YFP 132: 2019 Financial Wins from the YFP Community


2019 Financial Wins from the YFP Community

Happy Holidays from the YFP team! As we near the end of 2019, it’s important to celebrate the wins, big or small, that we’ve had over the past year. Take a listen to several YFP community members sharing their 2019 financial wins on this week’s episode.

Summary

On this week’s podcast episode, Tim Ulbrich reflects on 2019 by acknowledging wins and also the hard work it took to achieve them. To celebrate wins, several YFP community members share their financial victories.

Liz paid off her car in half of the time of the loan. Drew shares that he completely paid off his student loans and the strategy he used to make that happen. Sandy paid off all consumer debt except their mortgage by really sticking to a budget. William purchased his first investment property. Marika shares that she fully funded an HSA account and started a side hustle. This allowed her to save aggressively, pay off her debt and increase her net worth by $48,000. Sally paid off $25,000 of debt and started her own side hustle.

Tim shares other wins from the YFP community such as paying off a car, cash flowing a dishwasher, budgeting a trip, starting a real estate investment business, paying off student loans and paying off medical bills.

Tim reflects on his experience in 2019. His family moved to Columbus and they welcomed their fourth son, Bennett. They started investing in real estate and purchased their first property.

Tim asks what your financial wins for this year are and what your big and audacious 2020 goal is.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Tim Ulbrich here, and welcome to this week’s episode of the Your Financial Pharmacist podcast. And on behalf of the entire YFP team, happy holidays. We hope you’re enjoying some quality time with family and friends and getting recharged for the new year. So speaking of getting recharged, this week’s episode is about reflecting on this past year and taking a moment, just a moment, to acknowledge and celebrate the wins and all the hard work that you put in to get there. Yes, we’re soon going to be turning the page on the new year, where the conversation will naturally focus on setting and achieving goals, very important stuff. But we need to pause for a moment to acknowledge the path that we’ve taken over this past year. So in order to do this, we’re going to feature a handful of financial wins from the YFP community. We believe in developing a community that empowers one another on this path towards achieving financial freedom. And part of building community involves celebrating wins alongside one another. And we are going to do just that this week. So without further ado, here are some of the financial wins of 2019 from the Your Financial Pharmacist community.

Liz: Hi, my name is Liz. I’m from Lexington, Kentucky. And my financial win from 2019 was paying off my car in half the time of the loan. So I paid off my car in three years instead of six years by budgeting and talking with friends and realizing that this goal was achievable for me.

Drew: Hi, my name’s Drew Harmon from Cincinnati, Ohio. My financial win for 2019 was getting our student loans paid off between my wife and myself. We both went to private universities, so we had quite a bit when we started. But throughout the years since graduation, we’ve been really diligent on making sure that any extra windfalls or any extra money that we come into, be it bonuses or gifts or anything of that magnitude, go right to the loans. And by doing that, we’ve been able to steadily chip away at our student loans and get them paid off. Another opportunity that we had that some others might have is I was able to get student loan repayment through my employer. So the biggest advice I would have would be to make sure that you have a plan for any extra money that you do fall into, but as well as making sure you find your hidden paycheck when you’re working to make sure that you have all of your benefits, whether it be 401k matches or student loan repayment, just to make sure you take full advantage of all of those options.

Sandy: My name is Sandy Richey. I’m from Hillsboro, Kentucky. And my financial win for 2019 was that we paid off all of our consumer debt except for our house. I’ve been working on it for a couple of years now, and I kept a budget for the most part. My big thing was that I kept a spreadsheet because I’m a little bit of a nerd, and every month at the end of the month, I would put how much that I had paid off and how much I had left. So I always had an idea of where I was. This year, we paid off a vehicle and credit card debt and a few other little things. My goals are to continue to stay out of debt by budgeting a little better and planning for things that need to be replaced like vehicles and things like that.

William: Hi, my name is William Amarkwe, and I’m from Tampa, Florida. And my financial win for 2019 was my first purchase of an investment property. I’m super excited about this investment property. I can’t wait to begin my journey of financial freedom.

Marteeka: Hello, this is Marteeka Martin. I am a pharmacist in Owensboro, Kentucky. My financial wins for 2019 included fully funding my Health Savings Account and starting a side hustle that provided me with additional income. So these and other wins have allowed me to aggressively save and pay off my debt. So that increased my net worth by over $48,000 this year.

Sally: Hey, my name is Sally Brown from Macon, Georgia. And my win for 2019 was paying off $25,000 of debt. The year started with a big change for our family. I left a pharmacy manager position at a chain pharmacy for a position at a local independent pharmacy. It was definitely the best move for our growing family as far as work-life balance goes, but it came with a $30,000 pay cut. My husband and I were anxious about how we would make ends meet, let alone continue paying down our debt. We realized we would need outside help to keep us on track. We found a local financial advisor and began meeting with him. The first thing he had us do was actually track where our money was going. We had always made a monthly budget, but we’d never sat down to see where the money was going at the end of the month. We were surprised to find that our family of three was routinely spending $1,000 or more a month on groceries and eating out. We started making changes to our lifestyle and got our spending under control. Once we made it over that hurdle, we really started working on paying off our debt, which was somewhere in the neighborhood of $320,000. It didn’t take long for me to realize that I wasn’t making the strides I wanted to be making on it, so I decided to create my own side hustle, Stress Less Vacations, which is a home-based travel agency. It’s a slow process growing a business, but I hope to see some real changes to our income this year from it. All in all, we managed to pay off about $25,000 in debt from credit cards, medical bills, and car loans. And we grew our emergency fund from $1,000 up to $5,000. We plan to keep the momentum up in 2020 and hopefully have both cars paid off as well as a chunk of my husband’s student loan debt.

Tim Ulbrich: Thank you to those that took time to submit a financial win from 2019. We appreciate you doing that. And again, we as the YFP community are excited to be able to celebrate that win alongside of you. And certainly exciting to see the progress that has been made in each one of your individual financial plans. We heard about, you know, cars being paid off, retirement accounts being fully funded, starting side hustles, paying off big chunks of debt, growing emergency funds, all key, important parts of a financial plan. Thank you again for taking time to submit those.

It’s interesting, as I listen to those, I hear some threads of keys that were allowing you to be successful in achieving those goals: things like budgeting, talking with friends and sharing some of these things, setting a vision, being intentional, something we talk a lot about on this podcast, and having a plan to be able to not only set that financial goal but ultimately to be able to achieve that goal. So in addition to those that were submitted that we just featured here, we had many others that shared their wins on the Your Financial Pharmacist Facebook page. Let me take a minute to read a few of those as well.

“Buying my first real estate property for a future rental.” What an awesome win for 2019.

“Paid off my car. Cash flowed a dishwasher. Budgeted for a trip.”

“Started my own real estate investment business. That business part-time is generating more revenue than full-time pharmacist salary. Looking forward to working full-time with others in this area that are doing real estate investing.”

“Paid my last ever student loan payment.”

“Paying off two small loans. Ten more to go, then I’m debt-free.”

“Didn’t pay off student loans but making huge strides. Also paid off some unexpected medical bills. Thrilled to not be carrying those into the new year.”

Awesome, awesome, awesome wins by all of those that I just mentioned. So for those that are not yet a part of the Your Financial Pharmacist Facebook group, I hope you’ll join us. We have more than 4,000 — might be 5,000 pharmacy professionals that are in that group, committed to empowering one another. And as I mentioned, part of that community is sharing wins. Part of that community is sharing challenges and asking questions and getting support. And I hope you’ll join us in that group and community if you’re not already a part of that.

So what was your financial win for 2019? And what will be your big, audacious goal for 2020? You know, for Jess and I, 2019 was a year that was marked by change where we adjusted to our new home here in Columbus and welcomed our fourth son, Bennett Michael Ulbrich. And he has been an incredible, incredible joy in our life. But certainly this has been significant time of change for us. And as many of you know, times of change present challenges financially. And we handled this at times I would say with grace, and at times, we could have done better. And that’s just reality, right? And on one hand, we can look back and reflect on 2019 and say, “You know, we should have done this,” or, “We could have done this.” Or, or we can choose to say, “Wow. That was a lot of change at once. And you know what? We handled it pretty well overall. And we’re on a solid path heading towards 2020.” Same situation, different mindset and approach. And so for us in 2019, you know, we said we really want to start investing in real estate as a couple of you mentioned as well in your win. And that was at the time, early 2019, really a big goal for us and somewhat scary. I’ve been listening to a lot and reading a lot on real estate investing but didn’t really know where to get started. And thankful for colleagues and friends and those that have been doing this and doing it well, was able to partner up and learn from others. And that became a reality for us in 2019. So in 2020, we’re hoping to hopefully look at two investment properties and potentially even more as we look at what success will look like for us financially in 2020.

So again, for 2019, what was your financial win? And for 2020, what will be your big, audacious goal for next year? So as a reminder, if you want to share a win or you have a question that we can tackle on a future episode of the Your Financial Pharmacist podcast, please send that over to us. And you can do that by going to YourFinancialPharmacist.com/askYFP. Again, YourFinancialPharmacist.com/askYFP. I hope you will join me next week, the first episode of 2020, where we cover five tangible ways to accelerate your financial plan in 2020. So until then, happy holidays and wishing you a fantastic end to 2019 and a healthy and productive start to the new year.

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YFP 131: Secrets to Building a Successful Side Hustle


Secrets to Building a Successful Side Hustle

Eric Christianson joins Tim Church to talk about his business Med Ed 101. Eric discusses his why behind beginning his side hustle, how it allowed him to drop down to part-time from his traditional pharmacist role and how it helped him accelerate his financial goals.

About Today’s Guest

Eric Christianson is a clinical pharmacist passionate about patient safety, geriatrics, MTM, long term care, and helping pharmacists pass their board certification exam. He is the owner of the blog at www.meded101.com, a valuable resource for practicing healthcare professionals and students alike who are interested in learning more about the practical application of clinical pharmacy. He has also created Real Life Pharmacology, a podcast designed to teach pharmacology and provide some insight into the practice of clinical pharmacy. He has 2 wonderful children and the best wife in the world.

Summary

When Eric worked as a pharmacist consultant he recognized problems in long term care and soon discovered a passion for promoting pharmacy education. He started blogging and sharing content on social media fueled by his passion for getting this information out there. Eric quickly grew an audience and officially created an LLC, Med Ed 101. After building trust with his followers by sharing free content for so long, he decided to try to monetize the content he was creating.

Eric failed with his first attempt at monetizing his work and dug deep into what his audience was looking for. He realized that they wanted clinical content, case studies and board certification practice exams. He created a practice BCPS exam and also wrote Pharmacotherapy: Improving Medical Education Through Clinical Pharmacy Pearls, Case Studies and Common Sense. Eric has since expanded content both on his website and on Amazon.

When Eric began his side hustle, he had $145,000 in student loan debt. He was able to use the income from Med Ed 101 to get out of debt. Eric also experienced two professional instances where he was concerned about his full-time pharmacy job and was relieved to have extra money come in from his side hustle.

Med Ed 101 eventually brought in enough income to allow Eric to step down from his full-time pharmacy position and take on a part-time pharmacy job instead. Although he was losing benefits and insurance, focusing completely on Med Ed 101 has provided him with a lot of freedom. He has more time with his children and wife and more control of what he wants to do.

Mentioned on the Show

Episode Transcript

Tim Church: Eric, thank you so much for coming on the show and for being part of this side hustle edition.

Eric Christianson: Hey, I appreciate the opportunity. It’s always fun to share experiences. And hopefully it’ll help give somebody out there a little entrepreneurial bug. We need it in the profession of pharmacy.

Tim Church: Definitely. Totally agree with you. Now before we kind of jump in, I know you’re a baseball fan because you mentioned you had to make sure that we recorded on a day that wasn’t a day when the Twins would be potentially playing. So question for you —

Eric Christianson: Yeah, that was a little bit of brutal optimism there. Deep down in my heart, I knew their pitching staff was not — they’re pitching staff isn’t where it needs to be. So if they could spend a little money and get a pitcher or two in, a starting pitcher, I think their prospects look a little better next year.

Tim Church: So question for you around that, Eric: If you were a major league relief pitcher, let’s say maybe for the Twins, what would your entrance theme song be?

Eric Christianson: Oh, gees. You know, I saw a really hilarious video. And I’ve got a couple little kids. If you get time, check it out on YouTube. But one batter had “Daddy Shark” going as his entry song. And the whole crowd just erupted and they were singing the whole song. I don’t know if that would be it, but gosh, that sure was funny to watch.

Tim Church: That’s good. I like that. Now, are you from Minnesota?

Eric Christianson: Yeah. Yep, grew up here. I was actually in North Dakota but moved when I was about 5, so yeah. Pretty much been here and grew up most of my life in Minnesota.

Tim Church: OK, great. Well, one of the reasons I was so excited to get you on the show is that you’ve been able to do something that I think many pharmacists out there are aspiring to achieve. And that is generating enough revenue from your business or side hustle so that you no longer have to work full-time in a traditional pharmacist role or just rely on that one sole income source. So in other words, you’ve been able to take your side hustle to the next level. And before we get into how you did that, I want you to talk a little bit about the business and how you’re serving others.

Eric Christianson: Yeah, so I mean, just I guess starting a little bit from the beginning, I mean, I really had no intention I guess of making it a business. And I really just wanted to help educate long-term care nurses, things of that nature. And I think honestly that helped a lot that that was my mindset, that I was really just going to be here as a pharmacist online, providing education to people. And I think that initial mindset really helped me gain a lot of trust with people. And I don’t know, maybe I’m just dumber than everybody else, but I did the blog essentially for free — or paying to have a website, that type of thing — I did the blog for probably a year or year and a half before I really even pursued income and that type of thing. So I think — I don’t know if that was an error or a stroke of genius or what, but I think that that level of trust between me and the readers of the blog was really developed over that time period. And I think that really helped when it came to obviously trying to promote something and sell something. That was kind of a unique development in the initial stages.

Tim Church: So Eric, what’s the name of your business?

Eric Christianson: Med Ed 101.

Tim Church: And how would you describe kind of the basic function of the blog, the website? And how does Med Ed 101 make money?

Eric Christianson: Yeah, the basic function I guess of the website was to promote pharmacy education. And you know, I mentioned that initial development. I recognized a lot of problems in long-term care. And I would see these problems as a consultant pharmacist in long-term care facilities, I’d see these common recurring problems over and over again. And you know, I just kind of thought to myself, wouldn’t it be nice if I could share this on a big, open platform and everybody that I consult or facilities that I consult to could actually see it and learn from it so I don’t have to write all these recommendations and patients’ lives can be improved and better and patient safety and all that good stuff? So that’s really kind of how it initiated and developed. From that point, I really recognized through also social media channels, a Facebook page and Twitter feed, I recognized how many pharmacy folks were really coming for these case studies and things of that nature because the clinical thought process, especially if you’re in a busy community store, that type of thing, I mean, you’re not seeing lab work, you’re not seeing some of the other things that go into developing the clinical thought process. So definitely a lot of young pharmacists, pharmacy students, contacted me and said, “Hey, we just really appreciate these real-life scenarios, we appreciate kind of seeing what might happen, what can happen, common drug interactions,” and all those sorts of things. So I really developed an audience pretty quickly just by sharing some of those case studies on social media and obviously on the Internet through my website.

Tim Church: Obviously, there’s a need for great clinical content. And you saw that through the various channels that were there. How did you start to monetize that? And then what are the specific revenue sources that you have?

Eric Christianson: Yeah, so this is a story for basically any entrepreneur and you know, I was probably a little embarrassed by it the first time. But basically created this PDF, “30 Medication Mistakes.” And it was a five- or 10-page PDF, that type of thing. And I thought it would be kind of interesting for people to read and recognize and some patient safety factors and important things there. And from that PDF, I was just like, “Ah, I could probably sell this, make a little bit of money.” So I think I put it up for sale for $5 or $10, you know, just a digital download type thing. I probably had 1,000 email subscribers, something like that. And I sold absolutely 0 in about three months. And so that really kind of brought me back to the drawing board. And it really allowed me to kind of ask the question, OK, what do people actually want? Why are people coming to my website? And I looked back through some of the emails I had gotten from people and things they were struggling with, things of that nature. A lot of it was the clinical content, you know, case problem solving, that type of information. And also, I had posted a couple of times about my experience and the challenge of obtaining board certification. And between those two things, my first two basically products, one was a practice exam for the BCPS exam, and the next thing I believe I released was basically a compilation of a lot of my most common case studies that you might actually see in clinical practice. And so one was a book on Amazon. And one was basically a digital download on my own website, a PDF file. And so those were really how me looking into generating revenue first initiated was through those two sources. Since that time, I’ve obviously expanded on the amount of content I have on my website. And I’ve expanded the amount of content I have on Amazon as well. And now, with the help of Tony Guerra, who I think you know, he took some of my early clinical books and turned them into audiobooks. And it’s a really cool medium, you know, that tons of people are using, obviously people probably that are listening to this podcast right now. And that’s — in my mind, that’s probably going to be another source of revenue and income in the future that I’m definitely going to focus on a little bit.

Tim Church: That’s really cool, Eric! And I like how you kind of started with what some people could look to as a failure or learning process when you kind of got crickets on your first product. And I want you to just talk about that a little bit. How did that feel coming out with something and first asking for money for something that you had created and then to really get no response? I mean, what did that feel like and how did that change your mindset going forward?

Eric Christianson: Yeah, it was definitely a tough thing. And I think when I look back on it, I think I probably put that up, and I think I probably waited two or three months. And obviously, like I said, didn’t make a sale. Honestly, I think it prevented me from taking the next step for a little while, just thinking like, oh, you know, maybe I don’t have what it takes or maybe I don’t know what I’m doing or what people want, that sort of thing. And yeah, it’s one of those things where you look back at it and it’s like, what if I did quit at that point? And not to be able to have some of this bigger income certainly I have now from the website and Amazon and book sales. You definitely think about that. So if you’re starting something, expect that you’re going to run into failures. I mean, it’s just inevitable when you’re doing something new. And that’s a really hard thing for pharmacists. I know it was a really hard thing specifically for me. You know, I did relatively well in school, I passed without issues. You know, when you’re a pharmacist and you talk to me, generally they’re like, “Oh, you must be really smart.” So it’s a common thing to feel that way. And when you talk to others and then you look at the business side of things and yeah, you have this totally epic failure, at least what it felt like at the time, but yeah. You just have to continue to keep pushing forward and try to learn from it as best you can.

Tim Church: One of my favorite books is John Maxwell, called “Failing Forward.” And kind of one of the essential quotes of the book is that the difference between average people and achieving people is their perception of and response to failure. And I think that’s such a key thing because like you mentioned, that it’s easy to sort of give up and to take that and to look at it as wow, I don’t know what I’m doing, how am I going to start this business, how do I start from nothing even though I have some of these subscribers? And really look at that and take that and say, “OK. This was an experience. I was OK to go out and fail. And actually, that failure may have been beneficial moving forward in what you had developed down the course.” And I know that that’s really been helpful for me is to kind of look at that. But I think you really hit that there is that pharmacists in general do not look at failure always as a good friend or as John Maxwell says, looking at failure as your friend.

Eric Christianson: Yep. And that’s one thing I’ve done a couple talks recently at colleges of pharmacy. And one of the big things that I tell them and that I try to teach them is we’re so ingrained as pharmacists when we think about failure, instantly what comes to our mind is somebody gets hurt, somebody dies, or you get sued. I mean, those are the things that come to your mind when you think about making a mistake as a pharmacist. And I mean, that is absolutely I think ingrained into you throughout school and throughout your work life. And that is not an entrepreneurial mindset for sure.

Tim Church: No. No, definitely not. Now, could you break down the different products and resources you have right now? And kind of break down those percentages in terms of what’s bringing in revenue.

Eric Christianson: Yeah, so it definitely is a little bit variable, I will say, because I’ve got some NAPLEX content, so obviously this time of year, there isn’t a ton of people taking NAPLEX. So that kind of drops off. And then you’ve got spring and fall testing periods for board certification materials. So you know, prior to the exam, 2-3 months prior to the exam up until the exam, that can kind of come and go a little bit as well. Amazon, I would say is probably in the ballpark of 40-50% of revenue. Website’s probably in that ballpark. And then Audible as well. And you know, I would say I work probably 2-3 days a week as a pharmacist still, doing some consulting and things of that nature, which I love to do and I always anticipate doing that. So that’s definitely a piece of the income equation. But just that side income to be able to step away from your full-time job and to be able to — this summer, I spent a lot of time with my kids going golfing and doing different activities that they like to do. And I mean, that’s really what I’m after as far as income and that type of thing. Initially I will say, I was — which is why I listen to you guys once in awhile and I love your stuff — I was $145,000 in debt I think, I think is what it started at. And yeah, I used any side income basically from the business to pay off, pay down on that extra debt, so that helped me get out of debt much, much sooner than I ever would just working kind of my standard, full-time pharmacy job. So always got to have something on the side. I do want to also mention I had two professional instances in my career where I did absolutely feel like my job was a little bit in question. And those were two big stimuli for me to continue to do the blog and to continue, keep going, creating different content and selling different content. So I don’t think I would be here talking to you today if it wasn’t for those two instances either. So that’s another important point I think to make to students, to young pharmacists, and especially in this job market too, especially when we’re talking about community and retail pharmacy. There is not a job that is secure. And creating that Plan B, starting that Plan B, there’s no reason not to do that today. And so I think that’s a really, really important thing to remember.

Tim Church: I definitely agree, Eric. And I think that no matter how secure a position that you think it is, there’s always a potential for change, whether that be political changes, just job market changes in general, so having an additional side income or just some other way that you’re bringing in revenue, is a really smart thing to do. Now in your particular case, I think you brought up some awesome points. And I think many people would agree that that side revenue has helped you pay off your student loans but also, it’s given you something that I think is probably the most important thing when we talk about side hustles and what this extra income. And for you, it sounds like what it’s boughten you is time. It’s really given you the time and the freedom to do some of the things that you want to do, such as spending more time with your family, with your kids. Talk a little bit about how you made that transition. Because as I mentioned in the beginning, you were able to go from a full-time, traditional pharmacist role now to only doing a couple days a week.

Eric Christianson: Yeah, that — honestly, that was probably one of the hardest professional conversations I’ve — and decisions that I’ve ever made. You know, I worked seven years long-term care consulting, assisted living consulting, a little bit of MTM kind of an independent consulting group, and then I joined on with a health system and worked as a clinic pharmacist, basically, right embedded in the primary care office. So really unique experience, great experience. And I mean, for a lot of pharmacists, that is absolutely the holy grail of jobs. And I did enjoy that job, but it was consuming a huge chunk of time. When I factored in the time that I needed to put into the website and blog, it just got to a point where financially it made sense to try to make that leap. One other factor that went into that was my wife, who stayed at home with our kids, she was going to go back to work as well. So there’s kind of a conglomerate of things going on that made it a little bit more tenable to make that jump. But that was a very, very difficult decision for sure. And you know, I maybe waited on it longer than I should have, you know, looking back. But I think, again, that’s kind of that pharmacist mindset being a little bit more conservative about things and trying to cover all your bases. But very, very difficult decision for sure. But definitely at this point do not regret that decision.

Tim Church: So what did your wife say when you first brought that to her attention?

Eric Christianson: She was pretty calm about it, actually. You know, she’s very, very trusting in my judgment and my decisions. She’s pretty level-headed when it comes to that type of stuff. I will say one interesting story. It’s a story I’ll never forget because it’s actually the first time I actually made $1 off the website. So I did this BCPS practice exam. And you know, I think I charged like $10 for it or something, you know, just ridiculously cheap because I wanted to make sure I sold some. And I remember seeing those first couple sales come through, and I was just absolutely jacked up. You know? And if I think about all the hours I spent and if I paid myself an hourly pharmacist wage for those hours, it’s like yeah, this doesn’t make any sense at all. But just the idea that I could go out for supper and potentially make $10, that was the coolest thing in the world to me, at least at that time. And so I made this, I’m so excited. And I’d been doing this, again, for a year and half, hadn’t made $1, and I’m doing it mornings, evenings, weekends, whatever. And I go to my wife, and I said, “I told you. I told you I wasn’t crazy.” And just instantly, as calm and cool, as collected, she says, “Well, you’re kind of a little bit crazy.” And I’m just like, like looking back at that, that is so true. I mean, you have to be a little bit crazy — and some people might call it crazy. I mean, looking back, it’s like, I mean, it was passion and it was energy for pharmacy and what we do. But that was just kind of a fun little story that I’ll never forget with my wife and the process of actually trying to generate some income off of the side business.

Tim Church: So at that point, when you had approached her and then actually finally made that switch and dropped the hours you were doing at your consulting job, how many months had you been consistently generating revenue from the site and from the books and resources?

Eric Christianson: Yeah, it was — I started making test prep material and books, I think it was early 2015, maybe in February-March 2015. And I, you know, definitely had seen that grown year-to-year. And so there was definitely a little bit of a track record. And I cut back out of my job 2018, just last year here. So I mean, I had at least a two-year track record, probably closer to three of showing that yes, you know, I’m seeing more people come to the website, I’m seeing more sales over time as you gain credibility and reputation and customer referrals and all that sort of stuff. So you know, they always talk about the overnight success, and that’s just not the way it works for the majority of people. And certainly my story is no different from that. It’s been a slow growth over time. So my wife was able to see that and say, “Hey, what could I do if I actually had more time to work on some of these other things, other projects, that I’ve wanted to pursue?”

Tim Church: So when you made that move, one of the practical questions that is popping up into my mind right now is did you lose your health coverage and other benefits that you had access to?

Eric Christianson: Yeah. Absolutely. That was by far the hardest decision with a family of four and definitely one that it’s like, oh my gosh, we’ve got to make sure that that expense is covered now. I think that probably prevents a lot of small, a lot of people from quitting their full-time job is health insurance coverage. I mean, it was $1,200-1,500 a month hit that we now have to come up with that money that we’re not getting through our employer.

Tim Church: So that wasn’t offered through your wife’s employer, then.

Eric Christianson: No. Nope, nope. Exactly. So yeah, that was a big hit that we basically had to make sure that we could cover. One other thing that I did — because I had paid off my student loans I think in 2017. So as a family, I definitely saw that there might be some point in time like that I want to cut back, so we definitely saved up some cash as well, you know, just worst-case scenario where I couldn’t figure out part-time work as a pharmacist for a little while or the business isn’t going as good or whatever the case might be. We definitely did stockpile some cash too, just to be on the safe side.

Tim Church: So Eric, you talked about the side income has helped you pay off your student loans and then eventually has allowed you to drop down to just a couple days a week. What are you doing now with the income each month that you’re receiving from the business besides just kind of taking care of monthly expenses, health insurance, that kind of thing.

Eric Christianson: Yeah, definitely life expenses for sure, making sure that’s taken care of. I am investing a little bit more in retirement than I used to be investing. So that’s definitely another thing there. You know, one thing as an entrepreneur you’ve got to pay attention to is taxes too, doing quarterly estimates and that type of thing. It’s like, you’ve got to pay attention and keep track of that. I think it was a year or two ago, I don’t know if I didn’t anticipate or didn’t do something the way I should have in my job change, but yeah, we ended up in $10,000 or $15,000. And it’s like yeah, if you’re not prepared for that or anticipating for that or planning for that, that’s definitely a good chunk of money to come up with for sure. So you know, the planning, strategizing, figuring out what to do. I have spent a little bit of money getting people to help on certain projects, that type of thing, as far as the business goes. I do market and advertise some on Facebook, specifically. I have been tempted to try other platforms as far as advertising goes, but I feel like I’ve probably got the best sense for doing Facebook ads, so I’ve done some of that with some of the extra revenue. We’ve paid down a little extra on our house as well. So I think that’s a goal for us maybe longer term, later in life. Minnesota and the north is very, very cold. I don’t know if you knew that or not.

Tim Church: I’m from Ohio, so I know a little bit about that, yeah.

Eric Christianson: Yeah, yeah, exactly. So yeah. I mean, plans certainly change, but our in-laws live down in Arizona, and it’s definitely nice visiting them in the middle of winter, I will assure you of that. So that’s definitely crossed our mind too to kind of plan and prepare for that when the kids are growing up.

Tim Church: So how are you investing your money? Is it through a brokerage account? Or did you open up a SEP?

Eric Christianson: Yeah, so I’ve got through my part-time employer, I’m actually investing into their plan. They allow me to do that with some of the income that I make through their organization. So that income doesn’t run through my business. I’m basically their employee. So I do a lot of my investing through that income just because it’s pretty simple and pretty easy. So that’s just through their retirement account. That’s the primary mode. Also, HSA, Health Savings Account, making sure that I’m putting some money into there as well. Those are the two biggies.

Tim Church: Yeah, and the HSA I think is a great — what has been termed a “Stealth IRA” or retirement account because there’s a lot of tax advantages to that but also just a great way to cut down your Adjusted Gross Income while you’re putting it into aggressive funds without even considering it to be used for health expenses in the near future. So you’ve got kind of a couple options with it. So definitely I have one through my employer as well, and I think it’s a great option.

Eric Christianson: Yeah, definitely.

Tim Church: So who do you have that supports the business, whether they’re contractors, employees? Can you break down, tell me a little bit about that?

Eric Christianson: Yeah, so I’ve got a gal that really helped me get the main MedEd101.com website up and going as far as some of the sale of digital products. Initially when I first started, I think that was part of the joy with it was figuring out things. It was maddening at some times, and sometimes you waste a little bit of money not knowing what you’re doing. But I think, you know, as pharmacists, we’re kind of learners. And we like to appreciate and learn some of those things. As I generated a little bit of income, definitely a website person to help out with stuff, I’ve had various odds and ends as far as book covers and design people and things like that. And then my wife has been a fantastic resource. She’s an administrative assistant by background. And you know, just formatting, editing, stuff like that, she’s been an amazing resource and helped the business a fair amount for sure. I wouldn’t be here without her either.

Tim Church: And then do you work closely with an accountant, an attorney?

Eric Christianson: Yeah. Yep. I’ve got a personal accountant here in our smaller town. And then attorney work, yeah, setting up the initial LLC and the other business documents, that type of thing, I worked with an attorney a couple times as well.

Tim Church: So Eric, as a fellow business owner, especially one that is involved with website and publishing content, I feel like there’s a million things that you could be doing at any given time. And just there’s always something that you could be doing. How do you spend most of your personal time in the business at this point?

