she was saying. You can think about your upbringing and how you were taught, and you can hold on to that and not let that go but probably to your detriment. It’s really about what are you doing today. What are the intentional actions that you’re doing today to better yourselves? That could be financially related. It could be something completely outside of that, just general wellness.

I think that part of, again, working with a therapist, an advisor, whoever that is, is to kind of pull back some of that façade. Ask good question. Ask pointed questions. Challenge you to say again, are we really where we want to be. Or when you said this, let’s dissect that. Where’s that coming from? What is this? How is this serving you or not serving you? What are the limiting factors?

We see this, I think, more often with people that are wading into spaces that they’re completely unfamiliar. So I’m thinking about like a business, and we hear things like impostor syndrome or – but it is true for that individual that is working a shift at a hospital or like a farm. All of that is there. So to me, again, it’s about reflecting on these behaviors and then questioning, does this serve me today. If it doesn’t, let it go, and then move on. I think building that as part of the plan is important.

I was talking with one of our lead planners who’s doing a certification on financial like kind of psychology counseling. A lot of that is to kind of, again, uncover some of the things that she sees in clients to be able to better serve them or challenge them, when they utter X or Y in terms of how they approach their finances. So it’s really, really important the behavioral aspect of it. I think having the pulse on your own, which is very hard, is, I think, part of the building blocks of creating a plan that serves you and not others. So great episode.

[00:40:49] TU: Tim, as we’ve evolved in our own journey as entrepreneurs and have had the opportunity to connect with various pharmacists that are falling in a similar pathway, we quickly came to the realization that finance is a threat across so many not only individual stories but so many business stories. Whether it’s people that are dreaming about their idea, those that are in the thick of launching something or those that are looking to scale, it’s really hard to separate out our personal financial plan and goals from the business.

That’s in part why we started featuring more and more of the show, I would say, over the last 100 episodes or so on pharmacy entrepreneurs, knowing that personal finance is a common thread to pharmacy entrepreneurship to that community. But also, given our personal passion for entrepreneurship, we wanted to give some examples and on some level inspire others with the many different ways that a pharmacist degree and license can be valuable.

Let’s take a listen back to one of these pharmacy entrepreneurs’ interviews that we featured in 2022. That was Kun Yang, the Co-Founder and CEO of Pricklee Cactus Water, and he was featured along with his co-founder on Shark Tank.

[00:42:02] KY: I think there were a lot of moments. When I look back, it wasn’t like I think one specific – I mean, I do have a specific moment that I’ll share. But I think there were a lot of feelings that I think that felt familiar to me, even in that moment that I can kind of trace back and say, “Okay, this kind of makes a lot of sense.” So the moment really was walking into – I just finished our fellowship and program, and had started a new company. It was a spin-off of our existing fellowship business. I kind of just walked in and had really, really fallen in pretty deep appreciation for the opportunity and the people that I was working with.

But I think one of the days I kind of walked in, and I looked around, and this was still pretty early on in our journey. But something hit me that I had always thought that through all the different career changes and exploration of getting to that point, that going this “non-traditional” path would have led me to move away from this feeling of “impostor syndrome” or feeling like everything that I was doing was actually getting more and more specific. It was because it was leading me to a point of clarity, right?

Really, over time, I realized that impostor syndrome and point of clarity had a lot to do with an understanding of who I wasn’t, as opposed to understanding of who I was. I think that’s something that probably a lot of us can relate to is growing up in your 20s and even maybe sometimes early 30s, you have a lot of ideas of maybe what you don’t like to do, right? Or what are some of the things that don’t excite you? What are some of the general things that do excite you? But you may not really understand specifically why or what you’re really good at to allow you to succeed in those roles.

Again, all those feelings led to that one moment I walked in. I looked around in this open office setting, and I was kind of like, “Man, there’s a lot of incredibly talented and smart individuals around me. If I work really, really hard here for another 15, 20 years, I can really be like one of them.” These were at the time, again, all my heroes I looked up to that kind of forged the pathway for us before.

I guess it hit me in that moment that there wasn’t a specific role that I could look at and say like that is exactly in specific what I wanted to do. I think that that was my – I call it a quarter-life crisis moment of all that impostor syndrome bubbling and kind of blowing up all at once, realizing that, “Wait a second. How could I have done all this and pursued all this specificity, only to feel this still in this moment?” There’s not much more specificity I could pursue. That was when it really kind of became an introspective question of like, “Is there something outside of pharmacy that I can apply my skills to still within the health and wellness space that we’re really passionate about, that I could find truth and clarity?”

[00:44:37] TU: Tim, that was one of my favorite episodes of 2022 and just the opportunity to cross paths with Kun. We would later find out we’ve worked at the fellowship program. Shout out to the MCPHS fellowship program, Amee Mistry, who’s been our collaborator now five-plus years and some really incredible graduates that have come out of that program. One of which is being Kun. But just to hear his reflection on that episode of his quarter-life crisis of coming to this moment of, hey, my pharmacy degree and the experiences I’ve had are valuable. But that doesn’t necessarily mean I have to be identified by that or be identified by a traditional career path. I suspect maybe that connects a little bit with you as well on your own journey.

[00:45:21] TB: Yes. I think going back to Cory, like I think early on, Cory Jenks, like we definitely wanted to give a voice, more of a non-traditional path. I mean, you yourself, Tim, since we started the podcast, again, what’s changed? You’re no longer full-time in academia. You’re full-time with YFP, so more of a non-traditional. So I’ll preface this by saying like being an entrepreneur is not for everyone. I think that that’s important to say out loud because there’s a lot that goes into that. It’s not necessarily for every personality type.

But I do think that, for me, personally, being an entrepreneur, I get a lot of juice and a lot of just energy listening to other entrepreneurs kind of share their story. This one in particular, obviously, we had them on the podcast and watched their Shark Tank episode. It’s very inspiring. I do think that one of the common things that comes out with a lot of these sources is the financial piece. That is a financial thread, whether it’s before, during, or even after the whole journey of being an entrepreneur.

So I think, selfishly, we highlight some of the stories because like it’s part of the things that you and I are both interested in. I can hear my own story when I listen to Kun in this episode, and I’m sure a lot of other pharmacists that are going down this path. But I think that it’s another thing that for us to kind of give voices or to highlight. You don’t have to necessarily color within these lines. There’s a life outside of this. For some people, that clicks. For some, it doesn’t. These particular types of episodes, for me, personally, being a fan of the show, are just super inspiring. Again, I can hear my own story in a lot of them, so.

[00:47:13] TU: Yes. Tim, one of the things that comes to mind here is when we started doing more of these interviews, I’ve often shared with folks. I grew up in small business. We’ve had a family business. My dad’s been in business, advise businesses. I think that probably has stayed with me over time. But I just can’t get enough of talking with other entrepreneurs. What are you building? Why are you building it? What’s working? What’s not working? What are you learning about yourself and the journey? It’s incredible to have those conversations.

One of my goals with these conversations was, hey, I’m not necessary expecting that any listener is going to listen to Kun’s story. Or I think about Allyson Brennan, the Founder of Emogene & Co. or Karine Wong, who founded My Guiltless Treats we had on the show, Victoria Reinhatz with Mobile Health Consultants, and the many stories we featured, Kelley Carlstrom and the awesome work that she’s doing. Not that a listener is going to say, “I’m going to go do exactly what Kelley’s doing.” But rather, it’s going to give them a different way of thinking, perhaps a source of inspiration or motivation of like, “I had no idea, like a pharmacist went that same traditional path that I went at one point or I am currently in.”

If students are listening, and they went and did something that was non-traditional, they colored it outside of the lines. Again, we’re not suggesting that path is for everyone. But we want to give a voice to that, and I think we’re in a really exciting/disruptive time in our profession. Depending on how you look at disruption, it can be scary. That’s fair. But it also can be exciting. It means there’s opportunity for new ideas, new innovations to come to – and we’re seeing that out in the pharmacy entrepreneurship community. It’s really exciting.

[00:48:55] TB: Yes. I mean and I think the writing’s on the wall. I would love to have maybe when I answer the question of like, “What’s next, Tim?” I actually have more long-form discussions about this, like the profession of pharmacy. I know there’s some other podcasts that, obviously, are strictly focused on that. But, yes, I mean, I think the writing’s on the wall for a lot of the things that we’ve been talking about with AI and Amazon and different legislative things that are out there that I think it is ripe for disruption. You can be on, “Hey, you embrace that,” or you could be on the, “I’m going to dig my heels in.”

Yes, I think that when I look back at my journey before even meeting you, it was a podcast that I listened to over and over again. It was about financial planners that had a very similar story to me that were kind of leaving the traditional big siloed firm and doing it themselves. I’m like I remember having that like aha moment of, “I’m a pretty smart guy. I feel like I can figure this out.” I just took that leap.

For me, and you see this in a lot of entrepreneurs, because unlike you, I didn’t grow up in that environment. I grew up in the environment of kind of what I was saying like, “Get the best job, i.e. the safest job.” Why would you ever like leave a steady paycheck to go start from zero? That’s a completely foreign concept in my family. I think for me is like once I made that switch, I kind of want to say like the chemistry of my brain change because, again, like I always talk, I said this on a recent post that you had, I was definitely that. A lot of pharmacists can relate to this. Every decision that I made, it was I’m going to dot all the Is. I’m going to cross all the Ts. I’m going to analyze every angle of this decision. Time will go by and I’ll be paralyzed by what should I do.

Now, since becoming an entrepreneur, it’s really like I’m going to cannonball in and figure it out. I might swallow some water, but then I’m going to iterate, right? So I’m going to figure out what works or what doesn’t work. I’m going to save a lot of time doing that, and I’m still going to do a general analysis. But I think that mindset for me, I almost kind of equate it to like the chemistry in my brain. It’s like changed because and, again, I think you talk about entrepreneurship comes in a lot of forms. But it could be a side hustle. But it could be where you’re leaving your job in academia, and you’re doing this full-time. You’re uncapping your income potential.

There’s just a lot of things that are attractive about it to me. Again, as a fan of the show and highlighting the stories, one, part of it is like I’m interested to see like what are people doing with our PharmD that’s related or even unrelated to the profession of pharmacy. What are some creative things that people are doing, and how is the profession going to pivot? Because I think to your point, it is ripe for disruption.

So, yes, just super grateful to have, like I said, the individuals that you mentioned come on and share their story. I’m hoping to do much, much more of these in the future because they’re inspiring in the least, so.

[00:52:14] TU: Yes. It’s so fun to give a voice to the stories here, the passion that comes through. One of the things I think I’ve shared with you, Tim, before, when I think about the traditional pie chart of the profession of pharmacy, right? You’ve got half or so that are in community practice. Maybe 20% or so that are in hospital practice, a smaller segment that’s an industry, smaller segment that’s in academia and research. Then that final five percent or so is very splintered between all these different opportunities.

I think, if I had to put a crystal ball in the future of the profession, we’re going to see that splintered part of the pie chart become bigger and bigger with pharmacists pursuing more and more non-traditional options, which is exciting. The role of the pharmacist is an important one in our healthcare system. I think we’ve got some really cool ideas of things that our people are doing, and I have a feeling we’re going to reflect upon this period as one that was really disruptive in a good way for the profession.

[00:53:07] TB: Absolutely.

[00:53:09] TU: So the last clip I want to share centers around the giving part of the financial plan. Let’s hear from pharmacist educator and Rising Suns Pharmacy Founder, Sarah Adkins, who came on episode 276 to talk about her why for giving, including the journey of starting a nonprofit pharmacy in Southeastern Ohio. Let’s hear from Sarah Adkins.

[00:53:30] SA: I was raised in the church. I think regardless of the spiritual realm in which you’re raised, a lot of my upbringing was about giving and making sure that those who were not as fortunate, that I gave to those people who were not as fortunate. I was taught that, I mean, since a young age. I think that, for me, that is – I don’t have a lot of money right in my – I never have needed that or wanted that. But I have time. Do I have time? That’s the question.

[00:54:05] TU: That is the question.

[00:54:07] SA: I think I don’t have time. But I definitely give wholeheartedly of my time is what I give. So I have given – it makes me feel good, truly. When I am at the free pharmacy, it is a lot like community pharmacy, right? It’s a lot. You’re on your feet. You’re taking phone calls. You’re answering questions. You’re trying to figure out cost of medications, spending a lot of time on the phone, asking patients about their insurance coverage or why are you not eligible and how much is your copay for this.

I have a couple people, just because it’s come to my head. I have a woman who has an $8,000 deductible on her plan, $8,000. That always comes to my head about people with their deductibles. So why giving? Because I can, because I can. I’m bright. I have a good job. I have a lot of support from my family and my community. I can and I’m able, so why not? It makes me feel good. I feel like I’ve done something to make myself proud and to make my community proud and my family proud.

[00:55:14] TU: Because I can. All the fields there from Sarah, someone I have a great amount of admiration and respect for. Tim, her passion and mindset around giving of time and money is contagious. I know one of the things you and I are both excited about is as we work with thousands of pharmacists across the country and have the impact I think that we hope to have on improving the financial wellness, pharmacists working through paying off their own debt, getting a solid financial foundation in place, I think that, naturally, the next question for many pharmacists is how can I help. How can I help in whatever capacity means most to me?

That might be something that’s more traditional in giving; nonprofits, churches, organizations. It might be family members, friends that are in need, other types of areas. But we really see this when we talk about the evolution of YFP and kind of the next phase of the podcast and other things we’re doing. I think the giving part of the financial plan is going to be a really important one.

[00:56:16] TB: I think sometimes there’s a little bit of guilt around this, especially kind of going back to the money scripts. I think this is a good money script to have is to give back. But sometimes, you got to put your own oxygen mask on before you can do that. So, yes, I think that this is one that I think naturally as people, again, kind of continue on their journey. They’re going to be looking for ways that they can kind of give back because a lot of people have been helped along the way as well. It’s something that you and I, again, have talked about in terms of like where does YFP fit in in this whole realm of giving. I think there’s going to be some things that we’re going to announce here in the future around that, which I’m really excited about.

But, yes, it is one of those things that I’m hoping that we can shine more of a light on of stories like Sarah’s because I think it is so important, and it goes back to like what’s the point, right? She mentioned it, how it makes her feel. I think if you can incorporate that into your own financial plan or kind of the vision of what you’re trying to achieve, I think kind of all boats rise. So love the stories as well. I definitely want to make sure that we highlight more stories like this in the next 300 episodes.

So, I guess, Tim, I guess, I’ll ask the question as like what do you think? What’s going to – what do the next 300 episodes have in store for us?

[00:57:45] TU: Well, this is the last – No, I’m just kidding. I think that there’s so much opportunity here. One of the things we’ve talked about is bringing this community together, right? Pharmacists empowering one another. This is not something that just Tim and I are leading or even our team at large. We really feel this vision and work around financial wellness for the profession of pharmacy is ongoing. The work needs to be done. That’s only going to happen at the level it needs to happen with the impact that it has the potential to have, if we can bring that community together to help one another empower one another share stories. So more stories are definitely on the horizon.

Another thing that I have as a vision for the future is more voices on the show. I love doing this. But I recognize that there’s a ton of value and other perspectives, both internally and externally. So we’re going to have folks externally that are really passionate about certain topics. We’re working on this year with Corrie Sanders, Founder of Huna Health, leading our new pharmacy innovators series, featuring pharmacy entrepreneurs but also internally with the team, having more of the expertise of our certified financial planners, our tax professionals, other members of the YFP team to bring some other voices to the show.

Then I think from a content standpoint, Tim, we’ve already started to make this transition that we want to make sure we’re representing the gamut of the pharmacy professional, right? From student pharmacist, new practitioner or mid-career, pre-retiree, retiree, we really feel like this topic of financial wellness in the profession of pharmacy is not narrowed into any one of those groups. It really spans the entirety because those topics are changing naturally as our phase of life evolves. So that will be done in content that we’re bringing to specifically more on that mid-career, pre-retire, retiree, as well as stories in those phases of life about that transition into retirement.

I was just having a conversation yesterday with a pharmacist who’s mid-career. Kids are starting to get to the point of getting out of the house, was taking care of elderly parents. Totally different challenges and opportunities in different parts of the financial plan and wanting to make sure we’re bringing a voice to that as well. So that’s the future I see. We’ve been doing this long enough to know that you can only plan so much, right? There will be some pivot points that will naturally happen and, hopefully, some opportunities that come as well.

Then we don’t have specifics on this yet, Tim, but both you and I share the vision of some more long-form content, bringing some more video in. We’d love to deck out YFP HQ with the studio and do some more video as well. So stay tuned. We might crack that down here in 2023. But what are your thoughts on that, other ideas you have for the vision as well?

[01:00:30] TB: Yes. I mean, I think we kind of follow the – At the time, when we launched the podcast, it was like keep it to like a commute, so like 30 minutes. We’re seeing a lot of successful podcasts go where – you just kind of turn the mic on and you’re just talking about a subject. A lot of the podcasts I listened to are an hour, an hour-plus. So I’m not necessarily advocating for us to kind of drone on about HSAs or things like that. But I would like to be talking more about – when I was looking at some of the statistics, some of our most listened to episodes are more or less about money and more about the broader profession and things like overall wellness. I think that is really important for us to discuss.

I’m fortunate enough to be able to sit in our conference room here with you, Tim, and just kind of talk about broader issues. I think that some of those discussions, if we actually record it and put those out to the masses, would be valuable. Kind of getting your perspective, obviously, my perspective and kind of how I’ve worked with pharmacists over the years and even an outsider. So I think if you’re listening to this, we’re definitely open to feedback, whether that’s more long-form, broaden our scope a little bit.

Are there people out there that are like, “Hey, I’ve been waiting for you to interview X, Y, or Z.”? Nominate yourself. We’d love to get more voices on the podcast and really make the next 300 episodes better than the first 300. Like I said, I want to do more. We talked about more shift in mid-career and retirees. I want to do more for my own kind of education on like money and kids and how we should approach that and what are some of the things that we should be teaching our kids. So we don’t kind of imprint some of these money scripts on them.

There’s lots of things that I think we still are – we need to dust off and really work through. There’s probably a lot of guests that we need to have back on and get updates. So all of that is on the table. But, yes, I’m just super bullish about the work that we’ve done on the podcast, but also the work that’s yet to be done. Excited about the conversation and excited about the journey and continuing to learn on my end. Like I said, I’m a huge fan of the show myself. Yes, just excited for the next 300 in store.

[01:02:53] TU: I am too. It’s going to be a fun journey. It has been a fun journey. As we wrap up, I just want to, again, say thank you to the listeners. Tim, a thank you to you for the many hours you have put into the show, to the planning team, as we’ve had folks from there come on to the show, the many guests, just a few that we featured today. Again, a huge shout-out to Caitlin and Rose from the YFP team that are really the engine behind us putting out this content each and every week and being able to make the show go on. So big thank you to them.

As Tim mentioned, and I’ll reiterate again, if you have an idea for the show, topic, guests, format of the show, we would love to hear that. You can email us, [email protected]. Last but certainly not least, if you’ve been a listener and you’ve liked the show, do us a favor. Leave us a rating and review on Apple Podcasts. That will help others find the show as well.

Tim, great stuff. Looking forward to the next 300.

[01:03:46] TB: Oh, yes.

[01:03:47] TU: Before we wrap up today’s episode of the Your Financial Pharmacist Podcast, I want to, again, thank our sponsor, the American Pharmacists Association. APhA is every pharmacist’s ally advocating on your behalf for better working conditions, better PBM practices, and more opportunities for pharmacists to provide care. Make sure to join a bolder APhA to gain premier access to financial educational resources and to receive discounts on YFP products and services. You can join APhA at a 25% discount by visiting pharmacists.com/join and using the coupon code YFP. Again, that’s pharmacist.com/join using the coupon code YFP.

[END OF INTERVIEW]

[01:04:27] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

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

[END]

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YFP 299: Home Buying for Pharmacists: What to Know, How to Determine If You’re Ready, Finding an Agent, and More!

Posted on March 16, 2023March 16, 2023 by Caitlin Boyle

On this episode, sponsored by The Real Estate RPh, Nate Hedrick, PharmD, The Real Estate RPh and co-host of the YFP Real Estate Investing Podcast, discusses home buying for pharmacists, how to determine if you are ready, how to find an agent, and much more.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, has a chat with Nate Hedrick, The Real Estate RPh and co-host of the YFP Real Estate Investing Podcast, about home buying for pharmacists and the many considerations that should be taken into account when pursuing home ownership. With a focus on first-time home buyers, Tim and Nate cover knowing when you are ready to buy a home. They share the importance of having a solid financial foundation so that when you purchase your home, it doesn’t become an additional stressor on your financial picture. Nate shares his checklist for home-buying readiness, including tackling bad debt, having an emergency fund, building a down payment fund, and understanding why you want to buy a home. With many pharmacists impacted by the student loan pause, there is a discussion on preparedness for when that ends and how home buyers will have to plan for that change to the financial plan, including changes in the affordability of home buying. Nate touches on additional costs of home ownership that first-time buyers should be aware of and plan for, taxes, utilities, maintenance, and capital expenditures. First-time home buyers should also consider assembling a team for the home-buying process, starting with an accountability partner, a lender, and a real estate agent. Listeners will hear about lending options and words of wisdom from Nate on the real estate landscape in early 2023.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[00:00:00] TU: Hello and welcome to the YFP Podcast. I’m Tim Ulbrich, and it’s great to have you here, as we strive to inspire and encourage you on your path towards achieving financial freedom.

Today, I’m excited to welcome back a friend of YFP, pharmacist, real estate agent, and real estate investor, Nate Hedrick, aka the Real Estate RPH. In this episode, we’re going to delve into the world of home buying for pharmacists. We’ll discuss what you need to know, how to determine if you’re ready, considerations for balancing a home purchase for student loans, the differences between lending options, and the various members to consider on your home buying team. Stay with us until the end of the show when Nate and I talk about the current economic environment that first-time homebuyers find themselves in and what to expect going forward.

Are you planning to buy a home in the next year or two? With the state of current home prices and mortgage rates, the home buying process can feel overwhelming. But what if you can leverage the knowledge and ongoing support of someone who has worked with dozens of other pharmacists through their home buying journey all at no cost to you? I’m talking about Nate Hedrick at the Real Estate RPH.

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

[INTERVIEW]

[00:01:32] TU: Nate, welcome back to the show.

[00:01:33] NH: Hey, Tim. Always great to be here.

[00:01:35] TU: So today, we’re going to focus specifically on first-time homebuyers. Few areas we’re going to cover, how to determine when you’re ready, including rent versus buy, how to potentially balance a home purchase with student loans. I think, Nate, this is a timely topic, although we’ve addressed it in the past. We’re getting ready to come out of this freeze period. So I have a sense that this is going to be a topic that is top of mind for many folks again. Then we’ll also talk about the key differences between some of the lending options, a common question that we get. Hey, I’m looking to buy a home, looking for an agent. What are the loan options that are available? So we’ll tackle that as well.

Nate, we have covered this topic before. But you and I talked and really thought this is worth bringing back for a couple reasons. One, first-time homebuyers, we recognize that at the time we publish that content previously, they may not have been in a position to buy at that point. So we wanted to reach them in this moment. But also, there are just some factors right now that are unique. I mentioned one with the student loans coming back on board, waiting to find out when that will be and then also just the reality of the market.

We felt like this was worth coming back to, and I think that we want to make sure that we’re covering this topic well, especially for those folks that are looking to buy for the first time.

[00:02:47] NH: Yes. There’s been a lot of changes, just in the last six months, in market conditions and interest rates. Like pharmacy, right? It’s a dynamic space, real estate. So you can’t just set it once and forget it.

[00:03:00] TU: So let’s start with the elephant in the room, I think, when we talk about first-time homebuyers, especially relevant to today’s market. Should I rent? Should I buy? I think this is timely, not only because of interest rates, but also because of rising rent rates. I think that this is a topic we know we hear often from our community. So my question for you is in today’s market, how do you advise someone to think through this question, should I rent, should I buy, and really to keep the home purchase within the context of the rest of the financial plan?

[00:03:34] NH: Yes. You hit the nail on the head right there, Tim. I mean, this is such a – like any financial decision, you’re not going to make it based on one factor, right? You have to look at a number of factors. So things like how long do I plan to be in this area might be just one piece of this bigger picture of, well, is it worth it to buy here because I’m only going to be here for two years of residency or whatever.

Other questions become what is the local rent rate. Like you said, the rents have been going up just about everywhere, to the point where now mortgages are looking a lot more attractive. But you’ve also got this higher interest rate you have to deal with. Things are just getting pricier. So I think there are lots of different pieces that go into that financial decision, and it’s not just a one-size-fits-all. But really taking a step back and truly evaluating it.

I think the one thing that I see more often than not is people just kind of put a feeling into it and say, “Well, it’s probably cheaper to buy. So I’ll just do that.” Or, “It’s probably better for me to rent right now. So I’ll just do that.” But I really encourage clients and anyone I talked to to take a minute, sit down, figure it out. Look at actual numbers and then help make the decision using that information, rather than just kind of a gut check.

[00:04:39] TU: Yes. I love that, Nate. You and I have talked about this before, but I think there’s a underlying tone of like rent is bad. Buying a home, equity is good. We’ll talk about all the costs involved. But I think what you’re saying is really astute, which is like, hey, let’s put some numbers to that, that feeling, and that statement. Maybe that ends up shaking out to be true. Maybe it doesn’t, based on how loans are structured, based on how much we’re putting down, based on what else is going on in the financial plan.

Sometimes, it does make sense to stay where you’re at renting-wise. Especially, we see this in higher cost of living areas. We have a chance to work with a lot of fellowship programs, folks that are based out of Boston and the northeast. Buying a home is not a possibility as they’re getting started. Or if it is, they might be giving up, “Hey, I’m going to have to move an hour, hour and a half out, and then commute in.” So everyone’s situation is different. An important piece to keep that in mind.

What would you say makes your checklist? So if I’m talking with you, Nate, help me out, first-time homebuyer. I want to make sure I do this in a way that is wise, considering the rest of my financial plan. You’ve been through this. You get the chance to talk with prospective homebuyers all the time. What is that checklist that says, “I’m ready to buy a home.”?

[00:05:48] NH: Yes. It’s a great question. Like anything else, this is going to differ by person. But I think there’s kind of a core set of things that you should be looking at before you say, “Okay, yes. We’re ready to start down this road of buying.” The first thing I would look at is looking at “your bad debt,” right? So making sure that if you’ve got a lot of credit card debt or other bad debt sitting out there, don’t let that rule your financial plan, right? Don’t try to work around that to buy a home. It’s going to be a lot more difficult, and you can set yourself up for a lot more success if you get that bad debt going first. So that’s kind of an easy – I say easy, but it’s a good first step, at least, to get started.

From there, you really want to make sure you’ve got an emergency fund. This is more important now, more so than ever, because the way that the economy has been changing, the way the market has been changing, there’s a potential for more disruption, right? More chances for either a layoff or changes in hours or all the things that can happen that constitute an emergency. Those expound when you buy a house, right? You might have a furnace go out or a roof that needs to be replaced. There are lots of different things that can pop up. So making sure you’ve got that emergency fund as kind of your core, and it’s separate from your down payment fund, which is kind of the next step. But making sure that emergency fund is there first, and then start saving separately for down payment.

This is where I get the most resistance from people that I talk to is, “Well, that’s so much money to save up, Nate. You’re talking about maybe a $20,000 emergency fund and then another $50,000 down payment. How am I supposed to do that? I want a house now.” But truly, to really make sure that you’re ready, making sure those pieces are in place ahead of time is a key to success.

Then ultimately, once you’ve done all that and started down figuring those pieces out. Throughout that, you should be keeping your why behind buying in mind, right? This is not a decision, like I said before, that you can take in a silo. It shouldn’t just be, “Well, I want a house, so let’s go buy it.” Figure out what that why is. We want to set ourselves up for financial success. We want to rent this house out in the future. We want to be in this area for 10 more years. So it makes a lot of sense. What is that why? Then allow that to support all those other pieces before you ever start clicking through Zillow and looking at pictures.

[00:07:58] TU: Yes. You and I both know, right? Well, once that point comes, like we may say, “Hey, we’re going to buy in 6 to 12 months, 12 to 24 months.” Start looking on Redfin, Zillow, realtor.com, whatever. Man, three days later, we’re looking at homes, putting in offers. What just happened?

What I really hear there, Nate, is a theme of having a strong base, having a strong foundation so that when you move into a home, right? We’ll talk about additional costs here in a moment, but things will happen. Things will pop up, whether it’s unexpected costs, expenses, remodels, additional furnishing, or just life changing. We don’t want the home to become another stressor exactly of the financial plan.

So, yes, this takes discipline. We’re not suggesting that every penny of debt needs to be gone. We’ll talk about how to balance this with student loans. We’ll talk about different down payments that may exist. All of those are nuances and details that are really important. But more than anything, we want to be able to move into the home, have peace of mind. Let’s be frank. That’s becoming challenging in today’s market, right? Home prices are going up, which means down payments are going up accordingly. Interest rates are going up, which means monthly payments are going up. So we recognize the challenge with this.

But we’ve seen it in our own situations. We’ve seen it with thousands of pharmacists we’ve talked with and worked with, is that if we can keep this home purchase in check and in consideration with the rest of the financial plan, it’s going to give us a lot. Not only a peace of mind but also breathing room, as we look at accomplishing other goals. You said something earlier that I want to come back to in this checklist, which is potential timeline of being in the home. I underestimated that. I suspect this is common for first-time homebuyers. We look at a home. We say, “Yes, I think we’ll be here forever.” Then job opportunities come. Kids come into the equation. Things shift or change.

Really, when you look at the profitability, if you will, or the return on investment of the home, it really comes with a long time period of being in that home. So what advice would you have for folks that are thinking about the timeline, knowing every market is different? But is it five years? Is it seven years? What might be that timeframe when we think about closing costs and other things, that transition if it does happen isn’t going to set us back financially?

[00:10:17] NH: Yes. It’s, like you said, very specific, based on location, right, that there’s a common phrase? Real estate is local. So it definitely matters where you’re buying. I think the average in the United States is something like 2.8 or three years, something like that, is the break-even point, right? If you can stay in that house longer than three years, you’re good. If it’s less than three years, you’ve probably lost a little bit money.

That totally gets thrown out the window, though, when the market shifts like it has, right? If you bought at the beginning of 2021 and sold at the beginning of 2022, just a year later, you probably made bank, right? Appreciation was going through the roof, and so you did fine. Similarly, you might buy today and have to sell in six months, and you might lose 10% of value, right? There’s no way for us to know.

So you can prepare. You can plan. But as you said before, things are going to change, right? You might find a new job in two years that you had never anticipated. Now, you’re moving across the country for that, right? So you can try to set this up as best you can. Definitely look and use what information you have to make that decision. But don’t get so hung up on we have to plan to be here for five years. If we don’t, it’s not worth it, right? Because that’s just going to make the decision more stressful. Plan with the information that you have and then kind of roll with the rest.

[00:11:28] TU: I think this is another vote in the bucket of making sure that we’ve got a solid savings plan and solid emergency fund, additional savings. Because from personal experience, when you move, it’s not just the closing costs. It’s not just, obviously, the fees that are associated. But it’s the physical move. It’s the, “Okay, we’re in a new home. We want to make some updates. We need some new furniture.” Depending on the size of the property and so forth, taxes may change. Insurance policies may change.

That takes me to my next question for you, which is around some of the additional costs of homeownership that I think, speaking from personal experience, when you’re going in this as a first-time homebuyer, you tend to overlook these because there’s so much excitement around getting in the home. Personal finance, author, speaker, podcaster, Ramit Sethi, talks about estimating an additional 40 to 50 percent of the mortgage payment for these additional homeownership costs, things that he calls phantom costs, right? Taxes, insurance, maintenance, furnishing, utilities, lawn equipment, et cetera. What are your thoughts on that number, and what folks need to be thinking about here?

[00:12:32] NH: Yes. That’s probably not far off. I mean, if you look at the average mortgage payment, just the mortgage payment by itself, it’s right around 25 to 28 percent of the typical American’s income. That’s what they spend on just their mortgage payment. If you look at what they’ve spent on housing expenses, it’s closer to a full like third or more of their full income is going toward their housing expenses. So there’s a big chunk of that other stuff that’s not just in a net mortgage payment.

I know when I was buying my first home, the things I missed, just because, I don’t know, I didn’t know what to look for, were the simple stuff like property taxes, right? I never paid property taxes in my life. I’ve rented forever. Now, I’m 22 years old or whatever, buying a home. All of a sudden, I have this every six-month bill I have to deal with, right? I didn’t expect that. Something simple like utilities too. Those might be baked into your rental costs today, right? You might have to cover sewer or water or trash or electric. Or maybe you’re just paying for Internet today, right? All those utilities become yours.

Then the biggest thing, maybe the most obvious but also the most expensive is the maintenance and capital expenditures. So this is the regular everyday stuff that breaks and you have to replace, but also the big ticket items, right? The roof, the driveway, the furnace, all these larger dollar expenses that can pop up. I’ll give you an example from our own life. We were sitting having dinner the other day. Our like sort of dining room/kitchen area has this big, gorgeous window that looks onto our backyard. It’s like five-foot by four-foot, this huge window. In the bottom left corner, I saw a crack in the window, like in the actual glass itself. I’m like, “Oh, my gosh. We need to look at that.”

So then the next morning, we get up and the crack is clear to the middle of the window. It’s like, “Oh, shoot.” So we were like, “Okay. Well, I guess we have to replace this window,” which I hadn’t done in our house before. We got a couple of different options. One person that wants to replace the glass, somebody else that wants to take out the whole window and install new windows, right? All these different things. It’s anywhere from like 1,000 to 3,000 dollars, depending on what thing we pick.

It’s like, “Whoa.” Okay, this just went from a small crack we noticed at dinner to, “Here’s $3,000 expense, potentially.” So those are the kinds of things that can spiral. If you’re not planning for it, it can really make or break your budget every month.

[00:14:41] TU: That’s such a great example. Sorry, you guys had to go through that. But that is the things that just happen, right? I think we think about objectively looking at the numbers. Speaking from personal experience, when we made that decision to go from rent to buy, I looked at the mortgage payment. I looked at the interest. I looked at the taxes. I looked at the insurance, which is a good start. But I vastly underestimated all these other things that we’re talking about.

Some of them are things that we just have to expect are going to happen, right? You mentioned the big ones; the roof, the furnace, et cetera. But then there’s just kind of the normal wear and tear or, “Hey, we want to make some updates and upgrades.” As much as we tell ourselves like, “Hey, this is the home as is. It’s our forever home,” like human behavior is you’re going to want to make some updates. You’re going to want to make some changes. So if we can plan for these and have margin in the budget, going from a rent to buy situation.

Does the budget not only allow for the principal, the interest, the taxes, and the insurance? But does a budget also allow for some of these other expenses and planning for these things along the way? Again, we want to be in the home, enjoying that large biggest purchase we’re going to make without having the additional stress of like, “Ah, cracked a window. This is now a headache.”

[00:15:57] NH: Something we stole from Tim Baker, actually, and that has been really helpful for us is we have a bucket in our ally accounts. One of our ally accounts is just for home stuff. There’s something powerful about seeing that money go in there and seeing that fund kind of increase and then ultimately decrease when you have to fix something. That makes it more realistic. If you just kind of roll those expenses into your budget every month, it’s easy to overlook them. But if you can plan ahead and actually see those dollars going in and out, it makes it a lot more real.

[00:16:23] TU: Yes, absolutely. All right. So we’ve talked about the expense associated with the home purchase, some of those that are obvious. Maybe some of those are not as obvious. We’ve talked about the readiness to buy, evaluating that rent versus buy. Let’s talk about putting together a team, Nate. I think this is a piece that we get on. We start driving around neighborhoods. We start looking on websites and looking at homes. All of a sudden, we’re off and running. We may not take the time to step back and say not only what is the why, right? What’s the big picture? What are we trying to accomplish? But who do I need on my team before I get too far in the process, and things kind of take off?

When you think about assembling a home buying team, why is it important to have that team in place? Ultimately, who is on that team? Who are the members that are part of that?

[00:17:11] NH: Yes. This is something that I know when I bought my first house, I sort of overlooked or kind of ignored. Probably because even though it was being recommended to me like, “Hey, Nate. Make sure you assemble your team before you get started,” that just sounds overwhelming. It sounds like it’s something I don’t know how to do. What I do know how to do is go on Zillow, see a house that I like, and show up at an open house, right? That’s easy. I can do that.

But what I encourage and what I talk to a lot of my clients about is try to build this mini team in advance, and it will just make the whole process that much easier and smoother. It doesn’t have to be a big ordeal, right? Start with just an accountability partner, right? That’s the first member of your team. This could be a spouse. This could be a parent. This could be a sibling. Somebody that maybe either is or is not involved in the transaction that can be that accountability piece.

I told the story before. But when my wife and I bought our first house, one of the first houses that we really liked was this gorgeous property on like 15 acres, right up, backing up against Cuyahoga Valley National Park here in Cleveland, just absolutely gorgeous property. We fell in love with it. It was way outside our budget. The house was literally falling down. Until we brought our parents out to come like see it for a second showing, and they clearly thought we were insane, we couldn’t see it, right? It was just too easy to get enamored by the vision that we had rather than the reality. So get that accountability partner first because that can really make decision making easier and get you back on track.