Eric Christianson: Yeah, I’m typically creating content, whether that’s a blog post, a podcast, a video recording, a book. That’s really what I’ve grown accustomed to doing. It’s actually what I like doing, for the most part, at least a little bit every day. I can’t create content eight hours a day. That’s just insane to be able to — at least for me — to be able to try to do that. But it’s pretty amazing what you can accomplish with 2-3 hours of good, solid, focused work in creating content and getting stuff done and how much you can accumulate by doing that day after day after day over a period of years. So definitely I’m the Chief, I guess, Content Creation person. And you know, that’s my biggest asset and I guess what I do in the business primarily to keep it running.

Tim Church: And then do you pass that on once you’ve created that to somebody to help put it on the website, maintain that, and then promote it on social media? Or is that also you doing that?

Eric Christianson: Yeah, so with social media, I do use a tool called Meet Edgar. It’s an automation system. So that is part of my expenses. I think it’s $50-100 a month, somewhere in there. So that’s definitely a significant cost, a little bit of a cost. So that automates a lot of my posts and puts stuff out periodically. That’s the primary tool. I used to do that rather than sending it to a person or whatever. Yeah, I’m a little bit more on the automation side and trying to harness those technologies as much as I can.

Tim Church: Anything else you’ve done in the business to help automate processes and take time — reduce the time that you’re involved with it?

Eric Christianson: Yeah, so I recently — it wasn’t anything I did. It’s the hosting platform for my podcast. They actually provide transcriptions of my podcast — and maybe you guys certainly get all that done or get it done for free or pay somebody or whatever too — so that is definitely something I’m going to look at and maybe try to use going forward, just to help with utilizing some of the content that I’ve created, maybe organizing it a little bit better, making it look a little bit nicer and that type of thing.

Tim Church: Well Eric, you’ve certainly shared a lot of great information. And I think it’s just awesome advice for people wanting to get started with a side hustle or a business. And I think the bottom line is you just have to start and you have to not be afraid of failing. But I wanted to ask you, you sent me a photo of you giving a presentation. And the title of that presentation was, “Secrets to a Successful Side Hustle.” And I wanted to ask you, what is the summary of that? And what advice would you give to other pharmacists or even students out there who have an interest in entrepreneurship or starting a business?

Eric Christianson: Oh, that’s a tough one. You’re asking me to sum up an hour-long presentation in about 30 seconds here. Probably one of the main points I remember telling folks about at that presentation that I think resonates a little bit is to really find something you enjoy because then it doesn’t really feel like work. And that’s really what I did with the blog initially. I mean, it was just for fun and just because I enjoyed doing it. And once you get into a public space, public forum, people start coming to you with all sorts of different ideas and things you should do. But it really takes — like I think you had mentioned earlier — it takes that initial action of actually doing something to figure out hey, do I actually enjoy this or not? So keep trying new things, think about if you’re at work, what do you really like to do at work? When do you notice that the time just flies in the day when you’re doing such and such? Think about those times where you’re happiest and you’re enjoying being able to be productive and getting things done at work. And try to recognize that and then utilize that as an area where you can be an expert, where you can share information if it’s something that you’re excited about and passionate about.

Tim Church: Any books or resources you would recommend for those interested or wanting to get started?

Eric Christianson: Yeah. I would say the podcast that really got me going — I think I listen to it probably every day — was “Entrepreneur on Fire.” I don’t listen to it much anymore, just because you hear the same recurring themes over and over and over again amongst successful businesspeople/entrepreneurs. And it’s really that sticktoitiveness, keep going, keep learning, keep applying, keep changing direction, continuing to evolve and adapt. But really that action piece is the No. 1 piece of advice. And that’s probably the main message I got from that podcast.

Tim Church: Well Eric, thank you so much for coming on the show and sharing your story, tips for building a successful side hustle. I know that our audience is going to be better off hearing your story and sharing that. So we really appreciate that. What’s the best way for someone to reach out to you to learn more about you or what you do?

Eric Christianson: Yeah, you can hit the “Contact” button at MedEd101.com. That’ll allow you to send me an email directly. I’m pretty active personally on LinkedIn, so Eric Christianson, PharmD pharmacist. You can find me on LinkedIn and connect with me there. Those are probably the two main places where you’re probably going to catch me the easiest.

Tim Church: Thanks again, Eric.

Eric Christianson: No problem. It was an honor to be on the podcast.

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YFP 130: House Hacking Your Way to Financial Freedom


House Hacking Your Way to Financial Freedom

Craig Curelop is the author of The House Hacking Strategy and is a real estate agent, investor, and employee of BiggerPockets. Craig talks all things house hacking including what it is, how he got started with house hacking and why he claims it is the single most powerful way to build wealth.

About Today’s Guest

Craig is a real estate investor and agent living in Denver, CO where he moved in April 2017 and shortly after closed on his first property. His move to Denver also afforded him the opportunity to work for BiggerPockets where he is the finance guy talking and writing about all things real estate, personal finance and early retirement. Outside of real estate and personal finance, he is a self-proclaimed health nut where he strives to be able to perform the highest possible level for the most amount of time. For fun he loves to exercise, hike, travel, ready write, snowboard, golf and play and watch sports. Craig is the author of The House Hacking Strategy and has been a guest on The Bigger Pockets Real Estate & Bigger Pockets Money Podcast. He’s also been featured in The Denver Post, the BBC and numerous real estate/personal finance podcasts including Choose FI, Side Hustle Nation, and The Best Ever Real Estate Podcast.

Summary

Craig breaks down what house hacking is, how he got started with house hacking and why he claims it is the single most powerful way to build wealth. Tim and Craig also talk through several key components of Craig’s book, The House Hacking Strategy.

In 2017, Craig closed on his first property in Denver, Colorado. He had $90,000 in student loan debt and a negative $30,000 net worth. He quickly reached financial independence in a short period of time through house hacking, side hustles, and spending less money.

Craig defines house hacking as buying a property with a low percentage down (generally 1, 3 or 5%), living there for a year (required), and renting out the other units or rooms. If you purchase a single family home, then you would rent out the other bedrooms. With a 2-4 unit home, the other units would be rented out. The rent from those units covers your mortgage and you live for free and sometimes even have cash flow coming in. Craig explains that at this point, you’ve eliminated your largest expense while building equity, paying down your loan, and saving money. You can use the money you saved to do it again and again to create more streams of passive income. Aside from these two methods, you could also buy the home of your dreams and live in the mother-in-law suite or a basement room.

Craig’s first house hacking property was a newly renovated duplex in Denver that had a one bedroom unit upstairs and a one bedroom unit downstairs. He purchased the property for $385,000. Craig lived in the lower unit and rented out the top for $1,750. The total mortgage payment for was $2,000 and Craig wanted to live for free, so he put his bedroom up on Airbnb and created a quasi bedroom in his living room. By renting out his bedroom for a year and the top unit, he made $2,800, lived for free and also brought in additional money.

Craig also discusses what he learned from his first house hack, his concept of net worth return on investment (NWROI), the four main benefits to house hacking, and how to get started with a house hack

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. And this week, we have a special guest for you, Craig Curelop, author of “The House Hacking Strategy” and employee of Bigger Pockets. A little bit more background on Craig before we get started with the interview: Craig’s a real estate investing agent living in Denver, Colorado, where he moved in April 2017 and shortly after, closed on his first property that we will talk about in more detail during this episode. His move to Denver also afforded him the opportunity to work for Bigger Pockets, where he is the finance guy, talking and writing about all things real estate, personal finance, and early retirement. Outside of real estate and personal finance, he’s a self-proclaimed health nut where he strives to be able to perform at the highest possible level for the most amount of time. For fun, he loves to exercise, hike, travel, read and write, snowboard, golf, and play and watch sports, and as a Buffalo Bills fanatic myself, I’m reluctantly supportive of his love of the New England Patriots. In addition to his book and being a guest on the Bigger Pockets Real Estate and Bigger Pockets Money podcast, he’s been featured in the Denver Post, the BBC, and numerous real estate and personal finance podcasts, including Choose FI, Side Hustle Nation, and the Best Ever Real Estate Podcast. Craig, welcome to the Your Financial Pharmacist podcast.

Craig Curelop: Hey, Tim. Thanks for having me so much. Grateful for the opportunity to be here.

Tim Ulbrich: And I’m hopeful my Bills might be getting closer to catching your Patriots. We’ll see what happens this year.

Craig Curelop: Eh, we’re giving you a flicker of hope, but I think we’ll smother that flicker.

Tim Ulbrich: That’s right. We’ll take a flicker. So I have to say, I’m a huge fan of both Bigger Pockets as well as the house hacking strategy, which you did a great job in the book talking about. And I think it’s a strategy that is such a good fit for so many pharmacy professionals. And we’ll talk about many reasons why. So it’s an honor to have you on the show and to share your experience and expertise. And before we jump into the weeds on house hacking, let’s start with your personal journey. So 2017, you find yourself, as you mention in the book, in $90,000 of student loan debt — many of our audience can relate to that — and a net worth of -$30,000. So take us from there to when you ultimately become financially independent just two and half years later in 2019. How did you make that transformation?

Craig Curelop: Yeah, so honestly, it all started with house hacking, right? But there are three things that I really did to allow me to get to that financial independence mark. The first and the most important and largest was house hacking. The second was kind of side hustles and all that kind of stuff, just figuring out how to make more money. And the third was how to spend less money. So between those three things is what has allowed me to pay off all of my student debt and achieve financial independence in such a short amount of time.

Tim Ulbrich: That’s awesome. What an awesome accomplishment. In the very beginning of the book, you talk about — which really resonated with me and I think will resonate with our community — you talk about the typical strategy for home buying, which is “go to the bank, see what you can afford, and purchase the largest possible house and live there for 30 or more years.” What is the problem with this strategy and why does it increase the likelihood of someone being trapped in the rat race?

Craig Curelop: Well, it’s because when you buy the most expensive house you can afford, you are going to live a very luxurious life. And you are going to get used to living that luxurious life, and you are going to be very difficult for you to scale back and to start saving in times when you need. When times are good, you spend your money because you can. But then when something happens, you may have to scale back, and that’s going to be really tough for you. So why not just never scale up, save as much as you can, do these strategies that we’re going to talk about in this episode, so you can have the financial freedom to then go do whatever you want so you’re not stuck in your pharmacy jobs or your doctor jobs or whatever your audience does. Like it’s great, even if they love their jobs, it’s great to have that option and say, you know what? I don’t need this anymore. If I want to go travel, I can. If I’m having a kid and I want to spend time with my family, I can take a few years off no problem. So that’s kind of what I really believe in. And that’s why this strategy is so powerful.

Tim Ulbrich: Yeah, and I love what you just said about having options there. We recently interviewed a pharmacist, Aaron Howell, who got started in real estate investing really by accident but has built up a portfolio of 29 units. And he talks about this concept of getting to the point where you ultimately has choice. He loves what he does as a pharmacist, but he now is in a position of choosing how he spends his time. And I think ultimately, when we talk about the concept of money leading to happiness, I think that’s a great example of how that can become possible. So in the book, Craig, you say something that really resonated with me. And I’m just going to read the quote. It’s, “The concept of financial independence can be lost on some people. Growing up in a middle class family, it was lost on me. That was until I read ‘Rich Dad, Poor Dad’ by Robert Kiyosaki. In that book, I learned the secret that separates the rich from the middle class.” So Craig, tell us about what is that secret? And why did that book have such a profound impact on you?

Craig Curelop: Yeah, well that book taught me that you don’t necessarily need to trade time for money. Right? You can make money by trading your time. You can spend less than you make and invest that difference wisely into assets that provide you passive income. So that money makes you more money but in your sleep. And once that passive income of more money exceeds your expenses, you now have the freedom and the flexibility to do whatever the hell you want whenever the hell you want, which was just mind-blowing to me because I just was never — it’s such a simple thing, right?

Tim Ulbrich: Yes.

Craig Curelop: But like it just — no one brings it up, no one talks about it. And because money is such a taboo subject in so many families and the American way is to go to school, get a job, work for 40 years, live in the house. But to challenge that conventional wisdom is mind-blowing.

Tim Ulbrich: Yeah, and I was so glad to see you reference Kiyosaki’s book in your book because that’s one I often recommend, I’ve mentioned it on the show here, I recommend it when we’re speaking at events, is that for me and even my wife as we read it together a second time, that fundamentally changed the way I just think about money and think about personal finance. So if you haven’t yet read it, I highly recommend you do so. Again, “Rich Dad, Poor Dad” by Robert Kiyosaki. Alright, let’s get to the basics of house hacking. Definition. How do you define house hacking?

Craig Curelop: Yeah. So house hacking is when you buy a property for a low percentage down, typically it’s 1, 3, or 5% down. You’re required to live there for one year, so you live there for one year while renting out the other parts. If you’re buying a single-family home, you’ll rent out the other rooms. If you’re buying a two-, three-, or four-unit, you rent out the other units. And such that the rent from those units covers your mortgage, and you live for free and perhaps even get paid to live there. So you’ve now eliminated your largest expense, you’re building equity in a property, you’re paying down a loan, and you’re just saving so much money that you can do it again in a year and just have that compounding effect and build that passive income extremely quickly.

Tim Ulbrich: Yeah. And the reason why I mentioned at the beginning of the show I think this will resonate so well with so many pharmacists is we know that for most individuals and obviously pharmacists as well, their mortgage payment becomes such a big percentage of their overall monthly expenses and ultimately can become a significant limiting factor in what they’re able to do in terms of cash flow, so this concept, essentially the idea here is one or two or three more people may be paying your mortgage and obviously allowing you to build up equity and other things, we’ll talk about tax advantages, but hopefully freeing up some cash flow as well. Now, Craig, before I read your book, when I thought about house hacking, I thought about it in the very traditional sense, which in the book as you outline, is a traditional house hack, which is buying a duplex, a triplex or a quad and ultimately renting out the other units. But you also talk about other options that are considered a house hack besides just that multi-unit situation where you’re renting out other units. So talk to us about the variety of what can be considered a house hack.

Craig Curelop: Yeah, so you can go as aggressive or as not aggressive as you want. And you know, we kind of talk about it on a continuum, right? We call it the comfort continuum where basically, you can sacrifice — you can be more comfortable, but you’re going to sacrifice profit for that. So it kind of depends on where you and your family and the people living in that house are going to lie. So my favorite strategy is the rent by the room strategy because you can buy a single-family house, you live in one bedroom, and you rent the other bedrooms out. Single-family houses are more liquid, they’re easier to sell, they tend to appreciate a little bit faster. And they’re just also kind of a little bit more cozy and nice to live in. So I like the single-family house strategy. But if you don’t want to live with roommates, the other strategy is a luxurious house hack where you still buy that single-family house, but instead of renting out the rooms, you have the house of your dreams that you love but maybe you have a mother-in-law suite in the basement or out back or you have like a casita or something out back, and you rent that out on Airbnb or maybe even long-term rental. And that may not fully cover your mortgage, but it may give you $1,000-1,500 a month. And that’s still $1,000-1,500 a month, which is still considered house hacking.

Tim Ulbrich: Yeah, and I love the way you reference that in the book, you mention the continuum. You call it the least profitable, smallest lifestyle change all the way to the most profitable, biggest lifestyle change. And that really resonated with me because I was thinking about this for my situation with four young kids, obviously that may look very different from somebody else who’s listening that is single and open to roommates and other types of things. So ranging from renting out additional units all the way to live-and-flip, which our listeners can check out the book to get some more information on that as well. Why is the four-unit number so important? So as we talk about a duplex, triplex, or quad, talk to us from a loan standpoint of why that four, that number of four units is so important.

Craig Curelop: Yeah, so anything above four units, so five and higher, will be considered a commercial property. And banks will not lend to that as a — you wouldn’t be able to get that low percentage down that I talked about, the 1, 3, or 5% or 3.5% if you do the FHA. But if you keep it at four or under, you can then. They consider it a residential residence.

Tim Ulbrich: So if I were to buy a quad and it’s not an investment property, it’s my first property. It’s essentially treated like it would be if I purchased a single-family home, but in a percent down, interest rate on the property but also in a future sale beyond the year. Again, from a tax standpoint, it’s treated — obviously there’s rules around the amount of value and things of which there’s profit, but it has all the benefits of a single-family home as long as it’s four units or less, correct?

Craig Curelop: Yep, it’s basically treated like a single-family home. Yep.

Tim Ulbrich: Awesome. So let’s talk about your first house hacking property, a newly renovated duplex in Denver. So talk to us through that property, the numbers, and what you learned from that first experience.

Craig Curelop: Yeah, so that first property, it was, like you said, a newly renovated duplex, it was a one-bed on top, one-bed down below duplex just a few blocks north of City Park, which is Denver’s largest park and just a mile and a half away from the office that I worked. So it was a perfect location for me. And it was listed at $400,000. I purchased it for $385,000. And I lived in the bottom, I rented out the top.

Tim Ulbrich: OK.

Craig Curelop: So total mortgage payment on that property was just about $2,000. I rented out the top for $1,750. And I lived in the bottom not for free, right? I was still paying $250.

Tim Ulbrich: $250.

Craig Curelop: But I really, really, really wanted to live for free. That was my goal. So what I did was I rented out my bedroom on Airbnb. And I made this quasi-bedroom out of my living room where I put up a curtain and a room divider, like a cardboard box room divider. I threw a futon behind there with like a little tote for my clothes and lived behind there for one year while I had a revolving guest of roommates, a revolving door of roommates coming in and out on Airbnb. And you know, with that, I was making $2,800 a month on the $2,000 mortgage total.

Tim Ulbrich: OK, awesome.

Craig Curelop: So I was living for free, I was cash flowing, I was saving tons of money, and I was really set my foundation for what has to come in the years since.

Tim Ulbrich: So you started that in essence of living on one floor, renting out to the other, saw that you were getting close to getting the home mortgage covered but not the whole thing. You wanted to see that, so then you added in the Airbnb and set up shop in the living room, made that your bedroom and rented out the other. So on the continuum spectrum, obviously we’d put that on the little more of the extreme side but love the passion and energy to make that happen. So what did you learn from that? I mean, was that an Aha! Moment or did you take away from that to say, hey, I never want to live with roommates again? Or did you see that as a strategy that you’d want to replicate further?

Craig Curelop: That was a foundation for me. I knew that it was only going to be for one year, so that helped. It wasn’t bad after the first two weeks. I’ve said this in previous podcasts I’ve been on, but it’s basically what’s called hedonic adaptation. And that whole idea if your listeners don’t know is that basically, they did a study of people who lost a limb and people who won the lottery. And after two weeks, they’ve regressed back to their happiness before that event happened. So whatever happens, you’re basically going to get used to it within two weeks. And I’d applied that some type of wisdom to OK, I’m going to live behind this curtain. It’s going to suck for two weeks. If I can just get past those two weeks, it’ll be just super normal. And that’s exactly what happened. It just became normal. It became my bed. Even when my Airbnb was vacant and I had my bed available, I would still sleep on my futon because it was just, you know, it wasn’t even worth it to clean the sheets again for me. So yeah.

Tim Ulbrich: Love that. And I think that’s a great reminder, Craig, you know, you gave the example there where two weeks you got used to it in terms of living in the living room and behind the curtain, but that’s true with so many things. As people are evaluating might I purchase a $500,000 home or maybe look at smaller and $200,000, they may have this built-up image of how painful it’s going to be or how awful it’s going to be. But ultimately, to your example in the research, you get used to it. But also, it’s all the other peripheral benefits. So when you in your case are living in your living room and you have roommates and obviously it’s cash flow positive versus if you’re living by yourself, fully funding the mortgage in a nice neighborhood, there’s other expenses that come along with that when we think about keeping up with the Joneses, taking care of your yard, all those other things that you can mitigate through some of these strategies. In the book, one of the concepts I found really interesting, Craig, is a concept that you call “net worth return on investment” or NWROI. What is this? Can you explain that? And why is this relevant to house hacking?

Craig Curelop: Yeah. So if there’s any finance people out there, it’s basically like a glorified internal rate of return or IRR calculation. But what it does is it takes all of the wealth builders of house hacking, so it takes into account cash flow, rent savings, loan paydown and appreciation, and it adds — it sums up all of that over the course of one year. And it divides it by your initial investment. So that would likely be your down payment and any rehab costs. And it gives you a percentage. Right? And that percentage is oftentimes well into the 100% or more, which just means that people are actually — like you’re making all of your money back on a house hack within that first year, which obviously allows you to then go ahead and save up for the next one and the next one and the next one. And it’s just such a powerful strategy, and there’s just no other investment out there that’s far from putting your money in a startup that has a 95% chance of failing. There’s just no other like risk-reward that’s better than house hacking. I just have never found it.

Tim Ulbrich: Yeah, and that’s why I love in the book, mention that house hacking for you — and I would agree — is the most logical first step to real estate investing. And I think in terms of building wealth and building net worth is something that many of our listeners can consider. So you outlined four main areas in the book in terms of benefits of house hacking. And I’m going to list these off, and then we’re going to go through each one of them briefly: cash flow and loan paydown, equity through appreciation — and that could be either natural or forced appreciation — learning to landlord, and then some of the tax benefits. So let’s walk through each of those. What are the benefits when it comes to cash flow and loan paydown, probably the most obvious here in this group of four?

Craig Curelop: Yeah. Well, you know, you obviously are living for free. So you’re saving whatever you paid for rent, that’s $0. You’re likely going to be cash flowing even more than that, so if you’re cash flowing $400 and you were just paying $1,000 for rent before this, that’s a $1,400 difference. Like that’s $1,400 a month difference. Like that is significant numbers, you’re talking tens of thousands of dollars a year just in cash flow, right? And a part of that payment you’re going to make is going to be your loan paydown. And so each time your make a payment on your loan, there’s a portion of it that goes to interest, and a portion of it that goes to principal. And the principal is what you actually owe to the lender. The interest is what you’re paying to the lender to borrow the money that you borrowed. And over time, the principal that you’re paying down goes up and the interest goes down. So you’re just — so you’re creating wealth that way by paying down your loan. But you’re not actually paying it down because your tenants are paying it down.

Tim Ulbrich: And your example, I think it was your first property, your example where if you would have moved into that home without renting it out, you would have been paying $2,000 a month. But instead of you writing a check for $2,000 a month, you had $2,800 that was coming in. So you’ve got to really think about what that net difference is and what that means to your financial plan. So No. 1, cash flow and loan paydown, which then obviously also impacts as that property increases in value. So here we’re talking No. 2, equity through appreciation. So talk to us about that point as well as the difference between natural and forced appreciation.

Craig Curelop: Yeah. So appreciation is exactly what it sounds like. It’s just your value appreciating or gaining value over time. And so forced appreciation is when you actually do something to the house, right? Maybe you remodel the kitchen. Maybe you add a bedroom or a bathroom or you add square footage to the house. You’re adding value to the house, and that’s forced appreciation. And that’s why real estate is so amazing too because you can actually just take an asset and you can change it yourself. Go ahead and try to buy Apple and then go try to change something that Apple does to force appreciation. That’s just not going to happen, right? So that’s forced appreciation, which is why a lot of people love real estate. Now, natural appreciation is just over time, real estate appreciates, right? It always goes up. Look at any 20-year period, and real estate has gone up over time, even in the pit of 2009, go back to 1989, and it’s still up from there. So over time, if you can just hold it, it’s going to go up. And that is what natural appreciation. And with my duplex, I got super lucky with this one. I bought it at $385,000, like I said. And I just got it appraised a couple months ago. And it came back at $550,000.

Tim Ulbrich: Wow.

Craig Curelop: I’ve done nothing to that property except just hold onto it. And it appreciated that much in that short amount of time.

Tim Ulbrich: That’s awesome.

Craig Curelop: So you know, did I get lucky? Yes. But I also — you can’t get lucky if you don’t put yourself in a position to get lucky. So I went ahead and bought that property, put myself in a position where I could get lucky, and lo and behold, I did.

Tim Ulbrich: I love that. And speaking of putting yourself in a position to be lucky, going back to the beginning when you had $90,000 of student loan debt and net worth of -$30,000, digging yourself out of that obviously is a part, as it is for our community as well, to put yourself in a position to be opportunistic. So No. 3 is learning to landlord. And I think a lot of people look at that and say, “Benefit? Landlord? I don’t see the connection.” Talk to us about that as a benefit of house hacking.

Craig Curelop: Well, so when you’re house hacking and if you do want to get into real estate investing, you will be a landlord at some point. Now, you can always outsource that to property management. But even still, you’re going to want to manage your property manager, so you’re going to want to know the basics of landlording. And it’s just a nice transition because you’re basically just living there, you’re going to go home anyway, you’re going to be with your tenants, you’re going to see what your tenants are doing. They’re not going to be that day. You’re going to make sure to screen them well. And you’re just going to go through that process of being a landlord. And you know, it sounds like a daunting term of whatever it is, but honestly, it is very — it’s not as hard as it sounds.

Tim Ulbrich: Yeah, and I like — and I think you talk about this in the book — when you’re house hacking obviously a property, let’s say a duplex, you’re on one side, you’re renting out the other, I think that’s about as convenient as it can get in terms of landlording, you know, versus if you’re trying to manage another property at a distance or even in the other part of town. So learning that process and reaping the benefits as you look to expand your portfolio I think makes a whole lot of sense of getting that skill while you’re going through a house hack. And then No. 4, which to me is an area that I’m really interested in and I think often gets overlooked, is the tax benefit. So we talked about already not only do you have cash flow, somebody else is paying down your loan, the property’s appreciating either naturally or through force, you’re learning some skills, and then also we have this bucket of tax benefit. So talk to us — and obviously disclaimer, I’m not a CPA, you’re not a CPA — but generally speaking, what are the tax benefits that come along with real estate investing but more specifically here in house hacking.

Craig Curelop: Yeah. So there’s a whole bunch of tax benefits that come with owning real estate. The biggest one by and large, especially for buy-and-hold investors is what is called depreciation. So what depreciation is is that the IRS says that you own a house for $300,000 or whatever it is. You are allowed to take a portion of that house and deduct it from your taxable income every single year. And so you basically take that $300,000 and divide it by 27.5, and you get roughly $10,000 or whatever that is dollars a year. And you’re able to take that as a loss against your business of collecting rent. So now your taxable income is much lower. Frankly, it may even be negative. And this may not apply to your audience, if you’re under a certain threshold, then you take that loss from your real estate business and apply it to your W2 income so your tax basis is lower, you’re not getting taxed on any of the rental income that you have, and so you’re like double saving on taxes. And that’s hard to actually quantify because it’s such a case-by-case basis. And it depends on if you’re below that threshold or not. But either way, there’s tremendous other benefits as well in terms of like doing 1031 exchanges or if you live in the property for two years, you can sell it with no capital gains tax to $250,000 if you’re single or $500,000 if you’re married. So there’s just tons and tons of tax benefits when it comes to real estate.

Tim Ulbrich: Yeah, and I hope our listeners will check out the book. You do a great job of teaching this in a very easy-to-understand way. You talk about the tax write-offs, obviously the depreciation, you give good examples in there, and the 1031 exchange are two of the last five here. And this reminds me, Craig, I read — awhile back after reading “Rich Dad, Poor Dad,” “Tax-Free Wealth” by Tom Wheelwright I believe is the author, which is connected to Robert Kiyosaki. And I remember hearing this for the first time, and I thought, wait a minute. So properties are appreciating in value, and you’re going to reap the benefits of that. But you’re capitalizing from a tax standpoint on the depreciation that you can write off. And the answer is yes. And it’s an amazing thing. And you highlight that in the book. So drawbacks of house hacking. Obviously, I imagine many of our listeners are thinking of objections. And you outline several in the book and you talk about ways to overcome these potential objections. But two that I want to specifically ask you about that may be most common objections that our community has: No. 1, living with or next to others, which you addressed a little bit already, and No. 2, which you call “living in a crappy investment property.” So talk a little bit more about those and how listeners may get comfortable overcoming those to be able to reap the benefits of the house hack situation.

Craig Curelop: Yeah, so it’s all — really, what it comes down to is delayed gratification if I had to sum it up in two words. It’s like, yeah, you could afford the nice house. And you know, your friends aren’t going to be impressed with you living in a dingy place with a bunch of roommates. And it may not even be dingy. You can still have a nice place and live in it with roommates. But — and it’s going to be slightly more work and all those things — but you’re making a couple sacrifices. You’re like, people might think a little less of you for a couple years, but what are those people going to think of you when you’re able to retire in 3-5 years and they have another 35 years ahead of them? Right? So think about like those — think about like 3-5 years out rather than just like in the now because this is going to be the huge, huge difference.

Tim Ulbrich: And I would encourage — as a follow-up, I would encourage our listeners pick up a copy of the book, I think you did one of the best jobs I’ve seen of talking about the importance of a why and giving a very specific activity of how you can identify and articulate your why and why that is so important before you jump into I would say real estate investing in general, whether that’s house hacking or otherwise is really spending time to figure out why is this idea of generating passive income important? Because I think ultimately, that will help uncover some interesting things but also keep you motivated along the way to achieve that goal. So the activity you have in the book is great for that. So Craig, I’m someone listening, I’m ready to pull the trigger and questions that I think of right away are, gosh, where do I even get started with finding deals? And what type of financing might I pursue? And where do I go there? But what advice do you have for people that say, yes, I buy into it, I love the philosophy, I love the idea, I’m ready to get going. Where do they go to get started in terms of finding deals?

Craig Curelop: Yeah. So I always say the first thing you should actually do is get in touch with a lender. Well, you can get in touch with a lender and an agent at the same time. So to find a deal, you need to be in touch with a real estate agent, tell them exactly what you’re looking for, tell them exactly what you want. It’s super helpful to find an agent that actually knows about house hacking and that knows about at least investment property. And you can find those on Bigger Pockets or you can find those — actually, I have like a website that I created. It’s just like www.CraigCurelop.com, and I have a thing where I can introduce you to a house hacking-friendly agent pretty much anywhere in the country.

Tim Ulbrich: Oh, cool.

Craig Curelop: And yeah. Basically the idea there is you want someone that either has done what you’re doing or at least knows a hell of a lot about it. So they can tell you what you’re going to get for rents, what your mortgage payment’s going to be, how you can extract the most dollar out of each investment. And so picking a good agent is really important. So I’d recommend finding a good agent that knows what they’re doing, they’ll send you MLS deals — and MLS is the Multiple Listing Service, which is just like a database of deals all around your area, and honestly, you don’t need to like — you know, if you’re into real estate investing and all, you’ll hear terms like driving for dollars or calling on foreclosures. You don’t need to get the best deal on a house hack because the difference between — like a $20,000 difference is going to be like $50-75 on your mortgage, which is peanuts compared to the thousands of dollars you’re saving a month in rent. So it makes way more sense to offer on a property whatever they’re asking and just like get the deal done so you can start saving on rent, start cash flowing, and most importantly, start that one-year timer until you can get your next one. So then you’ve got two working for you exactly one year from now instead of one working six months from now, then another 18 months from now. Those really start to add up as you get more and more farther down in the process. So tens of thousands of dollars, maybe hundreds of thousands of dollars if you just continue to wait.

Tim Ulbrich: Yeah, and I think the Bigger Pockets team does such a good job of emphasizing the importance of get started. Jump in and not get paralyzed in some of the weeds and details. Obviously you want to be educated, you want to be informed, you want to make sure you’re ready, it fits in with the rest of your financial plan, but ultimately, so much is to be had in terms of the learning, especially as you get started. And I think that’s great advice that you shared. So congratulations, Craig, on the work that you’ve done with the book, “The House Hacking Strategy.” It’s an excellent, comprehensive resource for anyone that is hearing this for the first time and wants to learn more as well as those who are ready to execute and certainly I think everybody in between. I hope our community will check it out. Available on Amazon as well as BiggerPockets.com. And really, we’ve just scratched the surface of house hacking during our interviewing time together today. We didn’t even get into all the information you have in the book about after you purchase the property such as marketing for rent, screening tenants, managing the house hack, etc. Again, all of which you cover in detail in the book. So Craig, where can our listeners go to learn more about you? Obviously, we’ll link to CraigCurelop.com, BiggerPockets.com, we’ll link to the book in the show notes. Anywhere else that our listeners can go to connect with you or learn more?

Craig Curelop: The best way is Instagram. My Instagram handle is @theFIguy. So @theFIguy. And yeah, follow me on there, hit me up, shoot me a message. I’m pretty good at responding within 24-48 hours. So by all means, yeah, I would love to hear from you guys.

Tim Ulbrich: Awesome. Craig, thank you so much for your time again. We appreciate it.

Craig Curelop: Thank you so much for having me on, Tim. Thanks.

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YFP 129: How One Pharmacist Built a 29 Unit Real Estate Portfolio


How This Pharmacist Started in Real Estate Investing and Renting Properties

Aaron Howell, a real estate investor, real estate agent and ambulatory pharmacist at University of Virginia Health Systems joins Tim Ulbrich on this week’s episode. Aaron talks about his journey from accidentally falling into his first investment property when trying to sell his condo to how he built his current portfolio that includes 29 units in 3 different cities across the country. Aaron’s real estate investing and the cash flow it provides has put him in a position to choose how he spends his time.

About Today’s Guest

Aaron Howell graduated from West Virginia University with his BS Pharmacy in 2000. Aaron is a part-time pharmacist at the University of Virginia Health Systems and the Pharmacist in Charge at the Charlottesville Free Clinic. He is also a private pilot and recently became a real estate agent. Before he met his wife, he accidentally fell into real estate investing. They currently have 29 rental units in their portfolio in 3 different cities across the country.

Summary

Aaron Howell is a pharmacist and real estate agent. He accidentally fell into real estate investing when he couldn’t sell his condo in Charlottesville, Virginia in 2009. After having it on the market for a year, his realtor suggested that he rent it out to at least bring in some income. That’s when the lightbulb went off for Aaron and his passion for real estate investing began.

After renting out that property, his mother suggested that he look at properties in Las Vegas to purchase. In 2011, the market was very hot and properties were selling for a half or a third of their original listing. During a visit to Las Vegas, he got one property under contact for $90,000 (original asking price was $270,000) which would bring in about $1,100 a month while being rented. Six months later, Aaron purchased another property without even seeing it. In 2014, his local realtor showed him a listing for a duplex in Charlottesville which he ended up purchasing. In 2015 Aaron married his wife, a nurse, found BiggerPockets, and ended up purchasing property in Cleveland to rent.

Aaron was still working as a full-time pharmacist for Walmart, however, in 2016 the company started talking about cutting hours. At this point, Aaron knew he needed to get his portfolio in order and redid his home equity line of credit.

To buy properties, Aaron uses his home equity line of credit. He worked hard to pay the principal on his first house down and eventually built up equity in it. He then opened a HELOC and uses it as a bank to fund purchases. He’ll take a large chunk out for the principal and down payment and then will use money that’s cash flowing from other properties to pay the HELOC back down.

When choosing a property to purchase, Aaron focuses on three main areas: location, price and the condition of systems (roof, water heater, etc). When asked about his financial why, Aaron shares that his goal is to generate more time and to have more flexibility in their schedules. He currently works 3 days a week, however his wife is still a full-time nurse and he’d like to be able to provide her the option to reduce her hours if she wants.

They currently have 29 rental units in Cleveland, Pittsburgh and Charlottesville.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. We mentioned before that we would be bringing more real estate investing content to the YFP community, and I’m excited to do exactly that this week through my interview with Aaron Howell, who is a real estate investor, real estate agent, and ambulatory pharmacist at University of Virginia Health System. Aaron, welcome to the Your Financial Pharmacist podcast.

Aaron Howell: Thank you so much for having me.

Tim Ulbrich: I’m excited to do this. We had a conversation a few weeks ago, and you got me fired up about your path in real estate. As I mentioned, we’re wanting to do more with this topic in the community. I think your story is really going to inspire many, so I appreciate you taking the time. And before we jump into your specific journey in real estate investing, including your current holding, talk us through your pharmacy career thus far since graduating from West Virginia University in 2000.

Aaron Howell: OK. I started out — kind of rewind that a little bit back to 1994. I graduated high school and my aunt — I kind of started college that August. My aunt was at the local pharmacy talking to the pharmacist there. She’d mentioned, hey, my nephew, he’s looking for a job. And the pharmacist there had mentioned like, hey, we’re actually looking for a technician. So I just kind of luckily got the job, started there, loved it, enjoyed it, kind of soaked everything up. You know, I knew I’d be kind of aiming for that as a career. So I was just like a dry sponge at that point just soaking every little bit of info, working extra shifts when somebody needed to trade or couldn’t work a shift. Got into pharmacy school, graduated, and moved to Charlottesville, Virginia, took a job here in town. And I didn’t know a soul. I remember talking to my mom and grandmother and they were like, “Why are you moving to Charlottesville?” And I just kind of just wanted to go somewhere and get kind of a fresh start — not that anything was bad back home, but I moved here, I didn’t have any relatives, didn’t have any friends that were living here, and kind of just started from scratch and started working. I worked for about probably a year and a half as a staff pharmacist. And then I took an overnight position at the pharmacy there. At the time, they were open 24 hours. Did that for about a year and then I started floating from various pharmacies kind of in central Virginia. And did that for about three years. At one point, you know, I was kind of approached by my district manager to take a PIC job at a local pharmacy, the one that was closest to my house. So I started there, did that for about three years, then I changed companies and then took a job with them. Worked for about 10 years, and so I worked up until about 2008 for Kroger. And then back in middle of 2008, I kind of had the idea of maybe changing companies. There had been some transition kind of with the leadership at Kroger. And so I made the move to WalMart chain. Literally, a good friend of mine was working as the PIC there and he’s like, “Hey, we’ve got a spot open.” It was like maybe half a mile, maybe a mile down the street, so I made the move then. And at that point, I had bought my first townhome at 2006 or so. This was 2008. And I worked up until June of 2018 at WalMart. And at that point, made the move down to a part-time position at the University of Virginia Health Systems.

Tim Ulbrich: Awesome. And that’s your work as an ambulatory pharmacist. And we’ll talk a little bit as we go through, I’m sure, how real estate investing allowed you to go down into a part-time position as you were able to supplement some of your income. But let’s start back at why real estate investing. Obviously, many pharmacists listening I’m guessing have much of their investments tied up in 401ks and 403bs and other areas, which certainly makes sense. But you obviously said, hey, I want to also get involved in real estate investing. Why was that the case? And where did that desire come from?

Aaron Howell: I mentioned that the house, or townhome I had purchased in 2006, you know, it really started kind of there. By 2009, I’d kind of outgrown the place just space-wise. I was like, I need a bigger place. I think I wanted a yard and a garage and things like that. So I decided to move a little bit outside Charlottesville to a small community called Crozet. It’s kind of to the west of Charlottesville, kind of toward the mountains. And bought a home, and this is kind of like in the height of the Great Recession. We had listed the house for sale, the prices were decreasing and decreasing and decreasing. So we had it on the market for about a year. My realtor at the time was like, “Hey, why don’t we go ahead and just rent this thing?” So I was like, OK, sounds good. So about a month later, he had brought a tenant to look at the place. She decided to move in, and you know, the lightbulb kind of went off at that point. She stayed a few months and then she lost her job and she had to move away, but I found the second tenant myself. And she did great. She eventually purchased the place in 2016. She was a great tenant for a beginner landlord like me. I’d go to fix something or go to go by to pick something up, and she had the place looking better than when I lived there. So she was a great start. But somewhere along the line there, I think the lightbulb just kind of went off. And I kind of thought to myself, OK, I can outsource my debt and take advantage of the tax benefits and maybe put a little bit of money, aka cash flow, in my pocket at the same time.

Tim Ulbrich: So I find it interesting you kind of accidentally fell into that first one. You mentioned the recession, not being able to sell the condo, and that person recommending that you get into a rent situation, which turned into a purchase. Obviously the numbers made sense. Can you talk a little bit about the cash flow with that property in terms of what was that doing in terms of month-to-month, which obviously I’m sure gave you the momentum to say, hey, I want to do more of this, you know, with other properties.

Aaron Howell: Grand scheme of things, I pretty much broke even. I might have maybe had $50 or $100 a month cash flow.

Tim Ulbrich: OK.

Aaron Howell: At that point, I wasn’t the one making both mortgage payments. I did that for a year. It was kind of painful. But you know, with her kind of making the mortgage payment and then long story short, when I sold the property in 2016, she had paid the property — or I had paid the property down to where I actually got a check at closing. Even though it was a monumental real estate fail, it was kind of like a high tuition real estate university for me over those seven, eight, nine years.

Tim Ulbrich: Yeah. Yeah, and I think it’s a good strategy even though you accidentally fell into it, I think it’s often something that people might think about, especially if they’re in a good rental situation with their first home and they’re looking to buy a second home or a condo situation like yours. You know, do they have the financial margin, the capacity to keep that property if the numbers make sense, of course, and purchase their second property but ultimately be able to rent out their first? And I guess my question for you on that point, Aaron, is you obviously had put yourself in a financial position that although painful, you could short-term take on two mortgages as well as come up with a down payment on a home without having to sell that condo. So I think for some of our listeners, they might be thinking about, there’s no way I would move in unless I pull the equity out of this to put down a down payment. So can you talk a little bit about how you were able to put yourself in the position, you know, whether it was you had paid off debt at that point, you had solid savings that allowed you to be able to front the two mortgages as well as come up with the down payment on the new home without needing the equity from the condo?

Aaron Howell: Yeah. You know, at the time, I had done some good saving. I had some money kind of set aside in the bank. You know, all through those years, there was a great shortage pharmacy market-wise. So from when I graduated in 2000 to when 2008 I had left Kroger, there was a huge opportunity for overtime. I mean, I’ve got a picture of me holding up like five paychecks, and just kind of like — it was kind of crazy at the time.

Tim Ulbrich: The good old days.

Aaron Howell: The good old days, yes. You know, like Kroger would pay us monthly. But they would pay you weekly for overtime. So I had gotten I think maybe a paycheck or two and like two or three overtime checks. And it was just a good time. I saved that money, though, and kind of was able to get into the second home.

Tim Ulbrich: Yeah, I’m guessing we have recent graduates that are like, what is this guy talking about? This doesn’t even exist. But what I heard there is you were intentional about saving it. Obviously, I think that could easily have been sucked up with other expenses. And I think being intentional to have liquid savings, whether it be for an emergency fund or beyond that, to put yourself in a position to be on the offense when it comes to something like a real estate purchase. I think that’s such an important, important detail in that story. So you accidentally kind of go into this first property, a condo you couldn’t sell, you turn it into a rental, you mention it’s break even, maybe a little bit better. Where did you go from there that ultimately obviously has led to your current portfolio? Talk to us about the second, the third, the fourth property and how you made those decisions.

Aaron Howell: Somewhere along the line, sometime after moving or right before moving out to Crozet, I become — got interested in hiking and mountain climbing. And I’d went to a mountaineering school in Alaska for a week on Denali, or in Denali National Park in 2008. I’d been to Mexico and climbed some of their highest peaks in 2009. So 2011 rolls around, and I fly into Las Vegas to go climb Mount Whitney, which is the highest mountain in the Lower 48 states. And my mom had mentioned before I went, she’s like, “Hey, get some of those real estate booklets that they give away for free like at gas stations and McDonalds.” And I was kind of like, “Huh?” And she’s like, “Yeah, the market out there is really depressed. You know, grab one of those while you’re out there or a couple of them and bring them back to take a look at them.” And you know, I completely blew her off. I’m Point A to Point B lots of times and I landed in Vegas and immediately made a beeline to Bishop, California, driving for brief stops in Death Valley and looking around a little bit. But real estate was not on my mind at that point. But a month or two later, she had sent me some listings via email and she’s like, “Hey, I’ve been in contact with an agent there in California” — not California but Las Vegas and you know, “Do you want to fly out there maybe and take a look at some of those properties?” And I’m just kind of like OK? Maybe? So we made the trip out there. And the market at that point, this was probably August or so, maybe late August, September of 2011.

Tim Ulbrich: OK.

Aaron Howell: The market at that point was just crazy. People were buying stuff left and right because it was half of the original price, a third of the original price, so we got one place under contract. It was pretty much Class A, you know, nice, gated community. The house was about five or six years old. We picked it up for like $90,000. I think it recently had sold for $270,000. It was getting probably $1,100-1,200 rent per month.

Tim Ulbrich: OK.

Aaron Howell: So it was kind of very easy. We had been recommended to a property management company there by the realtor. We used them from the get-go. They did great. So about six months later, I go back and I buy the second property on my own at this point kind of getting a taste for that first property. Again, the market was just crazy hot. Stuff would come on the market, it looked good, and it would go under contract by noon, 1, 2, 3 o’clock. So at this point, I didn’t fly out there at all. I just trusted the realtor’s input. She was able to get me into another property. We got it for $100,000. Again, $1,100-1,200 rent per month, pretty much Class A in a nice, gated community. And you know, the funny story is — and I highly do not recommend this — I never saw the property. I didn’t go out there to see it, I had the home inspector do the home inspection, I got the report, I had pictures, but grand scheme of things from purchasing it to selling it in 2017, I never physically laid eyes on the property, which was strange. Again, I don’t recommend that for the most part. But so things go well there, 2012, late 2012, get that property, and at the same time, I started getting my pilot’s license, so that kind of put property buying on hold for awhile. I’m still managing at WalMart, doing things there. The company was great to work for up until that point. 2013 rolls around, I have some mutual friends who introduced me to my wife. So I met her. 2014, we get engaged. Late May or so, maybe early May of 2014, I walked into my realtor’s office just kind of saying hey, shooting the breeze, and he hands me a listing for a duplex here in Charlottesville, which is near the college, aka prime rental market there. So long story short, after probably about four months of working on closing and whatnot, we purchased the duplex. And Day 1, it was pretty much a cash cow. It’s also been the problem child of the portfolio too.

Tim Ulbrich: There’s always one if not more.

Aaron Howell: Yes, exactly. You know, there’s been many days I’m like, sell it. Sell it all. But for the most part, like the last couple years, it’s had 0% vacancy. The property management company here just keeps it — if the tenant doesn’t renew, they have them move out four or five days ahead of time and then July 1, they’ll have a new tenant in there and ready to go. So 2014 rolls around, 2015, early in January, I got married. We at that point — I had kind of found Bigger Pockets online and was looking in the marketplace there and then discovered Cleveland. So we at that point, probably June, July, contact a realtor up there and we fly up there, take a look at some properties, we go to an Indians game, we went to the Rock and Roll Hall of Fame, had a great time.

Tim Ulbrich: Awesome.

Aaron Howell: But we get a house under contract, single-family home at that point and close on it probably November or so. And in the meantime, my realtor here again knowing kind of what I’m looking for, he shows me a townhouse that was a foreclosure just here in the neighborhood. There was no sign up in front of it. Lots of times, he and his partner don’t put signs up in front of properties. They just list on the MLS because they don’t want people just tire kicking. But I can see the townhouse from right here, from my back porch. And I had no clue that it was for sale, but we go in there, and there was an awful smell, the carpet was messed up, not one of the appliances in the kitchen worked properly. Like the refrigerator was dead, the microwave was missing the handle, the oven’s bake cycle didn’t work. But we end up purchasing that about the same time we did our first purchase in Cleveland. You know, again, that one here local, the townhouse I can see from here has been a great rental property. We’ve had pretty much 0 vacancy the last couple years. So 2016 rolls around, and we purchase another duplex in Cleveland, kind of later in the year. And then things at work kind of changed late 2016. You know, it was kind of happy-go-lucky. I had built a kind of great staff there at work, and then kind of late 2016, you could hear kind of like winds of change on the conference calls. Everything went from like, “You guys are doing great. This pharmacy is leading in this, this pharmacy is leading in this. You’re doing great,” to late 2016, it went from that to kind of like, “Hey, we need to cut hours.” And you know, at this point, it was kind of like, OK. So another couple months go by, maybe another two or three months, and I’m like, I need to get my butt rolling with my portfolio. So I redid some things. I changed our home equity line around a little bit. The things in our neighborhood were selling for a lot more than I had ever purchased for back in 2009. So we redid the home equity line and kind of got things rolling there in Cleveland. I went back I think maybe in April or so for a home inspection. We had got a quad under contract there. And it went from the home inspection, everything looked pretty well. And I remember kind of flying out that day to go to Cleveland for the inspection and this little voice kind of in the back of my mind was like, how dare you think you could leave pharmacy and be a real estate investor? How dare you? But I knew that other people had done it, so I was like, if other people can do it, then I can do it.

Tim Ulbrich: Yeah. Now, so that’s really — it’s really awesome. And first of all, congratulations. I mean, what you’ve done here — and we’re going to dissect it a little bit more, I’ve got a lot of questions that I’m hoping our listeners are thinking as well — but first of all, congratulations. I mean, what you’ve done and I think obviously you’ve taken some risk, calculated risk along the way, you’ve taught yourself. And I think for many of us, especially when we’ve been in school for so long, maybe residency training, other things, there’s kind of that one-track mindset of maybe I can only do this. But I think what you saw as changes were happening in the market and obviously latching onto an area that was of interest to you that would diversify your income and give you options, also allow you to build your portfolio and long-term wealth, I think it’s really incredible. And so many things that I want to dissect. The first one — and you alluded to this maybe a little bit with the HELOC when you talked about the Home Equity Line of Credit, you know, if I’m somebody listening to this and I have no real estate investment properties, I’m thinking to myself, man, he’s just talking about buying properties, buying properties, buying a home in Vegas, buying a duplex in Cleveland, buying a quad in Cleveland. So what is your strategy? How are you coming up with the cash to buy these? Are you putting these on conventional loans with 25% down? Even that, where is the cash coming from? Has it been savings? Has it been a HELOC? Has it been a combination of? And what might be some strategies our listeners can find in that area?

Aaron Howell: Yeah, that’s a good question. So basically, the home equity line, I had purchased my house in 2009. And for a long time, I had worked really hard to pay it down, to pay the principal down. And I paid extra whenever I could. I would get a bonus at work and I would use that to just pay the mortgage down. So eventually, I’d build up equity. The market here, the values were improving, and you know, I was paying the principal down. So eventually, I opened up a home equity line and over the years, I’ve kind of used that as a bank to fund purchases. So I’ll take like a big chunk of principal for the down payment and then with the cash flow from Property A, Property B, Property C, I’ll take and pay the home equity line back down or use the home equity line to pay more principal down on the original property.

Tim Ulbrich: OK.

Aaron Howell: I just basically use that kind of as a bank. It could be problematic. You actually have to make payments on the home equity line.

Tim Ulbrich: Sure.

Aaron Howell: And it’s almost like the bank’s giving you enough rope to hang yourself with.

Tim Ulbrich: Yep.

Aaron Howell: But you had to be kind of somewhat responsible in a controlled kind of fashion.

Tim Ulbrich: Yeah, and I’m glad you mentioned obviously there’s risk there as well. But I think many investors — and I know several, and my wife Jess and I have explored a similar path — once you put yourself in a good equity position on your home, if done well with calculated risk and you understand the risk and you have a good emergency fund and you’re buying properties that you’ve done your homework and you know that the numbers and all those things, obviously you can mitigate that risk. But nonetheless, the risk is still there. And you have to be aware of it, but I think your point is well taken is that we don’t want our listeners to hear this and say, “Oh, well, I’ve got a decent amount of equity in my home and I’m just going to run out and purchase properties and use it as a bank and hope for the best.” So I think that obviously, there’s payments that come with the HELOC, obviously the longer you have that money out, you’re going to be paying interest on that depending on the rate, a whole host of variables to think about. But I think that strategy is one that our listeners should think about that especially when they either have their student loans gone or maybe have a really good debt payment plan, got a really solid emergency fund and have a good equity position on their primary residence, OK, how can they then begin to move into that next level, offensive position if they’re interested in real estate. And I think this speaks so well to some of the challenges with $0-down mortgages and other things that you know, if you enter into your primary residence with a good equity position to begin with and then you can ensure that home is at a price point that you can ideally make aggressive payments, even potentially extra payments to build more equity, it’s going to give you options in the future. And here, we’re talking about one option being that you can then potentially invest in real estate. What, Aaron, do you look for — and we’re going to talk in a little bit about, you know, maybe preference of property because I know you have a variety of things from duplex to quad to single-family homes, you started with a condo, but before we do that, what are you looking for in terms of general rules of thumb when you’re screening properties to say OK, I think this one looks good enough in terms of something I might want to invest in? Are there a couple rule of thumbs? And I know this is obviously a complex question, but a couple things that you tend to focus in on?

Aaron Howell: Yeah. You know, initially, I think I kind of looked for location. I wanted the property to be in an area where there are going to be tenants who want to rent the property. I mean, you could buy something in a population of a town that’s like 2,000, but it’s going to be hard to rent it. So that’s one thing. Probably No. 2 is the price, obviously. You want to be able to cash flow some. 3 is the condition kind of some of the systems in the house, you know, like how is the roof, the hot water heater, what are the condition of the units? Because at some point, you’re going to be putting that money back into or into the property, and you’d like to put it in later than sooner. Those are some of kind of the key things. But location, primarily is the big thing.

Tim Ulbrich: OK. And you mentioned, I know for our listeners, we could get into this in the future as well, but on Bigger Pockets, they often talk about a 1% rule, which is obviously a very general rule of thumb. But in short, the idea is if you buy a property for $100,000 and you’re able to rent it out for $1,000 a month, then obviously you’d meet that 1% rule. And the examples you’ve given so far were above and beyond that. Again, very general rule of thumb. But I’m guessing something along those lines is numbers you’re looking at but other variables that are included in there as well, correct?

Aaron Howell: Yeah. Yeah, absolutely.

Tim Ulbrich: OK. So one of the other questions I had for you is I find it fascinating that you have invested in multiple areas, so obviously you started with the condo, you mentioned the Vegas property, you talked about some others you picked up in Virginia where you’re located, you mentioned identifying the Cleveland market as a unique opportunity where you saw and have continued to invest. And then one we haven’t talked about is you’re also doing some investing in the Pittsburgh area. But I’m guessing as our listeners hear that, they might be thinking, man, how are you comfortable with investing outside of the area? You know, you can’t necessarily just drive down the street and see how everything’s going. And I could see that being both a blessing and a curse. And so talk a little bit about the out-of-area investing or long distance investing and how you became comfortable with that. And what are some things our listeners might want to consider if that’s an area they’re going to dabble into?

Aaron Howell: Yeah, originally the out of the area investing was in Vegas. We were just essentially at that point looking at the barrier to entry, which is price on the property, what would our down payment be? So that was a big thing. Some reservations generally you would have kind of at a distance would be like how are you going to manage the property? You know? And a lot of people ask me like, do you manage those yourselves? And I always answer like, no way, man. No way. So a good property manager is going to make your life a lot simpler or make your life a lot tougher. And that’s kind of my key is just honing in on that property management company. You know, the one we had in Las Vegas is amazing. The one we have here locally, they’re great. Our Pittsburgh property managers are great. I’ve recently just changed property managers in Cleveland, just kind of wasn’t comfortable or wasn’t necessarily real happy with the management there. So we’ve made that change. But investing at a distance, it’s a little less comfortable than you would normally like it. I mean, I would love for all my properties to be here in the Charlottesville, Albemarle, Virginia area. But the barrier to entry because of price is pretty prohibitive. So I’ve kind of got to go where the market is available, where I can purchase things that cash flow well. I mean, I could buy a house here in our neighborhood and buy it for $300,000, $400,000, $500,000 and charge $2,500 rent, but I’m not going to make the cash that I do say like if I purchase a duplex in Cleveland for $100,000 and I’m getting $1,500-1,800 rent.

Tim Ulbrich: Yeah, and I think what that does is, you know, to your point, it allows you to look more strategically at markets where the numbers make more sense than the area in which somebody is. So for example, my wife and I are here in Columbus, Ohio, and I don’t claim to know the Columbus, Ohio, market as well as many other investors do, and I’m sure there’s plenty of deals to be had regardless of market. But we’ve gone outside and identified some opportunities with another pharmacist up in the Muskeegen, Michigan, area because of just more opportunity there where the numbers make sense. And one of the books I read — and I’m sure you’ve read as well — and we’ll link to in the show notes for our listeners is Bigger Pockets has a really good book on long distance real estate investing. And one of the takeaways I had from that in addition to being able to then shop by market and where the numbers make sense is it really forces you I think to develop systems and processes and checklists that I think allow you to scale and grow if that’s a goal that somebody has. And I’ve seen that firsthand where, you know, when I can’t drive down the street and see something or run by the property before work and have to work with contractors at a distance, you start to put some of those other checks and balances in place and develop some of those other systems because you can’t control, you can’t do all of those things. And I think that in hindsight, now that we have this first one behind us out of area, I feel more comfortable doing more knowing that I think we’ll be able to grow a little bit quicker because it’s not all on our back, you know? And again, property management being another one that I often hear people that want to do that themselves. And I, like you, tend to think about it as hey, look at the deal and calculate in property management, of course assuming it’s good, as a cost to ensure that the deal still makes sense with that cost included because I think that’s going to allow you to get to the point of growth that I’m assuming many people want to get to with their portfolio in the future. Do you have, Aaron, you’ve mentioned single-family homes, duplexes, quads — do you have a certain type of property that you would say, I really like these better for this reason? Or are you just looking at a variety of opportunities that come your way and looking at where the numbers make sense?

Aaron Howell: You know, I think a lot of people like to start with single-family. You know, I’ve graduated more to multi-family at this point. You know, I kind of think maybe the bigger, the better at this point. You know, I have the same issues on a duplex that I have on a six-unit apartment building that we purchased. Same issues, but scaling it is just a lot more manageable for the property manager and the six-unit absorbs the hit. Say if we had to change a hot water heater on a duplex, that’s $800-1,000 there that basically eats up cash flow for a month or two. Where if we have a six-unit building and we have to replace a hot water heater, that’s maybe a half a month’s cash flow.

Tim Ulbrich: Makes sense.

Aaron Howell: So over time, I’ve kind of graduated into the bigger, the better. But also too if there’s a deal in front of me on a duplex, I think I probably would take advantage of that also.

Tim Ulbrich: Awesome. Yeah, that’s cool. I think just the reinforcement there of looking at the numbers and being open to the opportunities, whether it be something you hadn’t originally thought, whether that’s a duplex instead of a single-family home, or a quad instead of a duplex, or another variance of an area. So I mentioned in the introduction, Aaron, that you’re a real estate agent in addition to being a real estate investor. So give us that backstory. Why did you decide it was worth your time and effort to get an agent’s license?

Aaron Howell: You know, over time, as the portfolio grew bigger, I knew at some point in the last year or two that I needed to change my CPA services. And so I did change that last — I guess officially this year for the first time. But in the last year or so, I’ve kind of sat down with them on several calls, and they kind of planned out some strategies. And one of those strategies was becoming a real estate professional in the IRS’ eyes, that I was spending probably, you know, an hour or two hours a day just dealing with real estate stuff in general. And they said, you know, “Hey, you need to take care of keeping a log with your time you spend on doing things. And then you need some active hours.” And where I wasn’t managing the properties myself, they recommended me getting my realtor license because I needed to have some of those hours for the year to be where I’m materially participating in real estate. So where I didn’t have the management, where I’ve outsourced the management, that realtor status or license was the way to go about that.

Tim Ulbrich: OK. Got you. One of the questions — and you and I talked a little bit about this when we talked a few weeks ago, but I think it’s important, as I’ve said on the show before, that people have a purpose and vision behind their investment decisions, whether that’s investing a 401k where they’re saving a significant amount of money, whether it’s starting a business or here, whether it’s buying real estate. And we often talk about this as the financial why. Why do you want to do what you’re doing? So as you reflect on building this mini-real estate empire, what’s the goal? I mean, obviously you’re going to hopefully build wealth over the long term and you have positive cash flow, all of those things, but what is the bigger goal, the why behind what you’re trying to do with your real estate investment portfolio.

Aaron Howell: The bigger goal, I think it will change over time, but the bigger goal now is to be able to generate some just time. I’m down to three days a week as a pharmacist. If I need to go in more or if I want to go in more, like example, I think last week on Wednesday, I went in for like three hours. I had to be in Charlottesville for a meeting at the bank. And my wife, she had just went out of town for a nurse’s conference, so I was like, you know what, I’m going to go in. I’ve got to be in at 11:30 or so, so I’m going to go in and work from like 8:15 to 11:15. You know, I was scheduled for two days, and I’d taken off the Wednesday, Thursday, Friday. So I actually did go in Wednesday for the three hours, but I just, meh, I’ve got to go, see you guys later, bye.

Tim Ulbrich: Right.

Aaron Howell: And they were just kind of funny, they were short staffed that morning so I walk in there, they’re like, “What are you doing here?” And I just came to work a little extra. They were like, “OK. Great.” But you know, having the real estate portfolio, ultimately, I’d love to be able to generate some more flexibility with my schedule, if not just mine, my wife’s also. She’s working like nine days in a 10-day pay period now. So she works five days one week, and then she’s off one day the next week, so she works four that week. Maybe giving her the option of maybe working 2-3 days a week, just like kind of what I’ve done. You know, she’s had kind of a stressful two or three days at work, and she’s telling me about it last night and so I think down the line, maybe giving her that option too. Yeah.

Tim Ulbrich: Love it. Yeah, love it.

Aaron Howell: And we don’t have kids yet, but at some point, we’ll have kids. And we have a little park down from our house and they have soccer leagues. I’d like to be able to coach the kid’s soccer team at some point down the road.