From there, the biggest pieces you need from there are really a lender and a real estate agent. I typically recommend people get one or the other first. Then you can kind of expand from there. Good agents are going to know good lenders. Good lenders are going to know good agents. But the agent is the one you’re going to be working with on a daily basis. So if you have to pick one, I generally recommend going with the agent first, and then letting them recommend several lenders and shopping around for that.

That’s typically where the team starts. Then you can expand with needs beyond that, right? You might need a financial planner. You might need a lawyer. You might need a tax professional. All of those people are people you can add on to the mix. But for truly the initial process of buying a home, start with that agent, get that lender, and then start to expand the team from there.

[00:19:16] TU: Nate, I love what you share here with starting with an accountability partner, whether that’s someone involved in the process or not, right? Because I think that reinforces what you’re saying earlier about defining the why, someone who can really help ask good questions, get you thinking more about that. But that also maybe can be a little bit prodding where needed about, “Hey, we’re looking at this beautiful property in Cuyahoga Falls. Yes, the land is perfect. We have this amazing vision. Hey, Nate and Kristen. Have you guys thought about like what it’s going to take the managers to repair it, remodel it? What does this mean for the rest of the financial plan?”

We had a very similar experience. We looked at a property up in Northeast Ohio. I remember vividly. Jess and I walked in. It was kind of a huge lodge type of property, really open. As many warts as there were and the costs that it was going to take to get it up and running, of which we have no – not only that financial means. We have no handiness in any bone of our body, let alone wanting to kind of manage that and take the time. But we just went in eyes wide open of like what this could be.

Thankfully, we kind of eventually got off that ledge and looked at something that was a little bit more reasonable. But I think that speaks to some of the emotional sides, especially on the first-time homebuyer, and how important it is to have that partner. That, once you then define the framework of, “Okay. What are we looking for? What’s the budget? What’s the game plan? How does this fit within the financial plan? Okay. Now, let’s move forward with selecting an agent. Let’s move forward to looking at lending options.”

Because I think we see this over and over and over again because of good marketing practices and other things. Someone is often running with a bank. We have to remember that that bank, that institution, as nice of a person as they are, they aren’t asking you all the questions about how is this best going to fit in with your long-term financial plan, your long-term goals. Sure, you might get approved. We’ll talk about lending options here in a moment. But that doesn’t necessarily mean it’s a good fit for your personal situation and the overall financial plan. I can’t say enough about the team and making sure you’ve got that accountability partner and that the folks are there that are going to help you ensure that this lines up with your long-term plan.

Nate, let’s talk about the loan piece. I think for many pharmacists, this is where we’re itching to get started. We want to know what’s the best rate, how much do I have to put down. Conventional approach is 20% down, which allows for no PMI, no private mortgage insurance, a healthy cushion in terms of equity in the home, if for whatever reason the home drops in value, or you end up moving, needing to tap into equity. But it feels like more and more borrowers are seeking an option that is less than 20% down. I suspect this is coming from a few different areas.

One, the desire to buy a home. We’ve talked about that, right? To get out of a rental situation. The second, I think, is that because of rising home costs, that means that if we hold true to that 20%, that’s going to take more to save for that down payment. It’s going to take longer. Then the third is, I think, for many pharmacists, first-time homebuyers, student loans are eating away at their ability to be able to save for that down payment. So home prices are going up, 20% takes longer to save. Because I have these pesky student loans, it’s harder to save for that down payment. So would you agree? Is this a trend that you’re seeing in terms of a shift away from that conventional 20% down?

[00:22:38] NH: Yes. I do see quite a bit that he’ll move in that direction. Some of it is simply because, like you mentioned, the rising depreciation we saw over the last two, two and a half years completely outpaced people’s ability to save. I mean, if you were – let’s say you were saving $1,000 a month, right? That’s a really nice chunk of change you’re setting aside every single month for a down payment.

But home prices are appreciating at 20% a year in 2021 and about 22% a year in 2022. Unless you’re adding another $200, another $200 every single year on top of those monthly payments, you’re not going to catch up. You’re actually losing money toward your down payment, just by appreciation outpacing you. So that alone is forcing a lot of people in all buying points, at all price points to say, “Well, what other options do I have? Can I spend less upfront and then just ride the monthly payments out over the long period?” Yes, we’re absolutely seeing that, and people are just looking for new options.

[00:23:38] TU: Let’s get to that here in a moment. What are those options? What might be the pros, the cons? What do we want to be thinking about? But I want to first address the student loans. This has become – prior to the pandemic, I would say this is an issue we’ve heard over and over and over again. Hey, I’m itching to getting a home. I’m looking to buy a home. But the student loans are really a big barrier to allowing myself to either fit this into the budget or be able to save for that down payment.”

That tone has shifted because of the pause now for three years. Obviously, that’s going to be ending here in the foreseeable future, unless something changes, which it could. But I want to talk about this balance. You wrote a blog article on this topic, balancing student loans with the home purchase. We’ll link to that in the show notes. But what advice at a high level would you have for our listeners, as they evaluate their options with buying a home with student loans, also knowing that we might have folks that haven’t been used to making payments for the past three years that are now going to be entering back into those payments?

[00:24:35] NH: It’s actually something that I’m worried is the wrong word but I’m concerned about because there are so many people out there today that either have bought a home, where they have entered into a rental situation sometime in the last three years and have not taken stock up their loan payments or what they’re going to be. I think if there’s one thing that people are missing more than anything right now, it’s that they’re pretending those don’t exist because they don’t exist today. I think that’s really dangerous.

If you look at how the lenders were handling these over the last couple of years, most lenders were basically taking your loan balance. Let’s say you have $100,000 in loans. They were saying, well, one percent of that is going to be your payment, right? We’ll just guess one percent. Some lenders were guessing half a percent, and they didn’t even look at what your actual payment was. They just guessed, right? They just picked a number and rolled with it.

Again, I think that if you’re not paying attention to that and then you suddenly restart, you could find yourself very, very house poor or just in a situation where you’re not prepared for that level of financial strain. So if there’s one thing you can do in terms of the loans right now, it’s look at what your actual payment is going to be, figure out what that number is, and build it into your budget. If you really want to stress yourself out and stress the finances a little bit before you make that home purchase, put that money that that loan payment is going to be into account that you that you can’t touch, right? Just throw it into a new ally account or a new bucket, and pretend you can’t touch it at all.

Make sure everything still works without you being able to touch that because it’s coming back, right? Just banking on the fact that it’s going to go away is not going to set you up for success. So that is definitely an important piece to keep in mind.

[00:26:07] TU: Yes. We got to build that muscle right now, right? I think what’s happened is it’s been an incredible benefit. Zero dollar payments, zero percent interest has been incredible, if we’ve been allocating those dollars to other parts of the plan, expecting it to come back at some point, budgeting accordingly. But I think the unintended consequence has been with multiple extensions of the pause. With each one, it’s becoming more and more, as you alluded to, like pretending that they may not be there.

This is the moment to start building that muscle back up if we haven’t been. For those that are looking, I think there’s the consideration for those that are in a home, that bought a home when the pause was happening. Then I think there’s a consideration for those that are looking to buy a home and have yet to have their student loans start back up or start for the first time as well. What you’re saying is just such a classic example of trying to avoid the trap of looking at any one part of a financial plan in a silo, right? So we’re looking at the overall budget. We’re looking at the impact of the student loan payment. How do we address those student loans, right?

Someone who pursues a loan forgiveness strategy, income-driven repayment plan, what they may or may not be able to do on a home is very different than someone who’s looking at an aggressive debt payoff period. So how you tackle your student loans and the repayment plan you choose is going to have big implications on what that means to the budget, which, of course, connects to what you’re going to be able to afford and look at on the side of the home buying. Great reminder. We’ll link to that article again in the show notes. I think it’s really relevant, as folks start preparing for this pause to pick back up.

[00:27:42] NH: Yes. Keep in mind, something – I don’t want to sound all doom and gloom, right? You can absolutely purchase a home with student loans. Just don’t ignore them, right? We bought our first house and had tons of student loan debt still. It’s absolutely doable. What I’m concerned about is people that are ignoring it and pretending that it’s not coming back. That’s where you can fall into a trap.

[00:28:00] TU: Yes. We got to look at the numbers, right? Look at the budget. Kind of objectively see what’s there. So at a broad level, Nate, define the different types of loans that are available. We talked about conventional 20% down, no private mortgage insurance. But again, we see more and more folks are pivoting away from that. So that certainly is one option. What other options are out there that individuals should consider before they kind of get off and running with any one individual lending institution?

[00:28:27] NH: Yes. I think, typically, when I’m talking about loans, I break them down into three types. Obviously, not a lender, right? Real estate agent and pharmacist but not a lender. But the three basic types that you’re going to deal with are what we call conventional loans. This is typically your 20% down, maybe 10% with PMI. But these are kind of your good credit score, run of the mill. Every bank has them type of loans, right? Conventional loans, and they’re backed by Fannie and Freddie Mae or Freddie Mac and Fannie Mae. Excuse me. Those are going to be just, again, standard underwriting practice, right?

You’ve also got government-backed loans. These are those that are attached to some sort of government-backed program. Either these are FHA loans, or these are USDA loans or VA loans. But there’s some sort of government-backed entity with these, and you might need to qualify for those, in the case of like a VA loan. Or you might just be able to offer this up through a certain type of lender. So those are available. Typically, the advantage of these loans is a lot lower down payment. But you might have different terms and a higher interest rate. Or you’re paying private mortgage insurance or things like that.

Then the third type is kind of a hybrid. Really, it’s closer to a conventional loan, but that is a professional loan. We’ve got lots of different types of these. The ones that most of our audience would be dealing with as a pharmacist is home loan, but they’re also called physicians’ loans or doctors’ loans. The idea is that you’re taking the conventional loan product, and you’re underwriting it using the fact that the person buying the home is going to be a physician or a pharmacist, right? There’s a lot more earning potential there, a lot more stability in their career, a lot more income-earning potential down the road. So they underwrite those a little bit differently.

Typically, what that means is that you can get the lower down payment of a government-backed loan, but you get the conventional terms that come with a conventional loan. So you get no PMI, for example. Or you get the lower interest rate that others are getting. So there are some advantages there. Each one of those loans has an advantage and a disadvantage in certain situations. It’s really on the individual to evaluate those with somebody that knows what they’re doing to make sure that you’re finding what the right product is for you.

[00:30:28] TU: Which comes back to the advocate or an agent like yourself that really has a good look into these different types of options. It can be a third party to have you thought about this because there’s really, you said earlier, the suggestion of looking at multiple lenders, which I certainly would agree with. I would add on to that looking at multiple lending options with multiple lenders, right?

We’re talking about conventional loans, government-backed loans, pharmacist home, doctor type loans. All of those differ, as you alluded to, in terms of down payment, potentially the interest rates, the nature of loans, it fixes a variable, and then, obviously, credit scores, other factors as well. So I think what I’m trying to advocate for is to really do that homework. Work with someone that can help you understand those options. Do your research because once you’re running off with a lender, at that point, you’re starting to really kind of box yourself into one option. So making sure you’re looking at the full spectrum of options before you move forward.

[00:31:28] NH: This is where a really good agent can start the conversation in the right direction too, right? As real estate agents, we are not lending experts. But we know a ton of lending experts, right? So if a client comes to me and says, “Hey, Nate. I’m thinking about buying a home. I’ve only saved up $10,000 for my down payment, and my credit score is not that great,” well, that’s fine. Let’s see if we can make that work. I’m going to get you in touch with three of my favorite FHA lenders. Talk with each one of them, explain your situation, and let’s see what that looks like, right? We can guide people to the right individuals to get that information, rather than having them just guess and start Googling things.

A good agent, if you’re not sure what the lending process or not sure which the next step is, start with a really good agent. Explain your situation. While they are not going to be able to give you all the answers themselves, they’re going to know the right people to talk to so that you can get those answers from the right individual.

[00:32:16] TU: For folks that are going through this right now or looking to get started here in the near future, as we mentioned on the introduction, Nate can really be that advocate for you. So we built through the home buying concierge service. Nate can connect you with an agent all across the country. So you don’t have to live just in Northeast Ohio to be able to tap into Nate’s expertise. Regardless of where you’re buying a home across the country, he’s vetted agents in certain areas is there to be alongside of you in that journey to talk about lending options, to answer questions that you have, and to be the advocate that he talked about earlier.

We’ll link to the page. You can get in contact with Nate in the show notes. You can also email him directly. We’ll link to his email address. I think that’s a great first step for folks that are getting started on this journey. Or as we talked about before, even if you’re thinking, hey, six months out, 12 months out, we know that timeline can collapse. So it can’t hurt to start the conversation now as well.

Nate, let’s wrap up by talking about some current trends, right? The past couple of years, since the pandemic, I would say is an understatement, have been a whirlwind, limited supply, high demand. You talked about the appreciation rates, rising interest rates. I think this creates an overwhelming situation for many first-time homebuyers. Here today, we’re recording today. We’re expecting an announcement on a jobs report, which the Fed is looking at, based on that what they’re going to do to be more or less aggressive on interest rate hikes.

There’s news that’s coming out daily that I think for first-time homebuyers, it’s like, geez, not only is the price going up. The interest rates are going up. We’re talking about student loans starting. So my question is if you had to look at your crystal ball, we won’t hold you to it, what is the outlook potentially? I’m a first-time homebuyer. I’m listening. I’m looking maybe this spring, this summer, next fall. What words of wisdom would you have for them, as they look at this pursuit of buying a home?

[00:34:05] NH: Yes. Like you said, no crystal ball, but at least the pulse that I’m getting. David and I on the YFP Real Estate Investing Podcast are lucky enough to talk to individuals from all over the country in all different walks of life, and understanding the lending and the markets and different agents from different locations. So that helps to give us a better perspective on kind of nationally what’s happening.

What we’re seeing right now is that most markets in the last three to six months have pulled back in their valuations. Some have been flat. Like here in Cleveland, we’re actually flat to up. I think we’re up like two percent year over year or something like that. So we’re very, very small increase year over year. But then there are some markets like Houston who pulled back 20% or more. It’s just incredible.

So a lot of that, again, goes back to what I said earlier about real estate is local. So understanding your local market can help you make a decision moving forward. What we’re seeing right now is that pullback or that flattening is making it a little bit more affordable, as the people save up more money and the appreciation isn’t outpacing them nearly as much. It’s making it a little bit more affordable to buy. But there is still a supply issue. We’re still dealing with a lot of people that aren’t ready to sell because if they sell, they have to go buy something else with a higher interest rate.

We talked about this on the show before, you and I, about if you had a three percent mortgage today, and you switch to a six percent mortgage somewhere else, you could have a much, much less expensive home but the exact same monthly payment, right?

[00:35:32] TU: Yes. There has to be a really compelling reason to move, right? When you’re going for – yeah.

[00:35:35] NH: Exactly. That’s hurting supply a little bit. I don’t think I see that getting considerably better until the end of the year. So what we’re seeing right now, and again it varies based on location, is that houses are still coming on the market. They’re a little more affordable, just because their prices have not continued to skyrocket. But the limited supply is still creating competition out there. I wish I could say it’s 100% better than it was last year. It’s better and it’s still not a bad time to buy. But the competition is still out there.

I mean, I offered on a house yesterday with a pharmacist. It came on the market two days ago. We put an offer in. There was a three o’clock deadline. We were almost six percent over listing price on our escalation clause, and we still lost it to somebody else who waived inspections. So like that’s still happening. It’s still out there. It’s getting better, but we’re not quite there yet.

[00:36:25] TU: Yes. I’m glad, again, to your point. Everything’s local. But that one example really highlights, I think, something important for folks that are on the front end of this journey as you’re looking. I’ve almost now, Nate, as I just observe homes and kind of keep an eye on what’s in the market, whatever I see is the list price, I just increase in my mind, right? I think that maybe that’s true in some markets, more so than others. But what I’m getting at is there can be a very creepy and effective looking of, “Here, our budget’s 300. Well, why don’t we put the search range like up to 350?” Then we go see the home that’s 350. Really, it’s going to take 380, 400 to get that home, right? All of a sudden, we’re $100,000 off what we had budgeted.

Again, I think finding someone on your team that can really help you understand the local market, what is happening in terms of putting together competitive offers, how far above our homes typically go into value, and then working that in your plan to make sure you’ve got a realistic view of what it’s going to take as you make that purchase.

[00:37:21] NH: There are opportunities out there too. I mean, we’re still seeing deals where a house is sitting on the market for a couple of weeks because maybe they overpriced it to begin with. It loses that initial flurry of activity. I mean, we as agents know that the first three weeks of listing a home are the most important, right? If you don’t sell in that first three weeks, right now anyway, your chances of selling it list price go down dramatically, and they just drop and drop.

If you’re someone out there looking for a home and you’ve not had success so far, and again this is going to vary by location, but what I’m encouraging some of my clients to do is look at those houses that have been in the market for two months. Those are the ones where you can potentially go find a deal because they initially overpriced it. They thought they were going to sell in a week. Now, it’s eight weeks, right? That’s where you can come in and make a deal.

I’ve had success with clients offering on those properties and actually getting quite a bit off of that listing price. So it’s softening, but it’s not anywhere near where we want it to be yet for the buyers that we’re working with.

[00:38:13] TU: So stay tuned. We’ll have Nate back on the show this year as well. Again, we’ll link to his information in the show notes, his email address. You can go to yourfinancialpharmacist.com. You can click on home buying. You can get to Nate that way as well.

Nate, as always, great stuff, and I appreciate the perspective you bring on this important topic to our community.

[00:38:31] NH: Yes. Thanks for having me on, Tim.

[00:38:33] TU: Nate and I have covered a ton of information in this podcast. So imagine working with Nate one-on-one through your home buying journey and having his support to give you much needed peace of mind. We know many pharmacists want to feel confident about big financial decisions, including a home purchase. So if you have fears of being house poor, concerns about the impact a home purchase might have on your other financial goals, Nate and his home buying concierge service can help, all at no cost to you. You can visit realestaterph.com or click on the link in the show notes to schedule your free 30-minute jumpstart planning session with Nate.

[END OF INTERVIEW]

[00:39:12] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

[END]

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YFP 298: Preparing for Retirement with Dean Emeritus Dr. Gary Levin

Posted on March 9, 2023March 16, 2023 by Caitlin Boyle

Dean Emeritus Dr. Gary Levin dives into the details of preparing for retirement. He shares how his career evolved from serving in the Navy to a career in pharmacy and then nearly 30 years in academia. He talks through how early investing and saving in his first job laid the foundation for his retirement, how he dealt with market volatility throughout his career, and why he started a charter company in retirement to supplement his income.

About Today’s Guest

Dr. Gary M. Levin is retired following a career in academia moving up the ladder from Assistant Professor at Albany College of Pharmacy to Founding Dean and Professor of the Larkin University College of Pharmacy in Miami, Florida. He was recently awarded emeritus status upon his retirement. Dr. Levin has worked in numerous Colleges of Pharmacy and Medicine including his alma mater the University of Florida where he also completed a residency in psychiatric pharmacy with the Gainesville VAMC and a Fellowship in Psychopharmacology and Pharmacokinetics at the UF College of Pharmacy.

Dr. Levin has been board certified in psychiatric pharmacy practice (BCPP) since 1996 as a member of the inaugural group to become certified. He is an elected fellow in the American College of Clinical Pharmacy (FCCP). He is a founding member and was the first elected president of the College of Psychiatric and Neurologic Pharmacists (CPNP). During his career, he precepted students, post-doctoral residents, and research fellows in pharmacy and psychiatry. This has been his greatest professional passion, to introduce students and other learners about the impact a psychiatric pharmacist can have on improving people’s lives.

Dr. Levin has been active in many professional pharmacy organizations and has held various appointed and elected positions. He has reviewed for many journals in both pharmacy and psychiatry and has served on several editorial boards. He has published over 150 peer-reviewed manuscripts, book chapters, and scientific abstracts and has received close to 1 million dollars in research and training support over his career.

His research interests have included improving outcomes in patients with psychiatric disorders, pharmacokinetics of psychoactive agents, and pharmacogenomic applications in patients with psychiatric and neurological disorders. Since 2013, upon becoming a CEO Dean, his research interests shifted to the scholarship of teaching and learning.

In his retirement he is enjoying spending more time with his wife, Toya Bowles, Pharm.D., MS, BCPP who works as a principal MSL for the Janssen neuroscience division of J&J, more time boating, traveling regularly to the Florida Keys, The Bahamas, and Mexico, and working with a private tutor to become fluent in Latin-American Spanish. He is also preparing for his US Coast Guard Captains License. He trains in Pilates and weights and has a 47th-floor balcony garden including many fruits and vegetables and a Key Lime tree that is producing too many limes in his home in Brickell Miami Florida.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, chats with Dean Emeritus, Dr. Gary Levin, on preparing for retirement. In their discussion, Gary explains how he found his way into pharmacy, ultimately pharmacy academia, from his early start in the Navy. He walks the listeners through the early stages of his career to where he is today, with guiding advice for pharmacists in all phases of their careers. Gary shares how investing and saving while working in his first faculty position laid the foundation for his retirement and how even small investments can profoundly impact the retirement paycheck.

Throughout the episode, Gary provides his top tips for those pharmacists in the first half of their careers, experiencing market volatility and how to keep a long-term mindset in preparation for retirement:

Don’t panic.
Recognize the value of having a good coach, trusted advisor, or financial planner.
Start planning for and investing for retirement as early as possible.
When you get a raise, save the raise.
Minimize withdrawal.

In closing, Gary dives into the story of how he started his charter company, how he plans to utilize the company as part of his retirement strategy, and the services used to automate the process so he can fully enjoy his retirement.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00] TU: Hey, everybody. Tim Ulbrich here, and thank you for listening to the YFP Podcast, for each week we strive to inspire and encourage you on your path towards achieving financial freedom. This week, I had the pleasure of welcoming onto the show Dean Emeritus Dr. Gary Levin. Some of my favorite moments from the show include hearing his career journey from the Navy, the choosing pharmacy to spending nearly 30 years in academia, how early investing and saving in his first faculty job laid the foundation for his retirement nearly 30 years later, how he dealt with the market volatility throughout his career, to avoid panic and to keep that long-term mindset and why he decided to start a business, Captain G’s Charter Company in retirement to supplement his income and to help build his retirement paycheck.

Now before we jump into the show, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 280 households in 40-plus states. YFP Planning offers fee-only high-touch financial planning that is customized to the pharmacy professional. If you’re interested in learning more about working one-on-one with a certified financial planner, may help you achieve your financial goals, you can book a free discovery call at yfpplanning.com.

Whether or not YFP Planning’s financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom. Okay, let’s jump into my interview with Dr. Gary Levin.

[INTERVIEW]

[0:01:26] TU: Gary, welcome to the show.

[0:01:28] GL: Hi. Thanks, Tim. Thanks for having me.

[0:01:30] TU: I’m really excited to dig into your pharmacy journey a little bit, how you planned for retirement and how you’ve thought about the financial journey throughout your career, and then we’ll wrap up and talk about the business that you recently started in retirement as well. I have a feeling just based on some back and forth conversation that we had on LinkedIn and email that you’re going to have a lot to share in terms of pearls of wisdom for our listeners, whether it’s new practitioners that are listening, that are just getting started, maybe it’s some mid-career pharmacists that are feeling they’re in the thick of it as they look ahead towards the future, or perhaps folks that are nearing retirement and are able to gain something from someone who has recently made that transition. Let’s start with your career journey. What got you into pharmacy and where did you end up doing your pharmacy training?

[0:02:17] GL: Interesting story, but I was in the Navy for seven years right out of high school. I had just really been done with school. I didn’t really like school. Once I graduated, I was just working at local restaurants. I was working at a gas station back when you had an attendant pumped your gas. I mean, still New Jersey has that, but it was everywhere and I was in – I grew up in Philadelphia. Really just wanted to get out and do something completely different.

My best friend said, “Hey, let’s join the Navy on the buddy program.” We did. We went to boot camp together. Right after boot camp, we were separated. He ended up on a ship out of San Diego. I ended up as an airdale, so I actually in seven years in the Navy, I never saw a ship, except from the air. I flew on a plane that was too big to land on an aircraft carrier. When I say I flew, I didn’t fly the plane. I was back in the middle of the plane. They called us a two rat back in the middle of the two. I operated the equipment that helped us hunt Soviet submarines. My job was actually aviation anti-submarine warfare operator.

I liked it so much that I started college during some off time at – and I was stationed in Jacksonville, Florida. What we would do is we would train for about 10 or 11 months in Jacksonville for the next location that we were going to go to, and then our whole squadron of 11 planes and about 400 people would just move to a new location for six months, and then we would operate out of that location. I really got to talk about enjoying the world. I got to live for six months at a time in Sicily, in the Azores, which are Portuguese islands in the north Atlantic, Bermuda, which I was there during the height of vacation season. Was in Bermuda from April to October. That was an amazing – Not a tough deployment place to be. Okinawa and the Philippines and Spain.

I really did get to see the world. From all of those places at any given time, they would send us to another location. For example, when I was in Spain, they said, “Well, Greece wants to play some more games.” We’re going to go try and find their submarine, so we would go to Greece for a week at a time, or we would go to France for a week at a time. I really did get to see almost everything. While I was in though, I knew I wanted to go to college. I thought I wanted to be a veterinarian and that was always my plan. My classes were pre-vet. After four years in the Navy, they wanted me to re-enlist. I had really just started to take classes. While I was in at my particular rating, as long as you got an A or a B in your class, they would pay for 90% of the tuition.

I took two classes while I was in Jacksonville. At the time, it was Jacksonville Community College. I think now it’s Florida State College in Jacksonville. I took two classes and just really loved it. When I re-enlisted, my squadron was going to Keflavik Iceland for a full winter deployment. I thought, Iceland is a place where people now go on vacation. My wife said, “I can’t believe that you didn’t go to Iceland.” I said, “Well, when people go on vacation, they go for two weeks and they go in the summer.” This was six months solid winter. I think it was September to March, maybe. Full winter I said, “No, I’ve done enough of my sea duty time. I’m ready to go to shore duty.”

Because they didn’t want me to leave the squadron, they wanted me in Keflavik, Iceland, they said, “Well, the only place we can send you is Memphis.” I said, “Well, that’s fine. I’ll use that time to go to college full-time.” I did go to college full-time while I was there and still doing my pre-vet. I went to Memphis State University, which is now University of Memphis. Anyone who is a former student of mine, or interviewed at any of my colleges that I’ve worked at as a dean, probably have heard this story, because I would tell it before the actual interview day started, what my background was. I apologize to any of those that have already heard this story.

I finished my sophomore year as a pre-vet, but pre-vet, pre-pharmacy, pre-dental, pre-med, they’re all the same courses. I had friends that were going to pharmacy school. At the time, this was the early and mid-1980s. Most people, really it was the BS in pharmacy that was the predominant degree. If you were not in California, there were only about four colleges in the country that offered an entry level Pharm.D degree. My wife was in pharmacy school about the same time and she went to University of Kansas and it wasn’t even an option. She had to do her BS and then she worked for a year and then applied and went back to get her post-back Pharm.D.

We didn’t know each other at the time. We didn’t meet until 15, 20 years later at University of Florida. I didn’t want to do that. I wanted to go straight through. Because I was already a resident in Florida by being in the Navy there, I went back to Florida to go to University of Florida. I thought, “Okay, what do I do? I’m now halfway through my junior year and I’ve been pre-vet the whole time.” I went and talked to a health career advisor. Of course, the first thing they say is, what about medical school? Oh, I didn’t say why I didn’t want to be a vet. I worked for a vet in my last year at Memphis part-time. If you’re not an owner and nobody can own a practice right out of vet school, you could do residencies if you want to specialize, but they don’t pay well. We had an associate vet, so he wasn’t one of the owners. He was just working for them full-time.

Now, again, this was 1985. At that time, pharmacists were making about 35,000 a year. I said, “Do you mind me asking, what do you make?” He said USD 18,000. He paid about a 100,000 in tuition. I said, “I mean, how long is it going to be for you to pay off your student loans? USD 18,000, that wasn’t much really more. It’s a little bit more than minimum wage.” He said, his goal was to work there about five years, build up enough of a clientele that ultimately, he can own his own practice. Very similar to what dentists do and even physicians right out of training oftentimes. That was really why I decided, vet school wasn’t for me. I wasn’t going through all these years of college to make at the time, what was just half of, or a third of what a pharmacist can make.

I still didn’t think pharmacy was for me though, because a lot of my friends that were in my classes in college were going to pharmacy school, and they were going at the time, it was the BS degree. At the time, they would even say, I would say, “What is your job going to be?” They would say themselves, “Well, we take it from the big bottle. Count by fives and put it in the little bottle.” I said, “You’re going to go to school for five, six, seven years and that’s what your job is going to be for the rest of your career?” They would tell me that there’s other things to do, but you have to do advanced training. Typically, you have to get a Pharm.D.”

At the time, Florida was transitioning to – I never even thought of pharmacy school. When I talked to the health care advisor at UF, they set me up to meet with a few of the faculty to explain that there were other jobs. It doesn’t mean to say that I didn’t want to work in the community. I actually worked in the community many times as a pharmacist in my residency, in my fellowship as an assistant professor, ultimately when I got to that point. I really enjoyed working with patients.

Med school was out, because I didn’t want to do another three or four years of residency. I said, when I graduate, I just want to graduate and be able to go into practice, or training, or into my career. UF was just transitioning from the post-back Pharm.D to the entry level Pharm.D. We had to make our decision after our first year. Everyone was together in one class. After our first year, we had to decide, okay, are you going to go into the Pharm.D track, or the BS track? It was about in my year, about 40 students went into the Pharm.D track and about 60 went into the BS. Interestingly enough, probably half of those people that went into the BS track ended up doing the program that Florida had, which was the working professional Pharm.D program, because they wanted to do something different, or just advance their career, beyond a chain, or a independent pharmacy.

They wanted to move up. Even if they wanted to stay with the chain, they wanted to move up into administration. They wanted to do something different. I went the Pharm.D track. Really, my goal was still at that point, to get my Pharm.D and to work as a pharmacist, not to do any post-doctoral training. A friend of mine was working for an independent in Tampa that had three different pharmacies. He had contacted me and said, “I would like to hire you. I don’t have any Pharm.Ds at the time, but I would really like to promote the fact that you can work with patient counseling, that you could do things beyond what are behind the counter pharmacists are doing, and we’re going to promote that we have a doctor of pharmacy. You would be probably one of the few in Tampa at the time.”

Again, because most of the people that were doing – that did the post-back program, a number of them are my friends now, went into hospital pharmacy, or they went into industry. Very few were doing community pharmacy. It sounded great. After I graduated, I went to do that and nothing was any different. I was doing the exact same job as all the “retail pharmacists,” and I was working behind the counter, not doing anything different. I did that for about six months and I left to go to the VA in Tampa.

While working at the VA, a number of my friends and colleagues, and by the way, I encourage people, I always encourage people to join, either be active in your student pharmacy organizations. For me, I was most active in Kappa side. That has really helped me throughout my career. A close friend of mine, who probably many people at least in the Florida area know, Doug Covey, was working as a clinical specialist at the VA in Tampa. I said, “Doug, I want to do what you do. I want to be a clinical specialist, not just working in the pharmacy.”

The VA had said, “We want to do an experiment. We have clinical specialists who are Pharm.Ds that have either been a Pharm.D for a long period of time and have either done a residency, or if they haven’t done a residency, they’ve been a Pharm.D for a while and they’ve built up trust with the clinicians that they work with. But at your level, you’re going to be in the middle.” I got to work with him in a cardiology clinic in the Coumadin Clinic and in a refill clinic. People that ran out of their medication, but they couldn’t get an appointment with a physician for probably three months. They would meet with us. It was me and three other Pharm.Ds from my class and we would actually review their chart, make sure that everything was stabilized so that we can actually write a prescription for them. This was before pharmacists actually wrote prescriptions in the VA.

What we wrote was a recommendation and the physician had, I think, about 72 hours to review it and say that he agreed with it. In all sense, we were writing prescriptions and this was in 1990. I really enjoyed doing that, but it was really only one day a week and then a half day a week working in the cardiology clinic with Doug and a half day a week doing the Coumadin Clinic, but I wanted to do that full-time. His best advice was, “Gary, you really need to go back and do a residency.”

The two things that I enjoy the most in pharmacy school, at least through my rotations, actually three. One was emergency medicine and toxicology. A friend of mine, who many people know in Florida and around the country is Joe Spillane. Joe was a year ahead of me in doing a two-year program in Jacksonville. It was considered a two-year fellowship. Another was ambulatory care, that was with John Gums at the University of Florida. Again, it was a two-year fellowship and probably, my favorite thing was psychiatry.

Now, psychiatry was a one-year residency at the VA in Gainesville. I got along amazingly with the preceptor. I got to know him during my rotation. They basically, this was before, if you did a specialty residency, you didn’t have to apply for a PGY2. This was before the time of PGY1s and PGY2s. Pharm.Ds could either do either a general clinical residency, which was pretty much what a PGY1 is now, or a specialty residency, what a PGY2 is now. But you could go into it right after your Pharm.D degree.

I wasn’t prepared to make a two-year commitment, so I did the one-year residency in psychiatry, or psychiatric pharmacy practice. Now, of course, actually, it was probably 1994 became the specialty board certified psychiatric pharmacy and I was in the first group of people to do that and I’ve maintained it ever since. I’ve re-certified four times, the most recent being for 2022. Three times, I did it by exam. The last time, because I was so far out of practice and I really wanted to do it just to keep my specialty, because I was the founding president of the College of Psychiatric and Neurologic Pharmacy, which this year will become known as the American Association of Pharmacy Practitioners, I think. AAPP.

[0:17:55] TU: Oh, cool. I didn’t know that transition was happening. Okay.

[0:17:57] GL: This year is the transition year. Anything that you see about them, it’ll say CPNP/AAPP.

[0:18:05] TU: Yeah. Okay.

[0:18:06] GL: Because of that and because of still being known with them and associated with them, I’ve gone to every meeting, I think, since they started in 1992 and I helped found that original meeting. I kept my board certification. This will definitely be my last one. That’s a long background, but that’s how I got into psych. When I first started, my residency preceptor asked me, “Okay, do you want to do a fellowship?” His name is Lindsay DeVane. He is the editor. He’s retired, but he’s the editor now of The Journal of Pharmacotherapy. He’s been the editor-in-chief for probably about five years, six years. He still has some practice with research at Medical University of South Carolina. He asked me that my first day in. I said, “I really want to practice as a clinical psychiatric pharmacist.”

After about three months with him, I realized that I wanted to do what he did, which was academic pharmacy, have a clinical practice, have a research practice, had an academic practice and teach. When I said I didn’t know yet, he said, “Well, you do need to decide by your third month, because if you want to do a fellowship, we need to start applying for grants now.” At three months, we did. But I said, “Lindsay, but I don’t want to do a two-year fellowship. I want to do a one-year fellowship.” He said, “That’s fine, if you’re willing to do fellowship work as a resident. It’s going to be a busy year, but you’re going to be a resident, but you’re going to be starting, laying the foundation for the fellowship, basically, by writing grants.” I said, “I’m fine with that.”

I ended up doing a residency in fellowship, which is a total two years post-doc at University of Florida and with the VA in Gainesville, Florida. Really, that was it. That’s what took off as my academic career. At that point, I’d been in Florida, I think a total of 11 years, between being in Gainesville, in the Navy. Well, more than that, as you count my Navy time, UF time. I was ready for a complete change. I applied for a number of positions, but ended up as my first academic position at Albany College of Pharmacy, which I think now is Albany College of the Health Sciences. I was there for seven years.

Then, I won’t go through my whole academic history, but my mentor left to go to MUSC and the department chair at the time, Larry Lopez, called me and asked if I had any interest in coming back to University of Florida. I was already an associate professor, so I’ve made that first academic step. Ultimately, I did go back to University of Florida as an associate professor. That’s my career from there.

[0:21:04] TU: That’s awesome. Thanks for sharing. Most recently, you were the founding dean at Larkin University down in Miami. Since you made that transition into retirement, I want to talk a little bit about that transition and some of the planning that you did leading up to that. I think for many pharmacists in the first, let’s just say, decade, or the career that I talked to, for good reasons, they’re feeling overwhelmed with over six figures of student loan debt. Average right now is about a USD 170,000. Obviously, we’re dealing with high inflation right now, a pretty crazy housing market, uncertainty and volatility with the with the stock markets.

All that to say, I think the idea of saving for retirement and getting to that point of, “I’ve made it,” and we could talk about what that means, can feel overwhelming. To some, it probably just feels out of touch. It’s so far away. It feels so big, so scary and, “Am I really going to get there and what planning do I need to do?” My question for you as we get into a little bit of your strategy of preparing and getting to the point of being able to be in a financial position to retire, at what point in your career did you start thinking, “I need to start planning and saving for retirement”? Was that something that you were doing all along? Was there a mentor, or a guide that you had? At what point were you beginning to think, “Hey, I’ve got to really be planning for the future”?

[0:22:28] GL: I think I was very fortunate in my first academic position, Albany College of Pharmacy, because people there had a mindset of preparing for retirement. It was actually the only place that I’ve ever worked at that – I mean, Albany College of Pharmacy was the fourth College of Pharmacy in the nation. They’ve been around since the 1800s. Therefore, I mean, they have a, for just being a College of Pharmacy, as opposed to a large university with many colleges, I think they are very, very well endowed, because they have hundreds of – well, not hundreds, but well over a hundred years of alumni. Now many of those alumni have passed away. But they’ve had alumni for many, many years.