Tim Ulbrich: Yeah. Options, option, options. I mean, I think that we try to talk about that a lot in terms of when you’re putting together a financial plan — and here, we’re talking about real estate investing, but it could be a whole host of things that putting yourself in the position to make decisions rather than those decisions being made for you. Speaking of your wife, one of the things I was thinking about as you told your story is that you were already investing in several properties, I think out in the Vegas area, and then you mentioned you met your wife and you ultimately, of course, got married. Talk to me about that in terms of you were doing this investing, then you got married. I’m guessing we have many people listening that maybe one partner’s really interested and the other either maybe is not interested or is kind of like, yeah, I’m on board, I’m not on board, I want to learn more. How has that worked for the two of you? Was she instantly on board or was that a journey that you two have kind of come along together along the way?

Aaron Howell: To be honest with you, she’s not terribly involved in real estate investing. I think she kind of gives me a blank slate and just says, “Hey, don’t screw up.”

Tim Ulbrich: No pressure.

Aaron Howell: No pressure there, no pressure. But you know, I think at this point, she trusts me. I’m cautiously ambitious with the whole portfolio. But I think at this point, she trusts me. She’s really on board, though, with the realtor. She’ll ask me like, “Hey, what’s this couple? Do you think they’re going to find what they’re looking for?” Like, “Well, you know, I think they really liked the house today.” And she asks me questions about that. I mean, she’s aware of what’s going on for the most part, but she kind of after about 30-45 seconds, she’ll glaze over. But at this point, she trusts me and things are going well for the most part. So she kind of lets me take charge.

Tim Ulbrich: Sure.

Aaron Howell: And just don’t screw up.

Tim Ulbrich: Don’t screw it up. And I would encourage our listeners, if anybody finds themselves in a situation where one person’s been eagerly learning this topic by listening to Bigger Pockets, reading books, and the other maybe is not as interested or just hasn’t been as eager in their learning, I think dragging somebody along is certainly never the right approach, especially when you’re potentially taking on some risk. And I would encourage people to dive into education together. I think when two people can learn together, just like we talk about with the budget, setting a vision, setting the goals together, and then working on the budget, I think the same thing is here true. If you can learn together, you know, watching webinars, listening to a podcast, reading books, I think it’s much more likely to be successful when you can both be on that journey. Before I ask you as a wrap-up question, ask you about your current portfolio because we talked a little bit about the beginning and some things you did along the way but haven’t talked about exactly where you are today, where would you recommend — I mean, Bigger Pockets is one resource you mentioned, which I would second, great resource. Anything else you’d recommend to pharmacists that are listening that say, “Wow, he’s really got me intrigued. I want to learn more. I want to think about getting started in 2020.” Are there certain books, other websites, other podcasts that you really have found helpful for you in your own learning and your own journey?

Aaron Howell: Yeah, I found at some point along the way, I think I had heard him as guest, the Michael Blank podcast on multi-family investing. It’s Blank. He’s German, so the k is pronounced a little differently than you would normally say it. But it’s spelled Blank. I’ve found that podcast, I found that ultimately to be very kind of informative as far as what I wanted to do with my portfolio and my career. That’s been a great find. Another thing too if you’re interested in investing, generally, there’s some local meetups for real estate investing. I’m sure, you know, any major city, you could probably go to meetup.com or find a meeting, maybe a once-a-month or twice-a-month meeting there. And just kind of immerse yourself with people who are doing the same thing or doing things that you’re wanting to do.

Tim Ulbrich: And we’ll link to the podcast you mentioned, we’ll link to Bigger Pockets as well in the show notes. And we’re excited, we’ve got some more content as I mentioned at the beginning of the show and hopefully some opportunities coming your way as well for those that want to learn more about this, for those that want to invest in properties. And we’re excited to build upon a lot of the existing content and education that’s already out there and bring a lot of that to the pharmacist community. So let’s wrap up, Aaron. Where are you at today? Tell us about your current portfolio and what you see coming ahead here in the next year or so.

Aaron Howell: So at this point, we spent a lot of this year kind of consolidating the stuff we’ve purchased in 2017-2018. And when I say consolidating, I mean kind of developing systems more so. We’ve had the property manager transition. But we’ve renovated a bunch of units. And at this point, I’m kind of with the portfolio, I’m looking to syndicate. We did our first deal in January as a syndication.

Tim Ulbrich: Oh, cool.

Aaron Howell: So I’m looking to do a little bit more of that, kind of gathering some passive investors for that. But you know, just have been kind of enjoying things a little bit, kind of got the realtor status off the ground here in the last couple months and just kind of been enjoying things.

Tim Ulbrich: So how many doors do you have? And what cities are you at today here in 2019?

Aaron Howell: We are currently at 29 doors. We’ve got 13 in Cleveland, 12 in Pittsburgh, and then four here locally.

Tim Ulbrich: Awesome, awesome. Very cool. Well, thank you so much, Aaron. I appreciate you taking time to share your experience with our community. I think it’s going to be inspirational. Again, as I mentioned, I think many people in the community have a desire to learn more if nothing else or maybe need that nudge to say, hey, I’ve been learning for a couple years, now I’m ready to get started. And I think hearing from others that have done it and done it well is really helpful. So thank you so much for taking the time to come on the show and congratulations on the success you’ve had and wish you the best of luck in the future.

Aaron Howell: Alright, thank you very much.

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YFP 128: How One Pharmacist Helped Another Out of Homelessness


How One Pharmacist Helped Another Out of Homelessness

On this special Thanksgiving episode, Tim Ulbrich welcomes Melissa Akacha, a pharmacist that helped rally her community to bring another pharmacist out of homelessness. This is a story of generosity, of being aware of your surroundings, and extending a helping hand to those that encounter misfortunes that could happen to any one of us.

About Today’s Guest

Melissa Akacha was resides and works as a community pharmacist in King of Prussia, Pennsylvania. She studied pharmacy and graduated from the University of Science in 2004. Melissa is divorced and has two daughters, Ava (11) and Emma (8) and is also mom to Paris and Milan, their two French bulldogs. In her free time, Melissa enjoys coaching cheerleading, crafting, watching movies, cooking and home projects.

Melissa has compassion for all living things and believes we all have a purpose. She trusts her instincts and takes time to slow down and enjoy moments throughout the day. Her children have taught her how to love in a way that is simple and pure.

Summary

Melissa Akacha, a community pharmacist in King of Prussia, Pennsylvania, shares her story of rallying her community to bring another pharmacist out of homelessness.

Melissa first saw Lynn when she was taking one of her daughters to school. Lynn was living in her car with two large dogs in the Target parking lot. When Melissa saw her, she knew that something wasn’t right. She approached Jen, her friend, neighbor and former social worker, to let her know about the situation. Together, they decided they would approach Lynn and see if she needed help. In the meantime, they posted about Lynn on an app called Nextdoor to see if anyone in the community had seen her or knew what was going on.

Melissa and Jen walked up to Lynn’s car and asked her, “Is everything ok?” Lynn couldn’t roll down her window or start the car because her battery had died. She said that she was fine, but the two knew something deepers was going on. They offered to come back later in the evening with pizza so they could talk and help her figure out a plan.

When Melissa and Jen went back, they learned that Lynn had lost her husband died suddenly and that she was faced with a lot of medical issues and bills and felt embarrassed to be homeless as she was a former pharmacist. She didn’t reach out to anyone to ask for help, but she said that Melissa and Jen were the first ones to ask if she was ok.

A group of 15 community members joined together to help Lynn get her life back on track. Lynn now lives in an apartment with her two dogs and has a community to support her.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Tim Ulbrich here, and happy Thanksgiving on behalf of the team at Your Financial Pharmacist. I hope everyone is having a great day with family celebrating this important holiday and reflecting upon everything that we are thankful for in our lives. This week, we have a special episode for you highlighting an incredible story of generosity involving a former pharmacist that was forced into homelessness. And then her community, led in part by another pharmacist, stepped up to help. That pharmacist that stepped up to help is Melissa Akacha, who we welcome on the show today. Melissa, welcome and thank you for taking the time to come onto the Your Financial Pharmacist podcast.

Melissa Akacha: Thank you so much for having me, Tim.

Tim Ulbrich: Before we jump into learning more about this story, tell us a little bit about yourself, why you wanted to become a pharmacist, where you went to school, and where you currently work and live.

Melissa Akacha: Sure. Well, I’ve always loved medicine, pharmacy, and my father actually was the one who had a great relationship with our local pharmacist and kind of sent me in that direction. I went to University of the Sciences, graduated in 2004, and since then have been working in retail. Right now, I reside in King of Prussia, and I’m fortunate to work in King of Prussia as well in the community.

Tim Ulbrich: And I sense that just based on the story, which we’ll get into here in a little bit, the sense of community and rallying around somebody that’s in need, I had a sense through reading that story that you’ve been a part of working and living in this community for some time. Is that true?

Melissa Akacha: Yes. Yeah, I actually grew up here and pretty much stayed in the area. Love King of Prussia, love the community, had a great experience with the schools here. And now I have two daughters, and they go to the same schools that I did.

Tim Ulbrich: That’s awesome.

Melissa Akacha: Yeah, so it’s great.

Tim Ulbrich: So this story really I think is a story of life’s unexpected turns and misfortunes that really could happen to any one of us. And here, it just happened to be a former pharmacist, Lynn Schutzman, that had found herself living in her car for two years, homeless. And from the article on WEUR 90.9 NPR, “After 43 years as a pharmacist, Lynn could have never imagined starting her days like this. In the morning, she’d go to McDonald’s to wash up and then drive around.” The story goes on to say, “That was the lowest point in my life. I had no dog food. I had just emptied the last bottle of water into the dog’s bowl, so I had nothing to drink. I was very upset because I realized I would have to surrender the dogs because I couldn’t feed them that night.” And I think that, Melissa, that many listening may be wondering, how is it possible for a pharmacist to become homeless? So tell us a little bit more about Lynn’s story and how she got to the point of ultimately living in her car for a couple years.

Melissa Akacha: Right. Yeah, Lynn was — unfortunately had many health issues. Well, rewinding back, she had lost her husband. He was only in his 40s, he died suddenly. After that, her life kind of started to fall apart. She had cancer, she had kidney problems, she was in and out of the hospital, she was wheelchair-bound for quite some time and was unable to work. She unfortunately had with medical bills, and also not a lot of — she wasn’t able to have children, so she didn’t have that family support that a lot of us are fortunate to have during those financial times when you need some help. She did not have that. And because she was a pharmacist in the community, a mentor to so many, she actually was just really embarrassed to be in her situation. And she still stayed in the community. She had a beautiful home in King of Prussia, and she still stayed in the same area and went to see some doctors. Nobody knew that Lynn was homeless. She kept in contact with some people, but she didn’t share. She was embarrassed because she was professional and she saw herself as a failure. And she probably, she was ashamed to ask for help.

Tim Ulbrich: Sure. Yeah, it makes sense. I think about your role as a community pharmacist and many others that are listening, and I think you become very much a pillar of the community, especially to those patients that you serve that come to see you, you know, every other week or every month. And people are often coming to you and looking up to you as a role model and looking for advice. As you mentioned and as the article highlights, Lynn was really trying to go unnoticed, didn’t want her previous patients and people in the community to see that she was homeless and living out of her car. But — but — you noticed her and you noticed something that was wrong. So when did you see Lynn? And what went through your mind when you saw her?

Melissa Akacha: Well, in the mornings before I go to work, I have two daughters and on my way to take my oldest to school, I’ll go at Starbucks and go through the Target parking lot. And a couple days, maybe it was about two days, I would see a car parked and there was a woman sitting inside. And I noticed her car was full to the brim of stuff, clothes, it looked like paper towels, and I saw an older lady sitting there. And I thought maybe she’s on break. I wasn’t really sure. But the second day, it was maybe the second or third day when I drove by, I looked at my daughter, and I said, “I just have this feeling I need to go check on this lady.” That’s it. I really don’t know how to describe it. It was just a feeling where I felt I need to check on her. And just having with the pharmacy background, the first thing I was thinking is dementia, maybe she’s confused, maybe she’s lost, maybe her family doesn’t know where she is. Something was just off about the situation. And I dropped my daughter off to school that day and I was with my best friend and neighbor, Jen Husband. And she has a social worker background. And I was telling her about the situation, and I said, us being the two nosy ladies we are, we said, “Let’s go up there together and see what’s going on.” And talking with Jen, my other daughter mentioned that when she was on a walk with her friends, she noticed this woman also. And she said she had two larger dogs in the car. So that right there was an indication that this woman is living in her car. And when Jen and I approached Lynn that day, she could not open the window, and she couldn’t turn the car on. She had no gas, and the battery died. So we spoke with her maybe like 2 inches of the window being cracked, and we asked her, you know, “Are you OK? Do you need help?” And she said, “No, I’m OK.” And we said, “No, we don’t think you are. And will you allow us to help you?” And she kind of gave us a look like, yeah, I’ve been down this road before. And I said, “You know what? There’s a lot of good people in this world. And through social media, we’re going to rally them together. And we’re going to be back later today.” I had to work that afternoon, and I promised her, I said, “We’re going to come back tonight and bring our children. And we’re going to have pizza together. And we’re going to talk, and we’re going to come up with some plan.” And as silly as it may sound, I wanted Lynn to trust us and our intention.

Tim Ulbrich: Yes. Yep.

Melissa Akacha: And that’s why I wanted to come back and just have dinner together and sit in the parking lot with our kids and just talk to her and let her know that our intentions are pure, and we’re not going to take advantage. I didn’t know what happened, how she got here. That day, very important that we were just talking about where she worked. And she said, “I’m a pharmacist.” And I said, “Really?” And I thought, I still in my head thought, oh, OK, she’s probably crazy. Maybe she’s — and then she started saying names. She said, “I worked for CVS.” And she started saying so many names that I knew. And it’s just impossible. And when she said that, then she said, “I went to University of the Sciences.” And I said, “Oh my gosh, I did too.” And she, her face, when Lynn spoke about pharmacy, her face lit up. She loves pharmacy. She loved her job. She loved being a mentor to students. She loves telling stories. She worked at a lot of different places, and she’s just a great, vivid storyteller. That was a really special part of her life. And that day, I went to work, and I called the store where she had claimed to work at. And that pharmacist, I said, “Do you know Lynn Schutzman?” And I told her where I found her, and that pharmacist just started crying. “Melissa, please, this woman is so generous. Generous beyond words. And she’s always been a giver for everyone. And she would always buy everyone gifts on holidays and never accept anything and tell students to save their money. And she lost her husband and kept working and always said she was OK and never asked for help.” And she said, “Please help this lady.” And I’d never forget it. I just had chills. I thought to myself, wow, this is someone who really, really deserves being helped. Just the way she was described, I thought, wow. What are the chances that I would have came across someone and had this very, very similar background? And personally, in my life, a lot of people would say, “How can a pharmacist” — and I’ve had to answer this question because once we started doing fundraising, many people would say, “How could a pharmacist be homeless?” And they would Google salaries and say, “How could that happen?” And myself, I knew it could happen.

Tim Ulbrich: Sure.

Melissa Akacha: Because I a couple years ago went through an awful divorce and if I didn’t have support, I could be in that situation. I was a paycheck away from that situation. And overnight, my life changed. And that could have me if I did not have family. And there was plenty of times I was embarrassed. Here I was, self-sufficient, and then overnight, the expenses are enormous and it’s embarrassing. So life throws a lot of different things to a lot of people, and it’s really important to prepare. I didn’t prepare because I thought, oh, I’m in my 30s, I don’t have to worry about anything, and what’s going to happen? And I wish I did more. And so I saw myself in Lynn a lot. And I personally was very, very draw to her because of that.

Tim Ulbrich: It’s such a good reminder I think for many of us, many listening, of why we went into this profession to begin with, to help people without judgment and to see need where need is, that need needs to be met, and I really respect your ability to just be aware. You know, I think I’d feel guilty that in life’s busyness of work and with young kids and running from one thing to the next, do we even have margin in the day that we can see those needs that are presented to us probably every day that we just may not even be aware of and then to be able to follow through and follow up on those. But to follow up in a way that doesn’t cast judgment. I mean, I think that it’s easy for people to maybe hear this story and sympathize and empathize with Lynn and be able to rally around her, somebody who was a helper to others in the community and also a pharmacist. But you didn’t know any of that before you initially decided to engage and to step in. And I think that’s great. And one of the articles, or one of the quotes from the article that really stood out to me is when Lynn says, “You feel like somewhere, you had to have failed. You accomplished all of this, but now, here you are in the gutter, and you don’t want people to know. You don’t want to ask for help.” And I think it’s such a good reminder to ask how you can help others or ask how somebody is doing. You never know where that conversation can go. So tell me, Melissa, a little bit more how the rest of the community got involved. So you identified this need, you begin to build that trust and relationship over a meal and having pizza — and I’m going to ask you in a little bit how you engaged your daughters and you alluded to that a little bit and the impact that that’s had — but the community specifically. How did you and your friend Jen get the community involved? And what was the response from the community?

Melissa Akacha: So the first thing we did was when we went on an app called NextDoor, and that’s a site that people in the community, they post things, everything from something they’re trying to sell to “I need a mechanic, can anyone recommend something like that?” And I’ve used that site before, and we posted on there saying that there was a homeless lady living in Target parking lot, and she needs our help. And I had no idea, Jen and I had no idea what response we were going to get. And I was working that day, and you know, we had said on there that she is unable at this time to get out because of her car battery, and she began getting I would say hundreds and hundreds of dollars of gift cards, food, water, dog food, there were veterinarians that came, dogsitters that came. That night, when we went back, she had — there was just random people coming all — like cars and cars of children, family, pet lovers, and Lynn could be — I understand now because she kept saying, I’m just overwhelmed. There was a time I thought, wow, is she upset?

Tim Ulbrich: Sure.

Melissa Akacha: And she just said, “I’m overwhelmed with love. I’m overwhelmed. I can’t sleep, I can’t talk. I’m just overwhelmed.” And now, I get that because I’ve had plenty of moments that I just was on a high and couldn’t sleep and just in awe of what people were doing. And sometimes, people were coming and they would just give her, they gave her something home-cooked and just kind words or a card. All sorts of things to the point that night, she said, “I don’t have room in my car anymore.” And we actually took some things out because she had no room. And we said to her that night, we said, “Listen, we are going to — we need some time, we’re going to plan this. But this is the last night, we give you our word, that you will be in your car.” And Jen and I went that night, and we had a big talk, and we were seeing a lot of donations and a lot of people were saying, “We want to give. How can we give?” And all these suggestions. And we knew that so many people wanted to help, and we weren’t expecting it. So we needed to organize it. And we set up a GoFundMe and a Facebook page, and people began donating through there. Although there was some backlash because there was some negative things that happened before with GoFundMe, but we were thinking that was going to be an issue, but clearly, it wasn’t.

Tim Ulbrich: Sure.

Melissa Akacha: And we got her in a hotel with some funds immediately the next day. And then we had to think of our long-term goals, getting her healthy. She could barely walk at that point. She had a big ulcer in her leg and getting her wound care — there was a lot of stuff we had to do. So we kicked about — I think there was about 15 or 16 people from the contacts in NextDoor, between that and Facebook that we began to trust, Jen and I, and we had a meeting at our home and we delegated. We had one mechanic come and take care of all her car issues. We had another woman come handle all the dog walking because these were dogs that were bigger dogs, a Beagle and a Sheltie, and they needed exercise and getting introduced again, socializing because they were in a car two years. We had a woman take care of that. We had someone, we had a couple ladies help with her financing, seeing what we could do. So we had — that was really helpful. We all, everyone came together. We talked that night, and everyone kind of split up and did their thing. And we just got her life in order. And it was beautiful. We finally found a apartment complex, we definitely wanted her to be in King of Prussia because now she has friends and family. And she needs long-term support. And we need her. Everyone needs a Lynn in their life. She’s just an amazing lady, and we needed to be close with her. So she is in the area. And getting that apartment together, that was one of the most emotional things because so we had this place and we had lists of donations and people were purchasing new things and donating items, everything from forks to toilet paper to cleaning supplies to beds. Her place in about nine hours was completely furnished, repainted, decorated. It is such a beautiful, beautiful, beautiful apartment. Everyone came together, and there was maybe I bet 20-25 people just coming in and out that day, putting furniture together, painting. And that night, when Lynn came through the door, she’d said that day, she said, “You know what? You guys just do your thing. I’m tired.” And we thought, OK, we’re really going to surprise her. And now, this was a woman who had traveled a lot, I mean, all of us, we can think of so many possessions that we have that mean stuff to us. Lynn had nothing. She even had to sell her wedding ring, just whatever she could fit in the car, and that was basically some clothes, dog stuff, dog bed, and water. And her diploma was all chewed up. So we even had a copy of her diploma, we had what was engraved in her wedding ring, which she had mentioned. We wrote that down and someone had a beautiful plaque, had that printed. We had a lot of, we tried to personalize it with a lot of things that she had lost in the moves and losing her — that meant a lot to her.

Tim Ulbrich: That was an incredible video that I think was linked to in the WBUR article of her walking into the apartment and just an incredible moment of seeing all that generosity come to fruition. And we’re going to link to our community in our show notes of the GoFundMe campaign as well as the Facebook page. I know we have a community that is generous and wants to be a part of giving in their own communities or even in situations like this. So we’re going to make sure to link to that. One of the things, Melissa, that you said that really stands out to me is that you mentioned before — I think it was the last thing, I think you said before, it was going to be the last night she stayed in her car, there was people coming, giving all types of things. And some were just coming to express that they were caring for her or thinking about her, others were actually bringing more tangible items, and I’m sure that was to all different degrees of how people were able to contribute. And I think that’s such a great reminder that I think giving, while financial giving is certainly an important part of giving, there’s many other ways that we can all give and contribute in our communities. And that could be time, that could be facilitating other people’s that maybe have the monetary means, it could be contributing financially, but I think there’s so much opportunity to give if we can just slow down and see that opportunity that is in front of us. Now, one of the things, Melissa, that really, really stood out to me as a father of four young boys where my wife and I are really trying to instill a mindset of gratitude and giving is in the WBUR article, there’s a photo of you and your two daughters. And I can’t help but think of the impact this story, as you’ve already alluded to their involvement and your role modeling of generosity and giving and the impact that that has had on them. Can you talk more about how you have included and taught your girls about giving and generosity throughout this story and this journey?

Melissa Akacha: Yes, well, the girls have, they have been with me through every step of the way, through cleaning out the car that night, which was a big project to moving to painting, and they’ve loved it. And they actually — it’s funny, every person with a messy car now, the kids nudge me and say, “Mom, I think they need help!” So they just, they really want to — they loved, loved, loved helping. And they had a lot of questions too, you know, as children. How could this happen? Where’s her family? And so I mean, I’ve tried to be as transparent as possible and also age-appropriate. But I really am so thankful that they got to experience all this and see — they would ask me, why are these people, why are they coming all day? And how do you know them? And I don’t know them. I don’t know these people, and they are coming all day because they’re good people and they want to help, and there are good people in this world. And we need that, we all need to hear that because there’s so much negativity.

Tim Ulbrich: Yes.

Melissa Akacha: And many people — one thing that struck me is that many people that were helping, sometimes they would just start crying that day when we were painting and decorating everything, they would just cry because they would say, “Oh my God, you have no idea how my heart needs this right now,” because look at all these people coming in. And it is, it’s overwhelming. I sometimes right after that, I just couldn’t even talk about it because it was just — it was overwhelming to just see so many people. We couldn’t even answer. I mean, we literally couldn’t get a committee here at our house because it was too much for us — too many people wanted to help. And we needed to just organize it. And Jen and I were not expecting this at all. So it really changed our lives. Many people came up to me and said, I walked past her. I drove past her, and I didn’t stop. But now I’m going to stop, and I’m going to ask someone if something’s wrong, are you OK, can I help you? And Lynn did tell me, she said, “You know, I didn’t go out of my way asking,” she’s like, “But you guys were the first people that asked, can I help you?”

Tim Ulbrich: Wow. Wow.

Melissa Akacha: And a lot of people have approached me and said that, “Yeah, we saw her at the park. We saw her washing up in the bathroom, and I didn’t say anything.” And you know, also we have to use caution. So I do understand why some people would be hesitant or the situation, but I think the takeaway message is sometimes just take an extra step because our — my gut that day just told me, you’ve got to check on her. And I am so glad I did. And I now try to incorporate that in my life just little things, asking people if I can help them or smiling or how are you? And my kids, they do the same. And it’s been a very rewarding thing that I’m thankful I got that experience to meet her and also to see that in life, see just abundance of good people. People love hearing this story because they like hearing good things. They really do.

Tim Ulbrich: Exactly. Yeah. I think in a time where there’s so much negativity, I mean, I’m grateful. I don’t know you personally, but your story has inspired me and is just a great reminder of being aware, being intentional, asking is everything OK? How can I help? And I think that will be the same for our community as well. So thank you for your willingness to share. And let me end on this quote from the article that really, I think just brought it home for me. It says, “None of this was part of Lynn’s original plan. She did everything right: the right education, the right job, the right marriage. Still, there was so much misfortune outside of her control. Misfortune that could have happened to anyone. She thinks about others in that same situation, and she hopes all of us can step up to ask our neighbors a simple, life-changing question, is everything OK?” So as we take a minute to reflect upon this incredible of generosity on this Thanksgiving Day, we are hopeful, I am hopeful that this is an opportunity for you, for me, as individuals to reflect on opportunities for giving, for generosity, and for being more aware of our surroundings and furthermore, how we as a community can do the same. You know, Anne Frank is quoted as saying, “No one has ever become poor by giving.” And we have a vision for the YFP community to be a generous group and to inspire one another to work towards achieving financial freedom in part to be in a better position to give to others. So again, on behalf of the YFP team, happy Thanksgiving to you and your loved ones, and Melissa, to you and your family as well. And thank you so much for taking the time to come on the show.

Melissa Akacha: Thank you. Happy Thanksgiving to everyone.

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YFP 127: A Widow’s Journey to Love, Happiness & Financial Independence


A Widow’s Journey to Love, Happiness & Financial Independence

Michelle Cooper, author of I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence, Director and Co-Founder of XML-W, a division of XML Financial Group, and former practicing attorney, joins Tim Ulbrich on this week’s podcast episode. Michelle shares her personal story and unique perspective on finances and law to inspire hope for those experiencing loss and provides sound financial principles for those seeking financial independence.

About Today’s Guest

Michelle P. Cooper is the Director and Co-founder of XML-W, a division of XML Financial Group which focuses on the planning and financial needs of women at all stages of their lives. She brings to XML-W over 25 years of experience in the estate planning, finance and tax fields. Prior to joining the XML team, she worked for Merrill Lynch and U.S. Trust as a Director helping high-net-worth clients design and update their estate plans. She also had the responsibility of educating over 650 financial advisors on estate planning and trust services. Before starting her career at Merrill Lynch in 1996, she worked as an attorney specializing in tax and estate planning for the law firms of Ralph R. Polachek & Associates and Joseph, Gajarsa, McDermott & Reiner, P.C.

Michelle recently wrote a book called I’ve Still Got Me – A Widow’s Journey to Love, Happiness & Financial Independence. In this book, Michelle shares her personal story of resilience after the loss of her husband to suicide. By sharing her journey and the life lessons learned along the way, she hopes to empower women to become more active and involved with their finances and estate plan so they can live a more healthy and secure life. Michelle has been featured on several local and national media outlets and was recently named one of JWI’s 2019 Women to Watch.

Summary

Michelle Cooper joins Tim Ulbrich to share her personal story of navigating her finances during loss and grief and her unique perspective on financial planning for those seeking financial independence.

Michelle is the Director and Co-founder of XML-W, a division of XML Financial Group which focuses on the planning and financial needs of women at all stages of their lives. Michelle worked for Merrill Lynch and U.S. Trust as a Director helping high-net-worth clients design and update their estate plans and previously worked as an attorney specializing in tax and estate planning. When she was 36 years old, she unexpectedly lost her husband to suicide. Although she talked about estate planning all day at work, she didn’t think something like this would ever happen. They luckily they had some aspects of their financial and estate plans in place, however, her husband Scott had previously handled everything financial. She was fortunate to have a background in estate planning and was able to find financial resiliency during such a difficult time.

Michelle shares three practical tips that every couple should think about: insuring both names are listed on every service account, having a conversation about bills before tragedy strikes, and automating bill payments.

She also shares her five building blocks to an estate plan which includes creating the following documents: a will, a revocable living trust, a power of attorney, a healthcare power of attorney and a living will. While not everyone will need each of these, it’s important to know what you want when you’re not here. Michelle shares that having a will and power of attorney are documents that everyone should have in place.

On this episode Michelle also discusses the importance of life and disability insurance and the process of getting your estate plan in place.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. We have a special guest for you this week, Michelle Cooper, an attorney who specializes in tax and estate planning and author of the book “I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence.” A little bit of background on Michelle before we get started with today’s interview: She’s the director and cofounder of XMLW, a division of XML Financial Group, which focuses on the planning and financial needs of women at all stages of their lives. Prior to joining the XML team, she worked for Merrill Lynch and U.S. Trust as the Director and Senior Trust Specialist, helping with high net worth clients designing and updating their estate plans. She also has had the responsibility of educating more than 650 financial advisors on estate planning and trust services. Before starting her career at Merrill Lynch in 1996, she worked as an attorney specializing in tax and estate planning. Michelle earned a BS degree in business from Miami of Ohio University and her JD and MBA degrees from Capitol University here in the great city of Columbus, Ohio. She’s married to Paul Cooper, and they have five wonderful children together. She enjoys yoga, traveling, a good bottle of wine — amen to that — and helping women thrive with their financial plans. Michelle, welcome to the Your Financial Pharmacist podcast.

Michelle Cooper: Thank you, Tim. It’s great to be here. Thank you for the warm welcome.

Tim Ulbrich: Absolutely. I’m so excited to have you. I’ve really enjoyed your book and what we’re going to talk about in today’s interview, again, your book “I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence.” I really think this book is fantastic. I would highly encourage our listeners to check it out. I think it’s well written, it’s easy to digest, it’s honest, it’s raw, and I think it’s a quick read. And I really do think the key principles that we’ll talk about here on the show are those that will stick with you and are action-oriented towards one’s financial plan. So your story that led to the book — and the book that we’ll discuss today — starts at the age of 36 where your life really took an unexpected turn. You were thriving in your career, you were a new mother to twins, you were happily married, and then in an instant, things changed. What happened at that moment in time?

Michelle Cooper: Yeah, like you said, Tim, I was happily married. I had been with my husband Scott for almost 11 years. And we just had a great time in our marriage. We did a lot of traveling and dining and just fun stuff. And then we decided to have kids and with the miracle of modern science, we were able to have twins. And they were quite small. We had a boy and a girl, but we were just elated. It was really I think the best time in our marriage and in our lives. We were so excited. And my career was going gangbusters. I was nine years in to kind of growing the corporate ladder at Merrill Lynch. And you know, one day, it was a March rainy day, I was sitting at my desk and looking out and the phone rang. And it was late afternoon because Scott usually called me about that time. And I was expecting kind of our normal banter, which was “What are you making for dinner? What do I need to pick up?” But instead, he kept saying, “Michelle, I love you. I love you. I love you.” And I said, “I love you too, honey. And I’ll see you at home.” And I buttoned up my desk and walked to the elevators, took the ride down to the parking garage, and it was in that elevator ride where I recalled the conversation, and my heart started racing. I was thinking, something was weird. That was not what Scott normally would say over and over again. And when I got into my car and out of the garage, I kept dialing his number, dialing his number, and there was no answer. And when I got home, he wasn’t there. And I filed a police report, and weeks later, I got a call from the police letting me know that they had found him in the Potomac River. And in an instant — he had committed suicide — in an instant, my life went from just a normal, everyday where I was happy with life to a day that changed me forever. I was a single mom overnight, a young widow, and I had more responsibility than I could ever have imagined. It was overwhelming.

Tim Ulbrich: And in the book, Michelle, you describe that evening you come home. And as a father of four young boys and happily married to my beautiful wife, I could just picture that moment you describe in the book where life’s kind of going on, you’re trying to bathe them and get them ready for bedtime and the uncertainty of the evening and just really, really a compelling picture into how difficult that moment was and the weeks to come. And as you talk throughout the book, not only that moment obviously personally, what that meant for your family, but what we’ll talk about here today in the interview just what that meant for your financial plan. And hopefully, it’s an opportunity for our listeners to really ensure that they have the right tools and resources and knowledge and understanding of their own financial plan, even if they have somebody else who’s helping them, whether that be a spouse or a financial planner or even potentially both. So at this point, you have 2-year-old twins, you’re working full-time as director at Merrill Lynch, so obviously you have what would be a unique background in this field in terms of estate planning attorney and working in finance where you’ve helped many, many couples plan their own estates. So surely, things were all in order and in place when it came to your financial plan, right?

Michelle Cooper: You would think so. But the answer, unfortunately, was not really. I talked about estate planning all day long. I knew it inside and out. I talked about finances with clients. And I knew that we had to do planning, and we had some things in place, but you know, frankly, I never thought anything like this would happen to me, especially not at that time in my life. I had read about lots of hypotheticals in law textbooks and I knew from dealing with client situations that things happen in life, but I just never expected it. So we divided and conquered. Our plates were full, and this is similar to so many other people in their 30s and 40s where you’re just juggling work, home, everything. And we divided and conquered the way gender roles typically fall. Scott handled everything money, he did our investments, bills, and taxes. He was really good at it, and I was like, great. I totally trust you. And I handled all things children and running the household. And I just, I had to pick up the pieces. And I was fortunate because I had this background knowledge, and we had taken some steps that really enabled me to find resilience and rebuild my life. But not everybody is that lucky to have some planning in place.

Tim Ulbrich: Yeah, and my wife and I, we’re talking the evening or after that I had read through your book, and you know, it’s a very similar situation for us. And I would say on the other side would be for all the inner workings and understanding of the day-to-day of things that she’s doing with the kids, I’ve done similarly on the finance side. And we have a planner that we work with, and we have legacy folders and documents and estate wills and plans, but there’s that level of preparation, but then there’s also just the day-to-day. And we’ll talk about some of this in terms of paying bills and whose names are on accounts and what’s the monthly process look like and how important it is for each individual to make sure they have a solid understanding of that. One of the things, Michelle, that stood out to me in the book in Chapter 2, you start with a question from your financial advisor the day of the funeral. And that question from your financial advisor was, “Are you planning to keep the house?” Why was this question so overwhelming at the time?

Michelle Cooper: Yeah. I’ll never forget that day. I mean, I can picture it in my mind right now. And when he asked me, I was really taken aback because I thought, well, why are you even asking me that question? Is there a possibility I can’t continue living in this house? And I just remember my stomach turning more than it already was. And shortly thereafter, I started digging into all our financial details because I knew that in order to keep the house, I had to make sure I was able to pay the mortgage and the real estate taxes and utilities. And frankly, I had no idea. But that house, when you go through a tragedy, was my one source of stability.

Tim Ulbrich: Right.

Michelle Cooper: And so just the thought of moving in addition to everything else going on was overwhelming. And so that’s why that question really rocked my world. And I had to figure out at that point, what did we own? What were our assets? What did we owe? What were our expenses or liabilities? And did I have enough income coming in to cover all the expenses? So I did a deep dive into our whole financial picture.

Tim Ulbrich: And my hope with this episode is our listeners will be able to hear your story and certainly there’s many others out there and use this as an opportunity to make sure that they are effectively aware and educated and ready when it comes to certain aspects of the financial plan. So I want to get practical for a moment in that I’m guessing there’s many of our listeners that are hearing the beginning of this interview and thinking to themselves, I’ve got some work to do to bring myself up to speed with my significant other or spouse. Or potentially on the other side of that, I’ve got some work to do to help my partner, my significant other, spouse, get up to speed. And in the book, you go through three I think very practical tips that help people begin to execute and think about this. And I’ll read those off and then we can talk about each one in more detail. One of them is ensuring your name is listed on every service account. The second one is having a conversation about the bills before a tragedy strikes. And the third is automating payments or setting calendar alerts. So let’s tackle that first one. Tell us more about this idea of ensuring your name — and that it’s listed on every service account and why that’s so important.

Michelle Cooper: You don’t really think of these things when you’re moving into a new house or you’re renting an apartment. It’s either one person or the other if you’re in a relationship that just wants to check that it’s done, that the water is turned on, that you’ve got power, you’ve got internet hooked up, you’ve got your cable. And no one’s really thinking about hey, both people need to be able to talk to the service provider. So when all this happened, we had cable, I had telephone, and all of those bills were in Scott’s name. So when I called the provider, they would say, “What’s your name?” I’d say, “Michelle.” And they’d say, “Well, you’re not Scott. We can’t talk to you.” And then I’d explain the situation, they’d say, “Well, I have to get a supervisor.” And it was a long, drawn-out process that really could have been simplified if when we opened the account, my name and Scott’s name would have been on the ownership. We would have both had authority to talk to the provider, make changes. So I encourage everyone, know what your bills are and make sure that if something happens to your partner, you have the ability to keep the lights on. Very simple.

Tim Ulbrich: And you give a great example in the book, and I think you do throughout as well, where you talk about an example where a couple was living together, but they’re not necessarily married. Both are contributing to savings for expenses but that the bank account may have been opened in one of those individual’s name. So I think these are just situations to think about, whether it’s service accounts, whether it’s bank accounts, whether it’s people that are living together and maybe they have a home but the home’s only in one person’s name and the other is contributing to it. And therefore, that asset isn’t necessarily — that they would have a portion of that. It’s just a good reminder I think in this tip, and again, as you do throughout the book, to think about the implications of some of these as we sign up for accounts. Because as you articulated well, you know, we just want to make sure things are moving. We want to make sure the water’s on, we want to make sure the lights are on, especially when you’re in a very busy phase of life where you have lots of things that are happening. The second tip you give here is having a conversation about the bills before tragedy strikes, which I’m guessing everybody hears that and says, “Yes, of course, I agree with that.” So my question here is tips or strategies on how to have this conversation and why, of course, this is so important as well.

Michelle Cooper: Well, when you think of like the fun thing that you want to do in the evening, it’s usually not talking about bills.

Tim Ulbrich: Right.

Michelle Cooper: So I always try to advise people, don’t do this when you’re tired. Do it on a weekend when you’re relaxed. And start off by saying something positive like, “You know, I want to make sure that we’re both on the same page with our expenses.” And maybe bring in some wine or something fun like a nice dinner out. And you know, make it conversational where you’re not accusing the other person of spending too much. You’re a team. And you are taking care of each other by making sure that each of you know what the expenses are and how they get paid. So sometimes, bills are on autopay or you have to pay them through an online password because you turned off the hard copies that get sent. I mean, there’s a lot of things that have happened since my tragedy where bills are automated. So it’s important to know how to access paying them and what is currently set up? And again, don’t make it harder than it is. It’s helpful to maybe make a list of the bills that you think are there just to start the conversation. And then it will flow from there.

Tim Ulbrich: Absolutely. And I think you do a nice job just building on that in talking about the third tip, really automating payments. I think especially in the situation where a tragedy strikes and maybe there is an account that didn’t have both names on it that payments can continue to be made. And again, you talk about setting calendar alerts and the importance of that as well. One of the things in the book you mentioned is that “a larger percentage of people fail to have a financial plan that will help them track and achieve their goals. And if you can take away one tidbit from this book, please take away the importance of having a financial plan.” And so my question for you in the backdrop of somebody who’s maybe listening that says, “You know what? I’m single, I don’t have any children, I’ve got $200,000 in debt. I’ve got very little assets to manage.” You know, whether it’s them or somebody that does have some of those variables involved in terms of children and other assets, why is this concept of a financial plan so critical?

Michelle Cooper: So when you’re thinking about a financial plan, I like to look at it more of a life plan. And it doesn’t matter what age you are, how much you have in assets, what your income is. You need to have a plan to achieve your goals and to achieve inner happiness. And so I analogize a financial plan to getting directions through a GPS or Google Directions where you don’t know how to get to that address, but you have a roadmap to follow. And if someone doesn’t have a lot of assets but maybe they have student loan debt or credit card debt, a financial plan is going to help you structure how do I repay those debts? What’s the interest rate? What’s the underlying principle that I owe? Can I refinance? Can I consolidate? If you are newly married with young children, part of the financial planning process is making sure you have an estate plan with term life insurance, disability insurance. So there’s many different aspects to financial planning that are going to be important depending on what stage of life you’re in. So it’s super important no matter where you are on the spectrum of your life.

Tim Ulbrich: And as you were talking, Michelle, I was just reflecting on all the conversations that Jess, my wife, and I have had with our financial planner, Tim Baker, over the last three years and all the things we’ve talked about from goals and visions for our family to the what are we going to do next month in our sinking funds and our accounts and our estate planning documents. And I think what resonates with me is that certainly I think that’s important for everyone but especially when you think about in the example of when a tragedy or a situation like this strikes is that you have a plan, you have a roadmap, you know, to use your example, you have directions and where you’re trying to go and I think you have a planner who’s in your corner that can really help continue to move that forward and especially in such a difficult time, talk that out loud and continue the path and also continue to execute on the things that you were trying to move forward with.

Michelle Cooper: That’s exactly right.

Tim Ulbrich: I want to dig into this next section. It almost has a checklist, just like we did with those three tips. I want to talk about things around income protection, appropriate insurance coverage, and estate planning. We’ve talked about many of these things on the show before like life insurance, disability insurance, and estate planning. But I want our listeners to hear it in this show. And my hope is that they’ll walk away with each one of these say, “OK, what are the things that I need to be thinking about with life insurance and disability insurance or my estate plan?” And hopefully this can be a reminder that they heard us talk about it before and they didn’t execute on these things, and they need to execute on these things, that they can take that action step here today. So let’s start with life insurance. Why is life insurance so important? You know, who do you generally think about absolutely needs life insurance? And then you alluded to term life insurance. Talk to us a little bit more about this area.

Michelle Cooper: Yeah, so there’s two main types of life insurance. There’s term, which goes on for a period of years, and whole life, which covers you until age 95 or 100. Term is more economical the younger you are and the healthier you are. That’s also true of whole life. But term is so important in those years where you’re really relying on a dual income to support your family. So as you listen to my story, put yourself in my shoes and think, if something happened to my partner or my spouse, would I be able to continue living the same lifestyle with the income that I earn or the assets that we have saved. And if the answer is no, then you have to plan for enough life insurance to produce the income or the cashflow that you need to continue living your life. And it’s not just until the kids are in college, unless you want to go back to work. It’s really for the rest of your life. And that number could be a big number because if you think about a $1 million policy, I usually look at that producing about $50,000 of income. So depending on what your expenses are — and that’s one of the things that you do in the planning process is figure that out — depending on your expenses, that’s going to dictate how much you need in terms of insurance. And there’s different ways to buy the insurance. Sometimes, there’s group policies at your employment. You can also work with an insurance agent to get a separate policy. And I usually recommend if you can, having both because you never know what’s going to happen with a job. Sometimes companies downsize, you might decide to go to a different job that doesn’t have life insurance. And those policies that you get through employment are not portable. So a really good plan is going to have a separate term policy. And get it when you’re young because it’s going to be the cheapest at that point.

Tim Ulbrich: Absolutely. And what you said just resonates with a lot of what we’ve talked about here before on the show in terms of individual coverage on top of the employment coverage but also not using just a general rule of thumb for life insurance calculations. You do a really nice job in the book of encouraging people to take a step back and say, what are you trying to do in terms of replacing with this policy? And for everybody listening, that’s going to be different depending on their situation, depending on if somebody’s at home and whether or not they go back to work, do you want to keep the home, this is going to serve retirement funds, kids’ college savings funds, you know, what’s the purpose of these funds and really objectively trying to evaluate that to determine how much need there is before purchasing a policy. Now, disability insurance, again, we’ve talked about this before on the show, but I think long-term disability, especially for our audience, is so important where their income is typically their greatest asset. And I think many pharmacists, certainly like life, they don’t like to think about a situation where they may pass away, and they don’t like to think of a situation where they may become disabled and unable to work as a pharmacist. So talk to us about the importance of disability insurance, especially when you think of somebody like a pharmacy professional.

Michelle Cooper: Yeah, I mean, I think disability insurance is at the same importance level of life insurance. It goes to relying on that income for your life. And if you’re not able to work for whatever reason, you need to replace that income, not only for yourself, but for your spouse and your family. So if your employer has a disability policy, I highly recommend. And also with your insurance agent or financial advisor, evaluating what types of disability policies are out there and work it into your financial plan.

Tim Ulbrich: So to our listeners, life, disability, I know many of you out there listening have thought about these, haven’t executed on these plans for probably just a variety of reasons. Again, it’s not necessarily something that’s fun to think about it. I know as I’ve shared before on this show, it’s something that I delayed in my own financial plan. So make sure to head on over to the website at YourFinancialPharmacist.com. We’ve got a whole section that helps you understand more of what Michelle and I are talking about here in terms of types of coverage, what to look for, projected costs, so make sure to head on over to YourFinancialPharmacist.com and check out our section on income protection. Now estate planning — and again, I think this is a topic we cannot emphasize enough. We’ve talked, again, before on the show about this. But the quote I love that you have in the book from Suze Orman was, “Estate planning is an important and everlasting gift that you can give to your family. And setting up a smooth inheritance isn’t as hard as you might think.” So for a moment I want to break down the different parts of an estate plan, quick definitions that I think our listeners can take away and begin to think about and evaluate their current estate plan or if they don’t have one, begin to think about what they need to have in place.

Michelle Cooper: So we’re going to talk about basically what I call the five building blocks of an estate plan. And the first one is a will. A will basically spells out your intentions on how you want to be buried, that’s in there, that’s one of the first paragraphs. It also names a guardian for your children, so for all of you that have children under age 18, this is so important because if you don’t name a guardian or a contingent guardian and something happens, a court’s going to decide who’s going to take care of your kids. And we don’t want that. A will also spells out how you’re leaving property to your beneficiaries. So it could be leaving something outright, meaning they get it right away when they’re age 18. Or it could mean leaving money in trust until they’re a certain age, which is what I recommend. And a will could work by itself or depending on what state you live in and what the probate laws are, sometimes they go hand-in-hand with what’s called a revocable living trust. There are many different types of trusts, but what we’re talking about is a trust that is revocable, meaning you can change it. And the main purpose of a revocable trust is a few things. One is avoiding the probate. And probate, depending on your state, can be costly and time consuming and an attorney would be involved. So states that have very expensive probates, people or attorneys will typically recommend a revocable trust. It also helps for incapacity. So for your listeners that have older parents and maybe one has dementia or Alzheimer’s or some kind of illness, a revocable trust would allow the spouse to step in and manage the affairs quicker if someone’s disabled. The same thing for us. It’s also private. So when you open a probate estate, a will gets filed at the county where you pass away. A trust is private unless there’s some kind of litigation. So a lot of folks like the ability to have things private, avoid probate, and have that incapacity protection. So those are the two main governing documents that spell out your intentions. And then there are powers of attorney. So there’s what I call two different flavors. One is a financial durable power of attorney, and what durable means is it’s going to go through incapacity. So it’s a document that you would sign today giving your agent, usually it’s a spouse or maybe a brother or sister or relative, the ability to transact financial affairs in the event you’re incapacitated. You’re alive, but you know, mentally or physically, you’re just not able to. Very important to have and also healthcare power of attorney. And the people that you name in these documents might not be the same. For example, I am aging and my husband’s financial power of attorney, but in the healthcare power of attorney, he’s named my brother because my brother has more health knowledge — he’s a physician — than I do. And so he would be a better choice in kind of an emergent situation than I would. So you have to think about who you’re naming and if they’re the right choice. And then you have a living will. Some of you might have signed these if you ever had surgery in the hospital. It’s a document that spells out whether you want to be kept alive if you’re in a vegetative state, if you want the plug pulled. And that goes along with the healthcare power of attorney.

Tim Ulbrich: So you covered will, revocable, living trust, financial durable power of attorney, healthcare power of attorney, and living will. And you talked about those in more detail, all of those, in the book. So when I hear “revocable living trust,” that implies there is a irrevocable living trust. So what are the main differences between the two?

Michelle Cooper: So an irrevocable trust, there are so many different types. But when you hear irrevocable, it means that it’s a document that typically cannot be changed unless you go through the court process. So some examples of an irrevocable trust might be a life insurance trust, which holds an insurance policy to keep it from being taxed in someone’s estate. It could be a charitable trust like a charitable remainder trust, some people have heard of those. It could also be what we call a testamentary trust. And that is an example of is in your will, you might have provisions that delay when a child would inherit assets, say until age 40. So if something happens to you when your child is 25, your will would create a testamentary trust for them with the provisions that you and your attorney draft and talk about. And that trust is an irrevocable trust. Typically, irrevocable trusts are going to file their own tax return, both a federal return and state return. But again, there are so many different types of irrevocable trusts, you just need to know that they are typically not easily changed and they accomplish different things.

Tim Ulbrich: So Michelle, as I hear you talking about — I’m guessing many of our listeners, you know, I’m thinking of the objections as I hear this, like oh my gosh, it’s so much. There’s five documents that we talked about, it’s a busy phase of life, the costs of doing this. So you know, Suze Orman’s quote that I outlined before talked about these and suggested it isn’t as hard as one may think. So talk to us a little bit about the process of putting these together, the potential costs of doing it, and I think that will help our listeners get some guidance about OK, maybe this isn’t as big or as overwhelming as I thought to ensure these documents get in place.

Michelle Cooper: So you definitely want to look at this as something that you can accomplish very easily because you don’t have to know all the documents. All you have to know is you want this person taking care of the kids, you don’t want your kids to get money until they’re age so-and-so, and where you want your property to go. The attorney that you work with will figure everything else out. And being in this field for so many years, I do recommend that you meet with an estate planning attorney that specializes in this type of law because there’s a lot of nuances in drafting. And every family situation and different. And you want to make sure when you’re not around that what you think is going to happen actually happens. And it doesn’t have to be super expensive. You can get a plain, vanilla will and powers of attorney. Not everybody needs a revocable trust. You know, you can probably get it, depending on where you live, I would say low end, $500-800, and on up into several thousand. When you add an irrevocable trust, that could increase the bill. But the best way to find an estate planning attorney — I talk about this in the book — is you could ask your financial advisor, your accountant if you work with one, you can ask a trusted friend, you can also look at your state bar. They’re going to have different choices online. And then interview two or three of them because you want to like this person just like you like your financial advisor. You have to open up to them about your concerns with leaving money to family members because that’s the way the attorney is really going to make a good document for you.

Tim Ulbrich: Yeah, and I can attest to what you had said about a good attorney will ask you the right questions. And you don’t have to get bogged down in the legalese and the terminology of it. And that was the experience for Jess and I. We spent an hour with an estate planning attorney, they asked some great questions getting at the individuals listed and certainly talking about the basics of the documents as well. But they asked really good pointed questions, good conversation starters for Jess and I, things we needed to go back and think more about if we hadn’t thought about it already. And then that led to a follow-up meeting and essentially the drafting of the documents. We had I think one revision, and then we finalized all five of these documents. So it definitely — I think like life and disability, it’s one of those things you go through and you look at at the end and say, “Wow, I am so glad I did that. And I thought it was going to be way worse than it was in both time, expense, and how overwhelming it can be.” One of the quick tips you give, Michelle, in the book that I really like that I think is something that often gets overlooked is you mentioned outlining your burial wishes and personal property in a letter along with having a list of your digital assets. Can you talk more about that?

Michelle Cooper: Sure. So you know, we just talked about working with an attorney to get documents done. And I wanted to mention that when you sign those documents, it doesn’t mean that you never look at them again because your life is going to change, evolve and change, and some of the provisions might need to change. But at the same time, you don’t want to have to go back to your attorney every time you change your mind on how you’re leaving particular assets. So the letter that Tim is talking about is a letter that spells out for your personal assets who gets what: maybe a watch or an engagement ring, particular furniture, because what I’ve seen in my practice is that the most simple personal property can cause a lot of family conflict. And that conflict can take a long time to forgive. And by having a letter right attached to your will that spells out who you want to give what assets to, you’re going to make the job that your executor has of handing out all this property much, much easier. And the other thing is explaining what your burial wishes. Nobody really loves the topic, but when there’s a tragedy and your children or a family member is trying to figure out what you wanted, if they can see in writing that you wanted to be buried or cremated or you wanted a celebration of life party, it’s going to make them feel so much better when they’re in this challenging time trying to do what you want and what’s best.

Tim Ulbrich: And I was also thinking, Michelle, as I was reading the book and I saw you mentioned digital assets, I even just started to think, well, if my wife or I were to pass away tomorrow, like I’m thinking of things even just like family memories and photos and all those things that might reside on a computer behind a password that nobody knows how to get in or on my phone or on a Google shared drive or something. So you know, or is there letters to children or family members or other things that, again, not something you want to have to think about, but certainly memories and other types of treasures that you want to ensure can get passed on. As we wrap up, I’m going to end on a quote that you have in the introductory letter to your readers that I think sums up so well the conversation we’ve had here today as well as the takeaways from the book. And that quote is, “In order to be empowered and independent financially, we all need to take an active role in our financial well-being. The good news is that it can be done. And all it takes is the willingness to do it. I am living proof of that. You too can accomplish this by being proactive, starting early, and following a plan, whether you’re single, married, widowed, or divorced.” So Michelle, I want to thank you for your time. I want to thank you for your willingness to share your story. And I hope our listeners will pick up a copy of your book as we have just scratched the surface during our time together of the wisdom that you share in this book. We also didn’t talk about during the interview mommy guilt, finding love again, kids and money, working as a blended family, and elder care, all of which you do a great job of covering in the book. So in addition to getting a copy of the book, “I’ve Still Got Me” on Amazon or Barnes & Noble, where can our listeners go to learn more about you and the work that you’re doing?

Michelle Cooper: They can find me at MichellePCooper.com. I spell Michelle with two l’s. They can also find me on Facebook or on the XMLW Financial Group website. And I would be happy to talk to any of your listeners that have questions on the estate planning side or how to get the conversation started with a spouse, whatever your listeners have, I’m willing to help.

Tim Ulbrich: And again, that’s MichellePCooper. Make sure two l’s and a P between Michelle and Cooper. And the book “I’ve Still Got Me: A Widow’s Journey to Love, Happiness & Financial Independence.” Michelle, thank you so much for taking the time to come on the Your Financial Pharmacist podcast.

Michelle Cooper: Thank you so much, Tim.

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YFP 126: Going Beyond Six Figures Through Medical Writing


Going Beyond Six Figures Through Medical Writing

Brittany Hoffmann-Eubanks, Founder and CEO of Banner Medical, joins Tim Church to share her side hustle journey in creating a company that’s on track to hit over $100,000 in revenue and what she did to get to this point.

About Today’s Guest

Brittany is the Founder and CEO of Banner Medical and a native of the Chicago-land-area in Illinois. Banner Medical combines her passion for writing with her medical background as a pharmacist; with the goal of improving patient outcomes through educating healthcare providers. Brittany is an expert in the development of needs assessments, continuing education, and scientific writing. With over a decade of experience in community pharmacy, Brittany tailors and delivers medical communication projects in any topic area in a balanced, accurate, and timely manner.

Brittany earned her Doctor of Pharmacy and Masters of Business Administration degrees from Drake University College of Pharmacy & Health Sciences in 2012. After graduate school, she completed a Post-Graduate-Year-1 Community Pharmacy Residency where she earned her teaching-and-learning certificate, dedicated herself to patient-centered pharmacy care, and learned the business of pharmacy. It was during her residency year that Brittany discovered her passion for education and desire to be an entrepreneur.

After residency training, Brittany accepted the role of pharmacist in charge and clinical pharmacist within the community pharmacy setting. Brittany also precepts student pharmacists helping to prepare them for their future careers as pharmacists. In her free time, Brittany loves to travel to new and exciting places with her husband and family, playing with her dogs, and singing. She is also very involved in her State Pharmacy Association where she serves as a Board Member, Journal Editor, and Co-chair of the Public Relations Committee. In 2018, Brittany was awarded the Edmond P. Barcus Distinguished Young Pharmacist Award for her service to the Illinois Pharmacists Association.

Mentioned on the Show

Episode Transcript

Tim Church: Brittany, thanks for stopping by and for being part of this side hustle edition.

Brittany Hoffman-Eubanks: Thanks so much for having me. I’m really excited:

Tim Church: Well back in Episode 116, Tim Ulbrich talked with David Burkus, author of “Friend of a Friend.” He discussed how one and can and should grow their network and how to build key connections. And this really reminded me of how we met and ended up doing this podcast today. So do you mind talking about that story?

Brittany Hoffman-Eubanks: Sure. I was just looking to put my business into place with a website and kind of make everything official after unofficially starting my side hustle about four years ago. And so one of my connections that we met through a mutual friend, someone that I had been working with on my business. And I was like, “Man, I really want to get my website together, have a place where I can put my portfolio for prospective clients. Do you have any ideas?” And they’re like, “I have a person, and they’re a pharmacist.” And I was like, “Oh, that’s fantastic. Who knew that pharmacists do websites on the side?” So we were connected and got to talk to you, and I was really excited because you understood my vision of what I was looking for for the website and just turned out to be an awesome partnership. And I’m super excited with how things turned out. And we started talking about my business, and here we are in the podcast.

Tim Church: Yeah. It’s really fun. Is it OK if I mention who our mutual connection is?

Brittany Hoffman-Eubanks: Oh, for sure. I don’t think he’d mind.

Tim Church: Yeah, shoutout to Alex Barker. I think he knows everyone in the pharmacy profession, by the way. But a great guy and really cool opportunity that we got to meet through him. So Brittany, talk about your full-time pharmacist position and also your career path.

Brittany Hoffman-Eubanks: So as a full-time pharmacist during my day job, as I like to call it, I’m a community pharmacist, and so I work as a pharmacy manager and clinical pharmacist with a large community pharmacy chain in the Chicagoland area. And as part of that role, I kind of wear a couple different hats of making sure that my pharmacy is running, we’re able to take care of our patients as well as managing my team and one of my passion of working with patients. So I do a lot of MTM with patients, Medication Therapy Management, hyperlipidemia management, diabetes, especially, and then also probably my favorite part of my job as a community pharmacist is the immunizations. So I’m travel health certified, I get to see people going all over the world. Traveling is a passion of mine, so that’s kind of the day-to-day job that I have in pharmacy. And then in terms of career path, I think I took probably a pretty traditional route. I went to Drake University College of Pharmacy and Health Sciences, got my Doctor of Pharmacy degree. Also did their dual program where I obtained my Master’s in Business Administration. And then after I graduated from college, went on to do a postgraduate Year 1 residency, community pharmacy residency, with the company that I now work for as well as Midwestern University in Chicago. And I loved my residency year. It was an opportunity just to immerse myself in direct patient care, learn about the business of pharmacy, do some ambulatory care projects on the side as well as obtain a teaching and learning certificate. And that’s kind of where my nontraditional pharmacy career that I have now happened by accident during that timeframe, my residency year. I didn’t jump into it right away. I just decided to work for a little bit and really just get my feet wet in being a pharmacy manager, helping take care of patients, really just immerse myself in community pharmacy before moving onto what I’m doing now, which is medical writing.

Tim Church: Yeah, so talk about how did that happen? Where did that vision come from during your residency and as you transitioned into your community pharmacy role?

Brittany Hoffman-Eubanks: Yeah, when people ask me about this story, I always share with them that my becoming an entrepreneur happened by accident. It was in my residency year that we were asked to write a continuing medical education written piece for a pharmacist to help educate them on a topic. And as part of that process, I received some really good feedback and just kind of got the wheel moving, so to speak, of is this something that I’m interested in? Could this be something I could do in the future? How can I earn some additional money on the side in addition to what I’m doing in my day job? I love to travel, as I said, and all of those student loans, trying to get rid of them as quickly as possible. Through that process of just trying to figure that out, what I was doing, what I wanted to do, I had a friend that I had worked with — I guess I should colleague that I worked with during my residency year who moved onto a different position with a large national publication, so I just reached out to them and said, “Hey, how do you get your content? I’m really interested in potentially doing more of this type of work. Do you take writers? Or how do you obtain new writers?” And that really kind of started it. And from there, I did my first project and just kind of morphed into what I am doing today with my full-fledged business.

Tim Church: So was that your first paid gig where you just reached out and you were looking for opportunities?

Brittany Hoffman-Eubanks: It was. And actually, it’s kind of a funny story because they didn’t give me just one project. They actually gave me two to work on simultaneously. So it was a fun challenge, and actually the first project they’d given me to write about was a topic that I wasn’t an expert in. It was actually on pet medications, so it required me to just take a step back, think about what angle I wanted to attack it from, and go from there. It was such a great experience. It was an opportunity to get my feet wet and just really figure out how I wanted to move forward with this type of writing that I was interested in.

Tim Church: So how did that feel getting that first gig and actually getting paid to do it?