One of my favorite things to do when I had a break was to walk through the administrative wing and they had pictures, like most colleges do, of their – somewhere near the dean’s office is the big picture of all the graduates in a composite picture. One of my favorite things to do was to go and look at the founding, well all the classes, but look how the styles changed, of coats and ties, and the number of women that came into –

[0:23:46] TU: Demographic.

[0:23:46] GL: Yeah, the demographics of the program. But they had pictures going back to the first class, which I don’t remember the exact year, but it was somewhere in the 1880s. Looking at what that class was like. It was maybe 18 students, all male for 30 years and then you see the first female. But because they had this large endowment, they were really able to have a great benefits package. Their benefits package for all employees, faculty, or staff, or anybody was that they gave you a 10%, not match, but they just gave you 10% of your salary every year into your retirement fund, which was TIAA-CREF, which is the majority of colleges, universities and I think hospitals, probably have TIAA-CREF as an option.

It was their only option. It’s been at least one, or the only option at most of the colleges I worked for. I think I worked for seven colleges, or pharmacy, or universities. They just put in 10% right off the bat. I’ve never heard of that. When I was at University of Florida, they had a 10% match, but of course, it was a match. If you put in 2%, they put in 2%. But they go up to 10. The fact that Albany right off the bat gave you 10%, the first year that I was there, I was concerned about student loans. My wife had student loans.

Actually, I take that back. She didn’t have student loans. She had a different profession before pharmacy, so she was able to pay for her pharmacy degree all the way through. It was really just me. Now, I ended with about close to USD 30,000 of student loans. You’re probably better at this than me, USD 30,000 in 1990 –

[0:25:44] TU: Just thinking that. Yeah, yeah.

[0:25:45] GL: Then for two years, I didn’t pay back for my residency and fellowship and interest accumulates. Interest at that time, most people probably don’t remember, but in the eighties, I know housing interests when as hot housing to buy a house. I bought a house when I moved to Gainesville in 1986. My mortgage interest was 12%. That was an owner financed, because they did a lot and they said, “If you go to the bank, it’ll probably be 14% or 15%.”

[0:26:19] TU: That’s right.

[0:26:20] GL: People right now that are faced with 5% –

[0:26:24] TU: Five, 6% looks good, right?

[0:26:26] GL: Five, six. I think last week, it actually dropped a little bit when the Fed raised three quarters of a point, rates dropped below five. People should jump on that. Because we’re probably never going to see two and a half, or 3% again.

[0:26:42] TU: Yeah. That’s something I talked about on a recent show. I graduated in 2008, as our listeners know. We’ve been spoiled for those that are in or since that time period, we’ve been spoiled with extremely low historical interest rates. I think we’ve been accustomed to this is just the way it is. 0 percent car financing, 3%, 2.8%, 30-year fixed rate mortgages on homes. Student loan interest rates, especially for those that need to refinance on the private side, really low. That’s not what it’s always been. I think, I’ve talked to my parents about this and other guests as well, but there certainly have been time periods of higher inflation and will we see those lower rates again or not? We’ll see in the future.

It’s interesting you mentioned how impactful that early contribution from Albany; them providing 10%. Even when you got to Florida, the 10% match. I mean, outside of academic institutions, those are unheard of today for many of our pharmacists, especially that work out in the private sector. They’re going to have to work a little bit harder on their own. You’re not going to see 8%, 10% matches and you’re certainly not going to see a whole lot of contributions being made without a match.

My question for you and I think one that probably a lot of listeners are struggling with in the moment is dealing with the current volatility, and especially for those that have not been through this. I go back to my experience. 2008, just graduated. I was doing residency at the time, making a whopping USD 31,000. I didn’t own a home. Outside of gas being expensive, I didn’t feel that recession. If anything, I was able to start my investing career, buying low and really saw the upside of that for almost 14 years, until we had the recent dip. Even the dip in the pandemic, back to March 2020, it was so short-lived, I’m not sure we saw the impact, like a 2008 recession or others before, where maybe we have people that have now been 10 to 15 years into their career, have never dealt with this kind of volatility. Maybe they’ve accrued three, four, five, USD 600,000. This is the first time they’re looking at saying, “Yeesh. I just lost 30% to 40% of my portfolio.”

This is the first test, I think, for many of like, “Am I really in it for the long-term? And making sure I don’t make any decisions in the short-term that are going to hurt me.” What advice would you have for folks that are – especially on that first half of their career that are experiencing this volatility, that are questioning their investment strategy and are maybe even wondering, is it worth it when there’s other competing expenses where I could be putting these dollars? You’ve lived through some of these cycles and obviously weathered them. Tell us your thoughts on that.

[0:29:26] GL: My first recommendation would be to never panic. So many people took money, or took their money that they had invested in especially the 2008, which was the biggest. 2007 leading up to that. So many people took their money and just put it into cash, or money market, which probably pays 1%. Or you can move it into annuity which pays 2% or 3%. But me and my wife, we looked at it as, this is an excellent opportunity to buy low, because we’re continuing to put in every paycheck, so we’re buying as low as possible.

Anybody that follows the stock market and if they don’t, then I encourage that everybody have a financial planner. As a department chair, I’ve been a department chair twice and a dean twice. In both of those positions, I saw myself not just as an employee mentor, but as a life mentor as much as I could be, because I went through having – I have one son, he’s 27 now. I went through having a child, or a baby while I was in academia, changing jobs, spouse changing jobs, all the sorts of things, buying houses, all the sorts of things that they’re going through, we’re going to go through. I encourage them to start putting money away as early as they can.

I have had, and here’s the part where I would never name names, but I have had faculty, many of them say to me, “I have been told by my financial planner, or advised to pay off my student loans first before I put money away.” I personally disagree with that, because you will get your student loans paid off long before you retire. But I don’t know, but compound an interest, if you put a USD 100 a month away at age, let’s say 25, at age 65 or 70, that USD 100, if you go by the general rule and the general rule is every seven years, your money doubles. That includes ups and downs in the markets, that every seven years. If you have a longer period of no downs and there’s definitely more ups than downs, that USD 100 – I mean, I don’t know how many sevens that is, but that USD 100 is probably several thousand.

If you’re doing that once a month, I mean, you’re talking about getting into the hundreds of thousands of dollars. It’s not uncommon for people that do that, to retire with well over a million dollars. A lot of pharmacists are married to pharmacists. If they’re not married to pharmacists, they’re often married to other people doing very well in the health care, like nurses, physicians, nutritionists, any other health care practitioner that’s making 60,000 and up. These are people where both of them could be putting away.

The way I started when I had that 10%, I realized that it was 10% of not much and I didn’t know that pharmacy salaries – as a faculty member, I started at 48,000. I didn’t know that that would go to well over a 100,000. I looked at it as it’s 10% of not very much, but it’s USD 4,800 a month going in. The first year, we focused on buying a house. We really decided, okay, we’re not going to put anything away. I plan that every year, I’m probably going to get a raise. That’s another benefit of Albany College of Pharmacy. We had good raises. Many people that work for state universities, they might not get a raise like privates will get. Private universities will typically look at what is the consumer inflation index and the average, I mean, I realized this year is not a normal year, but the average is around 2%.

What they’ll do is most company, or most private universities will take that 2% and add 2% to that and they’ll say, “Our average raise this year is going to be 4%.” Depending on merit, it’s going to vary between the very worst person is going to get 2% and the highest might get 6%. At Albany, I typically ranged between 4% and 6% and 2 years in a row. I got the highest raise in the university. That’s great, but not normal. It wasn’t that way my entire career, but it was two great years.

My goal was always, whatever my raise was, if my raise was 4%, 2% I was going to enjoy in my salary and 2% I was going to put into the match. I did that every year, so that by the time I left Albany after seven years, I was matching that 10% that they were putting in. Again, that was 10% of a relatively no number, even though I was there seven years with some great pay raises. When I left there, I was making, I think, it was 67. Then I went to University of Florida as a associate professor in 1999 and started at 75.

Pharmacists coming out were making more than that. They were making about 80. It was not until I became vice chair for the department at University of Florida and the stipend that I got for being vice chair. At that point, about nine years in academia, vice chair for the department and I’m finally making as much as one of our graduates.

[0:35:09] TU: Yeah. I think there’s so much wisdom in what you shared of the habit that then has a compound effect. You mentioned your example of 4%-ish, maybe a little bit higher at Albany. Taking a portion of that and building the behavior of I’m going to save it and invest it. Because salaries go up if, you’ve built that behavior based on a percentage that not only is that number going to go up, but then the compound effect of that number is going to go up, even more over time. I think that’s a really good strategy.

I’ve been recording some of the lessons that you’re sharing here, and I’ve got four so far. Number one we talked about, don’t panic. We’re going to experience volatile periods in the market as we are right now. Number two is –

[0:35:49] GL: I guess, with don’t panic, try not to look every day if you’re invested.

[0:35:54] TU: Be informed, but not in it so much that you’re panicking.

[0:35:57] GL: Right. Because you’re not in it for day to day. You’re in this for 20, or 30 years from now. There will be ups and there will be downs, but no matter what, if you look at the market from the date they started recording, it goes like that.

[0:36:11] TU: Yup. That’s right.

[0:36:12] GL: It’s a mountain slope.

[0:36:14] TU: Number one, don’t panic. Number two is the value of having a good coach, a trusted advisor and planner. I think that relates to number one, because a good coach and a planner is going to talk you through some of the volatile time periods to make sure we’re looking long-term. Number three, you mentioned start as early as possible and you gave some good examples and numbers of what, it’s a USD 100 a month equal over time. Then number four, we just talked about this concept of save the raise, is what I call it. If we get raises over time, if we can build the discipline to put away a portion of that, that’s going to have a huge impact over time.

My last financial question before we transition and wrap up by talking a little bit about what you’re doing on the business side of retirement, is that saving for retirement is one thing. We talk a lot about building a nest egg. We talk a lot about how much might someone need. Is it one, or two, or three million dollars, but building a retirement paycheck and determining how you’re going to actually withdraw that money and the strategy for doing that is a completely different thing. We don’t talk as much about that, I think, in the financial services world. We talk about the accrual phase a lot, but we don’t talk as much about the withdrawal strategy. This is really where a lot can happen in terms of mistakes made, or opportunities, if we can optimize this phase. Can you can you share, especially for those listening that are getting ready, or see on the horizon that retirement phase, what your strategy has been thus far, or what you’re planning to do for withdrawing these various funds that you’ve accrued throughout your career as you begin to build that retirement paycheck?

[0:37:51] GL: I try to take out as little as possible. I’m very fortunate in that my wife is younger than me and she will probably work about five to six more years before retiring from J&J. She has a very healthy income, too. That allowed me to retire and really not have to touch any of my funds. However, I’ll try and make it for anybody that still has either a spouse retiring, or you both retired at the same time. Social Security, we have to mention that. Right now, they say, I think that there’s about 30 years left. This is just something I believe as a core in my heart that Social Security will not go away. I mean, it’s a promise –

[0:38:36] TU: I agree.

[0:38:37] GL: – that the government has made since what, FDR was president, when it started.

[0:38:42] TU: It would be catastrophic if it does.

[0:38:44] GL: I believe, it would lead to something like a civil war. Much, much worse than the January 6th insurrection. Because you’re affecting tens of millions of people, not a couple hundred thousand that are upset. Tens of millions of people. And that have been putting away. When Obama was president and they first started to talk about there being potentially an end, or a lifetime of Social Security that it has to come to an end. Well, if it has to come to an end, you have to stop taking from people. Social Security, and say, take this money and invest it on your own, but we can’t continue to take it and make money off of you and then say, it’s gone. It’s not. For those that don’t know, it’s seven and a half percent, I think, or 7.55% and your employer pays 7.55%.

[0:39:44] TU: That’s right.

[0:39:45] GL: If you’re self-employed, it’s double that, so you’re paying the entire 15% yourself. That’s a lot of money to take from somebody for 40, 50 years and then say, we’re not going to give you anything. Even the people that are billionaires, they took that money from them I think they owe them something in return. Now, I do believe that they can move to a sliding scale. People that are billionaires probably don’t need to get USD 2,000 a month. I’m very supportive of a sliding scale. But that sliding scale should not be the number that I’ve heard talked about, like 200, or USD 220,000, because two pharmacists could be making over USD 220,000 that are partners. Maybe not after they retire, but they might have more than that, a lot more than that in their retirement funds.

We all live, and I have this other – This is just the rule of Gary. Everybody lives to about a half a percent, or 1% beyond their means. If we didn’t, we would have no need for credit cards, lines of credit. We all tend to live at our means, but just a tiny bit over that that we’re always comfortable. We shouldn’t have to change that, because social security goes away. I don’t think that, again, that’s not a promise. That’s just my opinion. It’ll never go away. It may change, but I don’t think it’ll ever go away, that would lead to, I believe, something as big as a civil war, that catastrophic.

I’m one of the last few years. I’m a baby boomer, but on the last few years. I was born in 1960. I was eligible to start Social Security at ’62. Every year that you wait in not taking it, that goes up 8%. If I took it at ’63, it would be 8% more than when I was ’62. I’m not. If I wait till ’64, it’s another 8%. When we look at market volatility over time, we consider 8% per year over say, a 10 or 15-year of good, or average years. Six percent if you want to be conservative, 8% if you want to meet what the S&P has generally done over time and 10% if you want to say, “Well, I feel like I’m retiring, or the next 10 years should be pretty good.”

I have not started taking my Social Security, because there’s nothing in life that’s guaranteed, right, other than death and taxes. This is something that’s guaranteed. There are three things is that every year, you don’t take your Social Security. It goes up 8%. My goal is to not take it at least until my wife retires. If that’s in five years, I’ll be 67 and that would have gone up five times eight, 40%. Right now, my retirement check would look somewhere around, I think, USD, 2,200. I think it would be 3,000 or over at 67.

[0:42:55] TU: Let’s shift gears here and wrap up with the work that you are doing in your own business. You’re retired from pharmacy, still working though not as a pharmacist, but have decided to start your own company. Tell us about Captain G’s, what the business is all about and what you’re working on.

[0:43:12] GL: Great. I still want to mention that I’m still licensed. I don’t know why I’m still licensed as a pharmacist. It’s just something we work so long on and have for so long. I don’t know if it’s a safety net. I think most places would rather hire someone that has a lot of a career left than somebody like me. But if I had to do per diem, I certainly would. I always said that I’d work behind a counter before I would live under a bridge. But I wouldn’t be behind the counter. Like I said, I’d be out there helping patients and hope all the pharmacists that are listening to this do that, or counseling, or anything else that you would consider helping their quality of life.

I retired about a year and a half ago and I really never planned to do this. Well, actually, I had planned to do it. That was creating a charter service with my boat. We had a larger boat. We had a 45-foot boat when I retired, with a fly bridge, which is a pretty big boat. Three state rooms, two heads or bathrooms on it, a full galley, an outdoor kitchen and grill. I probably could have lived on that boat. We tried it. We actually, when we lived in Coconut Grove, which is a very popular area in Miami, we did Airbnb for one week a month –

[0:44:33] TU: Oh, cool.

[0:44:34] GL: – for our house and lived on the boat to see if we enjoyed living on a boat. Because that was always my goal, to try and get my wife to say, “Let’s not have a mortgage on the house and a boat. Let’s just get a big boat, big enough to live on.” It probably would have been a 60-foot boat. That experience though, she said, “I can’t live on a boat. I just can’t do it. Too small of a space. Not enough closet space, etc., and not a bathtub. My wife loves a bathtub, not a shower.” But we still owed a couple 100,000 on that boat when I wanted to retire. She said, “Look, we’ve got a lot of equity in this boat. Why don’t you sell it?”

It was right around the time that quarantine had ended and people wanted to get out and the boating market and the housing market, that’s when they both really started to skyrocket. Boats were selling literally in a day, just like houses. I hired a broker. We had literally three cash offers. We had three cash offers before COVID. Then the pandemic hit and it cooled down. The same people that had an offer on the boat when the quarantine ended came back and said, “We’ll buy it.” They tried to offer us a lower amount. I said, “No, we have two other cash offers for one day. No survey. We’ve already done all this with you, a marine survey. Take it as it is,” and they did.

Then, I ended up with about USD 250,000 in equity. My wife said, that was the original plan was take what you get in equity and just buy a boat outright. I did that. I looked around for a while and found an amazing boat that if anybody’s interested in a boat, buy a used one and typically, look at three years. Boats depreciate at 20% the first year like a car, 12% the second year and 8% the third year. After that, they plateau and appreciate about 2% to 3% a year.

Really, 40% of depreciation is in the first three years and it hasn’t been used that much. We were fortunate to find one that only had a 100 hours on the engine. Two state rooms in it, full galley. We went to one bathroom, but a separate shower. I had thought about chartering it and I didn’t want to put all those hours on it. I talked to a couple charter companies and they said, “You know, when we do charters, it’s really about the people being in the water. You’re not really taking them on a tour of Miami and the Keys. You’re not cruising at 30 knots, or 30 miles an hour, which uses a gallon pretty much every mile, you’re burning about a gallon, which is a lot of money.”

I mean, when we go to Bimini or the Keys, it costs about 60 gallons to get there. Well, marine fuel is less expensive, especially marine diesel, it’s still about USD 4 a gallon. It’s a lot of money to get to Bimini and back. That’s what I was thinking is that’s a lot of fuel, that’s a lot of hours. That means more maintenance I’m going to be paying on the boat, everything. In talking to a couple of charter companies, I realized that the ideal charter is four hours in length. It’s basically an hour of cruising around and you’re cruising relatively slow, eight to 10 knots, which burns maybe one gallon during that time period. One, maybe one and a half gallon. That was about USD 6 of fuel during that first hour. Showing them around. Then typically, they want to anchor and go out in the water and swim. We let them do that. They typically play in the water for two hours and then it’s about an hour to get back. It doesn’t put a lot of time. Each charter puts about two hours of engine time on my boat, but the amount of money that people pay for a charter for a boat of my size is great.

[0:48:27] TU: Makes sense. They don’t want to own it. They want to enjoy it.

[0:48:29] GL: They just want to enjoy it. My company is Captain G’s. Www.captain.gs, g for Gary, S for Captain G’s .net.

[0:48:43] TU: We’ll link to that in the show notes, so people can see that.

[0:48:45] GL: Okay. If you see anywhere on that page, I also do a second job and that’s because I’ve had a number of people call me and say, I just went up from a single engine to a double engine, or I’ve moved to a boat that has an air conditioner, or a generator, or I’ve went from gas to diesel, there’s just a lot of new things that I don’t know how to manage. I’ve owned everything, from an 18-foot to a 45-foot, all over 30 years. I started with an 18-foot bow rider right out of my fellowship and I’ve owned a boat ever since. I’m on my 11th boat. This will be my last boat. No sense in getting a bigger boat, because I like the number of people that I take out on the charter. Maximum is eight people and average is going to be typically, anywhere from two to six.

My first three charters, two were last week. Two were two weekends ago and one was this past weekend and we’re in low season. They said, I’ll probably get five to seven a month in low season. Then in November, we pick up into high season and they said, I’ll probably get around 11 to 15.

[0:49:51] TU: Wow. Wow.

[0:49:53] GL: Now, that’s a lot of work for me. I don’t want to do all that work. I want to enjoy the income that it brings. I like getting out on the water. My goal is to do about four charters a month. I get one so far. I was on a vacation to Asheville, so I have a backup, Captain Natasha. She’s relatively young, but extremely experienced and she captains boats up to 75 feet. She does – handling mine is like me playing with a tinker toy. She doesn’t even hire a mate when she does mine, when she charters 75-foot boats, she’ll have a mate with her too, to help getting the drinks, helping with the water toys, all that. I had my first one where I captained it, just this past Saturday for four hours.

Because we were coming back at night, I had my wife with me, because Miami can be pretty busy even at night. She just helped as a lookout and helped me dock back in. She served as the first mate. We bought a pair of walkie talkies, so we could seem very professional.

[0:50:59] TU: That’s cool.

[0:51:00] GL: She had it in her ear. It looked pretty cool. It was great. It was just a couple and we dropped them off at a restaurant when we were done. If it makes enough money to pay for my slip, slips are not expensive, or not cheap, especially in Miami. I have a type of slip where it’s called a full-service marina. You can get fuel there. They do minor repairs for free. Major repairs, they’ll bring somebody in, but I haven’t had any major, knock on wood. Minor things, they’ll do for free. If it’s anything that a charter customer did, like let’s say, they put a hole in a seat, then the charter – the company that I work with, or partner with, which is called theadvantaged.com. It’s www.theadvantaged.com. If you click anywhere on my website to do a charter, it’ll go directly to my boat on their website.

[0:52:01] TU: Got it.

[0:52:03] GL: The reason for that is, I don’t want to deal with the clientele. I don’t want to deal with people saying, “Hey, I want it for USD 200 less. I want this. I want that.” I want another company to do that, so theadvantaged does that. Do they make a fee? Yeah, they make 50% after the captain is paid, which is either me or Natasha, but we get the tip 100%, which is typically 20% of the full charter price and we each split 50% of it at the end. It’s very good.

I probably figure that I will need a service more often than once a year, maybe once every eight or nine months, especially once we get into season. A service costs about USD 4,000. I do expect that I’ll have additional expenses, but things that I was paying for already. My slip is 1,295 a month. That fuel, these are things that I’m paying for already, regular upkeep. All this can be written off now as an expense of the company. I hired a company called Zen Business, which is an ideal company for people that want to start small businesses and don’t want to do all the paperwork themselves.

They’ve handled my Florida S Corp, creating an S corporation. They’ve handled getting my EIN number, which is basically the social security number of a business for federal purposes and taxes. They’ve handled everything. Theadvantaged handles everything with the clients. They actually even take the money, I deal with nothing unless somebody hands me a cash tip. It’s been great. I mean, I like to get out on the water. Like I said, I don’t want to be out there every day of the month, or even every other day, because I want my time to go out with me and my wife and our friends also. We take friends out, probably once every other weekend. Again, I’ll do it about four times and Natasha can do the rest, or second backup.

[0:54:08] TU: I love that. I mean, you’re already building the system of the beginnings, at least of the business and having other people involved, doing what you want to enjoy, but not taking up so much time. I think that fits in so well to that fifth lesson we were talking about minimizing withdrawal, because obviously, there’s an opportunity there for additional income that can further allow that delay of social security and other type of withdrawal.

[0:54:32] GL: Exactly. We were, without me starting social security, I was having to take out about USD 20,000 twenty a year. I don’t think I’ll have to take out anything, which again, just let’s continue to build.

[0:54:44] TU: Yeah, that’s right. Yeah.

[0:54:47] GL: I only wish that I had additional money to put in during this low time.

[0:54:50] TU: I know.

[0:54:51] GL: I don’t. If it gets big enough, I will continue to put money in. Because my wife’s still working, she’s still putting in –

[0:54:59] TU: Contributing at the low.

[0:55:02] GL: Yeah, at the low amount, knowing that it’s going to grow.

[0:55:04] TU: Yeah. Well, this has been great. I really appreciate your time and sharing some of your journey here with our listeners and especially for those folks that are looking ahead and thinking about the journey over the course of their career, I think this will be really insightful. Thank you, Gary, for taking time to come on the show. I appreciate it.

[0:55:21] GL: Tim, if there’s one biggest thing that I can say, especially for those that have student loans, by all means, don’t forget your student loans. But take something, even if it’s a USD 100 a month, USD 50 a month, USD 10 a week, anything. Just start it. Make it as an auto withdrawal, so you don’t even notice it. Remember, when you take it out if your paycheck to put into retirement, you’re typically going to do it where you’re not going to pay taxes on that amount. If you take out a 100 a month, it’s only going to look like you’ve taken out USD 70 a month.

Now, there’s a whole other option that you can do where you do it after taxes and put it in as an IRA. That’s probably a whole another session for Tim to talk about. That wasn’t an option when I started my career. That only started about seven years ago. If it was, I would have done that, because I’m going to be taxed on everything that I take out. Whereas, if you do this relatively new option, yes you’re going to pay taxes now, but not when you need it in retirement.

[0:56:24] TU: That’s right. That’s right. Many folks now have access to a Roth. Not just the Roth IRA, but also a Roth 401k, or Roth 403b.

[0:56:31] GL: Right, right. If you do a whole show on that, please let me know. I’d love to listen in on it.

[0:56:36] TU: Yeah. Awesome. Thanks so much, Gary. I appreciate it.

[0:56:38] GL: Thank you, Tim. Thanks, listeners.

[END OF INTERVIEW]

[0:56:41] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided you for informational purposes only and is not intended to provide and should not be relied on for investment, or any other advice. Information in the podcast and corresponding material should not be construed as a solicitation, or offer to buy or sell any investment, or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

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

[END]

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YFP 297: Introducing The Pharmacy Innovators with Corrie Sanders of Huna Health

Posted on March 2, 2023March 16, 2023 by Caitlin Boyle

YFP Co-Founder & CEO, Tim Ulbrich, PharmD, introduces the new series, The Pharmacy Innovators, designed for pharmacists navigating the entrepreneurial journey, featuring founder stories and strategies to help guide current and aspiring pharmacy entrepreneurs. In this first episode, Tim interviews Corrie Sanders, PharmD, before handing over the lead to her for the remainder of the series.

About Today’s Guest

Dr. Corrie Sanders joins us from Oahu, Hawaii as President of the Hawai’i Pharmacists Association and founder of Huna Health, Hawaii’s only pharmacogenomic consulting company. After five years of practicing in private and government settings, Corrie transitioned to solopreneurship and is passionate about sharing the intricacies of that journey with other healthcare professionals. Dr. Sanders enjoys educating pharmacists and students about consulting opportunities and how ‘thinking outside the box’ will be integral to the pharmacy profession in the future.

Episode Summary

This week, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, announces a brand new series of the YFP Podcast, The Pharmacy Innovators. This series, designed for pharmacists navigating the entrepreneurial journey will feature individual founder stories and strategies to help guide current and aspiring pharmacy entrepreneurs. Tim kicks things off by interviewing Corrie Sanders, PharmD. Corrie is a pharmacy entrepreneur with a passion for innovation in pharmacy. During their discussion, Corrie shares what excites her most about pharmacy entrepreneurship, the pharmacy journey that led her to this point, why she chose to walk away from a desirable position in pursuit of entrepreneurship, and how she prepared in advance to transition from a W-2 job to running her business, Huna Health. Tim and Corrie talk through the creation of Huna Health, how Corrie developed the idea based on solving problems in her market, and the services offered by the pharmacogenomic consulting service. Listeners will hear practical advice and resources that helped Corrie early in this journey, how her role as president of the Hawai’i Pharmacists Association played a part in helping her grow as a business owner, and how she works through “head trash” as a small business owner. Tim wraps up by sharing what listeners can expect from The Pharmacy Innovators series and hands the series over to Corrie for the next four episodes.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[00:00:00] TU: Hi, guys. Tim Ulbrich here, and welcome to this special episode of the YFP podcast. Today marks the beginning of a journey that has been in the making for some time, and I’m thrilled to be kicking off a new series on this show, The Pharmacy Innovators.

Now, if you’ve been listening to this show for some time, you know that over the past couple of years, we’ve been featuring a handful of pharmacy entrepreneur stories of individuals that are blazing paths to monetize their clinical expertise, evolve our profession, and improve patient care. It’s an exciting time to be in a profession that is ripe for innovation and disruption, which means there are opportunities all around us. As we see more pharmacists embrace these opportunities and enter unchartered territory, we want to create a space to learn more about who these innovators are, what they’re working on, why they took the paths they’re taking, and what makes them tick. That’s exactly what we have planned for this new series, on the YFP podcast, The Pharmacy Innovators.

This series is really designed for pharmacists that are navigating the entrepreneurial journey, whether that be for individuals that don’t yet have an idea but are looking for inspiration, or those that have an idea and just getting started, or perhaps those that have been at it for a while and are looking to continue to improve, to grow and to scale. In this series, we’re going to feature individual founder stories and strategies that will help guide current and aspiring pharmacy entrepreneurs.

Today, I kick things off by interviewing Corrie Sanders, and I’m going to play my usual role of host and interview Corrie about her career and entrepreneurial journey. But here’s the twist. Here’s the exciting part. After today’s episode, she is going to take the mic for four more of The Pharmacy Innovator series podcasts throughout 2023. She’s been planning and scheming with some awesome guests and content to feature throughout the year.

Now, for those that don’t already know Corrie and the work she is doing with Huna Health, stay tuned. That’s what we’re going to talk about on today’s episode. But let me give you the short story of why I thought she was such a great fit to serve as host of this series throughout the year. Lots of reasons. But three that really stood out to me. Number one is she has a passion for pharmacy entrepreneurship and innovation. Both for those that are starting their own thing, but also for those that are looking to innovate and disrupt within their own organization.

Number two is she has made the jump from employee to entrepreneur and being towards the beginning of that journey she has a lot to share about how and why she made that transition and what she’s learning as she grows her business. Of course, while interviewing others, she’s going to bring that perspective, as one that is curious, that is getting started as an entrepreneur, which I think it’s going to be so helpful to others that are on their own journey.

And number three, she is contagious with her enthusiasm and energy. We need that in our profession at a time when there’s a lot of pessimism. We need that to be a realistic, enthusiastic, and energy, and I think Corrie brings just that. All right, let’s jump into my interview with Corrie Sanders as we kick off The Pharmacy Innovator series on the YFP podcast.

[INTERVIEW]

[00:03:02] TU: Corrie, welcome to the show.

[00:03:04] CS: I’m excited to be here, Tim. Thanks for having me.

[00:03:06] TU: Well, this is an exciting time, one for our profession, I think lots of disruption and innovation, and we’re seeing many pharmacists enter into some really cool ideas and intrapreneurship, entrepreneurship. We’ll talk about those throughout this series that we’re featuring in The Pharmacy Innovators. But also, an exciting time, as we’re going to feature your story, your career journey, your journey into pharmacy entrepreneurship on this new series, The Pharmacy Innovators, and then I’m going to pass the mic, as you’ll interview others throughout 2023. I think there are lots of exciting pharmacists, founders, stories, and ideas that are out there that we’re going to explore in much more detail.

My first question for you, Corrie, is what excites you most about diving more into pharmacy entrepreneurship? It’s a topic that I’ve since, as we’ve talked over the last six or so months, that you’re just as energized and enthusiastic as I am and what’s behind that?

[00:04:02] CS: I think we’re seeing pharmacists leverage their clinical skill set in a way that we haven’t seen before. And this is just varied across the country, whether it’s access to care or quality of care, and we’re seeing a lot of expansions and pharmacists’ scope of practice at the state level. So, I think the legislation is really setting the foundation to get pharmacists to be thinking outside the box of alternative revenue streams and traditional care settings.

[00:04:27] TU: Awesome. Awesome. We’re talking about what you’re doing with the work at Huna Health here in a little bit. But I want to start with your journey into the profession. Where did you go to pharmacy school and what ultimately led you into the profession of pharmacy?

[00:04:40] CS: Sure. So, I went to pharmacy school at Virginia Commonwealth University in Richmond, Virginia. I’m born and raised in Virginia, and I went into pharmacy because I love the clinical care setting and the impact that you can have directly on patient care. So really, just a nice hybrid of science and medicine, but still retaining a lot of the interpersonal relationship that you can have with your patients and other healthcare providers. It was just a really perfect combination for me to step into the pharmacy practice area.

[00:05:09] TU: So, from Virginia, graduated from VCU, you would then go on to do a PGY1 residency. Tell us more about that experience and then what led you to your first job after that.

[00:05:19] CS: Sure. And I joke all the time, I feel like I’m 30 years old, and I’m on my third pharmacy career already. But I did a general PGY1 at a healthcare system called Sentara, based out in Norfolk, Virginia, and I was really critically care focused there. But then, my husband was in the Navy for seven years, and his orders took us out to Hawaii. So, I made a complete 100 Navy pivot. I had to switch from a critical care focus to an ambulatory care setting, just based on the job opportunities that were out here in Hawaii. Then, after spending three years with the Department of Veterans Affairs, I’ve now transitioned into independent entrepreneurship and pharmacogenomics.

[00:06:00] TU: Corrie, by all accounts, outside looking in, the VA is a pretty good job in our profession, right? Great compensation, good benefits, expanded scope of practice for many folks. So, I think the question is, what led you to the point to say, “I’m willing to walk away from that. Maybe this isn’t, for me, maybe there’s something else that’s out there.”

[00:06:20] CS: Sure. I think that’s such an important question is really taking a look at yourself, and what makes you happy and what you get job satisfaction from, and I just wasn’t feeling that within the department that I was in. So, looking long term, and being able to grow in leadership positions, or being able to really practice towards the top of my license, despite having expanded clinical scope at the VA baseline, just the innovation and the growth for me wasn’t there.

On top of that, I didn’t like the person that I was becoming because of the work culture that I was practicing in. I just felt like I was carrying such an emotional and mental weight stepping outside of work and that was really taking a toll on me mentally, and I just wasn’t willing to sit in that space for the rest of my career. Then, ultimately thinking about, I learned so much about what work can be from my parents. I did not want my kids to think that this is what work looks like, is that their mom comes home, they’re tired every day, they’re complaining about their job, it’s not invigorating them in any way, shape, or form. And I just projecting a couple of years ahead, my husband and I all have kids, hopefully in the next few years, but that’s just a lesson that I wanted to teach my kids to is like, work can be amazing, and it’s not worth sacrificing your mental health to say in a position just because it’s a good position from the outside or it meets a certain paycheck metric.

[00:07:48] TU: Corrie, that’s really powerful. And I think many of our listeners are going to resonate with that of, maybe there’s something more, something else out there. I think, for many, that emotional side of what we often say is living a rich life, not just dollars and cents, but living a rich life in terms of the work that we’re doing, the contributions that we’re making, the relationships that we have is so important. But I think, what often is the struggle is translating that emotional desire with some of the Xs and Os to actually make a transition or make it happen.

I talk with pharmacists every single week that says, “Hey, Tim, I would love to do X, Y, and Z, or that are feeling some of the emotional pains that you brought up. But… I’ve got $200,000 in student loan debt. I don’t really feel like I have a good foundation investing. I’ve got a young family. It’s a busy phase of life. I’m not sure how I’m going to replace my income. What about health insurance?” All of these things that we have to think about when we’re starting our own business, and they’re all real, but they’re big barriers to overcome.

I know you and I have talked about this before, as we’re planning for this series that, “Hey, this is a topic we don’t talk enough about and transparently enough of how do we actually make and prepare for this financial transition from a W-2 that pays well and great benefits, to a path where you’re out on your own.” Tell us more about what that looked like for your own journey?

[00:09:13] CS: Sure. There are so many components of this question, right? So, at the core of it, it’s really you need to have a skill, and what skill are you confident that is going to translate outside of whatever practice setting you’re in, that you can monetize after you make that transition? It’s one thing to think about wanting to be in a different care setting and all the opportunities that exist and really, it can become overwhelming, if you really start tapping into the pharmacy entrepreneurship community. There are a lot of things that pharmacists are doing. But really what is that skill? And what skill are you passionate about? And that is really the core of being able to make that transition tangible.

For me, it was getting a certification in pharmacogenomics. I had heard about pharmacogenomics, because I also majored in nutrition and undergrad, and so I was familiar with nutrigenomics. So, that was just an amazing hybrid when I learned that you could apply that to the pharmacy practice setting. But one, really honing in on that skill, and then two, preparing financially and leveraging the finances and the opportunities that your current position provides.

For me, it was staying within the VA for X amount of years to retain the match on my 401(k). It was planning ahead and really leveraging some of the costs in my home life or in my personal life. My husband and I had spoken for almost — about a year, about what our savings should look like and what marks we wanted to meet, and how many months of savings we needed to have added up. You and I can dive into that a little bit deeper, too.

But I would say the two biggest takeaways are, one, leveraging that skill that you’re going to be able to utilize outside of your care setting. Then, two, really diving deep into those finances, with your significant other or your family or if it’s just you, and being honest with yourself in real about what’s going to make you feel comfortable. And that’s different for everyone, just depending on your risk tolerance.

[00:11:03] TU: Yes, I think risk tolerance is different for everyone. That’s a great, great point. I think leveraging that skill, and really having – nothing is known, right? When you’re starting entrepreneurship, but obviously doing some of your background, and your homework, you’re planning to understand what is your skill set and your ability to monetize it. What’s the potential market look like?

Something I heard from you, which is really important, is this concept of a runway. I think we often think about entrepreneurship as like someone jumping in the deep end. The vast majority of people that you talk with, I think share a story similar to yours, which is, I’ve been planning this for a while. Sure, there was a point, there was a decision point where you made a jump. And of course, there are those stories here or there where people just truly jumped in the deep end. I think often those are because of job loss or other things that might happen or life events.

But more often than not, there’s some strategic thought and planning and work that’s been done. I think about it more like an exit ramp than literally jumping off the diving board into the deep end. Financially, of course, that’s so important for many reasons. One of the things I share often, Corrie, with folks is partly from my own journey, and just talking with so many pharmacists is that if you aren’t able to approach your business with a perspective of having a strong personal financial foundation, your business is going to suffer. Because you’re going to get into short term thinking. If you’re stressed with, “Hey, I don’t know what to do with my student loans. I don’t have the right reserves.” You mentioned that. “I’m worried about X, Y, or Z.” I’m not suggesting you have to have it all figured out. But if we at least have thought through these, and we’ve considered some of the potential pain points, and we have a plan in place, that’s going to be better for the business as well as your sanity.