Brittany Hoffman-Eubanks: It was exciting. I think oftentimes, we think about how can I make money on the side? And is it going to be worthwhile, so going to be that return on investment? Or what’s the opportunity cost? You know, what else could I be doing if I wasn’t doing this right now? And I think for me, the biggest piece of it was is that all it required was my computer and my time at that time. So it was easy for me and kind of exciting to be like, OK, I can go to my day job, come home, fit this into when I have time to do this and make some extra money on the side that I can either use to put towards traveling or I can add some extra funds to paying off my loans quicker.

Tim Church: And so those were the two biggest motivators, at least initially, for kind of pursuing this side hustle?

Brittany Hoffman-Eubanks: It was for me. I knew — just to back up for a second, I came out of school with probably close to $250,000 in student loans, which is a ginormous amount of student loans. I’d done an undergrad degree first, so four years before I went on to Drake. Drake actually has a six-year program, and I didn’t go that route. I did the four years and then the additional four years. And in addition to that, added on a second degree where I obtained the MBA program and stayed during the summers to achieve that dual degree by the time I finished pharmacy school. So I knew going into that that it was going to be a lot more burdensome in terms of the cost factor. And so you know, having had that background with the MBA degree, looking at those amortization tables and the compounded interest, I was like, I’ve got to do something to get rid of this student debt as soon as possible. So I think paying that off as quickly as possible and having some extra funds was a big motivator in the beginning.
Tim Church: So your medical writing business is called Banner Medical. Talk a little bit about what your business specifically is all about, other than obviously we know it’s medical writing, but what is your mission of the business? And who are you specifically serving?

Brittany Hoffman-Eubanks: Yeah, that’s a great question. I appreciate you asking that. It’s probably the first question that everybody asks me of what is that? Or what is medical writing? So by now, I’ve gotten very good at explaining to people what it is that my company does. But essentially, if you were talking to a lot of the pharmacists out there and maybe other healthcare providers who are listening in your audience, it’s pretty simple. We write about medicine. And there’s a lot of different areas that encompass medical writing. It could be continuing medical education, it could be education grant writing, which is something that we now are experts and something that we’re typically sought out for with our writing for a needs assessment. It could be on the editorial side where we’re writing about maybe a new drug that came out or something that’s going on in the healthcare field. Or maybe even the academic scientific writing where we’re helping a company put together their manuscript for a journal submission or working with a pharmacy organization to spread some of their grant work that they’re doing. So it’s a wide, encompassing field. There’s a lot of different types of medical writing. And every business is going to excel in certain areas and have a focal point. So for me, the mission of my company, it really is a business-to-business company I would say. We serve many other businesses, helping them, whether it be through educational grant writing with the needs assessments that we do, but ultimately, it serves the patient and the healthcare provider in the end. And so for me, our mission at Banner Medical is really just to optimize that knowledge to improve clinical care or clinical outcomes for the patient. So if you think about it, when we’re writing these types of medical writing pieces, our goal is to help healthcare practitioners and clinicians, especially, make better clinical decision-making or improve their clinical decision-making so that they can ultimately take better care of their patients and improve the outcomes for them in the long run.

Tim Church: I love that, Brittany. And I think that’s so cool the way that you articulated that because it’s not just about the education piece of the healthcare provider but ultimately, what is going to happen as the end result of that education? I think that’s so great the way that you put that. So the businesses that you’re working with, is this primarily have pharmacists as the audience in terms of who’s reading this content and taking charge? Is it other healthcare providers? Is it a mix?

Brittany Hoffman-Eubanks: So when I first started my business back in 2014, it was exclusively for pharmacists and pharmacy technicians. And now, since we have been moving forward with expanding the business, we’ve moved into other clinicians as well. So for example, we now service regular physicians, we do non-physician clinicians like Physician Assistants, Nurse Practitioners, really have gone beyond exclusively writing for pharmacists, which is really exciting for Banner Med because it opens up our opportunities, additional revenue streams and additional access to helping improve outcomes for patients.

Tim Church: Now you talked about initially reaching out and getting that gig or actually two gigs in the beginning. But how difficult has it been to acquire new clients and getting them on board? I mean, was it easy after you did the first couple and then you didn’t have to market as much? Or is that a constant thing that you’re doing in terms of getting new business?

Brittany Hoffman-Eubanks: I think maybe the answer to your question is two-pronged. So when you have your own business, you spend a good amount of time working in your business as well as working on your business. And I think finding the right balance of that is really important, especially as you’re trying to grow and obtain new clients, especially. I think the biggest thing for Banner Med and me specifically is that it really comes down to the relationships that you build. So you always have to be making sure that you’re reaching out to new people, be it somebody you know through your network, just always be ready to have that elevator pitch, so to speak, when you meet someone knew and they may be interested or how you can help them or provide value to them for what they’re looking for. So to answer your question, I think for me, I spend a good amount of time each week looking for new prospective clients, now gotten to the point where a lot of times, people are reaching out to us now, seeking out our help, which is great. It’s taken a bit of time to get to that point, but I’m excited to be moving into that arena rather than having to constantly hustle to find new clients. And we have a group now of great core clients that are repeat business, which is fantastic because it makes it a little bit easier to not have to always constantly be looking for new work all the time to build those revenues. So to have repeat customers is really helpful too.

Tim Church: What percentage of the business right now is repeat customers?

Brittany Hoffman-Eubanks: I’d say about 80% at this point in time is repeat customers. And then the other 20% is new clients that we’re working with that have either been referred to us or that we’re actively seeking out.

Tim Church: Great. So talk a little bit about what is the earning capacity for doing medical writing? Because one of the things that you mentioned was basically what you needed was a computer and you needed some time. And obviously, it takes time to do what you’re doing. But talk a little bit about how much you’re charging for the different pieces of medical writing and the different focus points that you have.

Brittany Hoffman-Eubanks: So the revenue piece of it, of what you’re able to earn is to a degree, kind of limitless. It really just depends on the clients that you’re working with, what types of projects they’re asking you for as well as experience. And all of that kind of goes into the whole thing together. So there isn’t really like a strict fee that we charge for every single project. It’s always going to be individualized. But to give you an example, for this year alone, we’re on pace to be six figures this year, which is amazing compared to where I started when I had my first gig that I told you about where I was doing two projects and made about $700 for those two projects, which at the time was fantastic because it took me about two weeks to write the two different projects that I was asked for, and I made $700, which was really exciting at the time. Now, fast forward, it’s been a growth process over the last few years where I think year 2, we did a little bit over $10,000, and then it’s just gotten — the revenue stream has gotten bigger and better. So really, it just depends on how much you want to put into it and what types of projects you’re willing to take. And the other piece too that I think is really important, especially for new, aspiring writers is not to undervalue your work. You know, oftentimes, we’re afraid to charge a certain price or tell a client or a vendor that oh, I think this project’s probably going to be about $1,000 based upon the amount of work that you’re asking for and what you need whereas someone who is maybe less experienced and maybe has that fear of oh, $1,000, like can you afford that type of thing, they may undervalue themselves and say, oh, I’ll do that really big project for you for like $450. But at the end of the day, you’re putting so much time and effort into it that it doesn’t make financial sense. So it’s important to consider the type of work you’re doing, what’s being asked of you, and one of the biggest places I always start is I ask the client, do they have a budget? And what have they budgeted for this particular project to kind of help me determine if I’m going to be able to work with them within their budget or if we need to negotiate and talk about what the project fee should be.
Tim Church: Now Brittany, I’ve got to step back for a minute because you just nonchalantly said that your side business is earning about six figures on pace to do this year, which is really exciting and just pumps me up. And I think a lot of people who are listening are probably thinking, that’s incredible, No. 1. But No. 2, how have you been able to do that?

Brittany Hoffman-Eubanks: Well thank you. It’s been pretty exciting to see the business grow. And I’ve spent the last year working really hard to scale it. And frankly, I think a lot of the credit I would have to give to just working with Alex Barker through the coaching process for my business. And I’ve talked about this previously, but I think for me, it was initially when I thought about the idea of hiring a business coach, it seemed a little silly to me at first. But then I sat back and thought about it and I was like, well, we have coaches for a lot of other things that we do in our lives, sports, especially. So you know, why not for a business? This kind of makes sense. And initially, probably like a lot of other people who’ve maybe considered doing coaching wonder about the costs of it and is it going to be worth it and what’s the return on investment going to be? But I have to say, working with the Happy PharmD and Alex specifically just really helped push me to think outside of the box and how I wanted to expand this business and I was really worried about hiring someone because I was becoming that rate-limiting step, right? There was only so much I could do in the time that I wasn’t at work in order to build this business. I mentioned earlier about working in the business and on the business. And I was really tapped out for working in and on it. So in order for me to move forward and expand to where I wanted this business to grow, I had to get over that roadblock, so to speak. And Alex was instrumental in helping me do that and just kind of work through the process and figure out, OK, this is the fundamentals, this is where I started, this is where I want to be. How do I get to that next level? And I’m super grateful just for the time that I’ve spent and wish I probably would have done it sooner because it’s been amazing from last year to this year where I’m on pace now. And I think about oh man, what if I had done this in like year 2 or year 3 instead of waiting? But it’s been really exciting. And I think it’s a testament to how working with someone else to think about different factors in your business can really help you grow and move forward.

Tim Church: I think that’s such a key. I mean, we don’t know what we don’t know. And sometimes, it takes really that outside perspective to help get to that next level. What were the initial hesitations with working with a coach or just paying money out of pocket to do that?

Brittany Hoffman-Eubanks: Yeah, I think for me, it was just being comfortable with the amount that it was going to cost on a monthly basis and just thinking long-term of OK, well, I understand having a business background that you have to spend money in order to make money. But as I mentioned, paying off those student loans were really important to me, and my business at that point was — I was at kind of a fork in the road. Either I was going to go to the left or I was going to go to the right. And I just decided to just go full boar to the right and do something different and hope that the return on investment was there and that it paid off, and it has. Within the first six months of working with a business coach, I tripled my revenue, which was amazing to see that happen and just be a part of that and just have those small wins, and it really just helped invigorate me. And I never looked back, so to speak. And as a result of working with a coach for the business, it just helped me think about things from a different perspective, bringing on a new employee to the company. I now actually have three employees, which is really exciting compared to where I was just a year and a half ago where I was terrified of hiring one and how was that going to affect my business and the quality, which was really important to me to teach someone else how to do what I do and just working through all of those pieces to be where I am now. So it’s been a long journey, but it’s been exciting. Each new thing, just thinking about something differently, not letting analysis paralysis take over and just stopping me from moving forward with the things that I wanted to do.

Tim Church: That’s really exciting, Brittany. And you mentioned that you were the rate-limiting step in the business, and I think that’s really interesting to kind of realize and recognize that. And talk about how you brought on employees and what that process was like and kind of what are they doing day-to-day in the business right now?

Brittany Hoffman-Eubanks: Yeah, so for me, I really needed someone who could help me with some of the pieces that didn’t really require me in the writing process. So I decided that hiring a medical writing assistant made sense, someone that could help me with the research, going through all the different articles that we need for the evidence-based writing that we do. Can they help me basically go through the research and highlight the pieces that are important for the particular types of work that we’re doing? Can they help me with bibliography writing and going through all the different sources that we have and that we’re using? Just some of those basic tasks that didn’t necessarily require me or my writing as well as someone who maybe was interested in becoming a medical writer with my business. And so it’s kind of funny how it happened because I have a group of pharmacists now who are working for me. And I love working with them, anyone with an advanced degree is perfect typically for medical writing, although there are a lot of great non-advanced degree writers out there. So I don’t want to generalize. But for what we’re doing at Banner Med, it’s been awesome to be able to hire other pharmacists and bring them on. But now, it’s turned into kind of a whole new thing where we’re working one-on-one with them, teaching them how to write the different types of medical writing projects or pieces that we’re doing and really helping them go from medical writer — medical writing assistant to medical writer and just being able to see that process and where they start and how they’re growing and their individual goals that they have as it relates to their own professional growth as well as Banner Med has been really exciting. So I started in one place and ended up being in a totally new place as well as far as the business is concerned, so that piece has been exciting too just not only educating healthcare providers but also helping to mentor and educate new aspiring writers as well.

Tim Church: And how did you primarily find these additional writers? What were the channels that you used?

Brittany Hoffman-Eubanks: So initially, this was one of the things that I think was kind of a hurdle for me to get over. In the beginning, I wasn’t quite sure how I wanted to go about that: Did I want to use a traditional place like Indeed or Monster or some of those places, the job boards that you think of when you’re going and looking? Or did I want to utilize a network and try to find people through that way? And I ended up actually utilizing a network, kind of a LinkedIn process of OK, I’m going to create an application, this is the qualities that I’m looking for, these are the things that are absolutely essential, these are the things that are ideal, and these are things that would be nice to have but aren’t necessarily required. I kind of went through that process, did a phone interview with them, made sure that they’re going to be a good fit for me, anyone that I work with, they ended up becoming like family to me. And my business is my baby, so to speak, so it’s really important to me that they’re just as passionate about writing. I can teach them a lot of the things that they need to know, but do they have good fundamentals? And so for us, we kind of went the more personal network route of utilizing LinkedIn and some other networking opportunities that made that process a lot easier. And now, believe it or not, just from some of the opportunities that I’ve had to spread the word about Banner Med, I actually have a lot of new aspiring writers that reach out to me now on a regular basis. And I’m always impressed by that. I think if you take the time to reach out to someone and tell them what value you can bring and how you’re interested in what they’re doing, then I can talk to that person a little bit more, find out what it is that they’re interested in, how they might be able to help us out or if it’s possible to work together. So there’s a couple — it’s changed from how we went about it in the beginning to how we do it now.

Tim Church: So are you still having a hand on each individual project? Or is your team taking certain project completely from start to finish?

Brittany Hoffman-Eubanks: Yes, there are — it depends on where they are in terms of the training process, how long they’ve been working with us. Quality control for me and making sure that every project is still meeting Banner Med’s expectations is very important to me, so the writers that I’ve been working with are absolutely fantastic. I do have one full medical writer right now who takes a project from start to finish. And then I come in kind of in editor role as opposed to writer role and just go through everything, make sure it checks every box that the client was looking for, just kind of as that last piece before we send the project off. And then with my new writers, I do take on a more hands-on approach where I work with them directly, offer feedback, and probably have more of a writing role with those projects. So like I said, it kind of depends on the individual. But yes, I do typically still look at every single project that comes through for Banner Med, just making sure that it’s going to meet the client’s needs and that we’ve successfully put together the deliverable that they’re looking for.

Tim Church: And then depending on kind of what stage they are as a medical writer, does that also impact kind of their compensation for each project?

Brittany Hoffman-Eubanks: It does. And unfortunately, in the medical writing world, there isn’t really a great compensation table, so to speak, where you can go and say, ‘OK, for this project, you’re going to make x amount of dollars,’ or, ‘This project, you’re going to make x amount of dollars.’ It’s really, for me, it’s a combination of their experience, their efficiency, their ability to write, along with what the total project cost is that we’re going to be receiving, the revenue that we’ve worked out with the client as well as my own just personal experience in terms of working with that individual of what the compensation’s going to be. But the one thing that’s really important to me is that the wage is always fair. And I strongly believe in that. I’ve gone back and advocated if a writer’s came back to me and said, “Hey, Brittany, you know what? This project took 10 extra hours more than we thought it was going to. And because of that, I had to spend all this extra time, x, y, z.” So in that case, you know, I have no problem going back to the client and saying, “Hey, you know what? We need to circle back on this project cost. These are some of the things that came up. Let’s talk about the compensation for this particular project and potentially renegotiate that.” Or I may even do that just on a personal level with that individual writer depending on how much extra time or effort that they had to put into it. So it’s a long answer to answer your question. But it’s so individualized that it’s impossible to say, OK, you’re going to do x and we’re going to pay you z every single time. It just really depends on the individual project.

Tim Church: So other than the payment to your employees for their assistance with the different projects that you receive, what are the other major costs of running your business?

Brittany Hoffman-Eubanks: I think the other major costs really come down to some of the software programs that we use. There’s a particular reference product that we use that has saved just so much time and energy when it comes to doing the bibliographies for a lot of the different products that we use. So I would say primarily software would be the biggest expense that the business has on a day-to-day basis in terms of operating costs. Aside from that, there really isn’t a whole lot of extra overhead types of things. I mean, we have some of those fixed costs like internet and if we want to have meetings with all of us together, there may be particular software that we use to facilitate that process. So it just — I guess it really just kind of falls into that software, the things that make our job a little bit easier. All of my writers live in different parts of the country, so they’re all remote-based. And so it’s not like we’re just meeting up in an office, working together. We have to facilitate those online meetings in some way or fashion.

Tim Church: And do you guys meet together as a team to kind of help foster some of that mentorship that you’re providing?

Brittany Hoffman-Eubanks: Yeah, so we’re going to actually start doing that. Recently, we acquired two new employees that now make us a team of four. So I’m really excited about that. Prior to that, when I was working just with my medical writer that I’ve now had for almost a year, actually, you know, her and I would meet quarterly. Sometimes it would be on the phone, other times it would be through a video chat. But it’s really important for me to make sure that we’re not only discussing the projects that we’re working on but that I’m also helping them with their individual goals that they have, what things do they need help with, what is their biggest difficulty when it comes to the projects that we’re working on, and really just having that open communication, that feedback, so that we can keep improving and keep growing the business and help them move forward into new roles that they’re excited about or interested in or their particular topic. So yeah, I would say that group discussion, the mentorship, is really important for the business.

Tim Church: I think that is so cool how you continue to grow and bring other team members on. And it’s just really exciting to see that growth. I think one of the other burning questions that a lot of people probably listening right now, and including me, is how much time are you personally spending in the business? Because even though you have writers and you have some help, I mean, clearly you said that you’re still having a hands-on, even if it’s from an editorial perspective, but just on the business itself. So talk a little bit about that.

Brittany Hoffman-Eubanks: Yeah, it’s a significant amount of time. I’m definitely not going to sugarcoat that. Probably I’d say between my full-time job and this side hustle, which is probably can’t even categorize it as a side hustle anymore. Now it’s like a full hustle.

Tim Church: That’s right.

Brittany Hoffman-Eubanks: I would probably say it’s easily like 80 hours per week. I’m definitely probably doing full-time on both right now. But you know, some of you guys may hear that and be like, ‘Oh my God, I can’t do that. There’s no way.’ You don’t have to do that to be in medical writing, right? You can pick the projects that you want to work on, you could do some extra money on the side if that’s what your goal is, or you can go full in like I’m doing. I think for me, I absolutely love this. And it doesn’t feel like work to me. So when I come home and I’m working on a project, it’s exciting to create this, to have my clients excited at the end of the day that they don’t have to spend hours upon hours redoing work and really come to us when they have those difficult projects or difficult topics that they know they need a good writer on. And I think that’s really important, and the biggest thing no matter what you choose is that at the end of the day, it’s awesome to make extra money on the side. But do you love the work that you’re doing? And if you don’t, then obviously you need to make a change or think about things differently. My grandfather always told me when I was a little girl, if you don’t like something, change it. And if you can’t change it, then change the way you think about it. And I’ve really just tried to use that as a guiding light for me in everything that I do. And this business is something that I absolutely love, so at the end of the day, even though I’m putting tons and tons of time into it right now, I know later on, it won’t be like that where I will have to spend as much time. But right now, we’re in that growing phase where it’s necessary. But I look forward to the days where I can step back a little bit and work on maybe some pet projects. But right now, it’s just fun and exciting to see things moving forward.

Tim Church: That’s so good, Brittany, and I think you just dropped a bunch of wisdom bombs in there, which was great. And what I want to know is because you’re doing so well and this is scaling, is this something that is going to take over your community pharmacist position? Is that going to cut back? What does that look like going forward?

Brittany Hoffman-Eubanks: Well, it’s hard to say right now. I absolutely love being a community pharmacist. I enjoy the patient interaction. I feel like to a degree, it helps me be a better writer, so to speak, in just being able to help patients navigate different difficult topics. In the community, I see people that are dealing with cancer, dealing with all kinds of just difficult types of long-term conditions or maybe it’s a short-term issue. So you know, I don’t know that I know the answer to that question right now, but I definitely know that I’m excited to see where things go in the future and depending on where the business takes me, you never know. This could be the final thing for me, or I may choose to scale back a little bit and do both. It’s hard to say right now, but I’m definitely excited for the future of what Banner Med can do.

Tim Church: You talked about you’re spending 80 hours many weeks out of the year trying to do both of your jobs, basically two full-time jobs.

Brittany Hoffman-Eubanks: Yeah.

Tim Church: So one of the things that often comes up that people feel that time is that limiting factor to work on a passion project, a side hustle, or another job. What seems to work for you in terms of managing both of those but then also your personal life?

Brittany Hoffman-Eubanks: Yeah. I get asked this question a lot, like how do you do it? And I think the biggest thing is that you have to be intentional about your time, right? So you know, if I’m working on a project, then I have to get rid of the distractors. I’m working specifically on that so that I can be focused and be efficient. But one of the things that I found during my residency year that was really helpful is just to schedule out my time. So my calendar — I’m that person that’s got thing color-coded and have a specific time I guess for everything. But that works for me. So I think the biggest thing — and everybody always says, oh, time management. But what does that actually mean, right? How do you put that into action? Are you the type of person that you need to work on something for 30 minutes and then take a five-minute break and then come back at it for another 30 minutes? You just really have to figure out what works for you. For me, scheduling my time, be it the time I’m going to work on projects or am I going to work out at 5 a.m. tomorrow? What time am I doing dinner with my husband, date night, etc.? It’s just really helpful for me to make sure. And then when that time comes up and I’m supposed to be working on that particular project during that time or whatever it is, make sure that you actually do it. I think that’s the biggest thing is just that follow through of whatever way that you find to manage your time, that you’re being consistent and that you follow through. Don’t say on Tuesday at 6 o’clock, I’m going to set time aside for my family and then be like, oh, sorry guys, this came up. I can’t do that. Like you need to honor those commitments and just stick with it.

Tim Church: I think that’s so true. There’s such power in that intentionality but then figuring out that system on how you’re going to actually execute. One of the things that you wrote to me before we jumped on the interview is that your husband has been one of your largest supporters. So I wanted to give him a shoutout because clearly, you seem to have written that with a lot of enthusiasm. And it seems like that’s probably necessary for the undertaking that you have.

Brittany Hoffman-Eubanks: Oh, 100%. I honestly couldn’t do what I’m doing right now without his support. I mean, just think about that for a second. You’re married to someone, you have committed to spending your life together with one another, and here I am going to work 40 hours during day, either work typically 8-4 or 2-10 at my job, and then when I come home, it’s like, “Hey, honey. Let’s have dinner. OK, I’m going to work again.” So I could totally understand him being frustrated or like what the heck, she has no time for me. But I think you know, we try to always schedule time with each other, which sounds very unromantic, I get that, but I’m in that phase right now with the business where these things have to happen, and I think he definitely understands that it’s a dream of mine, something that I’m pushing really hard for. And he’s just awesome. I can’t thank him enough for being super understanding about it, never gives me a hard time when I say, “Oh, I have this project I have to work on,” or, “Oh, I have this deadline.” He’s my biggest supporter, and I love him for that.

Tim Church: That is awesome. What’s his name?

Brittany Hoffman-Eubanks: His name’s Matthew.

Tim Church: Matthew, you’re doing an awesome job. Keep supporting Brittany. So Brittany, one of the questions I think that often comes up — and I feel like especially with medical writing — but just in general with trying to start a business or a side hustle, one of the things that comes up is just how do I get started? How do I break in and get going? Because I think it’s easy to kind of sit back, hear your story, and obviously it’s taken a lot of hard work to get to the point where you are now, but what advice, what guidance would you give to somebody who’s just trying to start to break in?

Brittany Hoffman-Eubanks: Yeah, I get asked this question all the time, actually. And so much so that I am actually working on a new project that’s hopefully going to help new, aspiring medical writers solve that problem. So stay tuned. There’ll be more to come. But just in general, to answer your question, I think the biggest thing that people who are aspiring to be a medical writer have to think about is one, what type of writing do they want to do? Do you want to have a staff position? Do you want to be a freelancer? Although that isn’t my favorite way to characterize what it is that we’re doing, but it’s in the vernacular to describe this medical writing role when you’re not working full-time for a particular company. And then ask yourself what types of things do you like? What are you interested in? And then seek out those types of opportunities. This is a gig economy where you can seek out different projects, let people know what you’re interested in, and just make sure that you come in prepared too. We want to make sure that you’re not only just asking people but that you’re letting them know what it is that you can provide to them that’s of value because that’s the biggest thing when it comes to different companies is how can you provide that value to them?

Tim Church: Well said, Brittany. So if somebody wants to reach out to you to learn more about your business, what you’re doing, or maybe just needs a couple key pieces of encouragement about getting started, how can they do that?

Brittany Hoffman-Eubanks: Yeah, so they can reach out to me on LinkedIn, Brittany Hoffman-Eubanks, can also find my email address on my website at www.BannerMedicalWriting.com. Either one of those is a great way to reach out to me. I love hearing from new people and talking about your story. So don’t hesitate to reach out. And if I can help you, I’m happy to do so.

Tim Church: Well, thank you again for coming on the show, sharing your story, and just really looking forward to hear about the progress as you continue to grow your business.

Brittany Hoffman-Eubanks: Thank you. I’m super excited. Thank you so much for having me. I hope that anyone who’s out there listening that if you’re really interested in being an entrepreneur, starting your own side hustle, start small with the things you can control. And you never know where things will take you.

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YFP 125: Why Lowering Interest Rates for Student Loans is an Alternative to Debt Cancellation


Why Lowering Interest Rates for Student Loans is an Alternative to Debt Cancellation

Dr. Joey Mattingly, a faculty member at The University of Maryland School of Pharmacy, talks to Tim Ulbrich about a recent article published in the American Journal of Pharmaceutical Education titled Before we talk about student debt cancelation, can we talk about the interest rates? They cover the basics of loan terminology, discuss why lower interest rates would have such a significant impact on student indebtedness and discuss the reasons why lowering interest rates may be a better option than loan cancellation or forgiveness.

About Today’s Guest

After graduating from the University of Kentucky College of Pharmacy and Gatton College of Business and Economics, Dr. Mattingly dove directly into pharmacy practice for The Kroger Company as an EPRN super trainer, facilitating the implementation of a new pharmacy information system software to more than 40 pharmacies. After completion of the pharmacy system rollout, Dr. Mattingly managed four different Kroger Pharmacy locations (L292, L780, L366, and L389) between 2010 and 2012, revamping operations at each location to improve multiple business and patient care activities. Dr. Mattingly was promoted within Kroger to serve as District 6 Pharmacy Coordinator in the Mid-South Division, based in Carbondale, Illinois, overseeing operations for 12 pharmacies.

In 2013, Dr. Mattingly left The Kroger Company to lead Indianapolis operations as general manager for a start-up long-term care pharmacy company called AlixaRx, providing pharmacy services and remote automated dispensing systems to 23 skilled nursing facilities (SNFs) across Indiana, Kentucky, and Ohio. He currently serves as an associate professor in the Department of Pharmacy Practice and Science at the University of Maryland School of Pharmacy, where he teaches business strategy to students in the professional program and is a strategic consultant for the University of Maryland Medical Center Department of Pharmacy. In 2016, Dr. Mattingly was selected as the graduating class Teacher of the Year.

In addition to his work as a faculty member, he serves as the Director of Operations for the PATIENTS Program and recently earned his PhD in Pharmaceutical Health Services Research with a special focus in pharmacoeconomics. Dr. Mattingly is also passionate about policy and parliamentary procedure and is the Speaker of the House of Delegates and Board of Trustee for the American Pharmacists Association. He has previously served the American Pharmacists Association Academy of Student Pharmacists (APhA-ASP), the Kentucky Pharmacists Association (KPhA), and Phi Lambda Sigma Pharmacy Leadership Society as speaker of the house.

Summary

Dr. Joey Mattingly joins Tim Ulbrich to discuss some important pieces from his APJE article titled Before we talk about student debt cancelation, can we talk about the interest rates? He also breaks down key loan terminology, what the math on interest rates shows, and four reasons in favor of supporting lower interest rates instead of debt cancellation.

To kick off the episode, Joey discusses what the words principal, term, interest rate and amortization mean in regards to student loans so that everyone has a basic understanding of what this debt is comprised of.

Joey then jumps into this APJE article titled Before we talk about student debt cancelation, can we talk about the interest rates? Using the AACP Graduating Student Survey from 2017, Joey estimates that that graduating class carries a total of $2 billion in student debt. Although there are Presidential candidates that are discussing loan forgiveness, Joey encourages a discussion of lowering interest rates. By lowering interest rates, principal balances will come down quicker and monthly payment will be less expensive. Joey talks through what this math looks like for interest rates at 6%, 3% and 1.5% When looking at a 6% rate, after a 25 year term, the total interest accrued for the $2 billion of student debt is $1.9 billion, almost double the principal. Lowering the interest rate to 3% or 1.5% significantly reduces interest as well as lowers monthly payments.

Joey also talks through four reasons to support lower interest rates instead of debt cancellation: resentment, incentive realignment, decision making uncertainty, and public support for lower rates.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. I’m excited to welcome back onto the show Dr. Joey Mattingly to talk about one of his most recent articles published in the American Journal of Pharmaceutical Education titled, “Before We Talk About Student Debt Cancellation, Can We Talk About the Interest Rates?” Joey was on the Your Financial Pharmacist podcast all the way back in Episode 005, where we talked about the impact of rising student debt on a pharmacist’s income. So a little bit about Joey before we get started: After graduating from the University of Kentucky College of Pharmacy and the Gatton College of Business and Economics, Dr. Joey Mattingly dove directly into pharmacy practice for the Kroger Company, where he facilitated the implementation of a new pharmacy information system software to more than 40 pharmacies. He managed four different Kroger Pharmacy locations between 2010 and 2012, revamping operations at each location to improve multiple business and patient care activities. Dr. Mattingly was promoted within Kroger to serve as the District 6 Pharmacy Coordinator in the Midsouth division, based in Carbondale, Illinois, overseeing operations for 12 pharmacies. In 2013, Dr. Mattingly left the Kroger Company to lead Indianapolis operations as General Manager for a startup long-term care pharmacy company called Elyxa Rx, providing pharmacy services at remote automated dispensing systems to 23 skilled nursing facilities across Indiana, Kentucky and the great state of Ohio. He currently serves as an associate professor in the pharmaceutical health services research department at the University of Maryland School of Pharmacy, where he serves as a strategic consultant for the pharmacy department at the University of Maryland Medical Center in Baltimore. Joey, welcome back to the Your Financial Pharmacist podcast.

Joey Mattingly: Thanks, Tim. I’m very excited to be back with your audience.

Tim Ulbrich: So the commentary you wrote for AJPE, again, titled “Before We Talk About Student Debt Cancellation, Can We Talk About the Interest Rates?” I really enjoyed this work. It was simple, it was straightforward. And I thought it was very effective in helping the reader understand the basics of loan terminology — and we’ll talk about some of that here today — as well as why a conversation around lowering interest rates should be happening alongside or potentially in place of the debt cancellation/forgiveness discussion that we discussed here on Episode 114 of the podcast with Richard Waithe from RxRadio and certainly I think many of our listeners are familiar with through the Democratic presidential debates that have been ongoing. So in this interview, we’re going to hit the high points of Joey’s article that he published in AJPE, but please make sure to check out the show notes, where we’re going to put a link to the full article. And it’s an open access journal, so you can read the article in its entirety. So Joey, before we jump into the specifics of your article – and again, you do a nice job of this in there as well, let’s break down some of the loan terminology, specifically principal, term, interest rate, and amortization to make sure we’re on the same page. So let’s start with principal. When you define the principal of a loan, what is it? Let’s start there.

Joey Mattingly: Absolutely. So and again, this is great, well-timed, Tim. Actually, I gave this exact topic today in my pharmacy management class at the University of Maryland.

Tim Ulbrich: Awesome.

Joey Mattingly: My students — and I always, because I think it’s important as any manager as well to understand debt. And I really — the goal for this article is not to scare people or freak people out because a lot of students when they’re graduating, you know, there’s that anxiety and fear around their debt. And I hope — what I love about your podcast and the work with your group is I feel like you’re doing your very best to try to empower students to understand their financial situation so that they don’t — rather than fear and anxiety, maybe they feel more hope and optimism. So anyway, I just start by hey, let’s break it down. So when we start, the biggest component that comes right off the bat that we think of is the principal. That’s that amount that we borrow from the lender. So thinking of if it’s going to cost me $100,000 to go to pharmacy school or $200,000, I guess that’s a whole other podcast episode, what am I going to have to borrow overall? And that’s the amount that’s really if you did not have — if you had all the cash in your bank account or your parents had a lot of money to help pay for your school, they would just pay your tuition, right? And so they would use, if it was $200,000, they would write a $200,000 check, right? Or whatever that may be. Whereas if you do not have the money in your bank account, then we look to financing. And so we start with the principal.

Tim Ulbrich: Yeah, and I think starting there, and you do a good job of this in the article, the way I think about it here too is if we have a P3 student listening and here we are fall semester of 2019, and let’s say they borrowed $10,000 for fall semester, that $10,000 and whatever that loan may be, unsubsidized loan, that’s the principal. But as you mention in the article, obviously we can’t stop there when we think about the full amount that somebody may end up being in debt because we have to think about the term as well as the interest rate. So why don’t we go on from the principal and talk about the term and the interest rate.

Joey Mattingly: Well, before we leave principal, one thing I think that often gets overlooked too is that when we’re having that initial transaction and say — so I keep using, I like easy numbers, Tim, I hope it’s OK.

Tim Ulbrich: Yeah, yeah.

Joey Mattingly: I know for everyone, the challenge is it becomes complicated when it’s $7,342 or whatever. So I always round and say, OK, say I need $100,000. If when I’m trying to get that initial loan, there are often costs that go into the transaction. And in the case of a student loan, often they’ll call them origination fees or things that around if you look at the Department of Education, you’ll see anywhere from about 1% to about 4.2%. So even in that initial signing the paper, once the $100,000 is transferred over into say it went into your account, if you tried to give that money right back to the lender, you’re going to pay possibly $4,200. Right? So there’s a cost in just the transaction.

Tim Ulbrich: And I think that origination fee, as you mention in the article, is often overlooked but so important, especially the students listening, that you understand how that is calculated and roughly what that may be in terms of the impact. You know, just this past week, I had the opportunity to speak with the vet med students here at Ohio State, and as we all know, the way these loans are typically presented to you, it’s hey, here’s the max. And sign the line, and the rest is good. And so often students will say, “Well, why not just take that? And then if I have anything left over, I’ll return it or whatever. At some point, hopefully I’ll be able to pay it off.” And I think what you’re describing here is so important is that right off the bat, you have that origination fee that anything you can do to minimize the amount that you borrow from the beginning is going to help you in the long run.

Joey Mattingly: Yeah. And then one of the things that — and I always go back to percentages and thinking about percentages versus whole numbers. And I can’t take credit for this, I actually, when I think of the whole reason why my whole life has changed when I think about percentages versus whole numbers, is because of an independent pharmacist in Kentucky that was originally from Alabama, so he’s got kind of an Alabama accent, and I would always tell him, I’d say, “Hey, Leon, we’ve got this medication. We’ll make 80% gross profit on it. We’ll make 80%. I’m so excited.” And he’s like, “Joey, how many dollars will I make? How many dollars will I make?” And it blew my mind. Tim, I had an MBA. I was the smart business guy. And it was this independent pharmacist for 25 years that said, “Joey, I need to make this many dollars,” dollahs, as he would say. So when you think about that for a second. As student loans increase or as the cost of tuition, the cost of room and board, all those other costs, as it increases, the percentage may stay the same, but what your total dollar amount that you need — so in a way, like guess what? If I’m a loan, if I’m giving out the dollars, if I am the person giving out the dollars, what does it cost for me to — as you’re thinking about it, like they’re able to make more whole dollars, not just yeah, that’s 4.2%, but it’s part of that incentive for the numbers to just get bigger. So anyway, we can move on to term, but I just wanted to, as we think about this, yes, it may be 1% or 2% or 3%, it may seem like nothing, but as we see the numbers get bigger and bigger, 1% and 2% can make a big difference.

Tim Ulbrich: And I think that’s a great point, Joey. You know, and we’re not talking here about tuition, whole separate — as you mentioned in the article — whole separate issue, whole separate topic for a different day, certainly a factor, but to your point, when you talk about something like an origination fee, we often see these presented separately where we’ll see OK, tuition has gone up x% this year, but it’s not just the increase in tuition, which is then going to increase what you need to borrow, it’s the increased amount that you’re going to borrow, which also increased your origination fees and then, of course, as we’re going to move onto here, the term in which you’re borrowing as well as the interest. So take us through those two terms.

Joey Mattingly: Yeah, so now the term. This is the one that we — when I say we, as graduates, as students, when we’re signing up — or not when we’re signing up, actually. So the difference — the interesting thing about student loans is that you don’t determine the term until you graduate. I think that’s something very different than when you’re buying a car, right?

Tim Ulbrich: Yep, right.

Joey Mattingly: So when you’re buying a car or buying a home — and often, when we’re buying a home, there’s opportunities to refinance and everything, which we can do that as well with student loans. I think you’ve got plenty of topics on that, you know. But when we get to the term, that’s just the time. That’s just the time that you’ve agreed to pay back the principal, principal and interest, I guess, over a period of time. And so what’s common is for student loans is somewhere between 10 and 30 years. 30 being the longest, which oddly enough, they have like the extended repayment plan is set at 25. So we often see 10 and 25 are common. But then I think there are other plans with the Department of Education where you can extend it out to 30. And that leads — and so we get the time built in. And again, we decide, you kind of get that exit counseling at the end of school. And so that’s often where you’re signing up. And think about what’s happening with some of our graduates right now. Tim, when you and I graduated — and we won’t talk about how long ago that was — but it was in a time when there was still a period where pharmacists were getting maybe bonuses, maybe we were getting multiple job offers, and let’s be real for a moment, we know a lot of our students right now aren’t in the same boat that we were in a few years ago. And so if I had been aggressive, which I wish I had gone back and was a little more aggressive at that time and taken a 10-year note, Tim, I just had my 10-year pharmacy school reunion this past, I guess, what was it? Two weekend ago back at the University of Kentucky. If I had not — so I initially signed up for a 25-year repayment plan. And I had been in that repayment plan for a few years, and after a couple years realizing oh my gosh, my principal isn’t going down. And so that’s what — and again, I would like to think I’m a smart person. I know how to do a lot of math, I’ve got the business and the degrees I think to say it. But a lot of it’s not about whether you can do the math, it’s about whether or not you’ve got the mental —

Tim Ulbrich: The behavior.

Joey Mattingly: The behavior. Will you do it?

Tim Ulbrich: Absolutely. And you had me reflecting back on when I graduated and the offers relative to the salary, and I’ve always tried to show graphs on debt-to-income ratio, debt-to-income ratio, debt-to-income ratio, where have we gone in the last 10 years? And if I’m correct off the top of my head, I think the median indebtedness for a pharmacy graduate in 2010, I believe in 2010 was $100,000. And so here we are now in 2019 and that now is north of $170,000, which you look at what’s happened, the Bureau of Labor Statistics I think for all pharmacists’ median salaries is a little bit misleading to the reality of the job market of somebody coming out today, but I would argue the entry-level community pharmacists in 2010 probably was making more than they’re making here in 2019, but we’ve seen the debt numbers go in the exact opposite direction. So you know, as you and I wrote an article on before and we’ve talked about in Episode 005, what’s the purchasing power of an income? And I think what we’re getting to here is when you think about your debt side of the equation, you’ve got what you borrowed to begin with, your principal, and then you’ve got the interest that’s accruing while you’re in school. And for unsubsidized loans, obviously that’s happening along the way and ultimately, we get to the point where those capitalize and it grows baby interest over the term, which as you mentioned is the repayment term, anywhere from 10 up to 30 years. So interest rate then is the next variable we’re looking at. So just basic definition of what is interest?

Joey Mattingly: Yeah, so this is what — if you think about it, this is sort of what the company that’s giving you the loan, they’re taking interest as sort of to cover their cost. So this is the amount that’s above, you know, I guess the way the U.S. Department of Education, is the cost of borrowing that money, it goes to the lender. And so if the lender is a nonprofit, then in theory, you’re just going to have the revenues meet the expenses and no additional profit. If the lender is a for-profit, so then we think about our private banks, we think about payday loan lenders or whatever, you’re playing with that number. Those interest rates are what puts food on your table as a lender. So anyway often we think about it annually. But I think it’s important to consider how — and again, as we roll into the more complicated thing, I think some folks can get down principal, term, and interest rate. It’s when we start to amortize the loan is when things get fun. But that’s where I really think we can have a big impact when we discuss amortization. But for student loans, it should range between 3-8.5%, which when you hear 8.5%, you’re like, it’s not our parents’ interest rates. And so that comes up. I make sure I have that conversation with folks is that I pull up 1980s numbers because I think about my father graduated high school in I think ‘80-’81, something like that, and as he was thinking about college, if you took out a student loan, comparatively or relative, you could get a 3.5%, 4%, 5% loan. Auto loans in the early 1980s were something like — it got as high as like 20% at one time.

Tim Ulbrich: That’s crazy.

Joey Mattingly: And so thinking about that, if interest to buy a house was 20%, then yeah, we’d say 8.5% is not too bad. But I just think it’s really important for us to understand that the area of interest rates — and that’s, again, the whole part of this exercise, the whole bulk of this article, but just to understand that these aren’t our parents’ interest rates. And so often, we think about our parents as our sometimes the folks that give us advice, you know? And we hope that they’re — and they’re trying, they want the best for us and are trying to give us some advice on how we can handle things. The number of times I hear people talk about how good student is, man, it’s something that — I don’t know how you feel about it, Tim —

Tim Ulbrich: I’m with you, I’m with you.

Joey Mattingly: I just don’t like calling it a good debt. Like you know, let’s talk about the math. Let’s do math first.

Tim Ulbrich: Yeah, let’s talk about the math, let’s talk about the career path, let’s talk about what you’re trying to achieve, what’s the ROI? I mean, so many factors that go into that. I mean, I think it’s a blanket statement that probably gets assumed too easily and too often. And I love what you had to say about advice we get from our parents because that’s something I hear so often from others, and this really gets to the concept of anchoring where when we talk to somebody and they’re like, “Oh, well, back in the day, my interest rates were 17% to buy a home.” All of a sudden, you look at 7% or 8% and you think, oh, not too bad. But even in that range you give in the article of 3-8% or so, as we know, as we’ve run various refi numbers and scenarios, having a 5% versus a 7% when you’re talking about $200,000 of debt, that’s a big, big deal. And so really digging in deep, especially for those that are in active repayment, understanding your options about what am I looking for in a repayment strategy and for those that are currently in school, really understanding and looking at what can I be doing right now to try to minimize any of the indebtedness while I’m in school. So Joey, in your article — so now that we covered the total cost of loans, which is inclusive of principal, term and interest rate — in your article, you mentioned that “for PharmD students, focusing on the impact of interest rates on their monthly payments and the total term (amortization) for their student loans may be the most beneficial approach to helping them achieve their personal finance goals. So there’s that term, amortization. So talk us through what you mean by that. Why is that the case?

Joey Mattingly: Yeah, so I highly recommend if this is the first time, if you’re an audience member listening and you’ve never really, you’re not familiar with the word amortization, get on the Google right now and start learning what amortization means. And download a free, I keep a free amortization calculator on my phone one, because I’m a nerd, but two, I mean, so it doesn’t matter what it is, if it’s a car or if it’s a house or whatever I’m in the process of discussing, I like to just throw out, look at the amortization schedule, play around with the numbers, see what it looks like if interest rates change, if terms change. So basically, the amortization schedule is simply the — when a lender is lending money and you’re agreeing to pay this back, it’s set up in a way so that the monthly payment is a fixed amount. And so you calculate it out so that the principal and the interest are captured over however many payments it is. And so it’s actually, there’s not a function of time, it’s a function of really how many payments and how frequently is the interest being captured. But typically, we think of it as annually, and then within that year, often you’ll see like 12, each month you’ll see things. So wanting to know how frequently does the interest start compounding because that’s something as well. So anyway, I don’t think listeners have to become experts in it, but I think getting to an amortization calculator quickly is a smart thing to do. Like being able to just pull up one of these calculators that has the different variables for you and then start with something simple, you know? Put $100,000 in it, put 5% interest rate, and just change the term from 10 to 20 years or change the term. And then look at the schedule, so the amortization schedule will map out all 120 months in the 10-year loan. And then if you switch it to 20 years, it will map out all payments for the 240 payments, the 240 months. And so that allows you then to break out what’s going, each month, how much is being contributed to the interest? And how much is being contributed to the principal? And this kind of really breaks down the nuts and bolts of your loan. And so that was sort of the purpose of this, getting into this and then walking through an example of — I use the class of 2017 as an example, and we had a little over $2 billion in student debt potentially estimated for this class. And you know, so we take that $2 billion and start thinking, alright, what if the average interest rate was 6%? And we start plugging it in. So that’s sort of what I hope folks as they follow along, they don’t get lost in the math. It’s meant to stay simple, but we wanted to use a real-world example to talk about how just changing those numbers from a 6% interest rate and then changing the terms or whatever, what would happen? And then if we were to hypothetically lower the interest rate, what would happen?

Tim Ulbrich: Yeah, and I echo your recommendation to our listeners. If you have not dug into an amortization table before, please do. Whether it’s your student loans or buying a home, I think it’s really powerful to be able to see if you’re on a 30-year type of mortgage repayment, for all of those months, how much would be going toward principal? How much would be going toward interest? And for those of you that are making those payments, you know very well when you get those statements, you’re like, man, I send in a big check, but only a little amount actually went to pay off the principal on the loan. And I think it’s a small but very important behavioral move that as we talk about over and over and over on this podcast, the more educated you become, the more empowered you feel, the more informed decisions that you make. And I think looking at an amortization table is just a great example of doing that versus you just blindly accept the debt for what it is. So Joey, let’s dig in. You talked about in the article, you walked through a case study using the class of 2017. You used the projections and the data provided by the AACP Graduating Student Survey, which we’ll link to in the show notes for those that have not seen that before. And obviously, those numbers have even gone up here in the last couple years. But you noted a total of indebtedness — if we assume across the entire cohort, all the graduating students, a little over $2 billion. And you then walk through essentially three different assumptions: one with an average interest rate of 6%, one with an average interest rate of 3%, and one with an average interest rate of 1.5% to determine what would essentially be the savings to the borrower and thus, the cost, I guess for lack of a better word, cost to the federal government if we were to move in this direction of actually lowering rates. So tell us more about what you found when you ran through that scenario.

Joey Mattingly: Yeah, so — and again, as the title of the paper sort of signifies, that there’s a lot of discussion around what if we forgive the debt, forgive the debt, forgive the debt. And I just thought that that is a pretty big jump. And whatever your politics are, that’s fine. I just want to make sure that we have a discussion around the issue of potentially the interest rates being problematic. And if we were able to — whether it’s subsidize or come up with a way to offset the interest, we could actually show gains, the students could — graduates, I should say — can make their payments, see their principals coming down, and pay off their loans. And from a budget perspective — and this is probably more our article that we did a couple years ago when we talked about what that payment is and budgeting out that student loan payment — and so as you walk through the scenarios, at 6%, this $2 billion in debt — I thought it was interesting to, I wanted to point like what if it was the entire cohort of students? Because you know, maybe the CEO of CVS Larry Murlow’s listening right and he’s thinking, hey, what can we do to help our pharmacists? So maybe CVS or Walgreens, one of the big boys, will step in and say, what if we wanted to help out? Have the Walgreens, CVS loan program.

Tim Ulbrich: Absolutely.

Joey Mattingly: So say that we were looking at that. The interest paid at the full term, so over 10 years for someone if we average it out at 6% and students had a mix of 8% and 3%, whatever — I like to keep the numbers simple for an article like this, so I just picked 6% — that we would see on the $2 billion about $677 million of interest would be collected over a 10-year period. And then if you were to take that out to 25 years, so if all the students picked 25-year terms, the total interest paid over a 25-year period would be $1.9 billion. So you actually, you essentially double —

Tim Ulbrich: Double, right.

Joey Mattingly: Double the principal. I mean, so you know, it’s interesting — and that’s just extending the repayment. That’s not messing with the interest. And then I started saying, well, what if we cut in half. What if we cut it down to 3%? 3% is like — in economics, we love that 3% number for an inflation number.

Tim Ulbrich: Inflation.

Joey Mattingly: Yeah. Because it’s probably more accurate on the whole for different types of areas. So anyway, let’s just say we were able to cut it to 3%. Well, as you’d imagine, when you start working out the math, it has a significant impact. Actually, one of the things I probably should point out is the monthly payment for students, the average monthly payment at that 6% level over 10 years is $1,815 a month. Now, imagine a resident trying to pay that. Imagine a pharmacist who took a full-time job but their hours got cut to 32 hours a week, imagine now paying that $1,815 a month.

Tim Ulbrich: For 10 years.

Joey Mattingly: For 10 years, right? So just cutting the interest, we knock $300 off of that 10-year scenario. And as we continue to cut, we cut $400 a month off if we — and I wanted to show an ultra-low, like what if it was just 1.5%? What if it was just enough to like this is the CPI? Economists would argue that’s too low for inflation, but let’s just say we had some philanthropy or something involved to offset so we got some dollars in interest. Because remember, the interest is the cost of the borrowing, the cost of the $2 billion. So anyway, just in doing that alone in a 10-year scenario, you’re knocking $400 a month off for each student. And when we look at the 25-year term, it’s that same kind of you’ll see about a $400 a month knocked off their payment, but you’re going from $1,000 a month to $654 a month in terms of your payments. And a lot of pharmacists can afford, we’ve gotten used to paying those $1,000-1,500 a month payments. So if you’re paying $1,500 a month but your interest, you’re actually able to get it done in 10 years, that’s — I don’t know, I just wanted to show that you can have significant impact in bringing it down. And one of the things I wanted to show in the article was I wanted to show a picture of just how the interest in terms of the amount of principal paid comes off. It’s not a linear line. It’s curved because your principal comes off at a faster rate later in the term. And so I think it’s disheartening for a student or a graduate in the first five years out because in the first five years, if you’re even on a 10-year repayment, you’ve only got about 40% paid off. It’s not exactly half, you know? In a way, it just I think — doesn’t it feel a little disheartening when it feels like it’s taking a long time to come off?

Tim Ulbrich: It does. It’s like the first five years of a mortgage. Same thing. You see those statements, as I alluded to, and the student loans, exactly. You’re making these big payments and you feel like you’re not making the momentum that you should. And this is where we hear from people, especially those that decided to more aggressively pay them off, whether that be a refi or not, they’ll say things like hey, I made an extra $3,000 payment. Boom, you jumped on the amortization table. That goes directly toward principal and then they start to feel like they’re getting a sense of momentum. And separate conversation for a separate day, but I think what’s interesting — and I would encourage our listeners, again, check out the article, this is all in Table 1 where you can see the data, but what we’re not even talking about here is what’s the opportunity cost of what that money could be doing? So when you talk about a 10-year term and you talk about going from a 6% rate to a 3% rate, essentially that would take it down to a little over $1,800 a month to $1,579 per month. Well, what happens then if that difference you invest in your 401k, your 403b, your Roth IRA, you make extra home payments, you’re investing in growing businesses? I mean, what’s the value of that? And how do you even start to factor all of that in? So what I want to wrap up on, Joey, is I thought you did a really nice job at the end of summarizing really four reasons that you think this concept really is in favor of supporting lower interest rates over debt cancellation. And you talk about resentment, incentive, realignment, you talk about decision-making uncertainty, and public support for lower rates. So let’s walk through those briefly. When you say resentment, what do you mean by that? Why would this type of plan be more favorable compared to something like debt cancellation?

Joey Mattingly: Yeah, so this is the — I mean, honestly, if I could weight them, this is probably like I’d say 50-60% of one of the things that we need to really consider is that while — and I even put, I don’t know if you noticed in the paper, you know how, so for when we write academic papers, we put out our conflicts of interest?

Tim Ulbrich: Yes, I saw that.

Joey Mattingly: I put in my conflicts of interest, I said my wife and I have student loans. I was like, it’s absolutely — like I absolutely have a conflict in writing this paper. Now in the case, I’m actually arguing against my own best interests, you know. But I’m saying that so I have a lot of friends who have sacrificed or made choices in their life where whether it was maybe not buying a home right away, maybe even delaying having children, maybe it was whether they stayed in the same car for an extra 10 years and kept it going or whatever it was, the sacrifices that they made, didn’t go on trips or whatever, so that they could put larger chunks of their income right on top of those students loans and get them paid off. Now imagine my classmates that I love to death, we have grown through pharmacy together, find out that magic wand is waved from the federal government or whoever, and your loans are paid. Right?

Tim Ulbrich: Right, right.

Joey Mattingly: Now, they would probably think for the last 10 years, oh my gosh, they could have been investing in the stock market, they could have started a business, they could have done all these things had they known. And now, I totally agree that yeah, that would feel really, that would feel kind of challenging. Now, for some would say, well, you know, I’m still in principle OK with getting rid of the student debt just because you’re against, you know — maybe your politics are that you’re against students having this much debt to begin with. That’s another discussion. I just think that that’s an unintended consequence of this, and I think in a way, it sort of polarizes us. We get into these bigger philosophical discussions about what’s fair. And I just, I think that we can get past that. So I just wanted to put that out there. I think that’s a big one.

Tim Ulbrich: And I would agree with you. I think your percentage weighting is accurate. We actually had this out on the Facebook group, on the YFP Facebook group, a couple months ago when the candidates’ forgiveness/cancellation plans came out. And the word “fair” was by far the word that kept coming up over and over again. And some people were, as you mentioned, even though I’ve gone down that route, I still am in favor of this for various reasons. But I would say largely, many people had this concern, well, what about the people who have already paid this off? Is this fair? And that word, “fair,” did keep coming up. So the second thing you mentioned is incentive realignment. Tell us about that.

Joey Mattingly: Yeah, so I’ve shifted to become more of a health economist over the last few years in my studies and so incentives are something that I look at all the time and what are the things that the healthy behaviors that we think about, but anyway, in this particular case, imagine a policy shifting that saying, OK, we’re forgiving student loans. Does that tell future students or people who are thinking about doing another degree or whatever it may be to take out the maximum amount when maybe they don’t need the maximum amount? Because oh, hey, maybe it will just be forgiven later. And so I think there is a potential unintended consequence that may make it to where it’s not — we’re not aligning the incentives appropriately. And then one of the things I think would be kind of odd — again, this is theoretical, I don’t know this for certain — but think about some universities right now. We have a lot of universities, organizations, that they recognize that this is a problem. And I think some — and again, we could have a whole other discussion on whether or not schools are being more efficient — but that’s one of the things I do think some schools are working to become more efficient. And what if their consumers, the people paying the tuition, all of a sudden come into a windfall of more tuition dollars? Does this sort of put them in a situation where they’re thinking, oh, well, no sense in being efficient, anyone can pay for it?

Tim Ulbrich: Yeah, does it de-incentivize the efficiency? And you wrote a piece on the efficiency of the PharmD education.

Joey Mattingly: I’m just trying to get more citations.

Tim Ulbrich: We’ll link to that in the show notes as well. So the third point you make here — and again, we’re talking about reasons to support lower interest rates over debt cancellation — is decision-making uncertainty. What do you mean by that one?

Joey Mattingly: Yeah. So and I wanted to give an — I tried to give an example of myself. You know, my wife and I, as I stated, have student debt balances as we’ve worked to pay these things off. And we have a mortgage, we bought a home. Well, with all of this stuff happening in the politics, the national politics, Ashley and I have been working hard to take extra dollars putting on our student loans. You know, you listen to Your Financial Pharmacist, we’re trying to follow good behaviors and do those things. Well, for the next 12-24 months, Ashley and I have had the discussion, should we put that extra money in a savings account or somewhere or even towards our mortgage at least until we figure out what’s going to happen? Because you know, for those who are holding debt, I mean, come on. Like that would be dumb financially for me to not consider the prospects of that debt being paid off. And then if it never happens, if my debt doesn’t get magically forgiven by whatever policy, then if we invested wisely, we should be able to take that money from our savings and then put it on the debt. But in a way, that’s going to cause more interest rates — we’re going to pay more interest over that in the short term. But it’s kind of one of those risk things. But I just think it causes some uncertainty in decisions and whether that’s good and bad, I just think that it’s a negative to like look, while we’ve got this uncertainty, we don’t know what’s the best thing for our money.

Tim Ulbrich: That’s a great one. And the last one, which is of course of interest, you know, what would be the appetite for something like this in terms of the politics and the public support? And you addressed just that, the public support for lower rates. So what did you find in the literature and how this compares to debt cancellation?

Joey Mattingly: Yeah, so you know, when you think about it, it shouldn’t be that surprising when we think of if you ask in a general survey about interest rates on loans, no one likes interest rates. Like why would anyone — like I’ve never met a person that’s like, man, you know, I think they should raise our rates. I feel like I should be giving more to the financial institution. And so now I’m assuming the 12% that disagreed must work for a lender, right? Because like why would you be against lower rates? Now, I think that’s going to be the flip side is when you’re thinking about if folks are trying to lobby for lower interest rates or even debt forgiveness, actually, either way, you’re potentially destroying an industry where people work. OK? So those interest rates are paying people’s salaries. They are paying companies, lenders, it’s going to those groups. And so you’ll eliminate the need for those groups. But let’s not forget that there’s people behind that. And so that also means lobbying groups or whatever. There are going to be companies that are going to be very much against anything like this, that may even if we all believe as a society it’s good for us, there’s special interests that will be against it. But overwhelmingly, like from a general population standpoint, I think this is something we can all get behind. And Democrat, Republican, whoever, like you can support this without it being too political. And that’s one of the things too because I know this argument has gotten so political. And once you put on your red and blue hats, like you might as well stop talking.

Tim Ulbrich: Yeah, and this reminds me, Joey, I recently had the pleasure of interviewing Dr. Daniel Crosby, who wrote the New York Times bestseller, a couple books, “The Laws of Wealth,” and most recently, “The Behavioral Investor.” And he talks about the contentious debate of passive versus active investing. And he actually proposes an alternative, kind of a third, takes the best from both worlds. And this reminds me a little bit of that. You know, I think that when some bold proposals come out like debt cancellation or loan forgiveness, there tends to be OK, I’m on the yes side, I’m on the no side. And we forget about what other solutions that exist. And I think your article did such a nice job of OK, what other viewpoints are there? And is there a solution that can get us all on board of trying to move the needle on this rather than something that may be more polarizing that actually never moves forward. So Joey, I appreciate your time. Again, for our listeners, what we’ve discussed is a commentary that he wrote and authored in the American Journal of Pharmaceutical Education titled “Before We Talk About Student Debt Cancellation, Can We Talk About the Interest Rates?” So Joey, I greatly appreciate your time and your work here and the support that you’ve had for what we’re doing over at YFP.

Joey Mattingly: Thank you, Tim.

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YFP 124: The Behavioral Investor with Dr. Daniel Crosby


The Behavioral Investor with Dr. Daniel Crosby

Dr. Daniel Crosby, New York Times best selling author, joins Tim Ulbrich to discuss his most recent work The Behavioral Investor. As both a psychologist and asset manager, Dr. Crosby provides a fascinating look into the sociological, neurological and psychological factors that influence our investment decisions and provides solutions for how to improve our behavior to be more likely to succeed with our long-term investing plan.

About Today’s Guest

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets. Dr. Crosby co-authored a New York Times Best-Selling book titled Personal Benchmark: Integrating Behavioral Finance and Investment Management and is the author of The Laws of Wealth. His most recent work is The Behavioral Investor.

He also constructed the “Irrationality Index,” a sentiment measure that gauges greed and fear in the marketplace from month to month. His ideas have appeared in the Huffington Post and Risk Management Magazine, as well as his monthly columns for WealthManagement.com and Investment News. Daniel was named one of the “12 Thinkers to Watch” by Monster.com and a “Financial Blogger You Should Be Reading” by AARP. When he is not consulting around market psychology, Daniel enjoys independent films, fanatically following St. Louis Cardinals baseball, and spending time with his wife and two children.

Summary

Dr. Daniel Crosby was ready to fully walk in the footsteps of his father and become a financial advisor. During a two year mission trip with his church during college, Daniel became fascinated with human behavior and decided he wanted to study psychology. Toward the end of his doctorate program, he was burned out on clinical psychology work and didn’t know if he was able to do that work full-time. He got a job assessing bankers before they were hired and his passion for behavioral finance was born.

Daniel shares that his new book, The Behavioral Investor, is written more for professionals where The Laws of Wealth is intended more for a mass audience. At conference Daniel attended, he heard people repeatedly sharing ideas that weren’t founded in science. This drove him to research behavioral finance to determine what was true and what he believed.

In this episode, Daniel discusses several aspects of behavioral finance and the research behind them. For example, Daniel shares that research shows that intelligent people can’t avoid behavioral bias. He says that we’re just smart enough to present a credible case to ourselves and that there is a negative correlation between intellect and the ability to navigate financial decisions.