I think, the reserves, tell us a little bit more about that. Because that’s an important piece of how much is enough? What are we comfortable with? I mean, if we just be kind of direct for a moment. If a pharmacist, let’s say is making, I don’t know, $120,000, $130,000, you multiply that by 1.25, 1.3, when you factor in benefits, probably even more when you consider purchasing health insurance on your own. That’s a pretty big number that I think scares people of how am I going to replace that. And then, what happens if I can’t replace that, which is where the emergency fund would come into play? So, how did you and your husband think about the reserves that you are comfortable with in making the transition?

[00:13:21] CS: What you said is completely correct. You can’t just consider the financial benefit. You also need to consider some of these background finances that are being flown from your paycheck that you may or may not even think about anymore. So, really important to be honest with your contributions and your investments. Really, the salary for us after benefits came somewhere around $160,000 or $170,000.

From there, we really dove into three different areas. Our reserves, our investments, and then our loans. I’ll work my way backward from those. Student loans, I still have a significant loan burden, so I didn’t pay that off completely. I was on a really aggressive payment path. I was on a payment path to complete my loans in five years, and I had close to $150,000 in loans when I left pharmacy school. So, I’m less than $100,000, which is significant in a short amount of time, but I’m still pretty high up there.

[00:14:16] TU: Which makes sense, right? The pandemic and $0 payment.

[00:14:19] CS: Totally. Yes. So, one thing that we did with the loan forgiveness, or the loan forbearance with COVID pandemic, is that we put a lot of those student loan payments into either going into a house account, so we purchased the house last year, and really cushioning the savings or building up the savings for our house account. And then everything else because I’ve been talking about making this transition for my career for about a year, went into building up the savings and reserves for going into entrepreneurship and really making that career transition.

So, for us, I have just about eight months of reserves saved up to give myself some grace between jobs, which I have some grants now that I haven’t had to tip into the reserves yet, and we can talk about those grants a little bit later. But that was our plan, is that eight months of savings. And then another thing I think is really important is having a plan B. So, what is your exit strategy going to look like if this is not a successful move for you? I think you really need to have that conversation before you make the jump and before emotions get tied into making that decision. Otherwise, it can be really messy down the line, when you’re already emotionally invested, and that you’re dipping into things you shouldn’t be dipping into financially, or you’re looking to offset different assets when maybe your business plan just isn’t working, or you need to pivot.

Having those conversations, knowing what the plan B is, knowing if you’re married, who’s going to jump into a higher paying job or make a transition, if you are going to continue down this path to make it work. Just really having the emotional conversations upfront before your back is against the wall, I think is really important to do.

[00:15:58] TU: I think that piece, right there, is so important. Having those conversations before the issues come to be. So, you’ve already kind of thought about them in a less stressful environment. Then, what I’m hearing a theme of, is that there are a lot of conversations that are ongoing between you and your husband, which separate topics for another day. But the health of an open financial conversation and making sure that we’re working on this plan together and beating up both the challenges that may exist and obviously being excited about the opportunities of, “Hey, if we are very successful in business, what are the priorities? What do we want to work on? And how do we allocate those dollars accordingly? How much are we going to reinvest in the business? How much are we going to take out?” So important to think about some of those things in advance.

Corrie, tell us about Huna Health. What problem are you trying to solve? What are the services that you offer? I think, at the foundation, every business is really trying to solve a problem that is one, that people care enough, that they’re willing to invest and pay for it. So, what is that for Huna Health? What are you trying to solve?

[00:17:00] CS: Sure. I think, there are maybe two components that you can think about when you’re trying to solve a problem, and then what that really means to you. One, what is your why? And are you passionate about what you’re doing? Because that is going to make the entrepreneur transition really makes sense, even when you’re in these tough times, and having to make hard decisions. If your why is something that you’re passionate about, that will keep you going long term.

But the second thing is, know your market. So, I have spent three years in Hawaii. I know the pain points of this healthcare system. I know how pharmacogenomics can really serve as a solution to a lot of those problems. It all just kind of came together perfectly for me.

In Hawaii, we have a lot of barriers to care, and a lot of access to care issues. We’re in a huge physician shortage. We are not leveraging pharmacists to practice toward the top of their licenses, which is something that I’m working on with the state association. But it’s just this perfect storm of we’ve got a lot of access to care issues, and pharmacogenomics can help to bridge that gap by reducing overall costs of medication, reducing the amount of touchpoints that you need to go back and follow up with a physician, just really providing personalized care that will reduce the burden on an already overburdened healthcare system.

On top of that, we’ve got a really unique patient demographic here. We’ve got a lot of minority populations that statistically process medications a lot differently than the Caucasian population. So, it’s really just, again, knowing that market, but also having that passion for why this makes sense here in Hawaii, and being able to bridge that gap and use the pharmacists to be able to do it.

[00:18:40] TU: What I’m hearing there, Corrie, is that we know there’s significant demand for pharmacogenomics services across the board. But it sounds like in Hawaii, even more so, for the reasons that you mentioned. The diverse population, access to care with shortage of primary care physicians, underutilization, and the role of pharmacists. You and I’ve talked before offline that there’s a huge opportunity, one that you’re pursuing, as a president of the state association to really advance the scope of practice to what we’re seeing other states do across the country.

It feels like if I’m reading correctly, kind of the business opportunity really sits in the center of this perfect storm. The pain and the problem to me is evident. Tell me more about the service. What does that look like? Or what are you building it to look like? Is it a standalone service? Is it in partnership with other care providers? Tell us more about what that offering looks like.

[00:19:32] CS: Sure. It’s a little bit of both. In my ideal world, I’ve got two arms to the business. One, unfortunately, pharmacogenomic tests aren’t covered by insurance, and there’s got to be a lot more data in order for that to begin to happen. So, in my heart of hearts, I really want to be serving a population that I know can’t afford these tests. I’ve started pursuing different grants. I’ve got two grants right now, through different state entities, to be able to provide pharmacogenomic tests to underserved, really complex care populations that are more expensive to the state as they would see it.

Those grants, I’ve partnered with physicians and different healthcare settings, to act as a consultant pharmacist to come in, give the tests, interpret the tests, and then streamline patient care. The second arm of my business is direct to consumer for patients that have the funding to be able to pay for these tests independently outside of insurance, and just want a really high standard of care, and want to tap into personalized medicine in a way that insurance coverage doesn’t make a difference to them. It’s just that important. So, really going off of those two arms of serving the people that I know needing it most, or serving the people that I know need it most with the grant funding, but then also being able to tap into a community that wants it at the moment through direct to consumer.

[00:20:54] TU: This is such a great example. Let’s pause for a moment here for the listeners. What I’m doing is really dissecting kind of the thought process behind how the services have developed to where they are. Many people I talked with, that are trying to start thinking about starting a business, they want to focus on the service they’re offering first. What I’m getting to is that is typically not where we want to start. We want to start with what is the problem that needs to be solved. What’s the pain?

One of the things I always encourage people is like, go through your everyday experiences. Where are the inefficiencies? Where are the problems that need to be solved? Good or bad, when you think about healthcare and pharmacy, they’re all around us. They are all around us every day of problems that need to be solved.

So, what are those things that, number one, there’s pain? Number two, that really interests you, Corrie, you mentioned your why, something that’s going to really fuel your passion, keep you motivated, keep you going. And then we start to back into, okay, under that problem, what is the avatar? What does this person look like that might be struggling with this problem? And to be as specific as you possibly can be. This is where I think folks often struggle, Corrie is where they want to try to build something that, I don’t really want to narrow myself into this specific demographic. It’s too narrow, it’s too niche. There’s always room to expand. But there are way too many examples of businesses that start broad, and they’re trying to serve everyone. And by doing that, they’re not really serving anyone at the end of the day.

What is your ideal customer within that problem? Within that potential solution that you’re going to offer? Painting a very specific picture in terms of naming them, age, what are they doing? What’s their profession? What’s their income level? All those types of things. And then from there, you’re aligning the solution with the problem and the person. I think you have done this so well, and we’re going to dissect this further with other people that come on to this series, of we focus on the solution. I think that’s maybe a little bit hardwired, of who we are as pharmacists of like. “I have this great idea. I have this solution.” Is it even aligned with the right population addressing the right problem?

This is so key, because all of your marketing, your storytelling, how you position this, all of this is going to be speaking to the pain and the problem that someone has and how this solution is addressing this pain. I just want to pause there for a moment, because I think it’s a great example to walk through how you’re developing this, and kind of the system to think about along the way.

I want to shift gears and ask you a question. I know you’re early in the business, but one of the things I see people struggle with is this question of should I pay myself? Or should I invest back in the business? I think this is really challenging, especially for folks that are transitioning from a high-income profession, like pharmacy where they want to, as quickly as possible replace their income. That’s different from other areas where you hear the startup stories where, maybe somebody lost their job, or they were very young, making a small income. So, that jump to zero wasn’t as significant, right? There wasn’t as much pain.

I think this pressure is even greater with pharmacists where they’re like, “Ah, I want to pay myself. I want to pay myself.” But they’re feeling the tug of should I invest this back into the business? Whether that’s systems, people, or resources, to really give this the fuel and the life that it needs. How have you approached this balance and this question so far?

[00:24:19] CS: Tim, I think this is such an important question because you can really put yourself into a hard-financial position. Like I said if you’re not having these conversations, and you haven’t set these boundaries for yourself before you get into the business, I just think it becomes way more complicated to answer them once you’re already up and moving. So, something that I did was just a really deep comprehensive analysis of my baseline expenditures every month, my fixed costs, my variable costs, and knowing what I would need to pay myself to live and maintain a lifestyle that I’m comfortable living throughout this transition. And that definitely involves streamlining some things and making cuts where I could. But I pay myself that amount of money every month, and then the rest of it gets circulated either back into the business or toward my student loans.

Again, I just came in with that number in mind, and it’s so important, that’s going to look really different for everyone, depending on the chapter of life that you’re in. Do you have kids? Do you have a significant other that has loans that you’ve got to prioritize? But really, being honest and upfront with yourself, and that’s just how I do it. I pay myself the baseline that I need to continue to maintain the lifestyle that I want. And then the rest of it is circulated into other financial vehicles.

[00:25:32] TU: If I can connect the dots too, because of what you shared earlier, that eight-month reserves, setting up a good financial foundation, having other revenue streams, that help to diversify, allows you, I would think, to keep that number within range that it’s not suffocating your business. Whereas if you said, “Hey, because of those other things not being in place, I have to have this income to be able to do all these things.”

I think that planning, as you’ve alluded to, a few times now is so important, and you kind of mentioned this. But we don’t objectively evaluate our business. That’s just human behavior. When you build something that you create and you’re passionate about, a lot of the objectivity goes out the window. It becomes very emotional, right? These are why you hear the stories sometimes of founders sharing what they’re doing, what they’re working on, and the money, they’re investing into it, not making money, not being profitable. You’re like, “How in the world are you continuing to run a business?” It becomes very subjective and emotional over time.

I think, having accountability, talking this through with a partner or preplanning, maybe having a coach involved, whatever be the case, is so helpful, because yes, that passion is going to serve you when you’re building the business and the mission. But it also can be blinders sometimes, as we’re not able to see clearly some of the challenges that are in front of us.

Corrie, let me ask you about resources that have been really instrumental to you early in this journey and going through the transition. So, whether it’s paid or unpaid things I’m thinking about, whether it’s programs that support pharmacy entrepreneurs. I know, you talked before we hit record on some of the work that you’re doing, an accelerator program, whether it’s coaching services, books, podcasts. What have been a few of the resources, whether paid or unpaid, that had been most instrumental in your journey of making this transition?

[00:27:21] CS: Sure. I think I’ve got two that come immediately to mind. One, I’ve found it very impactful to be surrounded by pharmacists that are also making this career transition. I am a part of one of the online academies that’s offered from another pharmacist to really just surround myself with other professionals, specifically in the pharmacy care setting, to be able to just provide a community of support and understand the transitions and the intricacies of pharmacy and have those conversations that are maybe a little more specific has been really, really great for me.

The second resource that I’ve tapped into is the Small Business Development Center here in Hawaii, and I would recommend that anyone that’s making an entrepreneurial transition do that. Because the small business community in your state is aware of your state specific laws. They’re aware of the needs of your state. They’re aware of the local resources that they can point you to. So, it’s one thing to have this pharmacy group and have a lot of people that you can maybe comrodorize with about what’s so specific to the profession and maybe bounce ideas off of them. But, I think, the most instrumental piece has been the Small Business Development Center locally in Hawaii.

Something that’s tapped me into is, I’m now going through a business accelerator program or a business incubator program that’s funded locally by the state. But it’s essentially a really intense one-month workgroup. They tell you to dedicate somewhere between 30 and 40 hours in a week. But basically, we go through every single aspect of business that you don’t touch in pharmacy school in a traditional care setting unless you had traditional training with an MBA or some kind of other entrepreneurship experience in your past. But we go through everything, branding, marketing, advertising, strategizing, scaling, and being able to not only have those resources provided to me and have conversations with local leaders. It’s just been an amazing, amazing growth and connection platform that’s local to the state.

[00:29:24] TU: What I love about that experience accelerator program is you’re in it while you’re building something. It’s the best time to learn. I mean, I’ll knock on MBAs for a moment. But I think often those courses are taken in the context of maybe a future idea or you’re already working with an organization more geared toward folks that are in a management role. When you are in the thick of trying to start and build a business and you’re learning, that’s power. That’s where I think the magic really happens. As you mentioned, Small Business Development Centers are located all across the country. I believe they’re partially or fully funded by the SBA. We’ll link to the SBDC in the show notes. I’ve had some experience with them in the past. A great resource, as you mentioned, to really help you with some of the foundations, to have a point of contact, basics around business plans, starting an organization, the early steps of the business, connecting you with other entrepreneurs, resources, illegal resources, et cetera in the area. I think they do a fantastic job and it’s free, which is a huge benefit, something that other resources do as well.

[00:30:25] CS: I have found that the small business community is so supportive of one another, and just really interested in helping each other out and pointing each other in the right direction. And it’s kind of like this camaraderie that you’ve got that maybe you don’t fit into a traditional work mold that everyone just likes to focus on, and really pull each other out of the weeds and support each other and be there.

I’ve also really found a lot of opportunity, just in the last year, just speaking into existence that, “Hey, I am a small business owner when I introduce myself in groups now.” I’m like, “Oh, my name is Corrie. I work as a pharmacist and I transitioned from a traditional role, I now own my own consulting company.” That’s how I introduce myself in various settings. But you would be so surprised, I’m not even doing and like a salesy way. I don’t want anyone’s business. But how many people approached me with, especially when they’re in health care? What are you doing? How are you doing that? What does that mean? What does your business look like? I found such a unique group, within the small business community itself. It’s been really refreshing.

[00:31:28] TU: Yes, let me introduce you to so and so, or have you thought about this? It’s an incredibly collaborative group and I think, especially when it’s authentic, and you’re there to learn, you’re there to contribute to the network as well. Obviously, there’s value to be derived from that also. Corrie, what role has your presidency of the Ohio – not the Ohio, of Hawaii —

[00:31:51] CS: We should leave that in there.

[00:31:53] TU: We are. We are going to leave that in there. The President of the Hawaii Pharmacists Association. How has that helped you grow as a business owner as well see the opportunity that’s out there?

[00:32:04] CS: Yes, that has been truly instrumental in having a successful transition. Like I said, my husband and I were really planning for financially about a year, but I knew that I was going to leave my job somewhere around that three-year mark with the VA. So, I started tapping into my resources within the state association, almost immediately after making the decision that I would be making a transition.

A lot of people that I work with, that are directors of pharmacy, or really impactful in the state just saying, “Hey, I’m going to make a career transition. This is what I’m looking to do.” And get them thinking about what opportunities they can provide for you has been amazing. That’s actually how I got pulled into two other grants that I have right now, is just having those conversations really early on with some people that were influential in the state association.

Hawaii is also really unique. I mean, our state association, it’s very small. Our state is very small. So, I can make a pretty big difference on a pretty big scale just because of how small the state is. But tapping into your state association is an amazing community, an amazing resource. They’re up to speed on the law. They can normally tell you where there are other weaknesses in areas where maybe they’re getting different things pointed to them from pharmacists in the state.

So, I’ve loved working with the state association. I’m obviously also biased because I’m the president. But that is another really huge way to impact pharmacy practice, that I don’t think is taught well in pharmacy schools, in general, is provider status. We’ve been hearing about it since we were in pharmacy school at the national level. But really, where you make a difference is looking across the map at the state level because that’s where your local legislators are able to cater different statutes based off of the needs specifically of your state.

One, it’s just the connections. But two, if you really want to make a difference fast, changes made at the state level. And so, being familiar with what the opportunities are. And then again, like you said, being able to change legislation to make that happen, it’s something that I don’t think we talk about enough.

[00:34:10] TU: Yes. I’m seeing the power of networking being involved, obviously, across the state with not only the Small Business Development Center here, you’re talking about the Hawaii Pharmacists Association. You mentioned you’re part of that pharmacist’s network of a community of individuals and other entrepreneurs. So, great touchpoints and connection points to learn from other people to contribute and to be at the forefront of what’s happening, obviously, in the profession and the opportunity that’s out there.

Corrie, I want to ask you about head trash, okay? And credit to my coach, my coach who talks a lot about head trash and the stories that we tell ourselves, and often it’s not objective when we can really shine a light on what it really is. But it has such an impact on what we do or don’t do in terms of the actions that we take. As you look at this transition, you’ve made this transition for from employee to entrepreneur, what head trash, if any, have you had to get over, that you’re working through, that you really see as either was a barrier or is a barrier to you growing your business?

[00:35:16] CS: I’m laughing because it’s so easy to get derailed in your own mind with what you’re doing. So, you could be doing something as simple as like filling out a form that you’ve never filled out before and you get frustrated, and then you’re like, “Why am I going into entrepreneurship?” I don’t know what I’m doing. It becomes really easy to derail yourself mentally. I think that’s a great question and it’s very real.

But you have to remember, most people that are really successful entrepreneurs, own one skill. They know one thing. They are not trained in all of these other aspects of the business. So, you are not doing anything that is out of the ordinary. And just having that perspective of so many business owners that are really successful, had no idea what they were doing when they started. They just knew they had a really good idea and they had a really powerful connection to what they were doing.

So, I think it’s just being aware of the head trash is probably step one, because it’s going to creep into your head at some point. You’re going to start second guessing yourself. Just being able to hone back in on your why, and what you’re doing, and who you’re doing it for, is something that’s really been powerful to me. And then, I will also say, having a support system is really instrumental. And whether that’s your spouse, or tapping into that pharmacy community, or tapping into the small business community, it’ll really help you get through the weeds and the head trash pretty quickly. You can talk yourself out of it mentally and you can write some things down and focus on your why. But when you’ve got another physical person that you can really have those conversations with, that just becomes a little more real. So, that’s helped me too.

[00:36:48] TU: It’s fascinating, I think how fragile this can be early on, right? You mentioned the example of, “Hey, I’m filling out a form and I get frustrated. And all of a sudden, my mind goes to like, second guessing. I am I cut out for this? Am I going to fail?” Like, whoa, like we’re filling out a form. What just happened?

[00:37:05] CS: It escalates really quickly.

[00:37:06] TU: It does. I think, with more time and even stepping into some of those “failures”, and realizing like, “Hey, it all worked out. I’m willing to put myself out there and kind of learn from that, grow from that, build a team.” I think some of that gets mitigated. I don’t think it ever goes away. But I think it is a fragile period where that community, that support, resources you mentioned is so helpful, especially early on in the journey.

[00:37:29] CS: Something else, Tim, I’ve also done, is I’ve started writing things down. I was never really into journaling. But when I left my job, I just had so many pent-up emotions, I just started journaling. But I’ve also started journaling some of the wins that I’ve had just with my career and in my personal life in general and being able to flip through some of those wins when you’re having a bad day or you have a loss because you’re probably going to have a million losses, that’s just inevitable. But being able to reflect back on some of those wins too, in a tangible way, has been really helpful.

[00:37:59] TU: Corrie, I want to wrap up by hearing from you, as you’re going to take the host seat of this series that we’ve got planned out through 2023, and I expect, beyond that as well. As you think about this series, who it’s for, the focus of it. What can people expect as they tune into The Pharmacy Innovator series throughout the year? What are you hoping to accomplish?

[00:38:25] CS: Yes, I think there are so many amazing resources out there for pharmacists that are looking to make a transition. We know it’s possible. We know that there are different care settings or areas or specialties or ways that you can monetize your knowledge. We know it’s possible. But what I really want to make real is having some of the conversations that will make those transitions seem tangible. I just think that the YFP community is a great place to answer and ask some of these harder questions that have to deal with finances, which no matter how you put it, you have to talk about finances when you’re going to make a career transition. I mean, you can have amazing ideas. But I know some of these academies and some of these support groups, they don’t want you to talk about finances. And I just think that’s totally unfair to people because you just can’t make a transition without having those hard conversations.

So, I think that this is a really great community because it’s built around finances and really diving into some of those questions in a way that’s not taboo or intrusive. But then, also, just hearing different perspectives from pharmacists that have been really successful, or maybe not even pharmacists, but just have made successful career transitions. And really, some of those hard-hitting questions and the planning process and making it all just seem more transparent and possible and hopefully, give some hope to some of the listeners that are looking to make those transitions and providing them with contexts to do it in a successful way.

[00:39:51] TU: I love that, Corrie. I think you and I both share the enthusiasm for – when there’s a period of disruption, you mentioned kind of a crossroad earlier in the show. There are two ways of looking at that. There’s kind of a gloom and doom of, “Hey, some of these traditional roles are being disrupted. Maybe perhaps some contraction is happening.” Or the other way is, “Hey, this is an opportunity that through that disruption, it means we’re ripe for innovation, for new ideas.” That is scary. That is big. That is, “Hey, what does this mean? And what does the role of pharmacists look like going forward?” I think it means it’s probably a lot more diversified and broader than we think about it today, or at least how I thought about going through pharmacy school as a student.

But I think that’s exciting. One of the purposes that we’re hoping to accomplish is to feature other stories, not necessary – so if someone can say, “Hey, I just heard from Corrie. I’m going to go do exactly what she did.” But rather, “Hey, that’s an interesting way. I haven’t thought about how pharmacists might leverage their training and their clinical background and expertise to be able to go solve this problem or that problem.” I think, our hope is some of that inspiration and motivation through hearing these stories. And also, to connect these folks together to the concept of community. We’re going to have a lot better outcome if we can all be helping and supporting one another.

This has been a great start. I hope the listeners will stay tuned to hear from Corrie throughout the rest of the year. Thank you, Corrie, so much for coming on to share your journey.

[00:41:17] CS: I feel the exact same way. I’m so excited to be able to bring some of these stories to light, and like you said, to just be able to inspire and motivate pharmacists to really step into different areas where maybe we hadn’t thought about stepping before, and really embracing the innovation and the future of the profession.

[00:41:32] TU: Awesome. Thank you so much, Corrie.

[00:41:33] CS: Thanks, Tim.

[OUTRO]

[00:41:35] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and it is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

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

[END]

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YFP 296: 5 Key Decisions for Long-Term Care Insurance

Posted on February 23, 2023February 23, 2023 by Caitlin Boyle

YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, RICP®, to talk about long-term care insurance. During the show, they discuss what long-term care insurance does and does not cover, common misconceptions about long-term care policies, and five key considerations when purchasing a policy.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, RICP®, to discuss long-term care insurance. Tim Baker explains what a long-term care insurance policy is and what it does and does not cover. Tim and Tim move through some of the top reasons why someone would need long-term care, necessitating a long-term care insurance policy, and how that policy is triggered and paid out. Three common misconceptions surrounding long-term care insurance policies are mentioned, including thinking that medicare will cover all long-term care needs, optimism bias, and the belief that long-term care insurance policies are too expensive.

In the second half of the episode, Tim and Tim address five key considerations when contemplating a long-term care policy, including when to look to purchase a long-term care policy, choosing a monthly benefit, choosing a deductible, deciding how long the benefit will be paid, and determining whether or not to have inflation protection on a policy. Tim and Tim wrap the episode with examples of different deductibles, benefit details, and policy costs. Listeners will hear realistic examples of long-term care policy details and may be surprised about the outcomes.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

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

This week, Tim Baker and I talk through a topic which we have not yet covered in detail on the show, and that is long-term care insurance. During the show, we discuss what long-term care insurance is, what it does and does not cover, and common misperceptions surrounding these policies. We also discuss five key considerations when purchasing a policy, including when to purchase one, what to consider in terms of a monthly benefit and deductible, whether or not it’s worth having inflation protection on a policy, and how long to determine that benefit will be paid.

Before we jump into our discussion around long-term care insurance policies, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 280 households in 40-plus states. YFP Planning offers fee-only high-touch financial planning that is customized to the pharmacy professional. If you’re interested in learning more about how working one-on-one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call at yfpplanning.com. Whether or not YFP Planning’s financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

[INTERVIEW]

[00:01:21] TU: Tim Baker, welcome back to the show.

[00:01:23] TB: Thanks, Tim. Happy to be here. What’s going on?

[00:01:25] TU: Excited to be continuing this journey on covering some of the topics for pharmacists that are listening in the second half of their career. We’re going to do that breaking down some of the long-term care insurance in terms of who needs it, what does it cover, how do you evaluate different factors when purchasing a policy.

Tim, we’ve talked a lot about insurance on the show, health and home, auto, life, disability. But we haven’t really discussed long-term care insurance in detail. Our hope is whether someone’s at the front end of their career and they’re listening, just to gather some more information or learn about what this may entail later in their career, later in their life, or perhaps folks that are in the position of purchasing these policies right now or soon to be, that they’ll be able to take away an important part of the plan that probably is not talked about as enough. Would you agree?

[00:02:18] TB: It definitely is, and I think even my own thoughts have kind of evolved on this. I kind of came into the industry where we would have long-term care insurance policies in place, and they were just – The premiums were crazy, and there’s a lot of reasons why this type of insurance has kind of evolved over time. A lot of it’s like just there wasn’t a whole lot of information out there. We can kind of talk through that, but it is an important thing.

I think when people live in longer, it’s definitely one of those things that I think at the fall, a lot of people are like, “Ah, it won’t happen to me,” or, “I don’t need that.” But as we’ll talk about, it is going to be a major part of the financial plan, and there is long-term care planning, which a lot of people, it’s kind of family and the money that I have. But hopefully, we take this conversation a step further. We talk about long-term care insurance. So I think that’s kind of the point of the conversation today.

[00:03:11] TU: Tim, insurance feels like one of those topics. You and I have talked about this before that when we speak with a group of pharmacists and we bring up the topic of insurance, you can just see eyes gloss over, right? I think that’s natural. I mean, who wants to think about – Whether it’s something like life or disability, it’s not an exciting thing to think about. Same thing here, being in a place where we might need long-term care insurance. Not a very rosy thought, right?

I think also just this concept of playing defense with the financial plan. Even though we know it’s important, it may not feel as exciting or as motivating as some of the investing parts of the plan, for example. So this feels like, Tim, a topic that we know is important. We’ve got to really translate that knowledge and perhaps have some accountability from a planner and someone that’s helping us to implement this, knowing that our tendency might be to mitigate and underestimate the risk and not focus on it as much as we do other parts of the plan.

[00:04:08] TB: Yeah. It’s just like, yeah, anything that we kind of put under like the wealth protection, whether that’s estate planning. Nobody wants to talk about their premature death or what’s going to happen to their kids or that type of thing or life insurance or even the disability insurance. They’re just not fun topics. But I think we as fiduciaries, we get to have these conversations with clients and have them think about it at the end of the day, right? Like what we’re trying to do is provide options and provide a path forward for them to kind of get from A to Z. Z, hopefully, as a financial freedom in a lifestyle that works for them.

But along the way, there are pitfalls, and life comes at you fast. This is definitely one of the ones where it’s like, “Hey, I wish I would have done that or –” Again, I think so many financial advisors themselves chalk this up to like, “Hey, we’re just going to plan for this as it comes.” But I think the way the policies are written now, they’re a lot more – They’re priced, I think, better, and I think they should be something that are considered as part of the financial plan in general.

[00:05:14] TU: So, Tim, before we break down five key decisions that someone should consider as they’re evaluating a long-term care insurance policy, let’s talk through some of the background first. What exactly is long-term care insurance?

[00:05:27] TB: It is a product that’s really meant to mitigate the major risks in retirement, one of the major risks in retirement, which is long-term care risk, which, Tim, is the inability to care for yourself. Again, we’ll talk about what triggers this in terms of the things that you do as a part of your daily life. But as you get older, cognitively, physically, there’s a chance that you can’t care for yourself. So then what do you do? By default, a lot of people will kind of fall back on their family and that type of help.

So what-long term care insurance is it’s a policy that provides for a broad range of skilled custodial and other services provided over an extended period of time, typically, to like chronic illness, a physical disability, or a cognitive impairment. So as I mentioned, the default is that a lot of people that don’t have these policies, they rely on unpaid family members. So 80% of care usually comes from a family member, which can be negative to that particular family member, their own mental health and financial resources, professional status. 20 hours on average per week is what an unpaid family member will get. Like I said, it can negatively impact the caregiver’s health and career, if it’s for an extended period of time.

Probably, unsurprisingly, I would say, Tim, the top reasons that long-term care really is needed is due to Alzheimer’s. That’s the number one. But the second one kind of surprised me. Arthritis was the second the second one and then cancer stroke. Then the fifth one was nervous system conditions. So the insurance really is a product that is meant to pay out. Typically, it’s a monthly amount to the insured to be able to basically pay it for paid care, whether that’s skilled or unskilled. We’ll kind of talk about that in a bit, but that’s really what long-term care insurances is.

[00:07:31] TU: I think, Tim, the classic example I always think about here is Alzheimer’s, right? As you mentioned, number one on the list, right? This is a condition that many of us probably had a loved one that we’re familiar with. You see the impact in terms of the progression of the disease, the level of care that’s needed, both financially and time, as you mentioned, caregivers within the family.

But also, unlike some other conditions that may have a shorter lifespan, folks with Alzheimer’s can live a longer period of time, in a state where there’s a lot of care that’s needed. So I know personally, that’s what I have to think about in terms of mitigating the risk financially to my family or my boys as they get older, if Jess or I were to have Alzheimer’s. That seems like the classic example where while there could be a long period of time where care is needed, both financially, as well as the time intensity to provide that care.

[00:08:22] TB: Yeah. I mean, that – I think that’s it. We’ll talk about misconceptions. But I think that is dead on. I think when most people think about long-term care, though, they think about being stuck in a nursing home. It being really expensive, which is true. But a lot of the industry, what we’re really trying to pivot to is kind of that aging in place.

A lot of these policies that we’ll talk about more is the insurance companies, they recognize that the cheapest way to age is to age in the home. So they’re going to do whatever they can to kind of keep you in place. So whether that’s ramps, handles for your shower, things like that. A lot of these policies have these written in as almost like add-ons because the longer that you can stay in a home and age in your home, the better.

I think that’s the direction that planners should really go is at a minimum, provide a benefit that really allows you to age in place, age in your home as long as possible. So you don’t have to be in the nursing home. That’s where care gets really expensive and probably from a cognitive mental perspective, the patient not in as good a place, so.

[00:09:26] TU: Tim, you talked about common misperceptions. What are some of the main ones that you see around long-term care insurance?

[00:09:34] TB: Yeah. I think one of them is that Medicare. We kind of talked about this with Social Security. Social Security can – It’s going to pay for everything. We’re good. We’ve been paying into this all our life. We know that’s not true. Another one is that Medicare is going to hook me up if I need to go into a nursing home or even aging in place benefit. That’s really not true. The Medicare is not necessarily meant to cover any kind of care that’s long-term and chronic. So this is where you really have to kind of either, again, self-insure or find your own policy.

Now, Medicaid, Tim, is there to help people in that regard. But that’s where you have to kind of be destitute. But there are strategies that are out there where people will spend down their dollars to kind of qualify for Medicare or Medicaid, if they need it. So the first one is Medicare really doesn’t cover you for long-term care coverage at all. So one of the things is that a lot of people recognize this as a concern. Just like you said, you’re talking about the boys and Jess.

Long-term care is a retirement risk and a concern, but it’s definitely one of these things where optimism bias takes hold, where it’s like that’s, “Ah, that’s a concern but not for me because that’s going to happen to somebody else.” So roughly 60% of the US population will need long-term care services. If you’re 65 today, 70% of people 65 or older will need long-term care services. So this is more than the majority, right. So like that’s important to understand.

Again, if you think about it too because of medicine and advances, like we’re living longer. But sometimes, we’re living longer with a chronic illness that we need some help. So there’s a lot of reasons why I think this number will continue to go north. The last one I would mention is that most believe that long-term care insurance is too expensive. Or just like we talked about with things like education planning, we need 100% solution. We have to have all the bells and whistles that the care is only provided for you at a nursing home.

In reality, again, what we’re trying to do is to establish a policy that pays for care in the home. A lot of the policies now, they used to distinguish between what kind of care you were receiving. But to simplify it, if you qualify for care, whether it’s nursing home or skilled or whatever, at home, it’s still going to pay that amount. So they’ve kind of streamlined these policies to make it easier to understand.

At the end of the day, you don’t need 100% solution. Even if you can put yourself in a position where the benefit that you’re receiving is essentially a 50% coupon, like we’ll take that at this point because that just makes things a lot easier. So those are some of the misconceptions that I think people have with regard to this type of insurance.

[00:12:20] TU: Tim, I want to dig a little bit deeper on a comment you made about optimism bias that I think really gets at the prevalence and the need, right? Anytime we’re looking at an insurance policy, whether it’s long-term disability, term life types of policies, you’re doing this risk evaluation of what’s the cost of the policy, what’s the potential benefit of the policy, and what’s the likelihood that I’m going to need it.

I think early on, I remember learning a lot about long-term disability, and I was caught off guard of, wow, the statistics from the Social Security Administration on the percentage of people that have a disability at some point in their career is much higher that I would have ever anticipated. I think that speaks exactly what you said of, “Hey. Well, I’m relatively young, getting ready to turn 39 tomorrow, relatively young, have been relatively healthy. And therefore, I can’t really visualize a scenario where these policies may be enacted. And, hey, I could use these dollars elsewhere in the plan.”

So same thing here and, of course, we have to mitigate that risk. We have to put that risk into reality, and that’s where, I think, a third party and a coach and a planner can really help. But break this down here. Like what is the true prevalence and need, and what’s the dollars we’re trying to mitigate against here in terms of costs?

[00:13:32] TB: So when we talk about the need, we said about 60% of US population will need long-term care. What’s interesting, though, is less than 10% of people aged 65 and older have a long-term care insurance policy.

[00:13:44] TU: Wow.

[00:13:46] TB: Yeah. We said the stat for that was approximately 70%. So we have 10% that have it. More than 70% age 65 and older are going to need long-term care insurance. So obviously, there’s a huge gap there. Men and women are different. So the average care needed for a man is about 2.2 years. So they’ll need – Once they kind of trigger that policy, it typically pays out 2.2 years.

For women, it’s quite a bit longer, 3.7 years. This is where if you’re a woman and you have a partner, a male partner, this is might be where you link your policies or have a shared policy, which you can do. So it kind of mitigates maybe buying a policy that will cover you for four or five years. 20%, so one in five, will need care for five-plus years. Again, I think some of these numbers will continue to go up.

So there’s lots of – It’s going to be dependent on your area, like where you live, because every state’s going to be different in terms of how much care costs. But one of the metrics that we use, and this is the 2019 metrics, so it’s a little bit dated with pre-COVID and, obviously, inflation being what it was, but a semi-private room in the US for a nursing home costs on average $90,156 a year.

If I’m looking at policies, I’m probably looking at, okay, what will cost me for someone five hours a week, and we’ll talk about this when we talk about breaking down the policy, five days a week, eight hours a day, some type of skilled or intermediate care, what does that cost? Then build it from there. So there’s shades of gray here, Tim, is what I’m trying to say with regard to – We don’t necessarily need a policy that pays that 90k. But maybe a policy that, again, focuses on aging in place that will have people come into the home to assist. So that’s kind of the gist of it.

[00:15:35] TU: So, Tim, when we look at these long-term care insurance policies, my mind is going on a path of like, “Well, what does it cover?” You’ve alluded to a couple things and really like what triggers a policy to pay out. Again, we think about this with long-term disability, and we think about, okay, what defines a disability. There’s some considerations around that, and when would the policy actually get paid out, and what things should we be thinking about. So same thing here, what triggers a policy to pay out and what’s it tend to cover?

[00:16:03] TB: The big things to remember with long-term care insurance policy is what’s called an ADL, an activity of daily living. They’ve actually modify this recently with IADLs, which is related to cognitive function. So an ADL, to go back to that, that is things like can you on your own bathe, dress, keep up personal hygiene, use the bathroom, maintain continence, kind of walk around with what they call mobility inside the house, transfer in and out a bit of a bed or a wheelchair. Typically, if you can’t do two or more of these things, this is where a policy will trigger.

For an IADL, like this is more of a functional thing. So these could be things like shopping for personal items, managing your money, using the phone, preparing a meal, managing medication, or doing housework. If these ADLs are kind of in question, then what happens is that you’ll have an assessment done by a professional that will say, “Hey, this person needs care,” and then the policy will start paying out per the kind of the contract language or the policy.

Some people, they need skilled care kind of right away, where it’s kind of 24 hours a day, and that’s typically if there’s more of like a medical need. Sometimes, if it’s more some of the bathing or some of the cognitive things of like help paying bills, it might be an intermediate, so a couple days a week type of thing. Really, the skilled versus intermediate care is really going to come down to frequency of how much is needed. That’s where an assessment will be done on the person to see, okay, what needs to happen in terms of people coming to the house. Or it could be moving to a facility to get the right care needed.

[00:17:54] TU: Tim, before we transition to really the second half of this show, we’re going to break down some considerations when selecting a long-term care insurance policy. We’ll talk through five specific things here in a little bit. But I think this is a chance, and I didn’t plan for this in the notes, but it just came to mind as you were talking. This really highlights an area where having a fee-only financial planner can be really, really valuable, right? So someone who is helping you evaluate a policy for, hey, what do you need? What are perhaps some things you may not need? What does the rest of your financial position, situation look like? Is self-insurance a possibility? Is it not?

Then, ultimately, when you decide if you’re going to purchase a policy, again, helping vet that and kind of cut through some of the weeds that can often be there in the insurance space, knowing that they aren’t making money off of recommending that policy. Again, I think one of many reasons we see value in the field and the environment where someone can really objectively look across your plan, and you know that there’s really – We’ll never say no bias, right? There’s always bias involved in any decision conversation, but really where you can mitigate those biases, right?

[00:19:01] TB: Yeah. I think anytime that you can separate the sale of a product from advice, that’s a good thing. Now, Tim, I would say that a lot of these policies aren’t being sold. I think a lot of that, it’s funny because Lincoln Financial did a survey on advisor attitudes about long-term care, and 99% of advisors think it is essential for families to discuss long-term care.

However, only 57% of advisors say they talk about it with clients, and I can understand why that is. Again, from my own perspective, it’s like, hey, when I was around long-term care early in my career, it was like, “Man, these premiums are going up every year. It almost feels like your health insurance every year open enrollments like, “Ah.” Everything’s getting more expensive.

Again, I think because of lack of data, but I think because of the low rate, low interest environment, because people were not lapsing on to these policies, all these reasons were why these policies were not good. So I think people or like advisors were a little hesitant to bring it up.

Now, again, long-term care planning should always be discussed. Insurance, I think we’re back to a place where these policies should really be considered. So, yeah, I definitely can see why that is the case. But it’s interesting because, again, we believe that anytime that you can separate the advice from the product and the commission’s involved, that’s a good thing.

[00:20:25] TU: So, Tim, as we look at mitigating this long-term care risk, you mentioned that at the beginning of the show, really there’s two big buckets that I see. One is the potential to self-insure. Then the second is, obviously, to purchase an insurance policy that helps to provide that protection. It feels like, just based off of what you’ve shared so far, that perhaps we have the pie chart a little bit backwards in terms of the number of folks that may need the policy, relative to those that actually have a policy. Meaning that a majority of folks are likely self-insuring now, when, in fact, maybe that should be the other way around.

So talk to us about self-insure. Does that make sense for some folks, and how would that be evaluated?

[00:21:08] TB: Yes. So I think the biggest thing, it kind of goes back to like what are the goals, and what’s the balance sheet look like. To me, this is the conversation. If we are self-insured, like what are the sources of funding that we could tap into and kind of the break the glass scenario? So obviously, looking at the balance sheet with all your assets on the left, all your liabilities in the right, and then understanding, okay, these are –

Again, by default, we’re, obviously, talking about things like cash accounts, retirement accounts, allocating the Social Security check in that way. It could be how do we allocate home equity. There could be government programs out there that do assists, depending on the state and where you’re at. But it, essentially, is like the self-fund is – Then, obviously, the social side of it is do you have family members that can care for you that can help assist with this and the like?

The hybrid approach, which is technically probably not self-funding, but a lot of insurance policies like life insurance now have asset-based or link policies that will provide some type of like rider for long-term care. So although they’re not primarily focused on that type of coverage, there are more policy that do offer that or even like annuities. Sometimes, annuities have long-term care provisions. Those are essentially on the table.

Then finally, the backup for plan for self-funding is Medicaid. So when the money’s gone, you’re kind of at the behest of the Medicaid program and to provide kind of the care that you need. Yeah. So I think the big parts here are what’s your balance sheet look like? Where is this money going to come from for long-term care and then probably where’s the family going to be in this whole picture are kind of the two things that I would focus on with regard to self-insure.

[00:22:54] TU: So for the rest of our discussion, let’s assume that we’re going to evaluate and decide to purchase long-term care insurance policy. Now, it’s really down to what are some things that we should be thinking about, so five key decisions to consider when purchasing a policy.

Number one, Tim, which I think is probably top of mind for everyone is when, right? I’ve heard, generally, mid-50s, but that feels like kind of that blanket advice of is that for everyone. So when should someone be looking to purchase the policy, and why is there potentially this a window of time where it’s optimal?

[00:23:29] TB: Yeah. So probably the conversation should start happening. Believe it or not, Tim, in the decade that I’m in that you are not in as in your 40s, in your late-40s, I think that’s probably when the conversation should start happening amongst family members or even your advisor.

To purchase a policy, probably you’re correct. In your 50s is preferable. The average age of a purchase for long-term care insurance policies is 57. So that seems to be the sweet spot. Once you get into your 60s and 70s, the number of people who are denied coverage quadruples, and that’s typically because things like prescription and medications for this ailment or that ailment kind of increase. So you’re either denied coverage because of things like that, or the policies are just that much more expensive.

Yeah. I think conversation in your late 40s and then start putting the pieces together in your 50s and to get a policy in place at a minimal, minimum to cover kind of that whole aging in place idea. So that’s kind of where we’re at.

[00:24:32] TU: Sort of broad level, we’re trying to play this dance between too early. Maybe a higher likelihood of getting coverage but, obviously, paying premiums for a longer period of time, and there is potentially a too early and then, as you mentioned, maybe a too late, where the amount of people that are denied coverage goes up. So finding that sweet spot and then taking a step back because you’re talking about how does this fit in with the rest of the plan in terms of cash flow in that policy.

Tim, number two is choosing a monthly benefit in terms of five key decisions to consider in purchasing your policy. So how does someone start to really determine what is the monthly benefit that I need? Obviously, that’s going to feed into what that policy is going to cost.

[00:25:15] TB: I think at a baseline, we should consider a benefit that covers the typical cost of like care in the home, since, again, that’s 80% of where care is provided. So if we say we need someone to come in to help eight hours a day, five days a week, we think that, on average, and again some of these numbers might be a little bit dated, but we’ll say we need a benefit that pays out 5,000 to 6,000 dollars per month because that’s the average cost for care like that. That’s, I think, where I would start, and I would look at it as a monthly benefit.

Again, back in the day, they had – If you needed care on this day, they would say, “Okay, you have a daily benefit versus a monthly benefit.” Most people look at this as a monthly benefit. So we’re looking at 5,000 to 6,000 dollars per month to kind of provide that baseline. I think that would be where I would start.

[00:26:07] TU: Hold that thought. Obviously, this isn’t advice. There’s lots of factors that are going to go into what exactly is that number for you. But hold that number in mind in terms of benefit five to six. We’re going to come back at the end and talk about a couple of case studies and just kind of ballpark what these policies might cost to get a benefit near or somewhere around that level.

Tim, number three is choose a deductible. So talk to us about making this choice and how the elimination period factors in and what that means.

[00:26:35] TB: Yeah. So just like a disability insurance policy, your deductible is paid in time. The time period is called the elimination period. So once someone kind of assesses that, me as the insured, I need help with one or two or more of the ADLs. That’s when the clock essentially starts. So let’s say it is January 1st. Then if my elimination period is 90 days, essentially, if it’s on a calendar day elimination period, then I start receiving my benefit April 1st. So 90 days have elapsed.

The other thing that can be written as a service is it could be a service day elimination period, not a calendar elimination. So a service day is if I’m only deemed that I need three days of care per week, and I have a 90-day elimination period, that could take substantially longer to basically get that benefit. So if we’re trying to get care to stay at home, I think sooner is better. I think a 90-day elimination period is probably a good baseline to use. So that’s kind of how I would look at that as. It’s the time that you have to wait for that benefit to be paid out. You pay your deductible in time, not necessarily dollars.

[00:27:49] TU: So we talked so far, Tim, about when potentially to purchase a policy, how to choose a monthly benefit, how to choose a deductible. The fourth consideration is deciding how long the benefit will be paid. Again, we keep coming back to long-term disability. The time, length of the policy can vary. Here we’re talking about the same thing, which is what’s the potential total bucket of the money that’s needed. So tell us more about how to consider this. This seems like a hard one to predict.

[00:28:17] TB: Yeah, it is. Again, if we look at kind of the average day, and we say that a female needs 3.7 years, then we might price a policy out for her that’s four years, 48 months. So we take that as kind of our number of months, and then we multiply it by – We’re going to say we need at least a $5,000 monthly benefit based on how much that five days by eight hours cost in the area that I’m living in. So 48 months times $5,000 is a $240,000 bucket. Essentially, that is kind of the money that you’re drawing on. So that’s the way that I would think about it.

I think a way to kind of really drive down costs is if you have – If you’re a couple, and this isn’t – You don’t even have to be a married couple. But if you’re a couple, you can kind of connect the buckets with a rider. Again, if I’m thinking as a male like, “Oh, I don’t really need this,” I can, essentially, leave my bucket to Shay as kind of a contingent plan when I kind of pass away. That rider allows you to kind of link your buckets together. So it’s an NF2 versus NF1, which is a beneficial thing when we’re looking at how long the benefit will pay the individuals on the policy.

[00:29:30] TU: Tim, would that be like I have a policy, Jess has a policy, and then we both have a rider that links them? Or is that the strategy of like one person has a policy, and the other is linked, but they also don’t have a policy? How does that work?

[00:29:43] TB: It’s more of the second one. It’s like you kind of are both named on the one policy.

[00:29:47] TU: Okay. Got it.

[00:29:48] TB: Then it’s kind of a shared bucket for kind of your gender and age.

[00:29:53] TU: That’s cool. I never heard of that before. So I learned something new today. It’s awesome. All right, number five, which is timely, consider inflation and, as well, as we just talked about some of the inflation protection and the benefits of Social Security having that provision. So number five, determining whether or not we need inflation protection on a policy. Tim, is this worth the additional costs? How does someone evaluate this?

[00:30:15] TB: This is probably one of the most expensive things on a policy because as you can see, especially a year over a year, how much inflation we’ve kind of experienced. So this would be probably one of the first things that I would downgrade from a policy. If you look at homecare cost, usually, it’s about one to two percent per year that it’s gone up, believe it or not. So there might be where you’re not necessarily linked to like a COLA, but it’s a flat 1%, 2%.

That known quantity of one or two percent or whatever you select is a lot easier to be priced into a policy versus an unknown inflation that we just don’t know about. So that would probably be where I would cut. Obviously, it diminishes your purchasing power in the future. But it’s usually one of the things that drives the premium up in a policy.

So I would say that might be if you get the sticker shock with, wow, that’s a lot with the inflation protected, I would price it without it or price it with a moderate one to two percent, and then see how that affects the price.

[00:31:18] TU: And hope we don’t have eight percent, right, and inflation long term?

[00:31:23] TB: Yeah. Although on the flip side of that, typically, a higher inflation market is better for these insurance companies to keep these policy, that was one of the things that they had thought that the inflation was going to be higher than it was. But because a lot of this has to be secured, like how they’re investing this money is very conservative. So if you’re paying 7% versus 2.5 or 3 percent, it should be a little bit of a benefit to the policy holder because the premium shouldn’t be as expensive in a higher interest rate environment, if that makes sense.

[00:31:56] TU: Yep, absolutely. Tim, let’s wrap up with a couple examples where we can start to bring this to life with individuals at certain ages and how much benefit they may need and for how long and then what that might actually look like in terms of premium costs throughout the course of the year. So you want to talk us through a couple of these?

[00:32:16] TB: Yeah. So I really have kind of an example that shows a couple. So one of the studies – I don’t know if this was Lincoln as well. But they kind of surveyed couples and asked like how much they would be willing to pay for long-term care insurance. The number was right in that kind of 2500 to 3,000 dollars per year. The example that I’m going to show, it kind of shows around that $3,000 like premium. So if we have a 55-year-old couple in this first plan, they had that shared care, so it’s a link benefit, it’s kind of a regular rate. So just like life insurance, you could be preferred, which is kind of top of the line. Regular rate is kind of average health.

If we’re looking at a $9,000 per month benefit with no inflation rider, there’s four years of coverage, so essentially two per person. But, again, it’s linked. That gives us basically a $460,000 gross benefit, and the premium for that is just under $3,100, $3,094 per year. So again, if I’m looking at this couple, and I’m like, “Hey, there’s no inflation rider, but you get $9,000 a month for four years,” it’s almost a half a million dollar bucket. Like is that worth $3,100 per year? Studies show that most people would jump at that.

[00:33:36] TU: That’s lower than I would have thought, to be honest.

[00:33:39] TB: Hey, when I was learning about this too, like learn about this, me too. Like I was kind of floored by that.

[00:33:43] TU: Is that fixed? Or does that go up, the policy? Can that rise?

[00:33:47] TB: It can go up. Like the premium can go up. But I think because of – So like back in the day, this policy might cost like half of this. But then because we didn’t have the right data and all those reasons that we were talking about, the premium will go up substantially. We’re not seeing that as much in terms of the huge jumps in premium because of, again, they miscalculated the mortality and the morbidity risk back in the day. The lapse assumptions were they thought that 5% of policies would lapse was closer to like 1% back in the day. So now, because of the information is a little bit better, you shouldn’t see that jump covered.

Now, that is one of the benefits, Tim. We talked about one of those hybrid policies with like a whole life policy. Those premiums are set. So one of the things that is the advantage of the hybrid policies that you don’t have those jumps in premiums that you would potentially in a more of a traditional plan. But I would say that they’re priced a little bit better from the jump, you’re not going to see that. So that’s the policy without that inflation rider.

[00:34:50] TU: Tim, I’m wondering if many people are kind of having the thought I am in the moment. As I look at this and I’m kind of seeing this for the first time, as you’re talking about it, and we prep for the show, like that is lower than I would have anticipated for more benefit. I mean, you talked about some ranges, kind of a baseline floor, not advice, but generally speaking, 5,000 to 6,000 dollars per month.

This policy here, if I heard you correctly, was a little bit higher right now, 9,000 per month, didn’t have an inflation rider. But it did have that benefit between the couples that you talked about, and that doesn’t seem crazy high. So I guess what I’m wondering is if many folks are listening, like myself that have parents either in or nearing retirement, like, hey, maybe this isn’t a decision for me right here in this moment. But, hey, what about my parents? Like are they adequately covered, and do they have maybe some of these common misperceptions around long-term care insurance? Could I, should I initiate a conversation, right?

It’s reminded me back of when we had Cameron Huddleston on the show, who wrote Mom and Dad, We Need to Talk, all about engaging in financial conversations with our parents. They may not be comfortable. But if I think about where the care often may fall financially and time on the children like selfishly, like should this be a conversation we’re initiating?

[00:36:08] TB: Well, yeah, and a lot of the conversation that we’re having and a lot of that based on Cameron’s book that we’re having with the younger clients is, obviously, they need to get their own estate plan in place. But is your parent’s estate plan in place because, ultimately, that’s going to affect you. The same is true for this.

So although my parents have always told me like they never want to be a burden and put me out on the ice flow, like that’s fine with us, at the end of the day, like we’re not going to not care for our family. We’re going to do the best we can do kind of either in time or dollars to make sure that they’re okay. So, yeah, I mean, it’s definitely something that it’s a conversation that we should have, and that’s so much about financial planning.

Most people probably not even on the radar. As a professional, I would say, two or three, four years ago, this wasn’t on my radar, just because of the experience that I had with policies early in my career. But to me, I think it’s important to at least have the conversation with your advisor, with your loved ones about what are the options.

[00:37:12] TU: Yeah. I guess what I’m thinking about here and, again, somewhat selfishly, and shout out to my parents who have done an awesome job, both tidying up this part of the plan, as well as communicating it with my brother and I, which I think is the other piece is like there’s the action or the inaction. But then there’s the actual conversations as well of like is everyone aware. So we have an estate plan or we have this long-term care insurance policy or we don’t. But are we all aware, and are we having an open conversation about it? I think that’s so helpful.

But as I look at these numbers, and we think about maybe somebody who’s in their early to mid-50s, with elderly parents, and what may happen in terms of long-term care risks, like that could be catastrophic on their financial plan. But the amount of these policies is not catastrophic. So I think that this is just another great example. We’re actually going to bring Cameron back on the show, I think, middle of this year to have some more of these conversations about the emotional side of the planet. How do we engage in those conversations, especially when it’s with our parents? So this was a great reminder of that.

[00:38:15] TB: Yeah. Tim, if I could go down, I want to kind of use a similar example. But this this is with a policy that has an inflation rider, just so you can see the difference.

[00:38:23] TU: Yep.

[00:38:24] TB: So a 55-year-old couple, shared care, regular rate. This time, they start with a lower benefit because they’re going to put the inflation rider. So instead of it being 9,000, whereas the one was higher because there was no inflation rider. So this is $4,100 per month, same coverage, four years of coverage, two per person. The starting benefit is not the 460,000. It’s the 210,000. But we know it’s inflation-protected.

So that gross benefit, when you factor that in, it’s a 509,000 worth benefit, but the premium for this is just under 3,000, 2,956. So less than half of the benefits of 4,100 versus 9,000, but the premium was about level or about 100 bucks apart. So you can see how that inflation rider can really be expensive. It’s just a matter of like do you want to start with a lower amount of coverage with the inflation rider or maybe a higher amount to kind of get to where you need? But again, some of these numbers, again, surprising to me when I initially saw these.

[00:39:25] TU: Tim, as I’m looking at the numbers here and the two examples, like it’s a really cool example and reminder, especially when shopping for insurance. Like design the need of what you want from a policy and then shop accordingly versus shopping from the monthly amount, right? Which I think is our tendency of what the budget might afford or might fit in.

But here you have two examples where the yearly amount is, essentially, the same. It’s within $100, actually closer to like 50, 60 bucks. So essentially, the same over the course of the year, but two very different constructs and designs of these policies. So what do you need? What do you not need? Then going from there.

Tim, [inaudible 00:40:01]. We talked about it in kind of a siloed approach of, hey, you may self-insure, or you’re going to buy a policy. But probably for many folks, it’s maybe a little bit of both, right?

[00:40:11] TB: I think it often comes down to kind of, yeah, a hybrid approach, where it might be a mix of self-funding, maybe some creative housing decisions in terms of how to use equity in the house or maybe moving in with loved ones. It could be, again, what is the family support. But then, hopefully, at a minimum, maybe a baseline long-term care insurance policy. So I think that’s often the case with a lot of things. It’s not kind of a binary A or B choice. It’s kind of a mix of a lot of things.

Again, I think that’s where these conversations are so important. Having a handle on the balance sheet is so important, and then having a handle on what your goals are, what are the resources that are available to you to kind of allow you to age gracefully, so to speak, and make sure that you’re cared for, and you’re living a wealthy life. So, yeah, I think, hopefully. Like you said, we haven’t talked about this a lot. I think it needs to be talked about more, and just figure out what is best for you and your family.

[00:41:11] TU: Great stuff, as always, Tim, and yet another example of a part of the financial plan where, ideally, we’re not making these decisions in a silo, right? We’re looking across the spectrum of the financial plan. You mentioned several examples throughout this episode, where determining what we do or don’t need with long-term care insurance, which, of course, we’re looking at just one sliver of the whole plan, is dependent on what else is going on. So I think just another reminder, the value of having a coach, having a planner in your corner.

Whether you’re someone listening who’s on the front end of your career and you’re thinking about this way off into the distance or perhaps thinking about this for your parents or for folks that are in the middle of evaluating shopping these policies, we’d love to have the chance to talk with you, to talk more about our one-on-one comprehensive financial planning services, what they are, how insurance among many other parts of the financial planner included in that engagement.

For folks that want to learn more, you can book a free discovery call with Justin Woods, a pharmacist on our team, by going to yfpplanning.com. We’ll also link directly into the show notes the link where you can book a call with him.

Tim, thanks so much and looking forward to continuing this conversation.

[00:42:19] TB: You got it.

[END OF INTERVIEW]

[00:42:20] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

[END]

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YFP 295: 10 Common Social Security Mistakes to Avoid (Part 2)

Posted on February 16, 2023March 10, 2023 by Caitlin Boyle

YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, RICP®, to wrap up the two-part series on common social security mistakes to avoid.

Episode Summary

This week, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, RICP®, to wrap up the two-part series on ten common social security mistakes to avoid. Tim and Tim start the discussion with a quick review of the first five common social security mistakes to avoid: not checking your earnings record, only considering your own benefits and not knowing what benefits are available, not understanding how social security benefits are calculated, taking social security too early, and not coordinating benefits with your spouse. They move on to dig into the second half of the list, including mistakes like not considering the cost of living adjustment (COLA) and how it changes your benefits, not planning for taxes on social security benefits, assuming social security benefits will fully cover your living expenses in retirement, how getting divorced too soon or remarrying can change social security benefits, and the mistake of viewing your social security benefits through the wrong lens. They share about potential dangers of polar opposite views on social security and how viewing social security as an insurance framework tackles a variety of financial risks that can impact the financial plan.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

This week, Tim Baker and I wrap up our two-part series on 10 Common Social Security Mistakes to Avoid. Now, whether you’re a new practitioner, where Social Security is far off in the distance, perhaps in the middle of your career listening or approaching that timeline towards retirement, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 280 households in 40-plus states. YFP Planning offers fee-only high-touch financial planning that is customized to pharmacy professionals at all stages of their career.

If you’re interested in learning more about how working one-on-one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call at yfpplanning.com. Whether or not YFP Planning financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom. Okay, let’s jump into my interview with Tim Baker, where we complete our 10 Common Social Security Mistakes to Avoid.

[INTERVIEW]

[00:01:11] TU: Tim, welcome back.

[00:01:13] TB: Good to be here, Tim. How’s it going?

[00:01:14] TU: It is going well. I’m looking forward to part two of our series on 10 Common Social Security Mistakes to Avoid. If you missed last week’s episode 294, make sure to check it out, link in the show notes below, where recovered the first five Common Social Security Mistakes.

Tim, we talked through not checking your earnings record and making sure you’ve got a good view on what’s going on in the ssa.gov profile and some of the tools in there. We talked about not knowing some of the specifics of the benefits that are available, spousal benefits and disability benefits. We also talked about how benefits are calculated and then some of the strategies around potentially the timing of claiming Social Security. So a lot of information in that episode. Make sure to check it out.

Tim, let’s jump right into number 6 on our list of 10 common mistakes, which is the cost of living adjustment. We talked briefly about this last time, but it really needs the attention that it deserves. So tell us more about the Social Security COLA and how that works.

[00:02:11] TB: Yeah. So every year, the government looks at the consumer price index for urban wage earners and clerical workers, and they do this I think – I think this is in fourth quarter. Based on the CPI-W, they announce what like the change in payments would be for security or other government benefits. This year was – Most years, it’s very incremental, right? Because inflation hasn’t been what it was year over year from 2021, ’22, what we’ve seen. But last year, they announced and then put it into practice that the benefit would increase by 8.7%, which is huge, Tim, if you think about it.

Because if we take a step back and we talk about one of the major pieces of the retirement paycheck, obviously, Social Security, which is what we’re talking about, the other major piece is the investment portfolio. So one of the reasons why we put our money into the markets and we, hopefully, take aggressive but intelligent risk is because, unfortunately, we can’t stuff the mattress full of cash and then hope that in 30 years, when we go to retire, that that’s going to be enough to sustain us. So the reason that we invest and we earn dividends and we earn capital appreciation on investments is to outpace really two things. It’s the tax monster and the inflation monster. That’s why we do this.

One of the beautiful things about Social Security is that it is inflation-protected. So your payments going from December to January got almost a 9% bump to month over month, which is huge. What we have said is that they don’t even sell annuities on the market right now, as I’m aware, that has a cost of living adjustment rider, which means that when I’m talking about annuity, all an annuity is is your own Social Security benefit that you’re creating yourself. So it’s where you say, “Hey, I have $100,000. I’m going to give this to the insurance company, and then they’re going to pay me for life or for a term certain X amount of dollars per month for that lump sum of cash.”

I can even go on to the market and say, “Hey, you see what Social Security is doing, where they’re simply giving me that 9%.” Or hopefully, it’s not that big. We don’t have inflation starting to temper down, but it could be 5% next year. It could be 7% the following year. You can’t even get that on the marketplace. So Wade Pfau, who is a professor at the American College, he’s written a lot of books on retirement. He’s basically saying that Social Security is really the cheapest annuity money can buy, even the firm process. So you can’t even get that on the market.

Now, what you can yet, Tim, is you can get a rider that says, “Hey, it’ll go up 3% every year or 2% every year.” That’s typically the component that drives the price of the annuity because two or three percent could keep pace with inflation. But this year, you’re like, “Hey, you’re down 6% if you have a 3% rider based on the difference.” So really what we’re doing with Social Security and it being protected by inflation is we’re protecting your buying power. We know that the price of gas, the price of eggs, the price of other groceries, housing, utilities, everything has gone up. For a retiree on a fixed income, that can be super stressful. But at least if a good portion of your retirement paycheck is protected by this inflation protection, it’s a little bit of a feather in the cap.

Social Security payments, just to clarify, they’re adjusted every year based on inflation, based on that CPI index. This is another important thing. By law, an individual’s benefit can’t decline, even in deflationary times. So that’s one thing that your benefit could stay the same. Usually, it goes up every year. When we’ve had a year like this, where there’s been a lot of inflation, you see that matched in the benefit increasing by 8.7% this year. So I think that this is one of the things that is often overlooked. When we’re buying policies or doing things, like cost of living always comes up, and it’s one of the more expensive things because it’s just an unknown. We just don’t know where it’s going, so the fact that the government has our back in this regard.

Again, a lot of people, we pay for Social Security. Like that comes out of your check every time. So this is just allowing us or the government allowing us to kind of get those payments for life. So they’re doing what they need to do on the back end to make sure that that is sustained. But to me, this is important piece that it is inflation-protected. Again, being on a fixed income, there’s risk there that if you’re not, you’re just being priced out. Your standard of living is affected without it.

[00:07:04] TU: Yeah, Tim. New news to me. That’s really neat. I was unaware of, essentially, the floor, right? That they’re in a deflationary time period, that the benefit can’t go the other way, which makes sense, right? That while some people are using Social Security benefit, obviously, for goods and services that are going up with inflation or in a deflationary period, those costs would go down. There are other things that are fixed that aren’t going to go the other way. So that would make it difficult for planning.

Tim, I was feeling good about my high-yield savings account with Ally at what? 34 or 35 –

[00:07:34] TB: 3.4.

[00:07:34] TU: So I saw 87, and I was like, “Oh, man. Still losing, right?” That’s inflation, so.

[00:07:40] TB: Yeah. You know what? Every little bit helps. Again, most banks, they kind of just collect that money on the float. So I like seeing those payments roll in, even though I know that it’s a jungle out there with inflation.

[00:07:53] TU: I’m glad that you mentioned the tax monster and the inflation monster. Obviously, we just talked about the inflation monster and addressing that with COLA. But our number seven common Social Security mistake really gets to the tax piece. I think, as we’ve talked about many times on the show, tax, like inflation, is often an overlooked part of the financial plan.

Tim, when it comes to this number seven mistake, not planning for taxes on Social Security benefits, another example of the integration of tax planning with the financial plan. So how are Social Security benefits taxed, and how could this impact, potentially, someone’s decision to whether or not they’re going to earn additional income as well?

[00:08:32] TB: Yeah. So to your point, shout out to our tax team at YFP Tax, Sean Richards and Paul and Ariel, I think this is another indication or another example of having a professional look at this and help decide on this as important.

So one of the things that people don’t know is that up to 85% of your Social Security benefit could be taxed at the federal level, if you earn substantial outside income, such as wage or dividends. Really, the benefit, Tim, the percentage of your benefit that’s subject to income taxes really depends on what’s called your combined income. So your combined income is essentially 50% of your household’s Social Security benefit, plus any other taxable income, which could be wages that you receive from a W-2 or a 1099, plus any tax-exempt interest, which is typically things for like bonds, that type of thing.

So 50% of Social Security benefit, plus taxable income, plus tax-exempt interest income. That’s essentially your combined income, and that’s how it is determined, like what your tax will actually be. So one of the interesting things is that back in the ‘80s, I believe it was the ‘70s, ‘80s. A smaller percentage of people’s Social Security was being taxed, and a lot of it is because some of these thresholds that they’ve set were not indexed for inflation. But as time has gone on, and people have earned more money, we’ve seen it creep up to where now a recent study projected that going forward, about 56 of beneficiaries will pay taxes on at least some of their Social Security benefits.

It’s good to kind of sit down and see, okay, if I’m earning additional money or I have a portfolio that spits out of income, how does that affect what I’m going to pay taxes on? Then probably even more, a broader conversation is really, okay, if I do additional work, am I going to lose some of my benefit, which is also a misnomer and probably something that should have made this list as well. Like if you make a lot of money, you don’t necessarily lose the benefit. You just don’t – They just kind of pause it, and they give it back to you later.

Earning money in retirement, so to speak, is actually a great strategy. But understanding kind of the tax and how it affects the benefit itself is important to know. Again, it can be great because it, obviously, helps maintain the portfolio and all that stuff. But it’s really important to understand that the tax is. Again, if you work with an accountant, a CPA, an enrolled agent, they should be able to walk you through, okay, this is what the tax bill is going to look like on your Social Security benefit. I think that’s an important piece of the puzzle as well.

[00:11:21] TU: Yeah. Tim, it’s reminding me back too on 275. We talked through how to build a retirement paycheck, right? You talked about that a little bit on the last episode as well, but so important. I mean, at the end of the day, like for planning purposes, we want to know what is the takeout, right? What’s the net? So we can plan for our expenses and goals and other things that we’re working towards.

Another good example is you mentioned of not only thinking about the sources of income, one being Social Security, that are going to make up our retirement income. But what are the tax implications, and the tax optimization strategies to, obviously, pay our fair share, right? But no more, right? We want to be able to allocate those dollars.

[00:11:59] TB: Yeah. If you know that your tax bill is going to be higher for that year, maybe the paycheck, the source is really coming from things like a Roth account, which you’ve already paid the taxes on. Or an after tax account, which you might have to pay capital gains tax on. But that’s different than ordinary income tax, and you leave the traditional accounts alone a bit. That’s why at the end of the day, a lot of people ask me like what proportion should be in pretax versus Roth versus like a taxable account.

It’s tough to say, again, depending on like where you live and what you’re doing because state taxes are different. But I think it’s a good bet to have a little bit in column A, a little bit in column B, and a little bit in column C, and be able to kind of like pull from those different accounts, depending on what’s going on in that time in your life. So, yeah, just, again, having that optionality is another key theme in all of this.

[00:12:55] TU: Tim, as we move on to number eight on our list, which is assuming Social Security benefits can fully cover your living expenses, I think we’ve highlighted well the benefits of Social Security. We talked about the COLA. We talked about potentially the size of that benefit. You gave some examples in the last episode, as you were looking at your ssa.gov, online portal.

I think maybe some folks might be listening and be like, “Man, do I need to be saving as much as I am outside of Social Security? Can I potentially depend more upon that than I was planning?” So what is the potential mistake here in assuming that Social Security benefits can fully cover your living expenses?

[00:13:32] TB: Yeah. I think it’s – When we’re sitting here and like, “Wow, it’s COLA,” and if I can work till 70, well, I’m going to work till 70, anyway. So it’s funny because like a lot of clients that come to us, and maybe they have a couple $100,000 in debt, they’ll be like, “Man, I’m never going to retire. I’ll never be able to retire.” Then we kind of start to deconstruct that repayment, and then we start to get them in a portfolio that does its thing. Over a couple years, you can start to see the script flip, so to speak on, okay, like I think there’s a path forward.

In a lot of those scenarios, we’re not even really accounting for Social Security in a lot of ways. When we say we’re going to plan first, as if it’s not there. But the reality is it will be there. Again, it might be dependent on how far away you are from retirement. It might be a lesser benefit. But I think it is definitely a mistake to say, and some people do believe this that it’s like, “Hey, I’m going to do what I can do in my 401(k) and my IRA, and I’m not going to kill myself because I know that the Social Security benefit will be there for me.”

I would say that, that is – Again, if we’re talking about optionality, if we’re talking about we don’t really know how long we’re going to live, we don’t really even know how long we’re going to be able to work, all of those things, I think, tend to say, “Hey, let’s do what we can to kind of make sure we have a good healthy portfolio that we can draw from.” We don’t know where inflation is going to be. We don’t know really know where the US markets are going to be in the next 30 or 40 years. Again, I still feel super bullish about that. But the fact remains that it is unknown.

But I would say that, and these are really beginning of 2022 numbers, the average for all retired workers, the benefit is about $1,657 per month. That’s 20 grand a year, Tim.

[00:15:23] TU: Yeah. That’s lower than I would have thought.

[00:15:25] TB: Yeah. I think we’re actually going to – But I think that for so many people who are collecting this benefit, the mindset was like 62 and go. It’s like once I get to that, I’m going to get the money because I’m only going till 68 or 69 or 70. So I want to get the money while the getting is good. We’re starting to see that trend really shift, where I think people are starting to understand, okay, I can defer. Or they’re just naturally working longer because of some of the affirmation things like debt, student loan debt, etc.

The average for older couples in situations where both spouses receive benefits is $2,753 a month or about $33,000 a year. There’s a lot of different ways to kind of skin the cat, so to speak. But a lot of planners will say, okay, if you make $100,000 as a household, they’ll use anywhere from 60 to 80 percent of those dollars and to say, “Hey, you need 60,000 to 80,000 dollars to live because they discount it, and a lot of the discount is based on really the fact that like while you’re in retirement, you might be saving 10, 20, 30 percent or more.

Then also ideal, that’s not necessarily true in early retirement because you’re typically a kid in the candy store where you’re like, “Wow, I need to go do all the things I defer while I was working, so travel and that type of thing.” So there is a little bit of a smile, so to speak, of spending where it starts higher, and then it starts to come down as you age. Then as you age, medical expenses get larger, so it kind of increases.

[00:17:00] TU: Yeah, makes sense.

[00:17:01] TB: But when you compare that, again, 100,000, most of the clients that we’re working with are making a way above that as a household. So 100,000, 33% of that is covered. It’s not a huge portion of that paycheck, and it’s even going to be smaller the further you climb up kind of the pay ladder.

So this is to say, and we’re kind of talking at both sides of our mounts, how great of a benefit it is. But it’s also to say that it’s not going to be the end-all be-all for you in terms of retirement, unless your lifestyle just says, hey, I can live off of $33,000, which maybe some people can do that and go from there. So to me, that’s a big thing. If we’re looking at somebody, their stats, Social Security will be a major source of income for many retirees, especially like lower income levels. It represents about 30% of the income for older adults.

Specifically, when you kind of go down from a gender perspective, about 30% of men and 42% of women receive at least half of their income from Social Security. Then probably one of the more concerning things is that roughly 12% of men and 15% of women rely on Social Security for 90% of their income. Again, hopefully, the people that are on our listeners, because of some of the socioeconomic differences and resources available and, hopefully, the education that they’re receiving from a financial literacy, that will not be them in the future. But it is safe to say that it could be 20 to 30 percent of what you’re relying on, which is getting a good chunk of money. If that can grow because we are differing, and it is inflation-protected, that’s the power of the Social Security benefit.

[00:18:47] TU: Yeah. Tim, this reminds me. One of the takeaways I’ve had just from listening, and you teach and talk on this topic, is to really kind of avoid the polar extremes of use on Social Security, right? I think there’s some folks that, especially maybe earlier in the career, like Social Security is not going to be anything, and we can establish why that probably won’t be the case in the first episode.

Then here we’re talking about the other side of the spectrum, which is assuming it’s going to fully cover all my expenses, and I think for obvious reasons of what you just highlighted, probably not going to do that for the vast majority of folks. But it can be a really good in-between, just like we talked about building a foundation early in your career with the financial plan here. Like you’ve got this foundation or at least some of the makeup of the floor that’s going to give us some insurances. It’s not nothing but it’s also not going to be everything that we need, as it relates to retirement planning.

[00:19:35] TB: Yeah. Like we mentioned before, like if you’re pretty conservative in your approach, if you can get Social Security and maybe annuity that you purchased by peeling off a couple $100,000 of your investment portfolio, and you can say, “Okay, this check from Social Security, plus this check from the insurance company for my annuity is going to provide for all of the necessities that I need,” like there’s a feeling of freedom there.

Now, someone who has more appetite for risk, they’re like, “Well, I would almost rather just kind of spend down my portfolio and be able to enjoy the things that I want to enjoy without paying that huge bill up front.” But there’s also stress in saying, “Okay. Hey, the market is down 30% and I’m drawing on it,” versus if you were just getting that paycheck built in. So there is a different approach. It’s based on your appetite for risk, and what we’re just kind of describing here is the flooring strategy versus the systemic withdrawal strategy, who I think can be – You can have hybrids of that as well. But, yeah, important to kind of see what is the best way to tackle it for you and go from there.

[00:20:44] TU: Tim, number nine on our list of 10 Common Social Security Mistakes refers to those that may get divorced and then potentially remarry as well. Talk us through what are the implications of the Social Security benefit for these situations?

[00:20:58] TB: Yeah. So sometimes, people don’t know that if they’re divorced and the failed marriage kind of meet certain criteria, you’re actually eligible for a benefit based on your spousal Social Security record or your ex-spouse’s Social Security record. So essentially, the rules for this is that you have to be divorced. The marriage has had to last at least 10 years. You are age 62 or older. You’re still unmarried. Then your ex-spouse is eligible to receive a Social Security retirement benefit or disability benefits and your benefit. So if you’re a worker, your benefit from your own work is less than what you would receive under your ex’s earnings record.

The other interesting thing, which kind of makes sense because as a divorce say, you’re not like – You shouldn’t be all up in like your ex-spouses like business and when they’re going to retire and claim. But they don’t need to be claiming the benefit. Whereas if I’m married and my spouse can’t claim on my benefit, unless I’ve claimed the benefit. So those are really the rules. So like, again, it might be where if you’ve been married for nine years and you’re looking at divorce, it might be best to kind of get to that 10-year mark, so stay married longer, to activate that benefit.

Or even just as you move on and have other relationships, whether you want to actually marry or not because once you marry, then that comes off, and then you’re kind of tied to your new spouse’s benefit, that type of thing. So it is one of those things that, obviously, Tim divorce can be a very emotional thing, and we would never advocate for someone to be in a situation that is unsafe or doesn’t make sense for them. But if it’s kind of a more of an amicable thing, it is something that you should definitely use and understand in terms of strategy.

The interesting thing, Tim, and I listened to a lecture on this, if you’re married and divorced multiple times, I mean, you could have a stable of ex-spouses that can be claiming on your benefit, and that’s kind of where maybe some of the inefficiencies. If I have three or four ex-spouses, and they’re claiming off of like one worker’s benefit that’s been paid into, and then there could be children involved with that, the bill could pile up, so to speak, for Social Security. I wonder, I wonder. This is just be speculating out loud. I wonder if this is one of the things they potentially tighten up in terms of what this looks like in the future.

So we know that, obviously, divorce is a reality for a lot of Americans and, obviously, this is the benefit that should be there. But I wonder if this is one of the things that they look at in the future.

[00:23:41] TU: For the record, Shay, nothing to worry about. Tim mentioned three ex-spouses. Just an example, in case she’s listening.

[00:23:48] TB: Yeah, exactly right.

[00:23:49] TU: This is the test, right? Is Shay listening to the podcast or not? We’re going to find out.

[00:23:53] TB: She says she does. She says she does. But I probably need to like quiz her or drop some –

[00:23:59] TU: Well, this is deep and a part two of a series, so like –

[00:24:02] TB: I know. For her, she’s probably sleeping or fell asleep listening to me talk about this stuff.

[00:24:09] TU: All right. Number 10 on our list is looking through the wrong lens. Tim, this is a new concept for me, as it relates to Social Security and looking at it as an investment framework or an insurance framework. Describe the difference. Tell us more here

[00:24:24] TB: Yeah. So I think so many people, when they approach the decision on when to claim, they look at it from the vantage point of like, “Okay, if I’ve put money into the system over the last 30 or 40 years as I’ve worked, I want to get as much money back and more.” So a lot of advisors would use what’s called a breakeven analysis. Basically, they would say, “Okay. If you claim at 62, here’s your reduced benefit. But if you were to wait to claim at 70, there’s eight years where you’re not claiming it, and it’s at any increased benefit. So where did those kind of cross?”

For a lot of people, it’s usually between age 80 and 84. So if you’re like, “Well, my uncle Donald or my aunt Ginny,” or whatever died at 78, then I’m like, “I’m definitely taking it early.” Many retirees, they live a lot longer than they think they will. So the average person at 65, they’re going to live. Once they get to 65, there’s a really good chance you’re going to live to 85 and beyond.

[00:25:25] TU: Yeah. Life expectancy increases once you get to a certain age. Yep.

[00:25:28] TB: Yep. So I feel like too many people think of it as an investment that only pays off if they live a long time, and they worry too much about what happens if they don’t live as long as they expect. The thought is that this framework gets the focus – This framework focuses on the wrong issue, dying young instead of living a long kind of retirement with a good kind of standard of living.

The opposite one, where I think the decision really should reside, is in the insurance framework. So why do we buy insurance? We buy insurance because we want to mitigate risk. Again, this is not advice because everyone’s situation is different. But typically, the longer you to defer, the more you kind of scratch the itch of mitigating some of these risks related to retirement, so one being longevity risk. So longevity risk is that you live too long, where you’re going to basically outlast your money.

Deferring Social Security and looking through for that framework, you get a larger stream of lifetime income, long-term care risks. So one of the things that I talked about with a smile is that you could get to a point where you need to use nursing homes or that type of thing. Because you deferred Social Security, you have more resources, i.e. in your portfolio, later in life to kind of cover that inflation risk.

Again, we’ve talked about this. A larger percent of your income is protected against inflation. That’s a beautiful thing. Things like frailty risks, which is as you get older and cognitively you might not be as sharp as you were, this really simplifies the decision making because, again, a bigger portion of your income is covered, and it’s inflation-protected. Even things like elder financial risks streams of income is – They’re less at risk to kind of be stolen and take advantage of versus like a couple million dollars in an account.

Excess withdrawal risk, so this is where you’re locking in larger income stream in Social Security, so eliminating risk of generating income from the portfolio assets. Again, market risks, it eliminates volatility and returns. Then early loss of spouse risk, where you’re deferring, again, a larger benefit. Even if I’m in poor health and I defer my benefit, when I were to pass away, even if it’s sooner, it might be larger than what Shay would do.

At the end of the day, you kind of look at it from the standpoint of, okay, if I have a short – So if I look at this from the strategy of claiming early versus claiming later, and I look at my retirement time horizon, whether it’s a short time horizon or a long time horizon, the only way that it works out to claim early is that if I claim early, it’s worked out, I get a lesser benefit. But I die early, so it worked out. If I claim early and my time horizon is actually longer, I permanently reduced my lifestyle because the benefit just isn’t as good. If I claim late and I have a short retirement, it’s minimal harm done because at the end of the day, again, a spouse could still use that. At the end of the day, it’s not necessarily there. It’s there to kind of provide a baseline for your needs.

Then if you claim late and you have a longer time horizon, you’ve permanently increased the lifestyle. Again, that’s where I think that most people will fall is that they’re going to live longer than they think. At the end of the day, they’ve permanently increased their lifestyle because of the deferral credits that they’re going to get 8% a year. Think about it as that 8% a year raise that you get for every year that you defer.

To me, that’s the crux of the issue. It really should be less about kind of a breakeven analysis and more about what is the impact that a decision like this can have permanently on my lifestyle, and what is it that we’re really trying to tackle. I would argue that the Social Security should be more, again, looking through from an insurance mitigating risk, and then the portfolio is where you’re really trying to maximize, okay, vacation and grandkids and things like that. So everyone’s going to be different. But to me

I think people are starting to come around on this, as they really look at this and they see, hey, we’re just living longer, inflation-protected, all those things that we talked about in the segments. But it is a really important decision, if we haven’t got that point across, that you want to make sure that you’re looking at this from an analytical approach and then overlaying that, again, with what your goals are in retirement.

[00:30:02] TU: Yeah. I think what you’re highlighting here, which is really interesting, something I hadn’t considered before is this is a framework, a mindset in terms of are you thinking about this more from the investment strategy, more from the insurance, and kind of bringing us full circle. Like what I’m interpreting is if you’re able to plan earlier and throughout your career by building other investment streams that you can pull from, it allows you to have maybe some more freedom and peace of mind and viewing that Social Security as an insurance piece and less as a need on the investment side. I think that’s a really, really great example and something that seems obvious that we need to be thinking about in great detail.

Tim, this has been great, 10 Common Social Security Mistakes to Avoid. We’re going to continue to build out more information on this topic, I think, I hope, as we’ve highlighted so much to consider around Social Security as a part of the financial plan. We’ve just scratched the surface really here in these two episodes. We also did an introductory episode on Social Security back on 242. We’ll link to that in the show notes. But much more to come, and we’re going to tap into Tim’s expertise and the expertise of the planning team at YFP Planning to really bring us some more content in this area.

So, Tim, as always, appreciate your time and looking forward to more coming on this topic.

[00:31:15] TB: Yeah. It was fun, Tim. Thanks.

[END OF INTERVIEW]

[00:31:17] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

[END]

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YFP 294: 10 Common Social Security Mistakes to Avoid (Part 1)

Posted on February 9, 2023March 16, 2023 by Caitlin Boyle

Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, to kick off a two-part series on ten common social security mistakes to avoid.

Episode Summary

This week, Tim Ulbrich, PharmD, is joined by YFP Co-Founder & Director of Financial Planning, Tim Baker, CFP®, RLP®, to kick off a two-part series on ten common social security mistakes to avoid. Highlights of the show include Tim Baker sharing about the Retirement Income Certified Professional designation and training and why it is a crucial aspect of the overall financial plan. Tim and Tim dig into tackling the complex and critical decision of when to start claiming social security benefits, why it is an integral part of the financial plan, and how the program is funded. They then get into the weeds on the first five of ten social security mistakes people make and how to avoid them. Major mistakes include not checking your social security earnings statement for accuracy, only considering your benefits or not knowing what benefits are available to you, and not understanding how social security benefits are calculated. Tim and Tim discuss the mistakes of taking social security too early, not working long enough, and not coordinating social security benefits with a spouse and how all impact the financial plan. Listeners will hear practical ways to get on the path to success and learn about resources available to prevent those common social security mistakes.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

This week, I had the pleasure of welcoming YFP Co-founder and Director of Financial Planning, Tim Baker, to kick off a two-part series on 10 Common Social Security Mistakes to Avoid. In addition to talking through just how big a part of the financial plan Social Security can be, we talk about the first 5 of 10 common mistakes, including some big ones like taking Social Security too early, not understanding how the benefits are calculated, and not coordinating benefits with a spouse.

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

Okay, let’s jump into part one of 10 Common Social Security Mistakes to Avoid.

[INTERVIEW]

[00:01:21] TU: Tim Baker, welcome back to the show.

[00:01:23] TB: Thanks, Tim. Happy to be here. I lost my voice over the weekend. So hopefully, this will be okay. But, yeah, I’m doing well. How about you?

[00:01:32] TU: Go Eagles, right?

[00:01:33] TB: Go birds. Yeah. I was at the NFC Championship in Philadelphia. Shout out to my cousin, Pete, for scoring some tickets, and it was crazy. One of the best sporting events I’ve ever been to. It was great. Yeah.

[00:01:46] TU: Love it. Love it. So, Tim, you recently completed the RICP training, which connects well with the topic that we’re going to talk about today, considering Social Security is such a big part of the retirement planning process for many folks. Before we jump into the topic today, tell us more about the RICP training and why it’s such an important really aspect to the overall financial plan.

[00:02:10] TB: Yeah. So RICP stands for Retirement Income Certified Professional. I think what it does is it kind of expands further on the deculumation or the withdrawal part of the retirement phase. So I think so much of what the CFP really focuses on is just accumulating assets to get to that destination. I think what the RICP – First, it says it’s not really a destination. It’s more of like a journey. It’s a process. I think a lot of retirees, they think they’re like, “All right, I’m 65. I’ve made it,” and it’s so far from that.

But then the idea really is to say, okay, we have all of these assets that we built up over the last 30 or 40 years. How do we then translate that into a recurring paycheck that lasts us for the rest of our life, which is a timeline that’s undetermined? So it’s looking at sources of income like Social Security, like retirement plans, like individual retirement plans, like home equity, how does long-term care, insurance, health insurance, Medicare fit into this, any type of executive benefits? If you’re a single business owner, what are the risks in retirement? What are your overall goals? What are we trying to accomplish?

Kind of really put that together as people are transitioning from the workforce, sometimes very abruptly, whether it’s their choice or not. Sometimes, it’s a phased retirement. But to do that in a way that, again, is sustainable for the course of the plan. So that’s really what it is. Obviously, Social Security is a huge part of this and probably one of the biggest things that a retired professional or a retired person has to answer is how does one access. How does one determine Social Security benefits? When should I do this? How?

Yeah. I think it’s often an overlooked part of the of the plan. There’s so much focus on climb the mountain. But if you ever watched any type of documentaries about Everest, probably the hardest part is getting down and the most dangerous. So that’s kind of the best analogy I can give.

[00:04:23] TU: Yeah. That’s why I’m excited not only to dig deeper into Social Security, which we’ll do on this episode of the next, but to dig deeper into more of that climb down the mountain, right? We’ve spent a lot of time in the first five and a half years of this podcast, talking about issues related to the climbing up the mountain. I think that whether someone’s approaching retirement, whether they’re in the middle of their career, or whether they’re on the front end of their career, beginning to think about this, and even if it’s, “Hey, I’m on the front of my career, but I’m planting some seeds.”

Obviously, for those that are listening that are a little bit closer, there’s some tangible takeaway items that they can implement, hopefully, sooner rather than later. But so much attention given to the front end, the accumulation side. We want to spend some more time here in ’23 and into next year as well, talking about the decumulation.

So today, we’re kicking off a two-part series on 10 Common Social Security Mistakes to Avoid. We’re going to tackle five this week. We’ll tackle five next week. Just about a year ago, we talked Social Security 101, including the history, how it works, why it matters to the financial plan. We’ll link to that episode, which was episode 242, in the show notes. Tim, we’re not going to rehash everything we covered in 242. But let’s get some of the fundamentals related to Social Security on the table so that we have a framework to consider, as we talk about these 10 common mistakes.

So first and foremost, I think that decision about when to claim Social Security benefits, arguably one of the most important decisions that clients will make, that individuals will make, is in your retirement. Why is that the case?

[00:05:54] TB: I think it’s the case because for a lot of Americans, it’s going to be the biggest source of income that they have, even more so than money that’s coming from a 401(k) or equity built in the house. So many people – There is this impression that Social Security is going to be the paycheck that dominates. Unfortunately, for a lot of people, that’s the case. Hopefully, for a lot of our listeners, that is not the case because of either good planning outside of Social Security or even good claiming strategies.

The thing that makes Social security so powerful, one, is backed by the full faith and credit of the US taxpayers backed by the government, which is probably some of the surest assets that are out there, no matter what you think about. Where the economy is going or if Social Security’s going to be there, it is, I think, one of those things, unfortunately or fortunately, that it’s just too big to fail. So people hear horror stories about it’s going to go bankrupt. It’ll be there when – If you’re 25, 35, 45, if you’re listening, it’ll be there. It might not be what it looks like for retirees right now. But nonetheless, it will be there.

I think one of the big thing I think that is often overlooked, and we’ll talk about that, is it is inflation-protected. So when we saw inflation run rampant in 2022, Social Security and a lot of these other government payments that go out went up, I think, by about 8.7%. One of the things we’ll talk about this is like you can’t buy an annuity that has a COLA, that has a cost-of-living adjustment out there. So one of the big strategies is that you want that Social Security payment to you and your spouse to be the largest it can be.

I think so many people, so many retirees, similar to like a student loan strategy, kind of just goes with the flow or talks to a colleague, and that becomes the basis for how they approach their security. But it really needs to be a lot more in depth than that. It’s going to be a big part of your retirement paycheck. We want to make sure that we have all the data, and we understand the system to be able to make the best claiming decision that we can.

When we talk about our first point here, I’ll give an example of just looking at my own statement what that looks like. Obviously, I’m a few years off. But when we talk about the student loans, the delta between scenario A versus scenario Z can be hundreds of thousands of dollars. So that’s important to understand.

[00:08:28] TU: Tim, just a general scope, I think you make a good point that whether it’s a good thing or a bad thing, depending how you look at it, maybe too big to fail. I think there’s many folks that are maybe earlier in their career, they hear pay Social Security, and they think, “Hey, that’s not going to be a thing.” But I think if we take a step back and really look at just how big Social Security is in terms of like who receives the benefits, how many people receive the benefits.

[00:08:52] TB: Yes. Some of the numbers?

[00:08:52] TU: Yeah. And how big this is for many folks in terms of their income in retirement.

[00:08:58] TB: Yeah. So the number is the majority of American retirees receive more than half of their retirement income from Social Security. So that is the most important retirement asset on the balance sheet, so to speak, even though it doesn’t show up as something on their balance sheet. There’s just a lot of dollars involved. A client who currently claims benefits at the age of 70 and who is eligible for maximum Social Security benefit will receive a benefit that’s like 50k a year.

So over 20 years, that really kind of relates about a million dollars in inflation adjusted spending power. So if you think about that in that context, where it’s like, “Oh, it’s 1,500 bucks a month or it’s 3,000 bucks,” maybe it doesn’t hit. But there’s a lot of dollars involved. Really, for a lot of people, not everyone but working longer and deferring, which we talk about with an investment, typically how you feel is what you should do. You should do the exact opposite in investment.

It’s almost like the same with Social Security. It’s like if you’re like, “Man, I need to get out of my job. I’m ready to retire,” working longer and differing are strategies that can have the most impact to help you kind of mitigate the longevity risk, is the risk of running out of money because, one, it’s another year where you’re not spending in retirement. But it’s also another year where you’re deferring, and you’re potentially earning credits, deferral credits, that makes that dollar amount larger.

We’ll talk about the whole, well, if I put money into, I want to make sure I get every dollar out. People look at this from a breakeven perspective, which I think is a little bit flawed, and we’ll talk about that in one of our things. But if we actually break down the numbers, there’s about 47 million retired workers who are receiving benefits that are around $73 billion per month. So it’s huge.

The second biggest pie are disabled workers. That’s another thing that we’re going to outline. About eight million disabled workers receive about $10.3 billion. Then there’s survivors’ benefits. So this is, typically, you have a worker that dies, and they have children or a spouse that might be receiving benefits, about six million or survivors that are receiving benefits at about 7.3 billion. So it’s very much a piece of the puzzle.

We’ll talk about kind of the averages when we – I think in part two, where we’re talking about like how much this is actually percentage-wise covered from a paycheck perspective. So it’s a big thing. Again, like I think just like we talked about other parts of the plan, you got to take the emotional inventory. You got to take what the actual statements or the balance sheet looks like, and then make the best claim decision for you. That’s, hopefully, some of the things that we’ll uncover.

[00:11:43] TU: So with that, let’s jump into 10 Common Social Security Mistakes to Avoid. Again, we’ll tackle five this week. We’ll tackle five next week. So tip number one Common Social Security Mistake to Avoid is not checking your earnings record for accuracy. Tim, whether someone is nearing retirement, listening in the middle of their career or listening on the front end of their career, tell us more about where they can go to find this information and making sure that they don’t make this mistake.

[00:12:09] TB: Yeah. I think in an effort to go more paperless, I think back in the day, once you reach a certain age, you get like a statement every month. Now, I think they’re moving to every quarter. They’re trying to kind of modernize. For maybe retirees, that can be a little bit of a hard sell. The best place to go is to ssa.gov. You can – It’s the my Social Security website. I signed on right before we hopped on here. It’s really easy to get on, and the website is actually pretty easy to navigate. We’ve talked about some other things related to student loans. The websites that the government built actually is pretty good, same thing with like the IRS tools. S

When I log on, Tim, just to kind of give you a description of what this looks like, I can download my Social Security statement. I can go and replace my Social Security card. I can view my benefit verification letter. The big thing that catches my eyes when I first log in, it’s called the eligibility and earnings section. It basically says that you have 40 work credits you need to receive benefits, and there’s four blocks. There’s a big checkmark, which basically means that I have earned enough credits to earn Social Security.

So Social Security credits, you can earn for a year. You earn a credit by – I think in 2023, dollars is a little bit more than $1,600 in that year. So 1,600 times four, if I earn that amount of money, then I get four credits. Essentially, I need 40 credits to collect Social Security. So it’s essentially 10 years of earnings. But the cool thing is that under that section, it says review your full earnings record now. So when I click on that, it takes me to the eligibility earnings, and it goes back, essentially, from when I first started making money back whenever that was.

When we talk about accuracy, one of the big things that you want to do is you want to make sure that when I filed my taxes in 2022, it shows the tax Social Security earnings dollars, and this is basically how they calculate that. There is a cap, but that’s basically how they calculate what your benefit is. So I can go back and see, okay, this is the amount of money I made in ’21, ’20 for me, all the way back to 1998, Tim, where I earned $353.

[00:14:25] TU: Love it.

[00:14:26] TB: So this is really important because they’re looking at the way that the – And we’ll get into this a little bit more, but they look at, essentially, the 35 highest years of earnings. If there aren’t 35 years, then they essentially use zero dollar year, which moves your average down. So you want to make sure that when you’re reviewing this, that your earnings record is correct. It’s not infallible, like you find errors here. So you want to make sure that when you go back and you’re looking at the top 35 years, that it’s accurate. You’re getting the best benefit you can.

It basically lists for me from 2022, all the way back to 1998. I’m just eyeballing. I’m like, okay, that makes sense because I left the workforce here, or I work part time or that type of thing, just to make sure it looks good. The other thing worth mentioning when we talk about deferral, for a lot of people, the last years before they’re retired is typically their highest income years. So that’s another feather in the cap of like defer work longer. We’re closer to that full retirement age and beyond that. For a lot of us, it’s going to be 65. But then the longer you defer to age 70 is when the benefit gets the highest. The earnings record is going to be the biggest thing in terms of accuracy and making sure in that.

But the other cool thing about this, Tim, is there’s actually like a section on here that shows me if I were to retire at age 67, it says your monthly benefit at full retirement age is going to be $2,599. So it shows me like this pretty cool graph that says, okay, at age 67, this is your full retirement age. Your benefit’s 2600 bucks, if I retire early, say five years early at 62, which is the earliest I can collect it, that drops to $1,774.

[00:16:21] TU: It’s almost 900 bucks, right, yours Tim?

[00:16:22] TB: Yeah. Yeah, exactly right. But then if I defer, so if I worked three years longer from age 67 to age 70, that goes up to the delayed retirement where I earn referral credits, 3,231. So that’s the thing is like when I’m when I’m talking about tens of thousands, if not hundreds of thousand, the earliest I want to get out, it’s 1,700, 1,800 bucks. The latest, age 70, eight years later, 3,231.

So that’s where – Again, and this is inflation-protected. So that’s a huge thing, where those dollars go up every year with what the index says. But then you can also look at disability benefits, I mean, if you have them. It talks about Medicare part A and B, and how you qualify for that. But it’s just a good – When we talk about when we work with clients, get organized, the big thing is looking at the balance sheet, looking at what’s coming in income-wise. Like this is going to be a huge part of that for the retiree or someone who’s transitioning into that. So checking it, making sure it’s accurate.

The earnings is going to be a huge thing that a lot of people don’t do. You want to make sure that you audit it as you go and make sure it’s accurate. So if it’s not, you can make the necessary adjustments.

[00:17:39] TU: Yeah. So takeaway number one, if you haven’t already done so or recently done so, ssa.gov. Log in to my Social Security. You can access your statements, look at the dashboard. Tim’s looking at and talking about, obviously, looking at whether or not you have the 40 work credits. Then looking at some of those simulations for when you may retire.

Tim, I also like – You can play with some of this, right? So you can change your future salary. You can include a spouse or not include a spouse. You can see how that changes the benefits amount as well. So similar to some of the credit I’ve been given to the Department of Ed lately on what they built, that is studentaid.gov, I think they’ve done a really good job with this, so credit where credit’s due.

[00:18:17] TB: I agree. Yep.

[00:18:19] TU: So that’s the number one mistake, not checking your earnings record, not being aware of your Social Security account. Number two, Tim, is only considering your own benefits and not knowing what other benefits are available. So I suspect that folks are most familiar with retirement benefits in Social Security but perhaps to a lesser degree or maybe not even all some of the survivor and disability benefits. Talk to us about really the breadth of benefits that fall under the Social Security benefit.

[00:18:48] TB: Yeah. So the retirement benefits are the big one, and one of the things that is often overlooked is kind of that, yeah, those spousal benefits that are available for non-working spouses as early as age 62. Typically, a lot of the benefits are like kind of hinged on the worker. So if the worker isn’t collecting, then the spouse can’t collect, unless there’s a divorce, and we’ll talk about divorce here later. If it’s a separate household, even though you’re divorced and maybe you had to be married at least 10 years, then you can collect, even if the working divorced spouse is not collecting.

To go back, a lot of the benefits hinges on the working spouse collecting the benefit, unless retired. But the worker must claim the worker benefit to trigger the spousal benefit at full retirement age, which is kind of that middle number, so 67 for me. If you’re a little bit older, it could be 65, 66 years old. But at full retirement age, the spousal benefit is 50% of the workers’ PIA, and we’ll talk about that a little bit. But basically, that’s the number that they use.

The spousal benefit is not affected by the age that the worker claims benefits. So it’s basically once the worker claims it, it’s 50% of that benefit, but it can be reduced if – The spousal benefit can be reduced if it’s claimed before that full retirement age, which again, for me, is 67. Then deferring that benefit does not increase. So there is no referral credits for a spousal benefit. So getting that beyond full retirement age doesn’t make any sense. The spousal and survivor benefits do not increase, like I said, past full retirement age.

The other interesting thing is that if a spouse is caring for a child that’s under 16, you can receive the full benefits, regardless of the caregiver’s spouse’s age. So there’s a lot of just little like nuance here that if you aren’t part of Social Security, you can, again, look these up and see if you would be eligible for a benefit. But this can also be paid for a dependent, an unmarried child under 18. So if I’m 65, and I’ve retired, and I’m collecting my benefit, and I have a 15-year-old daughter, they’re eligible for a benefit, as an example.

Then if there’s a disability, as long as the disability started before age 22, there’s another benefits there related to that. There can be, Tim, a fat family like maximum applied. So like if my family – If I have two dependents and a spouse and then myself and then we’re all drawing like four checks, essentially, there is a cap per family that has to be considered, and that changes over time.

It’s just interesting to know, again, a lot of people overlook this. Unless they’re looking at their mail, which there might be some notices here, or working with a planner sometimes, like this goes unpaid. So you want to make sure that, again, this is a system that you pay into as a worker. That you want to make sure that you and your dependents have the ability to collect the maximum amount.

[00:21:50] TU: Tim, one thing that stands out here real quick is it feels like this is a good example. I mean, there’s many that you just listed off there, where really getting in the weeds and planning could be helpful. But I’m thinking about – Selfishly, I think about my situation, Jess, and others that maybe have a nonworking spouse. Like when you talk about things about a spousal benefit and the percentages and that being hinged on the worker and that it doesn’t have the deferment credits, like there’s really some calculations to be done there of like does it make sense that there’s a strategy around spouse gaining employment, and what might that look like, and what’s the net benefit relative to the time.

Or if the plan is that there’s a nonworking spouse, and it’s going to remain that way for whatever reason, then kind of understanding some of those nuances, right? It’d be hinged on the individual that’s working. What are the risks and benefits of that? Then also, that there’s not things like that deferral credit, right? So there’s a lot to unpack there.

[00:22:49] TB: Yeah. Even taking a step further, if your full retirement age is 67, and you decide to take it at 67, the things that you would have going on there is, say, your benefit is $5,000 at 67. Jess, if she decided not to work, it would be 50% of that, so $2,500. Or do you wait to get that 8% every year, which is essentially going from 67 at age 70, it increases by 8% every year. So you say you claim at age 70, which she can’t claim until you’re claiming, and then she gets 50% of that, right?

If you were to pass away or she were to pass away, you basically get the larger of that benefit. So if you’re at 5,000 and she’s at 2,500, that’s 7500 hours for the household. But then if you were to pass away before her, she would get your benefit. So you would get 5,000, but the other 2500 we’re going to turn off. So the exercise then is what is the best strategy for you to claim to get the maximum out versus deferring. So there’s lots that goes into this.

Again, even me making blanket statements of like, “Hey, deferring usually makes the most sense,” for your case, maybe that’s not the case because you want to turn that benefit on as quickly as possible because deferring for her is not going to really matter.

[00:24:12] TU: Yeah. But that highlights the value of the planning here, right? Yeah. I mean, you talked about at the beginning building a retirement paycheck. Well, that paycheck is going to come from multiple sources. Here we’re only talking about one source and within that one source all the decisions and the nuances.

[00:24:28] TB: Exactly, right. Yep. The second population of people, Tim, so everybody we’ve talked about so far in terms of like benefits, that’s like the worker and like their dependents. So the next bucket is for when that worker dies, so you have like a survivor benefit. When a person who has worked and paid Social Security taxes dies, certain members of family may be eligible for survivor benefits. So a widow, widower would get full survivor benefits are available at full retirement age, but reduced benefits can begin as early as age 60.

This is a whole another ball of wax that we get tested on for the RICP. That can be very confusing to understand. If the widow or widower is disabled, the benefits can then begin as early as age 50, not 60. Then full retirement, full benefits are also available if the widow is caring for a deceased person’s child who is under age 16. You can also get survivor benefits if divorced spouses are under certain conditions. Or unmarried children younger than 18 can also get a benefit. Children under the age of 80 or 18 or older, if you’re disabled before 22, so this kind of falls very similar to the worker benefits. Then dependent parents aged 62 or older. So if I am –

[00:25:43] TU: Interesting.

[00:25:45] TB: Yeah. So say I’m taking care of my mom, and I’m receiving a work benefit, and then I die, my mom might not be receiving a check for Social Security. She might get her own. But if she’s not, then she has the ability to actually get a benefit based on my Social Security. Again, a lot of nuance when a worker passes away as well.

[00:26:07] TU: Tim, what about disability? I know this is an area when I’ve talked to folks before that are evaluating Social Security, asking questions, thinking about Social Security, it’s always focused on the retirement income side of it. But a big part of Social Security on the disability side as well, correct?

[00:26:23] TB: That is correct. I think what we had said in the beginning that it is the second most behind – Yeah, second most behind workers benefits is the disabled workers. About 8.1 disabled workers receiving about $10.3 billion per month. This one’s tough, though, because the Social Security definition for disability is pretty strict. So to receive disability benefits requires providing proof that the worker is incapable of engaging in any type of gainful employment, any type of a gainful employment.

You have to be in a pretty tough medical status to be able to get this, and they typically have an end date. So they’re paid until the earliest of death, the end of disability, or attainment of full retirement age. So then you would go – So if I were disabled at age 55, and I was still alive at age 67, then I would switch over to my worker benefits. It can be pretty strict to be able to get the disability benefit, but it is the second largest after workers benefits. It’s a pretty strict interpretation of work and gainful employment.

It is important to know, again, do I have a worker benefit? Do I have a survivor benefit available to me or my kids? Do I have a disability benefit? So kudos to the website. I would be on there. Obviously, there’s a lot of education, but then being able to log in and see, hey, I do have this benefit because I paid enough into it. There’s some assurance there, to know that.

[00:27:57] TU: Tim, when I see on the disability side that the worker is incapable of engaging in any type of gainful employment, my first thought is, well, this seems to be why, for so many pharmacists, we’re often looking at standalone long-term disability insurance policies that have some type of an own occupation component to it. Am I reading that correctly?

[00:28:16] TB: Correct. Yep. Yep.

[00:28:17] TU: Okay. Yeah.

[00:28:19] TB: Really, the reason for that is like what often happens, if it’s not an occupation, say I’m a pharmacist and say I’m in an awful car accident, and I cognitively can no longer do the work of a pharmacist, that doesn’t necessarily mean I can’t do the work of bagging groceries or doing something like that. So what the insurance company could say is like we’re going to deny the claim because you can still have gainful employment. It’s just not for the employment that you were trained for. So that’s just – Yeah, it’s important to know that.

[00:28:51] TU: Good stuff. Number three on our list of 10 Common Social Security Mistakes is not understanding how benefits are calculated. Tim, admittedly, this is something I know very little about. You’ve already thrown around a term. I’m sure you’ll define PIA. Tell us more about the formulas that are used to determine one’s benefit?

[00:29:09] TB: Yeah. So the two big terms here is the PIA, the primary insurance amount, and the AIM, the average indexed monthly earnings, which I alluded to a little bit. So the worker’s benefit is tied to the primary insurance amount, PIA, which is a benefit formula applied to the worker’s average indexed monthly earnings or AIMs. That’s a mouthful. So the way you get to aim is you add together all of the index wages for the highest 35 years, and you divide that by 420 months or 35 years, and that’s the AIM.

So if you look at this on a timeline, the timeline zero is kind of the PIA. Then anything before that, so if you retire early, say at 62, that’s kind of a reduction, and I’ll take you through the math on that, then anything to age 70, which is the opposite on the spectrum, is a credit. So the worker’s benefit is reduced by – Of course, we don’t want to make this simple, Tim, but it’s five-ninths of 1% of the PIA for each month before retirement age up to 36 months. So essentially, you’re getting a haircut five-ninths of 1% of PIA for every month before your full retirement age.

If it’s greater than 36 months, it’s further reduced by five-twelfths of 1% per month. So in my exam, I’m basically calculating this. I’m like, okay, the full retirement age is 65. They – Yeah, no doubt. So here’s an example. If we’re claiming 44 years early, that’s 48 months. So the first 36 months, it’s five-ninths of 1%. Then the last 12 months to get to the 48 is five-twelfths of 1%. So if I do the math there, that’s a 25% reduction. So five-ninths times 36, plus five-twelfths times 12, the 12 months is 25%.

[00:31:06] TU: Four years early.

[00:31:08] TB: Correct. So that tells me that my paycheck is reduced by 25%. So if my primary insurance amount was 1,500, then my benefit would be reduced by 25% or 1,125. The scary thing or not the scary thing, but the problem is, Tim, is like once you do that, there are some like you can unwind it. If you claim early, you have 12 months to kind of give the money back. Or you can give them money back and say, “I’m just kidding. I want to actually defer.”

But once you take that haircut, you take that haircut. Again, you still might get the cost of living so that 1,125, if you’ve got that in 2022, you still get the 8.7% increase. But I would rather have the 8.7% increase on that 1,500. So if you defer the worker’s benefit, it increases by two-thirds of 1% for each month, until age 70 or 8% per year. So if that 1,500, basically, I go all the way out to age 70, for every year, essentially, it’s about 8% per year, which is why when I was looking at my benefit, I’m like, all right, 2,600 bucks at age 67, if I wait to age 70, 3,231. That’s kind of the idea.

[00:32:27] TU: What was your spread, Tim, your low to your high, 62 to 70? What was your –

[00:32:31] TB: 62, I’m getting $1,774. To age 70, I’m thinking 3,231s. What is that? 70, 80% difference between the two or something like that?

[00:32:43] TU: Quick $1,500 about. Yep.

[00:32:45] TB: Yeah. It’s significant. We’re talking about this a little bit, Tim, but what people are saying is like, “Well, if I retire at age 62, I’m probably going to live to age 65.” Like people have kind of very little sense of their own mortality, and they typically live longer than what they think. Now, that’s not always the case. There are some people that it does make sense to claim, and we’ll talk about a little bit more of the mindset. But a lot of advisors and people, it’s like, well, it’s kind of a breakeven. It’s like, well, if you are collecting at 62, that’s eight years of collecting it at that versus waiting at 70. There’s a breakeven analysis that you can do. But I think that’s flawed in a sense, in terms of it looking at it from an investment decision versus like an insurance decision. We’ll talk about that in the next episode.

[00:33:34] TU: Tim, a question I have, when you talked about the benefit going up 8% per year by deferring, is that 8% plus the COLA then, just like it was on the downside? You know what I’m saying?

[00:33:48] TB: Correct.

[00:33:49] TU: Okay.

[00:33:49] TB: Yeah.

[00:33:50] TU: Yeah. I mean, that’s wild, right? I was just kind of taking those numbers like, so instead of 1,500 going to 1,125, getting reduced by 25%. Essentially taking that up 8% per year and, obviously, it’s 8% on the 8%. But then adding to that the COLA piece, like that’s where the numbers start to really deviate.

[00:34:08] TB: Yeah. Again, this was a crazy year, so –

[00:34:13] TU: Yeah, that’s right. That’s right.

[00:34:14] TB: I’d have to look at in terms of like what the – But I feel like it’s gone up, even in years of very little inflation. The CPIW, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers, is essentially what they use to adjust it, even if it’s a 1%, 2%. Yeah. That’s completely separate from the deferral credit of 8% that you receive away from inflation. Again, that can be huge.

[00:34:41] TU: Yeah. Yeah, absolutely. Again, I think this is a good reminder, like we’re talking in generalities. I think you mentioned, Tim, the importance of, hey, we can run the math. You can run a breakeven. But it doesn’t stop there, right. As we highlighted earlier in our conversation, there are so many layers to this and considering spousal benefits and quality of life and overall health condition, what you’re doing.

I mean, there are so many things that consider that, yeah, I mean, there are cases where someone may claim early, as we look at generally. Certainly, the math here would advocate that deferring makes sense, but that may not always be the decision. I think that’s where the planning really comes into play.

All right, number 4 on our list of 10 Common Social Security Mistakes is taking Social Security too early, not working long enough. Tim, we talked about this a little bit already, and perhaps it’s due to the age of my parents and in-laws, where this topic is one that comes up a lot. But this feels like a topic that is often discussed, often debated. So talk us through some of the major implications here.

[00:35:42] TB: Yeah. Just like any other parts of the plan, Tim, like what we’re really trying to strive for here is optionality. I can speak to my own parent, at least my dad. When he retired, it was kind of out of his hands because his company was bought by another company, and he was kind of duplicitous. So his options there were, okay, find a new job at 65 or whatever it was or start retiring.

Again, like if I’m him, in that moment, I’m probably trying to use other sources of income. So I can then defer Social Security, get the biggest benefit. Sometimes, your plan is out of your hands because of external things like that. You want to prepare yourself as best you can to kind of cushion the blow, again, if you are, if you do kind of get phased out of the workforce. A lot of it, it’s related to scale backs and things like that. But sometimes, a lot of it is health.

Sometimes, you’re like, “Oh, I’m definitely going to work to age 65, or I’m definitely going to work to age 70.” I think it’s something like 40% of the time, that’s not the case. So 40%, that’s a coin flip, a coin flip, Tim. Sometimes – Now, just because you’re not working doesn’t necessarily mean you have to claim Social Security. But for a lot of us, especially for a huge portion of that, you have to, right? But the argument that I would make is that if you can build a plan to have enough retirement assets or being able to tap home equity or taxable brokerage assets to kind of bridge that gap, it allows for further sustainability later because just more of your dollars are coming from Social Security, versus taking a 30% haircut or whatever it is. Yeah. Not working long enough is huge.

The other factor is that, again, typically, towards the end of your careers, when most of us are working or earning the most money, which, basically, we’re looking at the highest 35 years, so it could be I’m making $200,000. If I decide to work another year, $200,000, maybe that’s taken zero or that $358 a year that I had in 1998 off the table. Then my benefit is going up even higher.

But then the other side of it is like it is another year, where you’re not essentially senior. You’re not in senior unemployment, i.e. retirement, where you’re not basically generating your retirement paycheck yourself, which, again, is the whole purpose of retirement. So there’s a lot of people that are now really trying to either phase into retirement, or they have lifestyle, jobs, or businesses, or things that they do that maybe bring some dollars in that they’re not full stop.

Because, again, from an emotional standpoint, we talk about this from an identity perspective, a lot of us like my identity is very much wrapped up in the job that I have, which can be unhealthy. But we’re seeing high levels of depression and drug use, alcoholism in retirees that we haven’t seen before. I think it’s because a lot more people are talking about it. But that’s another benefit of like easing in from a work perspective.

But as we talked about it, again, it’s a 30% reduction if you claim at age 62, versus full retirement age. If you work past it to get the full credits, 8% per year. The difference, it can be like 70 to 80 percent between age 62 to age 70 in terms of the benefit, if you defer. One of the things that is if you’re listening to this, and you’re like, “Ah, I just retired summer of last year, and I took the benefit right away,” there isn’t the ability. It’s called a withdrawal of application, which can be made by a worker within 12 months of claiming the benefits.

It’s basically like a take back seats, like do over. You’re like, “Oh, I just kind of did what everyone else is doing, and my situation maybe requires some more TLC and attention to see. Like maybe I can get by or not claim this. I can work part time. I can consult or do whatever to kind of grow that benefit to –” Where you’re getting that 8% raise to age 70. I think that’s important. Really important to look at.

[00:39:57] TU: Tim, one of the things that just hit me as we were talking, to reiterate something we lead with, is the need for time, attention, love, planning, whatever you want to call it for Social Security. We spend so much time – When I think about numbers like $5,000 a month, right, just throwing a round numbers here, as we’re looking at some of our examples, $5,000 a month, and the attention and time we give to building and putting together a nest egg that would generate $5,000 a month, while we, I think, largely often kind of wander, walk into perhaps on some level and inform the decisions around Social Security, the implication around Social Security, a very similar level here we’re talking about, and it’s substantial, significant level, several thousand dollars per month.

I think it just highlights, as we’re digging into some of these numbers and how to optimize it, how much time and attention Social Security does really need and deserve as a part of the financial plan and one that admittedly – We look back over the first five years and said, hey, we haven’t really talked about Social Security. It’s a huge part of the financial plan, and that’s in part why we’re talking more about it right now.

[00:41:02] TB: Yeah. Again, just like anything, the financial plan is not necessarily built in a day. I think a path towards financial freedom, how you just decide that, is months. It’s years. It’s decades of being very intentional, of working towards stated goals. Social Security is a part of that. Again, we often think of it as just I’m earning money, 35 years of earnings in the background. But a tweak here or a tweak there, someone listening, and they’re like, “Hey, I can definitely earn $1,600 times four a year to turn that benefit on for me.”

Even if it’s a small benefit, I mean, that might be a car payment. It might be a chunk of rent. It might be groceries. So I think every little bit counts. At the end of the day, what really – Again, it goes back to the being intentional but then optionality when you get to that moment. Again, like one of the things that we do – Again, if we use the term, if we use 5,000, 60 grand a year for that, we might need another 60 grand to live.

So let’s say it’s 120,000. Essentially, what we’re doing then is we’re looking at those alternate sources, which could be pretax dollars from a traditional 401(k), after tax dollars from, say, a Roth IRA, a taxable account. We’re kind of trying to bring all those in, and it could be money from home equity. It could be money from an annuity that we take a chunk of the portfolio, and we say, “Hey. For us to get to a minimum, maybe it’s not – Maybe we need 80,000.” So maybe we buy a $20,000 annuity for that year or for like a term or whatever to get to that level. Then you know that based on Social Security and based on what that annuity is going to pay you that I’ll food, I’ll have a roof over my head, all those basic necessities. So everything else that’s coming from the portfolio, which is kind of cream.

Essentially, what I’m describing is like the flooring strategy. But, yeah, it’s huge. It’s huge. Again, I think what we’re advocating for is just intentionality. So it leads to optionality in the future.

[00:43:23] TU: Yeah. It’s separate conversation for a separate day. But just things that are coming into my mind as we walk through some of this if you have a solid flooring strategy in place, if that’s the route and pathway you’d go, like does that change your risk tolerance or risk capacity around investing or other opportunities? Again, all this feeds into to one another.

All right, let’s wrap up this two-part series on 10 Common Social Security Mistakes. We’ll finish up with number five here, and we’ll pick up next week with 6 through 10. Number five is making sure that we’re not looking at this in a vacuum and specifically not coordinating benefits with a spouse. Tell us more about this one, Tim.

[00:44:01] TB: Yeah. Kind of I’m thinking about this. We do have a lot of people that come through the door that’s like, “I’m looking for a financial plan just for myself,” but they’re married. I’m like it is hard to do because up and down, whether it’s a shared benefit like a home or even something like Social Security, like you got to be on the same page.

As we said, the spousal benefit does not increase if the worker defers benefits. But a survivor benefit may. You can get credit based on that because it’s based on the PIA of the worker. One of the things that like we often hear is like, “Well, I’m in poor health, or like my dad and my uncle, they all died in their early or late 60s, early 70s.” But it might make sense. So even if the spouse, who is in poor health, it might make sense to defer the benefit because the longer you defer –

Again, if we give an example of spouse A has a benefit of 1,700, and spouse B has a benefit of 3,000, that’s a $4,700 per benefit. But if I can defer spouse B to get the 3,500 or to get the 3,800, I still can either pick mine, which is 1,700, or my spouse’s at 3,000, when they do pass away.

Again, it can’t be looked at a vacuum. You really have to look at everything. But a lot of people at default, they’re like, “Hey, I just got to get the money as quickly as possible.” Because I put all this money into, I want to get out. That kind of goes back to like the whole investment. So it really is important for you and your spouse to go back to the first one, where it’s like look at your earnings. Look at everything. Make sure it’s accurate. Then really coordinate the benefit that maximizes the dollar for the household, when both spouses are alive but then also when one spouse predeceases the other.

So not in a vacuum, just like so many other pieces of the financial plan, you need to really make sure that there’s a coordination strategy there to, again, maximize the benefit and not leave money on the table.

[00:46:00] TU: Tim, one of the themes I’m hearing from you, especially for folks that are listening that have still a decent runway to save, is what can we be doing to take off that pressure of early claiming, if that’s not the move that we would desire to make, for the reasons we’ve talked about looking at the dollars and cents here?

Can we build those other sources that we can pull from, when it comes to that retirement paycheck? You mentioned the traditional retirement accounts, Roth IRAs, brokerage accounts, etc. Can we build those up in a way that relieves that pressure? Then if the decision really should be different for some and, again, that may not be a blanket for all, but we take that out of the equation, pressure out of the equation.

[00:46:42] TB: Yeah. I think this all goes back to like goals, like what is your goals around retirement? It’s funny. Like it goes back to all the other pieces that we talked about what the financial plan. It’s like what’s the balance sheet say? What are the sources of income, and where are we trying to go? What are the goals? It’s the same, whether you’re starting out, or it’s the same, whether you’re starting to wind down your career, so to speak.

Having a good eye on like where you’re at and where you want to go is just as important at age 60, 65, 70, as it is at 25, 30. To me, it’s really, really important to have these conversations out loud. I always – I laugh at myself, where I’m like, “Man, I love what I do. I love the work that we’re doing at YFP. I can see myself working at least till age 70 to get ready for retirement age.” But I also know that like we can be fickle creatures, right? Something could happen outside of our control that just makes the work that we’re doing a lot harder. There can be a lot of things.

So I think even checking in with yourself, checking in with your spouse in terms of like what you want is important. But then if you do have to kind of pivot because of maybe some of the things that we did 20, 10 years ago, we have the option to say, okay, we can still not be hasty with our retirement claim or Social Security claiming strategy because we have the ability to pull through other sources to still max them out, max out like what we get from the system.

Again, like I would almost say that this decision is going to be one of the bedrock decisions, if not the bedrock decisions, because we’re looking for sure things. Although, again, like there might be differences in the benefit in the future, it’s still going to be there, and it’s still going to be inflation-protected and all those things that is really positive about the Social Security benefits. So, yeah, I think, hopefully, this is a good first five and looking forward to getting to the next five. But I can’t stress the importance of this decision on the retirement income plan.

[00:48:43] TU: Great stuff as always, Tim Baker. We’re going to pick up next week, as we continue with 10 Common Social Security Mistakes to Avoid. Again, I’d reference you back to episode 242, where we relate some of the foundation around Social Security. We look forward to talking more about this topic throughout the year.

For folks that are listening, especially, Tim, I’m talking about folks that are maybe in that later part of their career, nearing retirement, a lot of these questions are really coming to life around Social Security. It’s moving from the education to the decision making, if you will. We’d love to have a chance to talk with you to determine whether or not the financial planning services that we offer at YFP Planning are a good fit for you. So you can do that by booking a free discovery call at yfpplanning.com. Again, that’s yfpplanning.com.

Tim, thanks so much, and we’ll be back next week.

[END OF INTERVIEW]

[00:49:29] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

[END]

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YFP 293: Employee to Entrepreneur with Dr. Victoria Reinhartz

Posted on February 2, 2023March 10, 2023 by Caitlin Boyle

Dr. Victoria Reinhartz, CEO of Mobile Health Consultants, a business founded to solve the access to care problem by empowering interprofessional Mobile Integrated Health and Community Paramedicine teams, discusses her motivation for building Mobile Health Consultants, the target audience and how this has evolved, how she overcame the initial hurdles of starting a business, and how she balances running a business while working in an academic position.

About Today’s Guest

Dr. Victoria Reinhartz is an industry leader in Emergency Medical Services, where she established the first-ever paramedic-pharmacist partnership to address chronic disease and medication challenges for underserved populations. She is the Chief Executive Officer of Mobile Health Consultants, a business founded to solve the access to care problem by empowering interprofessional Mobile Integrated Health and Community Paramedicine teams. Dr. Reinhartz is a national advocate for innovative models of care, and she serves on the Board of Directors for the National Association of Mobile Integrated Health Providers, an organization advocating for mobile interprofessional teams as the nation’s care solution. She also serves as the Mobile Integrated Health subject matter expert for the Commission on Accreditation of Medical Transport Systems.

For her leadership and exceptional care provision within Emergency Medical Services and Mobile Integrated Health, Dr. Reinhartz has been recognized with a Chief’s Commendation Award, a Congressional EMS Unit Citation Award, and national attention from the United States Public Health Service.

Her national advocacy for pharmacists as part of mobile health teams has resulted in Dr. Reinhartz being named a 2021 Top 50 Most Influential Leader in Pharmacy. She was also selected as the 2020 Next Generation Civic Leader, an honor awarded to one pharmacist nationwide whose vision for interprofessional care best spotlights the needs of underserved communities.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, talks with Dr. Victoria Reinhartz, CEO of Mobile Health Consultants, about her journey from employer to entrepreneur. During their discussion, listeners will learn about the motivation and inspiration behind the genesis of Mobile Health Consultants, the target audience and offerings, how they’ve evolved, and how Victoria conquered the initial hurdles of starting her business. Highlights from the episode include a discussion of Victoria’s start in pharmacy and how a standout moment in her career highlighted the teaching abilities that she thought she might never use as a pharmacist, how Victoria discovered her passion for community paramedicine and mobile integrated healthcare, and how she moved her idea for Mobile Health Consultants from an idea to a business.

Tim and Victoria discuss the path from employee to entrepreneur, the value of professional coaching and small business development centers, and how as a CEO, time distribution can fluctuate when managing competing responsibilities and onboarding teammates. Victoria shares practical tips and tricks on managing and running a business while also working in academia, how her presence in the front office and the back office have evolved as needed, and strategies she has used to grow her team.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

This week, I had the pleasure of talking with Dr. Victoria Reinhartz, CEO of Mobile Health Consultants, a business founded to solve the access to care problem by empowering interprofessional mobile integrated health and community paramedicine teams. During the show, we discuss the why behind building Mobile Health Consultants, the target audience and offering and how this has evolved over time, how Victoria was able to get over the initial hurdles of starting the business, and how she balances her time running a growing business, while also working part time in an academic position.

Okay, let’s jump into my interview with Dr. Victoria Reinhartz.

[INTERVIEW]

[00:01:22] TU: Victoria, welcome to the show.

[00:01:24] VR: Oh, thanks for having me, Tim. This has been a long time coming, so I’m glad we’re able to put it together.

[00:01:29] TU: It has. We crossed paths this past year through the pharmacy entrepreneur circles. After I learned a little bit more about your career path and the work that you’re doing with Mobile Health Consultants, I knew we had to bring you on the show to share a little bit about your entrepreneurial journey, what was the genesis of the idea, what is the work that you’re doing. We know that we have many pharmacists in our community that are itching with an idea or a side hustle or a business that they’re working on and excited to feature other pharmacy entrepreneurs such as yourself.

So let’s start with your background in pharmacy. What drew you into the profession? Where did you go to school, and what was the first position that you had after graduation?

[00:02:07] VR: I decided to become a pharmacist because I am kind of a nerd at heart. I really enjoy a good puzzle, so to speak. I think that every patient and the best drug therapy for them is really a puzzle for us to figure out and navigate through the various challenges related to genomics and treatment course and side effects, etc.

So the nerd at heart in me, I love putting together puzzles, and I ended up going to pharmacy school at LECOM School of Pharmacy and graduated, I guess, now over 10 years ago, which feels crazy, right? We no longer qualify as new practitioners too.

[00:02:45] TU: We don’t.

[00:02:47] VR: But that’s alright. So graduated from LECOM School of Pharmacy down in Bradenton, Florida area and stayed in Florida to practice more in the community setting. But I was fortunate enough to continue to take on leadership roles and new opportunities to develop skills within myself, which really is what led to a lot of the opportunities and academia and public health and now mobile integrated health that I’m involved in.

[00:03:16] TU: So one thing, Victoria, I read that you shared on LinkedIn was a story from your last year of pharmacy school, when you did an educational training session, I would assume, during an experiential rotation for a nursing staff at a hospital. Through that experience, you realized the love that you have for teaching and problem solving. Tell us more about that experience, and how did it influence some of the career path and directions that you’ve taken today?

[00:03:44] VR: Yeah. So the story that I have on LinkedIn is a true one, and it is something that I feel still happens to this day. So I come from a super blue-collar family. We cuss a little bit in our family. I don’t know. Any of pharmacists listening, if you have families that that cuss a little bit, my family is super blue-collar, and I had been practicing like how to say glomerulus. I was so nervous about this presentation that I was going to do to an inpatient nursing staff.

After the presentation, a preceptor pulled me aside and wanted to have a serious talk with me, and she was kind of had that serious face on, and I said, “My goodness, I’ve cursed in the middle of the presentation, right? I let a four-letter word slip somewhere on accident.” But she wanted to have a serious talk with me about my future and about whether I had considered teaching.

Like many of the entrepreneurs that you bring on the podcast here, I thought that when I did decide not to do a residency that I had closed the door on any opportunity to teach. I was candid about that that, no, I decided not to do a residency. So I don’t think I would be allowed to teach anywhere. She really encouraged me to pursue opportunities where I got to develop that skill set of teaching.

So when I graduated and took a role in community pharmacy, I started figuring out how do I gain teaching skills. So I started to bring in new pharmacists, to train them. I started doing teaching events with our local pharmacy school and in local college of medicine. I started taking on more initiative on the district level to figure out how can I develop the skill set that I need to become a faculty or a professor.

Really, that professor had a huge impact on my life, that preceptor. It was secondary to her taking a minute and saying, “I think that you should develop this,” that prompted a lot of the steps that I took to continue to develop myself. So once I had kind of launched some of those things where I felt more comfortable in teaching, I had been engaging in teaching concepts for a while now, I took the opportunity to apply for a faculty position. I did accept that faculty role in 2015 with LECOM.

But I knew that I wanted to really stay involved in clinical practice as a younger practitioner. So I started working in the public health department and doing tuberculosis management and women’s health and immunizations and things like that. I was brought in to kind of help the Department of Health figure out a solution for our access to care problem. We started brainstorming. Really, this is where I found the passion for what we call community paramedicine and mobile integrated health care.

Like a lot of pharmacists, I think when we start to do a side hustle or when we step out to become an entrepreneur, it’s often born out of a problem that we’ve identified in practice that we feel passionate about or something that is just like lights our soul on fire, right? Like something that brings out that, “I want to do this. I’m excited to do this. This lights me up, and it keeps me up at night.”

So this was kind of a blend of those things, as there was a big problem. As we know, in all of our communities, we have a huge number of patients or underserved populations that are not able to navigate the healthcare system, right? So they don’t have primary care. They’re uninsured or underinsured. They don’t speak English and can’t navigate even getting established with a primary care. So what this leads to is we have these patients utilizing the 911 call system and emergency rooms as their primary care, right?

So definitely something that we all see in our communities, we know that health outcomes suffer. We know that cost, it gets expensive. So I said, “Well, why don’t we do a pilot? Why don’t we launch a pharmacist and a paramedic side by side into patient homes on a proactive basis, so not when the 911 call comes?” But paramedics know who in their community needs the support.

[00:08:30] TU: That’s right.

[00:08:30] VR: They know who’s calling 911 all the time. They know when Mr. Jones calls for the fourth time that they’re going to be back next week. So they know who to see. We launched a pilot with a pharmacist and a paramedic side by side together, going into the homes proactively for these patients that did not have the resources they needed, and we were able to see a huge impact in reducing the overall cost of care, but also improving the health outcomes.

That is now how my entire consulting business is founded in the mission of empowering these paramedicine teams with the training and resources they need to improve access to care.

[00:09:15] TU: I love that, and I want to come back and dig into more of what you’re working on with the consulting business and how it’s grown over time, the vision you have for it going forward. I want to make sure we don’t gloss over, though, some really important parts of the story you shared on that rotation and that experience, and one being great mentorship, right?

All of us have the opportunity to interact with other pharmacy professionals. Perhaps we precept students as well, and we never know the impact that some of those words of encouragement are just seeing a skill set or a passion in someone and either affirming them in that skill set, encouraging them in that as well, the impact that that may have long term. So it’s just such a great example of that.

Then another key piece that I really heard in that story was initiative, right? So one of the mindsets that can be out there is, “Hey, I can’t get X, Y, or Z job,” in the case here, you’re talking about a faculty position teaching, “Because I might not have,” insert whatever. Residency training, board certification, whatever credential. That’s one mindset.

The other mindset is like, “I’m going to figure it out. I’m going to figure it out because I have a passion for teaching. I have an interest in it. Somebody else has affirmed that skill. And I’m going to kind of blaze that pathway, and I’m going to take initiative in building relationships, collaborations, and getting opportunities that I can then go and make a case for why I can provide value in this teaching role.”

What’s really interesting, Victoria, is you are doing teaching in somewhat of a traditional format, obviously, in a faculty type of role or position. But you’re also teaching every day in the work that you’re doing through your business. I think one of things we got to be careful about is if we have a gift or a passion in a certain area, but we feel like we may not be able to do that because it’s defined a certain way by an employer or in a certain career path, it doesn’t mean we can’t do that, right?

You can teach. I can teach. I’m not in a formal academic role anymore. But I’m teaching every day on personal finance. It’s a different method of delivering that information, but it doesn’t necessarily have to be defined in the way that we may think that it has to be with a certain step or credential or degree or pathway to be able to do that. So I love that story and that journey. I think that’s so powerful.

So when it comes to Mobile Health Consultants, so you talked a little bit about the pilot project, the initiative, really the problem and the opportunity that you saw, that you’re able to solve. Tell us more about the step from idea to actually beginning to implement that business, right? It’s one thing to identify a problem that needs to be solved or an opportunity that can be addressed, and you could have continued to do that through collaborations and partnerships with existing entities, while you’re employed in other positions.

But it’s another thing to really take a problem and then develop a solution through creating a business. In here, we’re, obviously, talking about the consulting work that you’re doing. So tell us about the early stages and how you were able to initiate and get started with developing the business.

[00:12:11] VR: Well, I have to say that we do not do a good job in pharmacy of teaching or creating skill sets around entrepreneurship, in general, I would say.

[00:12:22] TU: Amen.

[00:12:25] VR: I know that you and I have gone back and forth about this issue over the last few years, and so many others that are out there creating side hustles for themselves, creating small businesses and solutions in the healthcare industry and outside of the healthcare industry also feel that way. But I was in that boat. I felt – I knew a little bit from managing a pharmacy or being involved in pharmacy management. But when you talk about entrepreneurship and establishing a small business, that’s not enough. It’s not even close to enough, right?

I did find it difficult in the beginning. I still find it difficult every day because so many pharmacists are kind of inherently intelligent, and they’re kind of good at things that they do and can figure things out really easily. Some of us, maybe you didn’t even have to study that hard for some of your undergrad courses and things. I think that that was a big challenge for me in the beginning was struggling, like struggling and navigating. How do I do this? What are the laws and regulations? How do I draft contracts? How do I set my hourly rates? All of those pieces have to be figured out?

I had a lot of success with, first of all, finding coaches. So for anybody on this podcast, and Alex and Jackie Boyle and the team from Happy PharmD have not asked me to discuss this or mention it or anything, but I did actually go through the Happy PharmD processes for prioritizing myself and my own goals and figuring out what do I need to do to make this happen. It’s living in my heart. But like so many of us that are parents and spouses and professionals, our own personal passions tend to take a backseat to all the other things that we have to do, right?

So I did pursue some coaching with Happy PharmD to create a series of deliverables for my own goals that I knew would set me on the path to getting established. I also found the Small Business Development Center or the SBDC to be really valuable. I will tell you, I still meet with them, with my SBDC rep like, I don’t know, every other month or every few weeks, if I need to, if an issue comes up and I’m like, “I have no idea how to handle this,” or, “Can you help me find someone in the area that is a trustworthy source and this expertise area?” So you have to ask for help. For a lot of these things, you have to be willing to kind of put up the money, if that’s what it takes.

[00:15:09] TU: Yeah. I’m glad you mentioned the SBDC. I’ve talked to several pharmacy entrepreneurs or those that are building something, just in the last couple of weeks, and that was one of the resources I pointed them. Hey, have you talked to the SBDC in your area? Because it’s – Even the technical stuff, some of that might be helpful. Some of it maybe you’ve already kind of gone down that path, putting together business plans, LLC formations, things like that.

But it’s about beginning to be a part of that network and community, where someone might say, “Hey, have you talked to so-and-so? Or what about this? What about that?” I think it’s just helpful to know you’ve got someone else in your corner to bounce ideas and questions off of as you’re developing. It’s such a great free resource that’s offered all across the country. We’ll link to that in the show notes, so folks can find SBDC office in their area as well. Then you mentioned the impact of coaching that can be there as well.

Let me ask a follow up, though, Victoria. Even with coaching, right? Even with coaching, even with putting up the dollars, there’s still a step of getting over the fear, right? The fear of, “Man, is this going to be successful? What if I mess up a contract? Who am I to kind of put myself out there of this expert in this area across the country?” There’s all what I like to call the head trash that might get in the way of us being able to actually move something forward. Coaching can help that. Don’t get me wrong. But at the end of the day, like we’ve got to be able to be comfortable taking some risks to move something forward.

So for your journey, was that a thing? Was that a part of the journey? Then how were you able to get past that to be able to take those first early steps of the business?

[00:16:38] VR: I think regarding the headspace, I think it’s not really a thing where you can say, “Oh, I don’t think I’m in the right mindset, or I’m being too hard on myself. So I’m going to do this tomorrow, and then that fixes the problem.” It’s an ongoing, continuous daily effort because every step of the process is going to be a learning lesson for you. So whether you’re earning your first dollar or your 100,000th dollar or your millionth dollar, each of those phases of growth creates a new element of imposter syndrome, right? Or a new element where you’re not sure am I ready for this level of the game, right?

So it’s an ongoing thing, and I just want everyone to know that and give themselves some grace. I think that giving myself grace was a huge part of how I continued to be in the right mindset and how I approached it early on as well. You’re going to make mistakes. You’re going to have to reach out for partners or resources because you don’t know how to do something, and you have to figure it out. You just have to be comfortable saying, “I don’t know. I need support,” and give yourself the grace to be able to do that. I think that was a big one for me, right? We’re a lot of times our own harshest critic, and so getting comfortable in that.

Then I think the other thing that I would say is, financially, it does take some preparation, potentially, depending on how comfortable you are with risk, with financial risk. I know that we, my spouse and I, had to put together a plan of what’s the dollar amount that we’re going to invest in here, and what’s the timeframe before we are going to count on a salary coming in for you that we feel comfortable with. So essentially, what’s the span of months, or even years maybe it might be for some people, until we say, “Okay, enough is enough. We did it, and we were not successful, and we need to kind of go back to a real world job, so to speak.”

So anything that you can do by saving ahead of time, making changes in the budget, putting money aside to reduce the amount of risks that you have or increasing your comfort level with the risk that you’re taking is valuable.

[00:19:12] TU: I’m so glad you mentioned that, Victoria, because I think there’s a lot of – I use the word over glorification of this idea of like just jump and figure it out. There can be value in like making some mistakes and learning along the way. But there’s also some wisdom in having a game plan and having some backup and options, especially when we’re talking about the financial aspects of the personal side. Of course, there’s a connection to that of the business side.

What we want to prevent is that we’re not able to pursue our business with the full attention that it needs and deserves because we’re worried about the risks on the personal financial side of things. Everyone has a different capacity and tolerance for risk, right? Everyone’s personal situation, of course, is very, very different. But doing that work, as you mentioned, to determine what is the runway that it’s going to take reminds me of –

We had Jodi Nishida on episode 266, I’ll link to that in the show notes, who has started a keto-based practice out in Hawaii, doing some really cool things. She talked about this for her journey of having a substantial amount of savings that she ended up having to lean on early in her journey because of some challenges that happened that maybe she could have predicted, maybe she could not have. But if it weren’t for having some of those reserves, it might have crippled her moving forward with the business. Potentially, without that, she might have felt the need to jump back into the work that she was doing previously.

So a ton of wisdom there, I think, that you’re sharing in terms of making sure that we have the financial plan and preparation, so we can approach the business with the confidence that it does deserve. So Mobile Health Consultants, I’m going to read your mission statement. Empowering mobile integrated health and community paramedicine teams in all 50 states with exceptional training and disease management expertise. So you painted the picture of kind of how it came to be and the problem you’re trying to solve. Tell us more about the target clients, the services that you offer today. Then we can also talk about kind of what you’re planning into the future.

[00:21:12] VR: Yeah. So I think one of the exciting things about being an entrepreneur is that you get to kind of follow your heart, and you get to really live the concept of success occurs when preparation meets opportunity, right? I started out just offering consulting services and some speaking services. That would be anything from coming in and doing a program evaluation, so for these programs that are already in existence, so coming in and doing a multifaceted evaluation to look for operational efficiencies, clinical appropriateness of their programs.

That ended up expanding to helping teams launch programs. So if they are recognizing there’s a high number of 911 calls secondary to injury in their area or frequent falls, then they might want to put together a false program. But maybe they don’t want to navigate all the challenges of which home safety assessment is best, which falls assessment tool is best, how do we deal with the meds that are going to contribute to falls. So I began going in and helping teams navigate that. How do you figure that out? What’s the best practice in the industry? What should you track for monitoring your effectiveness? So that kind of expanded to helping launch new programs and establish both clinical and operational efficiencies.

It has kind of expanded from there. So now, I work with teams that are getting set up with payers for establishing what metrics to track and how to quantify their effectiveness from a value-based care standpoint and reduce the overall cost of care for patients. That might be Medicare or Medicaid patients. We also do consulting for technology companies and healthcare service provider companies.

So as they are expanding markets that intersect with mobilized healthcare professionals, which we saw a huge boom of that via telehealth and community-based care programs as part of the pandemic, as technologies grow to recognize the value of mobilizing teams into the communities, there is a huge need to modify their technology systems. So we also have an end user design type consulting service that we provide, where we give insight to these teams and the companies that are developing the necessary technology.

[00:23:49] TU: I love it. We’ll link to the website in the show notes, so folks can get a feel for services and offering and educational programs. I think you’ve done a great job of laying that out on the website. One of my questions for you, Victoria, as I hear you talking about the evolution of the services is that – I think any early entrepreneur kind of goes through this phase of coming up with the content and the product, doing a little bit of business development and marketing.

I’m also, obviously, kind of a key relationship developer with partners. I’m trying to manage the finances a bit, wearing all these hats at once. So as I hear what you’re doing, and we’ll talk about how you balance this with other responsibilities that you have as well, like how would you estimate or breakdown your time in terms of where you’re spending and actually delivering the products and services, and where you’re in more of the backstage of the business, whether that’s in developing new relationships, partnerships, business development, marketing, brand awareness promotion? Like how do you distribute your time and how has that evolved over time?

[00:24:50] VR: It has evolved. It also waxes and wanes, to be honest with you. So as I pick up new projects with clients, then for a period bit of time, we’ll kind of go intensely more towards one area of the business or another. Some examples of that include the fact that if I have a really intense four-month project that involves consulting and user design and technology development and things, then we will shift, and we might do 60 to 80 percent on the consulting side, as far as hours commitment for that period.

On the flip side, on the education platform that we do, which is providing mobile integrated health care and community paramedicine providers, so this is paramedics, but this can be social workers. This can be nurses, any healthcare profession really. As they are looking to grow their skill sets, get into this industry, look for future employment opportunities in this industry, we have a rolling educational side.

For example, we have a community paramedicine accelerators course that launches our next cohort in January. So when January comes, for a couple months there, January through March, we’ll kind of pick up on the education piece because multiple times per week, I’ll be logging on live and doing case working and practice questions and live teachings and active discussions with paramedics across the country. So it does wax and wane, depending on the season, which is also fun because it keeps it not boring, right?

But in general, I would say about 60% or so of the business is consulting-related right now or over the last year or so. Then probably the speaking and education side is about 30% or so. The remaining 10% is really related to advocacy involvement at a high level nationally within the industry and internationally. Then also, we do have things that come up that are a little bit unexpected sometimes. So one of our core values is we get it done, plus some. We really believe in going kind of above and beyond and over delivering whenever that’s possible. So we’ve had multiple clients over the last two years that have asked for social media, graphic design, newsletter and content development. That has been an aspect of the business that I did not originally anticipate, and that I have actually contracted out and brought in new resources and things to help develop that.

So now, that is a growing area that we’re going to see over the next few years if we keep it or not, but it’s bringing in revenue. So it’s another way that we can over deliver to clients. That’s probably, I guess – Things like that are the other 10%.

[00:27:55] TU: Yeah. You’ve said we several times now throughout the show. So one of the questions I really like to dig deep on and better understand because I think it’s such an important evolution of the business when you go from solopreneur to having other people that are contributing, and that could be W team to employees. It could be contractors. It could be fractional services in terms of kind of piecing the team together. It can look very different. But how have you constructed the team, as you talk about we, and what are those different roles where you have some help in the business?

[00:28:29] VR: We are in a period of growth, so things are about to change. Tim, I didn’t get the date that this will be released, so it might already be announced. But I’ll hold off for now. So we are in the process. When I say we, I do have a few team members that work with me consistently and have now for several months or even years. I also have interns, so I accept interns each year.

[00:28:52] TU: Oh, cool.

[00:28:54] VR: Yeah. They stay with me for a period of time. So at a minimum, three months, but sometimes that relationship gets continued as they find value in the work and want to take on additional projects and things. So we have interns that cycle every few months or stay with us for half a year or even longer.

I think that we from a core team standpoint is pretty heavily administrative. It’s pretty heavily education-focused and content development-focused. The consulting side and also some of the education, I do a fair amount of contracting out. So I bring in people on a 1099 independent contractor basis, who I know will meet the criteria within the industry for projects that I am reaching for.

If I pitch for a project on social determinants or if I pitch for a project on high-risk medications or pediatric-focused meds or whatever that looks like, then I reach out to the network of experts in that area. That’s another one of our core values is cultivating a network of experts. So now, we kind of have this diverse team of experts. I think that we’re now over 50 different consultants that we’ve brought in in the last few years in different focus areas, based on what we’re working on at the time. Their projects range anywhere from three to six weeks to a year or more.

[00:30:33] TU: Yeah. The reason I asked that question, Victoria, and I love kind of the angle you took, is I read an article recently, and I’ll link to in the show notes from Y Combinator on the different and evolving roles of a CEO as you’re growing your business. They make a case that a CEO’s first job is to build a product that users love. Their second job is to build a company to maximize the opportunity that the product has surfaced.

I think that that requires a very different skill set over time, and one of things that we’re going through in the evolution of just YFP is early on, my role, typically, as the case for many early entrepreneurs, was all about product creation, content creation. You’re wearing all these different hats. Now that we’ve grown a team over time, it’s really about leadership and vision and that evolving role in terms of leading the company.

As time goes on, if I’m building the thing the right way, if you’re building the thing the right way, as I know you are, like your role as a content creator ideally becomes less important as you build the team, and you’re able to kind of step into other needs and roles and responsibilities that the business has. So it’s fun to see the evolution of some of these pharmacy entrepreneurs over time, really cool stuff.

Natural question, as a follow up to all of this is, Victoria, how in the world do you balance all this, right? So you still are working in the academic setting and a part-time role. You’ve described a very, I think, impressive and nuanced consulting business that you’ve built that has multiple different arms and is clearly on a growth path and trajectory? How do you balance the time, the schedule, the responsibilities, personal and professional? What are some of the strategies that have worked for you?

[00:32:16] VR: I’m smiling and I’m laughing because I think most of us feel like am I balancing it right really? I don’t know. I think that I am, and I would say that this ties into what the next 5 to 10 years looks like pretty heavily. I would say that right now, I am very dependent on my calendar, and I’m very dependent on all the intersections of my world being on the same calendar, right?

My spouse can see when I’m blocked off as busy and out of town or traveling from the work side. My academic teaching schedule has to be integrated on the business aspects so that we know not to schedule there. So I mean, there’s the technology piece that I think helps immensely and just you’re free when you’re free. When you’re not, it doesn’t work, right? So staying up to date and utilizing tools to make sure that you’re not getting double-booked, that you are making time for everything appropriately is important.

I would also say that if you’re in an early phase of content creation of project-based work, whatever that looks like for the type of business that you’re starting, you have to be intentional with scheduling or your calendar will get filled for you. So there’s times where you have to dedicate a full day a week to start maybe, maybe more, maybe less to something like content creation or writing or social media blocking and those sorts of things. There’s also time required for the follow up of that, right? So like if I record my YouTube channel, my education –

[00:34:06] TU: Which are great, by the way. Which are awesome. I love them.

[00:34:09] VR: Thank you. The Reinhartz Rundown is the title of that. We’ll put it in the notes or I can send you a link. So if we record that, it’s so multi-phase, right? You need to decide what you’re writing on. You need to narrow it down to the big points people need to know. You actually need to write it out. You need to do the digital transformation to teleprompter. You need to schedule like a day on your calendar to do the videography. You need to figure out what needs to be done from the editing and block that time.

Then you need to figure out all of the social media aspects that go along with that, like do I hashtags? How do I caption this? Do I upload to YouTube? Like what is the drip process? All of those things, right? So it’s not enough to say, “Well, I’m going to do content creation on this day.” It’s like I need to map out a process start to finish, and I need to make sure that we have proactively allocated the time accordingly on a schedule so that that gets done without being a point of stress for me. I think that it comes with some intentionality, and it comes from recognizing that everything takes longer and is a bigger deal than it seems like it’s going to be, and making sure that you’re as proactive as possible.

The next thing I would say is I have gotten better about delegating and automating things where I can. So now, for example, if I bring in someone, an expert to teach in the MIH Academy, before I would be like, “Here’s the thing you need to sign, and here’s your contract, and I’m going to get you set up for getting your check, and where does that need to go, and give me your headshot, and what are your objectives, and I’m going to add you into the platform,” and all of these aspects, right?

[00:36:05] TU: 20 emails later.

[00:36:06] VR: Yes. 20 emails. So now, I outline the process start to finish. I train my assistant on how to do that. Now, I just get to do the fun part, where I say, “Tim, I’d love to have you do a lecture on this topic or financial literacy for paramedics,” which, by the way, that sounds like a great idea. I’d love to do that.

[00:36:25] TU: That’s awesome. That’s awesome.

[00:36:28] VR: So I’m going to connect you to Rain, and then I CC my assistant, and I say introducing so-and-so here. Please get him set up for teaching in the academy. Then that process gets executed, even though I’m not the one physically doing it.

[00:36:46] TU: Process is the key word there, right? You gave a great example with that most recent one. You also give a good example with the Reinhartz Rundown YouTube and all the steps. Often it’s normal. You’re going to be doing all those steps to begin with, right? Until you kind of get to a point where it makes sense that you can justify having somebody help out. But if you can document the systems and the steps in the process over time, that’s the point where you can begin to systematize parts of your business and have other people step in and do it as good, if not better, than you’re doing it and more consistently over time so that you can focus on other parts of the business.

That’s something that Tim Baker and my partner are always talking about is how do we build this in a way that doesn’t depend on he or I sitting in any single seat of this business. The reason that’s so important, and it’s the same for your business, is that the work you’re doing in Mobile Health Consultants and the vision of the problem you’re trying to solve is bigger than Victoria, right? You started this, but there’s a day where like we want the impact and the vision of this to live on, whether you’re doing this or you’re not doing this. So if we have systems and processes that are in place that we can bring on team members and others to help execute that vision, all of a sudden, we’re building something that can transcend our time and the work that we have in that specific role.

So I love what you had to share there related to some of the systems in the process. This has been a ton of fun. I have really enjoyed following your journey from afar, at least on LinkedIn and, obviously, have the opportunity to talk here. I know this is going to be an inspiration to many other pharmacists that are perhaps at the beginning stages of an idea or looking to get something started on their own. If folks already are not aware of you and the work that you’re doing, where’s the best place that they can go to learn more about you and to follow your work?

[00:38:32] VR: So a couple different places. Obviously, on social media, find me on LinkedIn. Connect with me. Send me a hello message. I’d love to watch your success and your growth and serve as a source of contact, if you’re looking to either get into this industry or figure out your own journey. So please connect with me on LinkedIn, Victoria Reinhartz.

Also, if you want the link to the Reinhartz Rundown, I’m sure we’ll put that in the show notes for you on YouTube. Mobile Health Consultants is our website, and there’ll be information there on education and the MIH Academy under the education tab. So don’t hesitate to reach out, if that’s something that you’re looking for.

[00:39:17] TU: Awesome. We’ll link to those in the show notes. Again, Victoria, thank you so much for taking time to come on the show. I appreciate it.

[00:39:22] VR: Oh, thanks so much for having me. I loved it.

[END OF INTERVIEW]

[00:39:24] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

[END]

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YFP 292: How & Why One Pharmacist Started a Functional Medicine Organization for Pharmacists

Posted on January 26, 2023March 10, 2023 by Caitlin Boyle

This week, Dr. Lauren Castle, founder of Functional Medicine Pharmacists Alliance, discusses how her experiences working with Walmart in influencer marketing and personal branding helped prepare her for growing her business, why she started FMPhA to integrate pharmacists into functional medicine, and her transition from employee to entrepreneur.

About Today’s Guest

Dr. Lauren Castle is the founder and CEO of the Functional Medicine Pharmacists Alliance (FMPhA.org), the first association representing pharmacists in functional medicine. FMPhA supports members practicing functional medicine across all pharmacy settings by uniting leaders in the field to provide continuing education, training, networking, and advocacy.

Lauren also serves as a functional medicine consultant pharmacist with the PharmToTable Team and maintains a part time practice as a retail pharmacist. She received her Doctor of Pharmacy from Ohio Northern University in 2013 and her Master of Science in human nutrition and functional medicine from the University of Western States in 2018. Lauren has also studied with the Institute for Functional Medicine and Functional Medicine University and became an Applied Functional Medicine Certified (AFMC) practitioner through the School of Applied Functional Medicine in 2022.

To download a free Functional Medicine Pharmacist Checklist, visit FMPhA.org/newsletter.

Episode Summary

This week on the YFP Podcast, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, welcomes Dr. Lauren Castle, founder of the Functional Medicine Pharmacists Alliance, to the show. Tim and Lauren discuss how her experiences working with Walmart helped to prepare her to create her business, why she started the Functional Medicine Pharmacists Alliance (FMPhA), and her transition from employee to entrepreneur. Lauren shares what led her to pharmacy and how an internship with Walmart unexpectedly changed her life plans in the best way. After graduating from pharmacy school, Lauren had always planned to become a pharmacy owner. She planned to use her internship with Walmart to see something the opposite of her chosen path. While working with Walmart, Lauren quickly learned that even in a huge company, she could stand out and make a difference. After working on special projects for the home office, Lauren realized she didn’t want to put her dream in the hands of something else. Recognizing the value of her ideas, she started the Functional Medicine Pharmacists Alliance.

She explains how social media and networking benefitted her career and how consistently sharing her story and message of food as medicine helped to catapult her to a market director position. Listeners will hear about Lauren’s personal experience and how it led her to pursue her passion for functional medicine, ultimately forming FMPhA. She shares what FMPhA looks like today, the importance of advocacy for the profession of pharmacy in the space, and how pharmacists can differentiate themselves in functional medicine.

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

This week, I welcome the Founder of the Functional Medicine Pharmacists Alliance, Dr. Lauren Castle. During the show, we discuss how her experiences working with Walmart in influencer marketing personal branding helped prepare her for growing her business, why she started the FMPhA to integrate pharmacists into functional medicine and functional medicine in the pharmacy, and how she planned for the transition over five years from employee to entrepreneur.

Now, before we jump into the show, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 280 households in 40-plus states. YFP Planning offers fee-only high-touch financial planning that is customized for the pharmacy professional. If you’re interested in learning more about how working one-on-one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call by visiting yfpplanning.com. Whether or not YFP Planning’s financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

Okay, let’s jump into my interview with Dr. Lauren Castle.

[INTERVIEW]

[00:01:17] TU: Lauren, welcome to the show.

[00:01:18] LC: Thank you so much for having me, Tim.

[00:01:20] TU: So this episode has been a long time in the making. We’ve crossed paths for many years now through Ohio Pharmacy Association and other circles. We share our alma mater, Ohio Northern, so go Polar Bears.

[00:01:34] LC: Yep.

[00:01:34] TU: So let’s start there with your career path into pharmacy, what led you into the profession, and how you ultimately landed the work that you’ve been doing with Walmart really for over the last 10 years now.

[00:01:46] LC: Sure. So like many people, I decided I wanted to go to pharmacy school. When I was in high school, I actually had started working in an independent pharmacy in Monroe, Michigan, and absolutely loved it. So I thought for sure I was going to go to pharmacy school and become a pharmacy owner whenever I graduated.

I ultimately ended up meeting my husband while I was in school, and that is what led me to pursue a different internship. I thought to myself what better time to just get some totally different experience. I’ve already got my path laid out. I know what I want to do. But just in case, I’ll check out the exact opposite of an independent pharmacy, right? Like the largest company in the world.

So I joined Walmart. That summer, I just completely fell in love with it. It still felt like I owned my own pharmacy in a sense. But yet I had all of these resources and all of this capacity to literally influence millions of people. I kind of figured that out because I shared a little story on their sort of social media Internet company website about Walmart’s 50th anniversary and my experience as an intern. I didn’t really think anyone would read it or care. But that story actually got picked up, and it was published in our home office newsletters.

So like our president of health and wellness at the time had read it and sent it down to my supervisors, and that was sort of the aha moment for me that I realized I’m just one person in a company of over two million employees worldwide, and I actually can make a difference. So that was sort of the theme of these last 12 years that I’ve really been able to continue on with.

[00:03:25] TU: I love that, starting with the concept of let me use the internship. For some, it might be experiential rotations as an opportunity to see something different. I often share with students, if I had to go back and do anything different pharmacy school, it would be to really reevaluate those precious summer internships and then those 9 or 10 months of experiential rotations because the safe plays are always going to be there, right? What a unique opportunity, where you have a month or a summer that you can see something that’s completely different and, obviously, building relationships and having different experiences. Those more traditional opportunities will be there but such unique time to see those things, and so cool to hear you take advantage of those.

Let’s talk about some of those experiences with Walmart a little bit more because – No disrespect in any way to pharmacists that are out there working the bench day in and day out. But that was not your gig with Walmart. Certainly, you’ve done that. But as you look at your experiences with Walmart, it’s very, I would say, nontraditional in those experiences with Walmart, in terms of – You alluded to some of that with some of the posts that you were sharing early on that got picked up. Nationally, you’ve had some experiences working with them, more in that influencer marketing, personal branding, wellness side of things.

Tell us about those experiences because I suspect, as we’ll talk about more of the work that you’re doing with the Functional Medicine Pharmacists Alliance here in a little bit, those experiences were really critical to the work that you’re doing now as well.

[00:04:59] LC: They certainly are. I mentioned, even from the very beginning, I started sharing my story in the company. I think no matter what company you’re working for, there’s actually a book I’ve recently read that talks about how purpose is more than a side hustle, and it’s actually the way you show up for other people every day. So it doesn’t matter what type of role you’re in. If you’re in a nine-to-five job, if you’re working as an entrepreneur, you’re living your purpose every day, and you can tell your story in whatever role that you’re in.

For me, that really looked like sharing what I was doing on social media and sharing little bits of how I work as a pharmacist for the company. Ultimately, that is what led to some additional opportunities that I had to get promoted. So networking, of course, is huge. A lot of times, people will say it’s not what you do, but it’s more around like who you know. So for me, I was always trying to reach out and connect with people on LinkedIn. So every market director, when I was an intern, I was connected with them. They knew who I was. They knew my name. They knew my face. I would show up, like you mentioned, Ohio Pharmacists Association meetings. Make sure that I was involved in professional activities as a pharmacist.

That networking is really what led me to get promoted to a pharmacy manager to a clinical pharmacist manager whenever we actually moved to Michigan and ultimately to a market director. So five years after graduation, I became a market health and wellness director, which was sort of my big goal as an intern once I joined Walmart. That role was incredible, and I learned so much, just from managing teams, managing people, really managing a business, right? Yet again, continuing to share my story on social media.

At the time, I had also started getting into functional medicine. So now, this was a new aspect of the story I was telling and also was picked up and seen by people at our home office. That was the moment that really kind of catapulted things to what my real dream was, right? I’d already met this milestone from just a, “Oh, I got promoted. I’m a market director. This is awesome,” to, “Well. Now, I want to go work at our home office. I want to go to Arkansas. I want to go and really make a difference for the company.”

I didn’t know what that was going to look like. But as I was talking about functional medicine and how I really felt like it aligned with some of the things Walmart does around helping people save money and live better, and you really do have everything that you need to live a healthy life at an affordable price in the stores. So that was the theme. That was the message I was sharing. I, ultimately, ended up getting to meet our president of health and wellness, and this was back in 2019. He was a fellow Ohioan, so he came out and visited. We sat down and, as we were eating lunch, started talking about this concept of food as medicine.

They were like, “This is awesome. We think this is a great idea. We would love for you to come out and share more and see how this would integrate with Walmart Health,” which at the time, they were just starting to build those as primary care centers. So I didn’t really think anything of it. I was like, “Okay, yeah. Cool. That’d be awesome. Would love to come out.” A couple weeks later, I got a phone call, and they’re like, “Hey, we need you to come out like this week to meet Steuart Walton of the Walton family.”

[00:08:46] TU: The Waltons. Yep. Yeah.

[00:08:47] LC: Like that’s one of those calls that you never expect to get in your life. But it was my dream, right? Like as I was sitting here, trying to figure out like how am I going to get to home office, what am I going to do, you just keep taking the next step, right? You just keep living your purpose. Ultimately, that’s going to all come together.

So I spent three months out there on a special project, basically looking at how we would integrate nutrition in with the services that we have in health and wellness. As we were getting ready to pick out our first store, it was kind of the end of the year. There was some leadership changes. They sort of paused all the projects and said, “We’re going to hold off for a little bit.”

2020 hits and, of course, the whole world shuts down, and it’s COVID. So silver lining, of course, is that we would have never been able to do a lot of the things we wanted to do anyways. That also was the moment for me that I realized this has been an amazing journey with Walmart. But I also realized that I can’t put my dreams in someone else’s hand. So that was the moment that I came home, and I actually started my LLC for the Functional Medicine Pharmacists Alliance too.

[00:10:07] TU: I love that. So much to unpack there. But I think one of the things you just shared, which we’ll come back and talk about your journey, really growing the Functional Medicine Alliance, spending more and more time on that, is not necessary putting your own dream in someone else’s hands. But also recognizing that the experiences that you do have working for someone else can be so valuable and catapulting what you’re working on. Also, just the experiences, the network, all of what you shared.

But when I hear your success in, ultimately, getting to that point where you’re going to meet someone from the Walton’s family, what comes to mind is that the reason that moment happened is because you, for years, were consistently showing up and providing value. Then the compound effect of that just worked its magic, as it always does, if you’re consistently showing up providing value. That’s value in person and in the work that you’re doing every day. That’s value in developing your personal brand and helping other people, staying connected and in-person meetings, virtual meetings on LinkedIn and other things.

I think we sometimes lose sight of that when we see someone who has gotten to the point of launching a business, or they’ve grown a following of whatever number of followers on LinkedIn, and they’ve got a great personal brand. It’s been a decade in the making, right? It started with that leap of faith, if you will, that you took as an intern to say, “Hey, I’m going to post this out there. Maybe somebody thinks this is interesting. Maybe it’s not.” But I know the value in showing, sharing my story. I know the value of showing up every day and providing value. It might be that in any one day, maybe there’s not an obvious like ROI on that. But over time, consistently, that really can take off.

So let’s talk 2017, if I’m correct. 2017, you actually started the Functional Medicine Pharmacists Alliance, and we’ll link to that in the show notes, FMPhA.org. I’m curious, before we get into kind of why you decided to go that pathway with starting the alliance to really have the impact in functional medicine, where does your personal interest in functional medicine and this concept of food is medicine, where does that come from?

[00:12:13] LC: Absolutely. So as I mentioned, I had become a clinical pharmacy manager when we lived in Michigan, and Michigan is where we discovered functional medicine. So my husband and I, he also was working in a pretty high-level job for a big company and was having a ton of health issues, super stressed, had struggled with losing weight, couldn’t sleep, had got issues, just felt terrible all the time.

As a pharmacist, I thought I was doing everything right to help him try to feel better. But at the end of the day, I kind of said, “I think if you go to the doctor, they’re just going to hand you a bunch of pills, and it’s not going to help you all that much. It’s just going to cover up these side effects.” I don’t know what is wrong. It seems like we’re doing everything right, and nothing seems to be working.

We got a flyer on our doorstep for a integrative wellness center. It basically listed all these side effects and symptoms. I just handed it to Seth, and I said, “Babe, this is you on paper. You have all of these problems. So whatever these people do, I think should go check out this seminar that they’re doing this weekend and see what this functional medicine stuff is all about.” So he went to the seminar, ended up signing up for this program. We paid $5,000 out of pocket to work with these people for, basically, 12 weeks. It sort of included everything. So it had all of these different labs that we didn’t learn about in pharmacy school, supplements that I had never heard of, and this elimination diet, where we, basically, were going to cut out most of the foods that we were still eating that we thought were healthy like whole wheat bread and skim milk and, basically, eat this sort of paleo style of a diet.

Within just a few weeks, he was feeling so much better. Pretty much all the symptoms dropped off, and he lost 20 pounds. It was just like incredible. So as I continued reading more about functional medicine, the Cleveland Clinic in Ohio was actually starting a center for functional medicine that same year. So to me, that was sort of the moment that I was like, “All right, I think there’s something to this functional medicine stuff, and Cleveland clinic’s doing it. So it’s got to be pretty reputable.”

I decided at that point, I really think this is the future for healthcare and for pharmacy. But I knew also at the time, I was looking into other degree programs, so I did not do a residency after pharmacy school. At that point, I was a clinical pharmacist, but I was looking to get promoted to market director. So I was looking at MBA programs, things like that. I decided, well, maybe I’ll look into programs for this functional medicine stuff.

There was one master’s program in the US that was in conjunction with the Institute for Functional Medicine, and that, of course, is also who Cleveland Clinic was working with. So I figured, all right, this sounds like it’s pretty reputable, right? So I ended up enrolling in that master’s program and was still working as a clinical pharmacist. We had just gotten engaged. We were planning a wedding, really burning the candle at both ends. But I was loving it. I just – Everything made so much sense.

As I was starting to learn all of this new functional medicine knowledge, I started talking to other pharmacists about it. So Melody Hartzler, who you’ve interviewed on the show before, her and I reconnected. She had gotten into this through her own health journeys. Other people that I had gone to school with or had met through pharmacy conferences were getting into this space. I started to realize that we all need to come together. Like we need to form a little community and stay in touch and figure out what this is going to look like for the profession.

That was sort of where the Facebook came from, was just this idea of like, “Let’s get together. Let’s kind of bring everyone in this space and start collaborating.” I was also starting to teach other pharmacists. So Ohio Pharmacists Association had me do a CE presentation in 2017, and that was sort of the start of it. So we introduced the Facebook group. We did the CE, recorded it. That same year, I also got invited to speak at the Michigan Pharmacists Association. In those, basically, four months, I decided to actually create a website and post my story on there and not have it just be a Facebook group. But actually set up FMPhA.org, which I always give credit to Alex Barker, another friend of the YFP team because he’s the one who told me like, “Why don’t you just make an organization?” I’m like, “I can’t make a pharmacy organization.”

[00:17:18] TU: I remember I was talking about that back in 2017. I just loved that concept. It was such a nontraditional way to think about how to influence this space and really how to try to meet many people, instead of – I mean, sure, you can meet with people one on one and have a great impact. But how can you be an aggregate of the pharmacists that are practicing functional medicine and bring them together? So, yeah, I love that idea. That’s a great one.

Just so I’m understanding, the actual formation of FMPhA as a business, you mentioned just a few moments ago forming the LLC. When you started the Facebook group, when you’re providing CE, when you actually built the website, at that point, you hadn’t yet formed the business. Is that correct?

[00:18:00] LC: Nope, no business whatsoever, and I never set out to make any money off of this. It was truly just a – I believe in this so much, and I want to bring other pharmacists into it, that I’m just going to start sharing these resources that I’m learning and trying to connect with more people and bring us all together.

So, yeah, it wasn’t until the Facebook group continued to grow, and we went from 30 people at the very beginning to 500 people. So then 2018, the next year, I was at Institute for Functional Medicine conference and was talking to their leadership. I’m like, “Oh, we have 500 pharmacists and a Facebook group. They want to do functional medicine. How do we actually get them more involved in the care team?”

Because at the time, IFM really didn’t have any resources that were geared towards pharmacist. It was mostly towards physicians, and so they didn’t even know what to do with us, right? Just like a lot of the medical profession, it’s sort of like the pharmacist’s role is very misunderstood and kind of left behind or left out of the picture. So that was sort of the next step that I was like, “Okay. Well, how can we start to work with other organizations?”

Then in 2019 is when I ended up going out to do the special project. Kind of coming back from there, I had also spoken with another pharmacist, Jerrica Dodd, and she was the one who then gave me the push of like, “Lauren, you got to monetize this thing. You have got to start actually setting up a business and really taking this seriously because you’re sitting on a goldmine in a sense because people are hungry for this. They want this.” Yeah, that was – We were at a functional medicine symposium, and I had someone that asked me, “How do I become a member? How do I join? How do I sign up today?” I was like –

[00:19:56] TU: Let me figure that out.

[00:19:57] LC: I will get back to you.

[00:19:59] TU: But, Lauren, what I really liked about this, I don’t want to lose that there was at least two years until that point of, okay, how can I monetize this? We’re providing value. It’s growing, which there should be. Jerrica is correct. As you’re building something that’s providing value to others, like there’s a fair price that can and should – We charge for that. But you focus on providing value first.

Pat Flynn talks about that, one of my favorite podcasts and a blog that really influenced my journey early on in the Smart Passive Income Podcast. He talks about the value of really focusing on providing resources, providing value, building your community, really making the deposits in the bank, and doing that authentically. The business will grow from there over time. I think your story is such a cool example of that.

Before we talk more about the actual transition and how and when you made that transition to spend more of your time working on the business and less of the time on the W-2 side of things, tell us more about what does FMPhA look like today, in terms of you went through this journey of, okay, we need to monetize this. Is it a membership model? Is it they’re paying for certain resources and being a part of the community? What does it look like in terms of the business today?

[00:21:17] LC: Absolutely. So today, it is a membership, much like many pharmacy organizations that you can join. We’re bringing together pharmacist and community through the Facebook still, of course, which is a free resource. But really, the advocacy piece is sort of what’s most important to me. We partner with a few different organizations in functional medicine, one being the Institute for Functional Medicine. So when you join, you have the option to also add on IFM membership at basically a discounted rate. We also were able to work with them to get a 20% discount on their trainings, which one of the top questions that we get asked is, “Okay, I’m interested in functional medicine. Where do I get training? Do I need to get certified?” So the answer is you don’t have to get certified. But certainly, just like with any type of training, having that additional credential is going to speak for itself, in terms of working with other providers.

We really were wanting to get more pharmacists into that organization. So part of that was how can we make it more affordable because, again, it’s not cheap. A lot of these certifications are upwards of 10 or even $20,000. So that was kind of our first big step. We also worked with them to actually get the word pharmacist listed as a provider type, right? So it’s the little things to some of these organizations that mean a lot to us as pharmacists and to the profession.

So those are some of the things we do. We also work with A4M, which is the American Academy of Anti-Aging Medicine. We also have discounted rates on their training programs as well. So those are sort of the big two training programs that we’ve partnered with. Then we’re actually working on launching our very first course for members, so Functional Medicine Pharmacists boot camp will be launching in January, as of the time of this recording. That’s really the culmination of all of these seven-plus years of working in functional medicine, trying to figure out how do we actually do this as pharmacists, and answering a lot of those frequently asked questions around training and how to implement it and what types of jobs you might be able to find or create for yourself, and really just putting all of those pieces together.

The last couple of services that we also offer, of course, is with CE. We have a few different partners there. At the time, again, when I got into this, there was no CE for pharmacists in functional medicine. Now, we’ve got a couple of different partners that we work with that are offering functional medicine CE. So that’s another area. Then, of course, we have our annual meet up in conjunction with functionalmedicinece.com. We have our meet up there every year, usually in the fall. So in-person events, it’s been really great to get back together with people and actually, again, bring that networking together because you never know who you’re going to meet and where they’re at in their journey and how they might be able to help you as well.

[00:24:23] TU: Yeah. One of the things I’m curious to get your opinion on is from an outsider’s perspective, kind of following the functional medicine movement, seeing more pharmacists, clinicians start to dabble in this space, I think, for really good reasons, I’m not seeing a lot of differentiation. As I’ve talked to a couple of people that are starting up a business of which I know very little about functional medicine, but I’m looking at it from a business perspective, what really is glaring to me at first is like why you, why your services. There’s not like a compelling differentiation that I’m seeing there.

So as someone who, I think, spent a lot of time building a strong personal brand, doing influencer marketing, really building a niche of what you’re doing out there, and understands the importance of that differentiation, what advice would you have someone for – That’s listening and say, “Hey, I’m really interested in functional medicine, about how they might differentiate themselves in this space and what they’re offering.”

[00:25:19] LC: Yeah. So I think you bring up a good point, and that was sort of another reason that I finally kind of pulled everything together into this boot camp course is that I had a lot of pharmacists that were coming and saying, “I’m studying functional medicine, and I want to figure out how to use it.” I think everyone, somehow or another, because, of course, a lot of this really picked up steam during COVID in 2020, and virtual or telehealth became kind of the norm for a little while, and so a lot of people assumed that like, “Oh, if I’m a pharmacist, I can quit my pharmacist job and launch a virtual functional medicine practice and become a millionaire.”

[00:25:59] TU: Patients will be flooding and scheduling left and right.

[00:26:01] LC: Yes. They – Yeah, exactly. For some people, they can do that. For a lot of people, it’s not that simple. So what I really try to work with pharmacists to understand is that there’s no one way to practice functional medicine. It’s just a lens through which you are going to use your pharmacist license. So more often than not, if you want to do a virtual practice, yes, we can help connect you with the resources that you need to set that up. But is that really the way that you want to serve your patients?

If you’re someone who isn’t necessarily a big fan of social media and putting your face out there and having to tell your story over and over and over every single day to try and attract patients in a virtual practice, what about considering working with a physician in your local practice, right? What about a chiropractor? What about an independent pharmacy? Do you have a compounding pharmacy somewhere? There’s all of these other pharmacy settings where functional medicine can be an additional service that you bring to the table to provide to reach those patients that really need it the most, right? So it’s really about figuring out your skill sets and what areas of pharmacy you are most passionate about and then thinking about how you can apply a functional medicine approach to whatever that is.

For a lot of people, it might be figuring out how to set up a collaborative practice agreement, so you can practice at the top of your license. Or it might be walking into an independent pharmacy and seeing if you can get a job as a pharmacist there, leading their health and wellness programs. So lots of different options to think about before you just kind of go and quit the day job and start trying to launch a virtual practice.

[00:28:03] TU: Let’s shift gears here and talk about the transition that you’ve made from employee to entrepreneur, at least where you’re spending more the majority of your time now focused on Functional Medicine Pharmacists Alliance. You had this to, say, a few months ago on LinkedIn. You said, “It took five years to get here. But it feels amazing to finally have the time and space to pursue this fully.”

It hit me right after I got back from the DiversifyRx hat I had used up all my PTO in the nine-to-five job in order to attend pharmacy conferences this year. So I did the math. I realized I could work part time for the same salary and then turned in my resignation. Tell us more about what led you. I mean, I’m sure you’ve thought about this moment several times. But what was it specifically that you said, “Hey, this is the moment. I’m ready.”?

[00:28:48] LC: Yeah. So to provide a little more background, at the time, earlier this summer, I was working for a company called Brand Networks. So I mentioned before, I sort of had been burning the candle at both ends for a number of years, working as a market health and wellness director. Of course, COVID happened. I was also a caregiver for my mom who, ultimately, passed away last year.

After that moment, I actually had taken a 12-week leave from my market director job that my boss had suggested to me like, “Hey, Lauren. You have gone through a lot. And if you need to take some time away, you can do that.” So just one more thing to consider about before you leave your job, have you used all of the resources available for your own health and your mental health? So for me, I took those 12 weeks. I went through intensive outpatient therapy. I really got to kind of heal from a lot of that trauma and also found this new path in social media marketing with this company. So I was able to work remotely from home for a year. Still working as just a part-time peer and pharmacist, a couple shifts a month.

Then kind of the nine-to-five was in the social media marketing, which yet, again, was sort of another very intentional choice of I know that I want to grow FMPhA, which now is a business, and I still have a lot to learn about running a company online. So what a great opportunity to be able to actually work kind of on the inside of running marketing for the world’s largest company? I probably can learn a few things, so great experience, amazing team, super fun role.

But, yes, I was having to take time off in order to actually go to pharmacy conferences, which were finally kind of starting back up again in 2021. So I was doing a lot of traveling. Even though I was in a remote role, I still didn’t really have flexible hours. Like I still had to be available from nine to five. So as I was taking all of this time off, it hit me because we were planning for our pharmacy symposium in the fall, and I wasn’t going to have the PTO to take to go to my own conference.

[00:31:13] TU: Your own event.

[00:31:14] LC: I was like, “Oh, wow. Okay.” So that was the moment that, like I said, I really just sat down and did the math. It was like, “I think it’s time. I think it’s time.” So my market director had actually reached back out to me, the one who backfilled my position that I had trained and said, “Hey, I’ve got a store open. If you want to come back, whatever hours you want to work, we can make it work.” So I was like, “Yeah. I think I’m going to be a 48-hour pharmacist.” It was another one of those moments where it’s like, if you would have told intern Walmart pharmacy Lauren that she was going to only work 24 hours a week as a pharmacist one day, I would have thought that like something horrible happened, and I was like disabled. Like, “Oh, my gosh. Why can I only work 24 hours a week as a pharmacist? That’s terrible.”

But it took a lot of like unlearning to finally see that like, “Oh, yeah. There’s more to life than working 40 hours a week for your company. You can actually have your own life and work part time, still have a good salary and full-time benefits, and do all these other things that you’re passionate about.”

[00:32:29] TU: I love the story. As you’re still working part time, obviously able to focus more full time on the business, but you’re able to do that. Why? Well, because you left with really good relationships. Well, you haven’t left technically, but you had really good relationships. Somebody who’s coming forward, obviously, they saw your wellbeing as a priority. Let’s take some time off, refocus. We value you as an individual, also as an employee. Then, hey, what hours do you want? It’s like, “What? Come again.” Like, “So I can build this business and focus on that, but still be able to maintain some type of a financial base.”

I want to emphasize that because if we hit rewind here for a moment, 2017, FMPhA became a thing, right? Here we are in 2022, five years later, this is much more of an off-ramp than it is diving into the deep end. I want to say that emphatically because I have the opportunity to talk with a lot of pharmacists throughout the year that are thinking about different business ideas. I can tell they feel this internal restlessness and pressure, much of which, I think, is externally influenced. They see what other people are doing like Lauren, like other entrepreneurs we featured on the podcast. But they don’t know the whole backstory of this was years in the making, and it’s still in the making before there’s potentially a full-time transition to the business.

I share a similar story of working in an academic role for about six, seven years, while I was starting the business until I made that transition full time. I think that’s more of the norm than it is not, and I think there’s really good financial reasons to do that. I think there’s really good other reasons. You mentioned that as you’re working for that new firm here in the last year and a half, two years that, wow, I can get some really good experiences with one of the biggest companies in the world that, obviously, you’re able to now draw from the value of those experiences and what you’re building.

So I think there’s so much to take away there as, again, thinking about this more of a transition, more as an off-ramp, slow and steady, being patient, which is hard, and less about jumping into the deep end. So –

[00:34:38] LC: One thing to add there too from a financial standpoint is that was something that we really thought about throughout this journey, right? Because for me, I’m still planning ahead. One of the beautiful benefits of being a market health wellness director is, of course, the golden handcuffs, the stock options, those types of things. So for me, I knew it was like, “Okay, I need to stay with Walmart to really maximize the value of what they provided me as part of my compensation and really think outside the box of, oh, yeah, I don’t have to completely leave the company. I can still work part time and run everything through our ethics department and make sure that like, yes, you can be a pharmacist, and you can work as a contractor employee for Walmart, doing social media.” Like look for the and opportunities there because those are things that are going to, from a financial standpoint, really make more of the work I want to do a possibility.

So we’re kind of planning that out, as we think ahead of like, yeah, I still have another year that I definitely need to stay employed with Walmart. So what can I do to make the most of that time before I even consider leaving in the future? Do I even want to? Do I still want to drop back down from 48 hours to being truly part time hourly again? Then you start thinking about some of the bigger questions, right? Or like, “Oh, yeah. Well, what are we going to do for insurance and some of those things?”

[00:36:14] TU: Retirement. Yeah, exactly.

[00:36:15] LC: All the things you have to think about in terms of starting a business or leaving a job, especially when for us, my spouse actually had left his job as well, right? So we mentioned that that was a big root cause of his health issues. The case for leaving the job, sometimes that is the solution. But sometimes, it’s not. So really think about that, evaluate it, and think about all the options. So for us, it looked like one of us leaving the job, one of us transitioning the job.

[00:36:51] TU: This is so great. Look for the and opportunities. I think there’s – When people are building something, there’s a lot of internal pressure, where you kind of fall into this trap, I think. I know I felt this for a period of time of like there’s option A, or there’s option B. Either I’m not working on the business, or I’m going full time in the business. But there’s always more options. There’s always more options. I think it’s having the creativity to see what those may be as well.

I want to wrap up by asking you two questions that I’m adopting and stealing from Tim Ferriss who ask great questions on his podcast. The first question is if you could have a gigantic billboard anywhere with anything on it, metaphorically speaking, getting a message out to all 300,000-plus pharmacists in the US, what would that billboard say, and why would it say that?

[00:37:36] LC: So I think for me, what I always like to tell pharmacists that are kind of interested in this functional medicine or maybe they’re starting to hear about it is, yes, there is a better way than a pill for every ill. That is the sort of mindset that we’re all sort of stuck in whenever we’re still in a traditional pharmacist role of whether it’s dispensing in retail or being a clinical pharmacist and working on making sure everyone’s meeting the guidelines to the tee. It’s always about like adding another pill and making sure that they’re on all the right medications.

But I think through COVID, we’ve, obviously, seen that lifestyle plays such a big role in our patient’s health. So how can you start to think about ways to incorporate lifestyle, medicine, functional medicine into your patient’s health? Because, ultimately, I think that’s where the future of healthcare really lies, and a lot of times you kind of have to start with yourself too. Start to evaluate, where you can make some of these changes in your own health and your family’s health and talking to your friends about it. Then just continue growing from there and building out sort of that muscle of starting to have those conversations.

[00:38:54] TU: Yeah. I think what intrigues me so much about functional medicine is like it so much of the focus on let’s actually get to the root cause, and that takes time. I think if we take a step back and take off our bias of being trained in a doctorate program and being trained as a healthcare practitioner, we live in a system that is a for-profit healthcare system that incentivizes efficiency. It does not incentivize taking more time and not dispensing products that aren’t going to have revenue associated, right?

So I think we just have to ask ourselves always. We should be asking ourselves, kind of look at the status quo and what we’re doing. Why are we doing it, and is it the best option that’s out there and potentially available? It’s the same thing. You talked about a little bit your personal journey and some time off and some of what I heard there, like the inner work that was being done. That takes time, a lot of time. It’s easier to prescribe a medication and to see a physician for 30 minutes. But like that work is so important, obviously, for long-term benefits, for quality of life, for optimizing who you are individually as well. So it’s just such a good reminder, I think, of like what are the incentives that are out there, and are they appropriately aligned for what we’re looking at.

My second question here for you is what is one of the best or most worthwhile investments that you have ever made? It could be an investment of money. It could be investment of time, energy, in a training resource. What would you say that is?

[00:40:19] LC: Yeah. I think that overall, FMPhA has been one big investment. Rather than it just being like a business, it’s been this journey, this kind of life work of, yes, investing in the beginning money to go back to school and get a master’s degree and not take out more loans to do it, going and doing more training with different functional medicine schools for the sake of, hey, I want to be able to actually tell people my honest opinion of these programs. So I’m going to spend my own money to test them out, again, before I even have a full-on business or am being compensated to do these things. I think about the time.

My husband and I, we were just celebrating Thanksgiving together. Of course, I was also doing a Black Friday promotion. So he made a comment of, “Hey, all of your discretionary time seems to go into FMPhA, and you’re spending a lot of time on this.” I was like, “Well, yeah, I am. But at the end of that Black Friday promotion, it sort of all paid off, right?” Because then he was able to see, “Oh, yeah. This is what you’ve been building for five years, right?”

Now, kind of entering this next phase for the organization of actually having courses and potentially a podcast next year and, again, putting out more of this value for other people. It has been this labor of love. At the same time, it’s fulfilling, right? It’s what I love to do, and I feel like this is what I’m here to do. So I think FMPhA has sort of been like one big investment with money, but time, and of course energy. So now, it’s like, “All right, how do we find the balance of being a functional medicine pharmacist, CEO, and founder, but then also still having time for life?”

I think that’s probably what most people are starting to sort of see functional medicine or any type of consulting role as a pharmacist is sort of this opportunity to reevaluate what’s most important to you. Again, from like a purpose standpoint, this is the book that Ivan was reading. In it, it just sums it up so perfectly, that perfect purpose is more than a side hustle. It’s not something you turn on or off, depending on the situation or the conversation you find yourself in. Purpose is the unique way you show up every moment of every day to make life better for others. You have a purpose, and you can live it out on a full-time basis.

[00:43:04] TU: I love that.

[00:43:03] LC: So I just feel like when you think about investing, everyone’s going to be investing their time, their money, their energy into something. You get to choose what that’s going to look like.

[00:43:17] TU: I love that. We’ll link for those that aren’t watching the video. Lauren just shared Purpose Is More Than a Side Hustle. It was the book. We’ll link to that in the show notes, if folks want to check that out. Lauren, this has been fantastic. I knew it would be. So glad to have you on the show. As I mentioned at the beginning, it’s been a long time in the making. Where is the best place that individuals can go to learn more about FMPhA, as well as to follow your journey?

[00:43:39] LC: So FMPhA.org is our main website. You can also find me on drlaurencastle.com. I’m @drlaurencastle on every single social media platform, so happy to connect with everyone there.

[00:43:54] TU: Awesome. We’ll link to those in the show notes. Thanks so much for coming on the show.

[00:43:57] LC: Thanks for having me again, Tim.

[END OF INTERVIEW]

[00:43:59] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with a financial advisor with respect to any investment.

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

[END]

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