Dr. Crosby also discusses why he has a financial advisor manage his money. He says that even though he likely knows more about markets than his advisor, his biggest impediment to managing his own money is that he gets anxious and freaks out. Having an advisor puts someone else in control and pushes him out of the way.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. We have a special guest for you, New York Times and USA Today bestselling author, Dr. Daniel Crosby. He was educated at Brigham Young and Emory universities as a psychologist, behavioral finance expert, and asset manager, who applies his study of market psychology to everything from financial product design to security selection. He’s the coauthor of the New York Times bestseller, “Personal Benchmark: Integrating behavioral finance in investment management,” “The Laws of Wealth” — one of my personal favorites — and his most recent work, which we will discuss on today’s show, “The Behavioral Investor.” He is the Chief Behavior Officer and Brinker Capital. His ideas have appeared in the Huffington Post and Risk Management magazine as well as his monthly column for WealthManagement.com and Investment News. He was named one of the ‘12 Thinkers to Watch’ by Monster.com, ‘A Financial Blogger You Should Be Reading’ by AARP, and named the ‘Top 40 Under 40’ by Investment News. When he’s not consulting around market psychology, he enjoys independent films, fanatically following the St. Louis Cardinals baseball team, and spending time with his wife and three children. Daniel, welcome to the show.

Daniel Crosby: Thank you. Great to be here.

Tim Ulbrich: On the Your Financial Pharmacist podcast, we preach the importance of behavior when it comes to managing money, and your work in “The Behavioral Investor,” “The Laws of Wealth,” and your other work so eloquently includes rich research, stories, case studies and cultural references that we can all relate to that make a topic interesting and applicable that, let’s be honest, has a tendency to be quite dry. So before we get into the weeds and talk about behavioral investing, before we get into the nerdy financial conversation, I need to know, how did you find yourself at the crossroads of psychology and personal finance? How does one get interested and make a career of this?

Daniel Crosby: Well, it’s interesting because I entered college, my dad is still a financial advisor, and so I entered college with probably a limited range of options just sort of parroting what my dad had done. And I said, ‘Oh, well, I’m going to be a financial advisor like my dad,’ just saw that that was a good life and indeed it is good work and a good life. But then after my first year of college, I went on a two-year mission for my church and there, I got a chance to interact with people, I got to do a lot of service and things of that nature and just became fascinated by the human condition, the human struggle and sort of came back with this added emphasis on psychology. And I said, ‘Nope, this is what I want to do now. I want to study psychology.’ Well, I finished my bachelor’s, began my PhD three days after I finished my bachelor’s. So it was the ripe old age of 23 when I started my PhD. And towards the end of my PhD program, I was candidly just burning out on doing clinical work because my PhD is in clinical psychology. And so I said, ‘Look, I love psychology, I love thinking deeply about why people do the things that they do, but I don’t know that I’m cut out for 45 hours a week of hearing about people’s most tragic life events and their hardest days.’ And so long story short, found my way back to this original love of finance and got a job out of college assessing bankers pre-hire. So before a bank would hire an executive, they’d bring me in to give them an IQ test and a personality test. And there in the bank, I sort of discovered behavioral economics and behavioral finance in earnest.

Tim Ulbrich: So at the very beginning of the book, Daniel, you mention that the aim of writing this book is to be the most comprehensive guide to the psychology of asset management that’s ever been written. And I think you did a fantastic job of that, but as I read “The Laws of Wealth,” I really enjoyed that work. What inspired you to build upon that that you felt the need to come out with additional research and work that you have here in “The Behavioral Investor?”

Daniel Crosby: Well, you know, for me, it was really two things. “The Laws of Wealth is written more for a mass audience, a retail audience, mom and pop investors. “The Behavioral Investor” is probably better suited for professionals or people with a little bit of background. So there was a bit of an audience shift. But a secondary and perhaps tertiary consideration were I would find myself at conferences with other professionals, other people who were in this kind of world of emotion and finance, and I would hear them sharing ideas that I didn’t think were founded in science, that didn’t sound quite right to me. So there was one conference in particular where I was just sort of frustrated with what was being shared. And I felt like it wasn’t quite right but that I didn’t have the resources at my disposal to rebut what was being said. And so basically, a lot of it was just for me to figure out what I believed. You have a duty — if you’re going to make your living by going around and talking about these things to people, I feel like you have a duty and a responsibility to be better versed than anyone else in these sort of things, and so a lot of the reason why I write is simply to figure out what I believe myself and to teach myself what to think and what to share with others.

Tim Ulbrich: And I think so much of personal finance can quickly become opinion or OK, what did my friend do or what did somebody else or what are others doing? What’s out there in the news? And I think for pharmacists, we are trained, it’s drilled into us to think about evidence-based medicine, and I like so much of what you’ve done here in presenting the research and really putting I think a lot of rigor in depth behind some of the financial principles that will be sound in terms of helping one’s financial plan. So you break the book into four parts, and in part one, you investigate the sociological and neurological and physiological barriers to making sound investment decision-making. And early on in the book, you state, “Humans who are capable of much greater complexity of thought are accordingly capable of much greater self-deception and irrationality.” And you go on to say that there are social norms that define us and that “trusting in commonness and what makes one human but learning not to is what will make you a successful investor.” Tell us more by what you mean by this.

Daniel Crosby: Yeah, so starting with that first point, you know, when we become aware of our tendency to be biased or our tendency to make cognitive errors, a lot of folks and perhaps maybe smart folks like the ones that listen to this podcast go, ‘Oh, well, that pertains to other people but not me because I’m a pharmacist, I’m a doctor, and this is sort of a Joe Six-Pack problem, but it’s not my problem because I’m smarter, I’m better.’ But the research actually shows that there’s a negative correlation between intellect and your ability to successfully navigate some of these things because oftentimes, we’re just smart enough to fool ourselves. Like we’re just smart enough to present a credible case to ourselves that what we’re doing is not, in fact, wrongheaded or biased. And so there’s a couple of things at play: One is that smarts can actually be your own worst enemy in the way that I’ve just said. But in “The Laws of Wealth,” I cited research that shows that people lose 13% of their IQ, basically their cognitive processing power, when they’re in a period of financial stress. And so even for parts of navigating your financial life where smarts are of us, we have least access to them when we actually need them most. So it’s sort of a double-edged sword, but you can’t really think your way out of this one. And it’s a case of what got you there won’t get you to where you want to go. And a lot of people misapply their smarts in this area.

Tim Ulbrich: And I think that makes so much sense. I think any of us can think back to personal financial decisions we’ve made and I think especially as you reflect back — I mean, sometimes in the moment but I think more so reflecting back — where you look at a decision you made and it’s like, what was I thinking? You know, in that moment of time, what was going on? And I think it really speaks to the power of the emotions that can take over some rational thought and as we’ll talk about later in the show, the power of having a plan and putting that plan on automation to really help yourself get out of the way to ensure that your plan can see through to success. Daniel, one of the things I really took away from your book is that while it may seem counterintuitive, you mention that a large body of research suggests that investors profit most when they do the least, you know, really building on what we had just talked about here a couple moments ago. So my question here is, why do we have a tendency towards action? And why can this tendency hurt us when it comes to investing and saving for things like the future in terms of retirement?

Daniel Crosby: Well, one of the hallmarks, one of the key takeaways of “Behavioral Investor” is this idea that things that have served us well evolutionarily or things that have served us well in other parts of our lives serve us poorly when it comes to the investing domain, in particular. And so this action bias, as it’s called, is a great example of this. You know, in many parts of your life, quite intuitively more action does lead to greater results. You know, if you want to get more fit, then you should lift more weights. If you want to get smarter, you should read more books. Taking action does indeed bring about results. But in financial markets, the reverse tends to be true. Myers Statten looked at 19 different countries and found that in every single country that he studied, the more active people were in markets, the more they traded, effectively, the worse they did. And that was a monotonic stepwise relationship. For every extra action you took, you did slightly worse both net of and gross of fees, and so it’s a weird thing to think just about anywhere else, if you want more good stuff, you should do more. But in this world, doing less tends to get you more.

Tim Ulbrich: Yeah, and I think we’ll talk more about automation as well, but I think this really gets to the point of when you can be aware of the potential negative effects of having an action bias or action type of mindset, I think there’s a tendency when it comes to our investments, our finances, to be wanting to check accounts. And certainly if those are reading the news or getting additional information, make quick decisions. And really, again, automation, take a step back, have a plan, have a coach, and really looking at putting that plan on automatic to get yourself out of the way. One of the things that I left with was in Chapter 2, which was titled “Investing on the Brain,” you summarize this study where the brain activity of individuals was measured, and they were making a series of choices that were either immediate or delayed monetary rewards. And I found this part really interesting and so applicable to how we handle our long-term investing strategy, this idea between rewards that are immediate or rewards that are delayed into the future. Can you talk more about what researchers found in this work and what the implications are when it comes to investing, especially investing for the long term?

Daniel Crosby: So what the study found was that when people were presented with a short-term reward, there was a flood of dopamine, which is sort of a neurological reward, if you will, but that no such dopamine rush was present when it was a longer term reward setup. So the key psychological concept here is salience, right? It’s how real, how vivid, how present to the mind, that reward seems. And so research has shown that when people are making long-term plans, what they have to do is make the long-term more salient. So to explain, like what’s happening to me right now is enormously salient because, you know, if I eat a donut or if I go on a walk or do any other pleasurable thing, I’m rewarded in real time. But something like saving for 80-year-old Daniel’s retirement is much more abstract, much more ethereal, much less salient. And so what we have to do is make the future seem more real. And so you see this in studies where people have actually aged their faces, there have been studies where people have shown you what you might look like when you’re 80 years old, and then ask you, do you want to save money now for retirement? And people save at a bigger rate when they imagine themselves vividly older than they are today. So with your planner, with your spouse, with whoever, we need to be having conversations about the future that make that future — if not just as real, much more real than it currently is because that’s going to entice us to do the sort of saving and preparing that we need to do.

Tim Ulbrich: And I think in your example in the book, I think long-term retirement savings, if we think about a traditional retirement model, you work for 40 years, you’re 70, 75, 80, whatever, you know, I think that one’s probably the most obvious in terms of OK, that’s so far off, and I have all these needs that are here today of which — and expenses that can happen, of course. But if I go to spend money today on a vacation or spend money on a home today or spend money on a car today, that’s an immediate reward. And that’s what you talked about in terms of the dopamine pathway being activated versus Tim or Daniel, 40 years from now, it’s a much harder goal to really see the urgency around. So I think that’s an obvious one. You know, one that I’ve personally experienced that maybe isn’t as obvious in a little bit shorter term is even something like savings for kids’ college. So I have four boys, my oldest is 8. And I can remember, I mean, it seems like just yesterday he was a newborn and we were talking about savings for college. And here we are at 8 and lots of needs have really been put ahead of saving for college for a variety of reasons. So while that isn’t necessarily a 40- or 50-year trajectory, it’s more of an 18-year trajectory, I still that gets to the point that you made well in the book of needs that you have today and really being able to work with a coach and a planner to help take those future needs and really making them as real as possible today to prioritize the savings for those. One of the concepts — and you link this well to the idea of keeping up with the Joneses — is you talk in this section of the book that we just referenced, “Investing on the Brain,” about anticipating a reward is deeply satisfying, whereas literally receiving the reward is far less gratifying. And I want to say that again because I think that’s a really interesting concept. “Anticipating a reward is deeply satisfying whereas literally receiving the reward is far less gratifying.” And again, you go on to make the connection here of how we easily can feel dissatisfied in the work and the money that we earn, how you kind of keep pushing that forward and that obviously leads to the concept of keeping up with the Joneses, feeling like you need more and more and more and it’s never enough. So my question here, Daniel, is is there a point where there is enough? How much is enough? And can money buy happiness? Is there a point where wealth can really produce happiness? That’s a question we all often hear and think about.

Daniel Crosby: Yeah, so I wanted to talk about why anticipation is more pleasant than the reward itself, and then I’ll move onto the happiness question. So there’s something in psychology called “focalism,” which is when we imagine a future event, we imagine sort of one dimension of it. We focus on one particular thing. And so if you’re imagining a trip to Hawaii, you focus on laying on the beach with a pina colada in your hand and not getting up at 4 o’clock to make your flight and getting stuck in traffic and everything that it takes to get there because even for something immensely pleasurable, there’s still some element of hassle and negativity associated with it. And we tend not to focus on that. So that is part of why preparing for an event, a vacation, a gift, whatever, is more pleasurable than the event itself. You know, I think about we bought our dream home a couple of years ago. And you know, looking on Zillow and dreaming about all the things we would do there and everything was a lot of fun, but cleaning all of the toilets in a big house is a lot less fun. And so this focalism leads us to sort of one-dimensional appraisals of things, and that is the way that it is. In terms of the literature on money and happiness, it’s really quite fascinating. So in a phrase, money is better at buying the absence of misery than it is at buying happiness. So money can make you not sad. Like people with adequate resources are happier or less sad than people with inadequate resources, and that increases exponentially up to about $75,000 or $80,000, up to about sort of a middle-class income. But after that, it plateaus very quickly because what money is good at doing is having you not worry about living in a safe neighborhood, not worrying about keeping shoes on your kids’ feet, not worrying about keeping food on the table. But once you’ve sort of provided for that lowest rung of Maslow’s Pyramid there, it gets much trickier after that. And after that point, money can buy happiness if you spend it on certain things. And so the things that money can buy happiness is if you spend it on time with others, like a vacation or time with others, if you give it away, so if you’re charitable, and if you buy yourself out of things that you hate doing. So like getting a maid or getting someone to cut your yard or whatever you hate doing, if you can buy your way out of that. And that’s about it. So it provides sort of a worry-free baseline. And then after that, you have to get kind of particular about how you spend it because if you’re not spending it on time with people you love and if you’re not spending it on making your life a little easier, it just doesn’t do much, candidly.

Tim Ulbrich: That’s so rich. And I love how in the book, you talk about the concept, along with keeping up with the Joneses and eventually getting to this basic level of happiness which money can buy of being able to cover needs. You talk about the concept of living on the hedonic treadmill. And I think we can all relate to that where we buy something, and the anticipation of it was much greater than the reality of that or that feeling, that dopamine rush over time subsides. But when we think about investing in things like giving to others and being philanthropic or investing in convenience is what I just heard you say there, investing in time and experiences, I mean, those are the things that really produce that true joy and happiness. And I think that’s such rich information that we all can think about and reflect upon with our own financial plans. Beyond the minimum, beyond taking care of our needs, are we spending our money and investing our money in the things that matter most? Which the literature supports really does buy happiness and hopefully doing what we can to minimize buying things that we know will not produce that same level of happiness. So shifting focus here for a minute, I want to talk about loss aversion because I think that is real for so many listening to this podcast, especially myself, and thinking of those that were significantly impacted, either directly or indirectly, by the 2008 recession. Can you talk further about the concept of loss aversion and how this may have an impact on one’s long-term savings plan?

Daniel Crosby: Yeah, so loss aversion is the observation in the psychological literature that people are about 2.5 times as upset about a loss as they are excited about a comparably sized gain. So if you go to Vegas, and you lose $100, you’re upset. If you gain $100 bucks, you’re like, yeah, whatever, it doesn’t change my life. So this is sort of this asymmetrical relationship we have between how we perceive loss and gain. So of course, this leads people to do a number of things in markets, notably, to take too little risk. Now this can be exacerbated, depending on sort of where in your life you encountered the markets. So for me, I just turned 40 last week, and so I got out of school in 2008, I finished my PhD in 2008. And so the first thing I did is I got out of school, I got a job, started saving, started investing, and immediately ran into the buzzsaw of 2008 and early 2009. And so there’s something in psychology called this primacy and recency effect. So we have increased memory, right, we hang onto things that happen early in a sequence or late in a sequence. And so for people like me whose initial foray into investing was getting their money chewed up and spat out, it can be a very discouraging thing.

Tim Ulbrich: And I think, Daniel, so I’m on the exact opposite. I also finished my pharmacy degree in 2008, but I was doing residency in 2009, so when I just started investing, I’ve only been on the other side of this 10-year run in the positive. So I have yet to experience that loss. I really bought at probably about the lowest point, and so I think that leads me to be somewhat of overconfident in what the markets will do. And I think you do a good job in the book of when you’re thinking about risk, truly assessing risk not based on one experience or one moment in time but really looking at the historical risk. And I think on the other side of that when I think of my experience is that I shouldn’t necessarily look at this 10-year period, as I may have a tendency to do, and expect that that run is going to continue going forward. And so I think there’s — I could see this on both sides of it as well. And I hope our listeners will pick up a copy of the book because in “The Behavioral Investor,” you do a great job — and we’re only talking about a few of them here, obviously loss aversion being one — but you do a great job of distilling what you say is more than 117 different types of behavioral biases into four types of behavioral risk: ego, conservatism, attention, and emotion. And you walk through each one of those in detail, you give strategies to overcome, and so I hope our readers will get the book to look at more of those in detail. So I want to shift to the topic of automation. And I think — and you mention in the book — you could have really titled the book and distilled it down to three words: automation, automation, automation. And I find the irony in your book of there’s so much complex research and so much rich data and ultimately, it gets to this concept of less is more, automation, and have a coach. And so talk to us about the power of automation and how that helps combat some of these biases. And I’d also be interested in, you know, how have you successfully navigated automation, even in your own financial plan?

Daniel Crosby: Yeah, it’s a fascinating thing because people make the mistake of thinking that a complex, dynamic system like the stock market has to be met or solved with equal complexity. And you remember from your stats class that to avoid overfitting, when something is complex and dynamic and always in flux, really the way to not overfit by solving that problem is to approach it quite simply and with just a couple of rules. And you know, you’ve touched on a couple of mine, which are automate and work with a coach. And so automation is great because it actually takes a human tendency to be prone to the status quo, to be sort of lazy, and it locks it in for our benefit. So you know, being lazy can lead you to never start saving and investing, and that’s certainly problematic. But if you begin a robust program of investing and saving, and then you lock that in and you automate it, that same laziness can work to your benefit. So that’s sort of the magic of automation is it just locks in this human tendency to be conservative and be status quo-prone and uses it, flips it on its head and uses it for our benefit. The second piece I’ve written about quite a bit is that I work with a coach, like I pay a financial advisor. And I mean, at the risk of being arrogant here, I probably know more about financial markets than my financial advisor. And so why do I pay someone to manage my money, to hang onto my money when I perhaps know more than they do on paper? Well, the reason goes back to our conversation about education and IQ and these sorts of things. The biggest impediment to me reaching my financial goals is not inadequate knowledge of markets. The biggest impediment is me freaking out.

Tim Ulbrich: Yes.

Daniel Crosby: And so I understand that I’m no different than the next person. Like I can’t write enough books to make myself rational or calm or cool-headed. And I know myself. And I’m, in fact, quite not level-headed. I’m quite anxious, and I’m quite skittish. And markets — and look, let’s call it what it is, just in life general, nobody goes into psychology because they’re well-adjusted, right?

Tim Ulbrich: Right, right.

Daniel Crosby: So I know this about myself, and I build a wall to keep me out of my own way.

Tim Ulbrich: Yeah, and I think the self-awareness — I share that with you as well — I think the self-awareness of that and then taking the initiative to say, OK, I need that coach, I need that accountability, because I think as your book highlights so well, we’re just hardwired toward getting in our own way when it comes to being successful with investments. And so I think if we can acknowledge that, be aware of that, call it what it is, I think that really gives us the humility to say, OK, we probably need somebody in our corner to help us out with this plan. I would also point our listeners to, in addition to Daniel’s book, we talked about automation in detail on Episode 057 of the podcast if you want to check that out. And a book I’ve talked about before on this show is “I Will Teach You to Be Rich” by Rahmit Sedi. I think he does a really, really nice job of talking about the power of automation and giving some examples of what that could look like. And in his plan, he talks a lot about that upfront time investment to develop the plan or work with a coach to do that. But then after that, you’re really saving yourself time and I would argue saving yourself a lot of anxiety and stress when you know that you’re going to be really just overseeing the plan as it’s hopefully functioning and running itself and not having to really wonder, am I achieving this? Am I not achieving this? What’s going on with certain parts of the plan? I want to end by talking about passive investing versus active investing, two terms that many of our listeners are probably familiar with. But then a third approach that you talk about, which is a new approach called rule-based behavioral investing and why that may be even a better approach than passive investing, which I think many of our listeners would probably be in favor of. So can you briefly define passive and active for those that are not familiar with those terms when it comes to investing? And then outline what’s different about rule-based behavioral investing?
Daniel Crosby: Yeah, so passive investing in its purest form is saying, I don’t know what the market’s going to do in the future. So I’m going to own the entire market, effectively, to use the S&P 500 as a proxy for the entire market. Instead of trying to pick the winners and losers from these 500 largest companies in the U.S. economy, I’m just going to own them all and own them in the sizes that they are. So the bigger the company, the bigger a piece of my portfolio it will be. And I’m not going to try and pick winners and losers. Active investing would be trying to pick winners and losers from among those 500, again, just using this as a simplified proxy, we’re going to try and pick the top 50 stocks from among these 500, hold those 50 with the aim of beating that benchmark, as it were. And so like many things I think in our day and age, the conversation around active and passive I think has sort of devolved into hysterics and people just shouting at each other from the other side, the other bank of the river. And so I wanted to look at this and say, ‘You know, what works about passive investing? And what works with active investing? And let’s just do that. Like let’s just do what works.’ So when I looked at what works, it must be said that the reason there are so many passive enthusiasts is that it’s just worked very well and it’s very cheap, on average. So if you look at 10-year periods over the last 10 years, it’s something like 85% of passive vehicles have beaten their active brethren and at a fraction of the cost, so that’s very compelling stuff. But passive investing still falls prey to a couple of mistakes. You know one of them that is somewhat controversial is market cap waiting, which basically says the larger a company is, the larger the size of my portfolio it will constitute in a true passive portfolio. Well, there’s research to suggest that larger stocks underperform smaller stocks. So you might want to do something as simple as equal weight or broaden your universe. There’s also interesting research that I think not many people are aware of. If you look at something like the S&P 500, this is the Standard & Poor’s 500. You know, the Standard & Poor’s is a rating agency. This isn’t mined from the earth, right? Like this doesn’t occur in nature. There’s a secret committee of people who chooses who will go into and out of the S&P 500. And at times, they have made poor decisions, just like we all do. They’ve made decisions to include, to break their own rules around profitability to include AOL right before the tech bubble burst. So they can break their own rules, they can make poor, wrong-headed, discretionary choices that can lead to some underperformance. So my thought was take the best parts of passive investing. It’s well diversified, it’s cheap, and do those things. Never overpay. Diversify to the hilt. Those are great things to learn. But you can also take rules from active investing or the best types of active investing, which is don’t use your discretion. Don’t leave it up to some external force to choose what’s going to go into your portfolio. You rule based on choosing affordably priced, high quality shares, weight them in a way that’s consistent with strong performance historically. So you know, before I get an angry army of passive investing enthusiasts after me, there’s so much recommended. For the average person, for the person who just doesn’t want to think about this stuff, passive investing makes all the sense in the world. But if you’re interested in these things and you want to take it just a step further, I think there are ways that you can improve on market cap-weighted passive investing that are very sensible and very affordable.

Tim Ulbrich: Yeah, and you do a great job of this. Chapter 12 is called “Investing a Third Way,” and I found this very refreshing, to be honest. And confession time to my audience and community, I mean, I was one of those people, I am one of those people I feel like that is kind of on the side of passive investing, shouting across the riverbank to the people on the active side. And I think this was just a good reminder of, you know, as you mentioned, many things in life, it’s not one of two options, but there’s multiple options. And really taking a look to see what’s the best from both of these? And is there a third way and a third approach. And you do a great job in outlining this in a table in terms of what really are the advantages of what you’re referring to here as this rule-based behavioral investing. It’s got low fees, it’s diversified, it has the potential to outperform, obviously potential a key word there, low turnover, and manages bias. And in the book, you were very clear and your quote was, “To be as direct as possible, passive investing should be the de facto choice of those uninterested in the art and science of investment managing. By buying a diversified basket of index funds that covers a variety of asset classes, know nothing investors who often know a great deal are likely to beat more than 90% of active managers and have time to focus on pursuits more meaningful than compounding wealth.” And so I think that’s also a great reminder of again, there’s not one or two options. There’s a multitude of options. And this also depends on how involved and how interested you want to be in learning more about the process. So Daniel, thank you so much for taking time, for coming on the show, for, again, the work that you’ve done here in “The Behavioral Investor,” “The Laws of Wealth,” and the other work that you’ve put out there as well. So in addition to listening to your podcast called “Standard Deviations” and getting ahold of the book, “The Behavioral Investor,” which is available pretty much anywhere, where can our listeners go to learn more about the work that you are doing?
Daniel Crosby: I’m very active on Twitter @danielcrosby and also post a lot of my research on LinkedIn, so just Daniel Crosby, PhD. So thank you so much for having me.

Tim Ulbrich: Awesome. Thank you so much, Daniel.

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YFP 123: Leveraging Your Expertise to Start a Side Hustle


Leveraging Your Expertise to Start a Side Hustle

Dustin & Melody Hartzler talk about their healthcare side hustles, how these ventures have accelerated their financial goals, how they balance and prioritize their time, and how they work together as a couple when it comes to business and managing their personal finances.

About Today’s Guests

Dustin Hartzler is a Happiness Engineer at Automattic by day, where he helps business owners work all of the kinks out of their WooCommerce stores. If working with WordPress all day wasn’t enough, he spends time each week recording his WordPress podcast called Your Website Engineer (http://YourWebsiteEngineer.com). He enjoys helping people understand and use WordPress to its fullest capacity and spends time tinkering with code. When he’s not in front of the computer (which is rare), he enjoys spending time CrossFitting, reading and traveling. He lives in Dayton, OH with his wife, 5.5 year old daughter, and 2.5 year old son.

Dr. Melody L. Hartzler, PharmD, BCACP, BC-ADM, is a family medicine clinical pharmacist and Associate professor of pharmacy practice. Dr. Hartzler is a graduate from Ohio Northern Raabe College of Pharmacy. She completed her PGY-1 Pharmacy Practice Residency with emphasis in Ambulatory Care at the Chalmers P. Wylie VA Ambulatory Care Center in Columbus, OH. Following residency, she joined faculty at Cedarville University School of Pharmacy and developed a collaborative practice in a family medicine residency program. She now serves part-time for Cedarville University School of Pharmacy and part-time as a clinical pharmacist at Western Medicine Family Physicians. Her primary practice interests are diabetes, IBS/IBD, and functional medicine. In her current clinical practice, she works collaboratively with her physicians through a consult agreements. She is board certified in both ambulatory care pharmacy as well as diabetes management. She is a nationally recognized speaker, who has presented 6 times at the ASHP Midyear Clinical Meeting, as well as numerous state and local programs. She is an active member of American Society of Health System-Pharmacists as well as state and local organizations. She is also is a current board member for the Ohio Pharmacist Association. Dr. Hartzler’s passion for functional medicine lead her to start her company PharmToTable, LLC; she blogs at PharmToTable.Life. Her newest adventure is FunctionalMedicineCE.Com, she is making quality continuing education for Functional Medicine convenient and affordable.

Summary

Dustin and Melody Hartzler share their career journeys and how they are leveraging their expertise to start a side hustle. They have created multiple side hustles built on needs they are seeing while also fulfilling creative outlets they crave. Melody works 3 days a week at Western Medicine Family Physicians and teaches at Cedarville part-time. At her office job, she focuses on diabetes medication, transitions of care, medical reconciliation and does functional medicine consultations. Dustin is an electrical engineer turned Happiness Engineer at Automattic where he supports customers set up their WooCommerce stores and websites.Together they have created two side hustles: Functional Medicine Continuing Education and Pharm to Table. This episode focuses on Functional Medicine Continuing Education.

Dustin and Melody share their roles in their businesses. Dustin is able to have a creative outlet by building websites for their businesses and Melody often brings new ideas to the table based on the needs she sees in the pharmacy and functional medicine fields. They often have business conversations while driving.

Melody dives into functional medicine, a break down of what it is, her personal story leading her to learn more about functional medicine and how she incorporates it into her office practice as well as in their side hustles.

They speak more about their business model and the costs behind getting websites like they have up and running. The couple also share their advice for getting started in a side hustle and the podcasts and books they help to inspire their journey.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. I’m excited to welcome onto the show Dustin and Melody Hartzler, proud fellow alums of mine of Ohio Northern University to talk about their unique career journeys with multiple side hustles, which most recently culminated in the launch of FunctionalMedicineCE.com and a virtual symposium that they are launching on Nov. 9, 2019. This episode is an extension of the work, the excellent work, that Tim Church has been doing as a part of our YFP side hustle series where we talk about ways you can create additional streams of income to reach your financial goals faster and highlight pharmacists who are making this happen. Now, before we get started with today’s episode, I want to mention an awesome giveaway that we have going on this month in combination, in partnership with Brandon Dyson and the team over at TLDR Pharmacy. And this is the ultimate residency prep giveaway, and you can learn more and enroll in that giveaway to get yourself eligible over at YourFinancialPharmacist.com/giveaway. Again, that’s YourFinancialPharmacist.com/giveaway. In this giveaway, the ultimate residency prep giveaway for five winners, we have a variety of resources, everything from interview prep, letter of intent prep, a pharmacy residency bootcamp from the Pharmacy Advisory Group, lots and lots of resources, including the forecast application fee that, of course, costs just over $100. So again, you can learn more at YourFinancialPharmacist.com/giveaway. So Dustin and Melody, welcome to the Your Financial Pharmacist podcast.

Melody Hartzler: Thank you.

Dustin Hartzler: Hello, hello.

Tim Ulbrich: Well this has been a long time in the making, so excited to have you guys on the show. And we’re going to talk everything from business and side hustles to how do you guys effectively work together, what’s the purpose, what’s the goal, why are you doing these side hustles, so I’m excited to be able to have our community, our listeners, get exposure not only to the businesses that you’re working on but also a little bit of the behind-the-scenes of how the two of you operate and the success that you’ve had. So why don’t we start with each of you — Melody, I’ll start with you. And then Dustin, I’ll ask the same thing. Melody, can you start and tell us a little bit about your day job, what you’re doing every day as a clinical pharmacist? And then from there, we’ll jump later in the show about some of the side hustles.

Melody Hartzler: Sure. So three days a week, I work at Western Medicine Family Physicians, which is a private practice family physician office in the Dayton, Ohio, area. And then I also teach at Cedarville part-time, so I get the opportunity to still teach what I love, which is endocrinology and diabetes-focused. And also I am in charge of our residency teaching certificate program at Cedarville. So during the week at the office, I do a lot of diabetes management, also transitions of care, helping med reconciliation for post-hospital discharge patients. And then I do a lot of functional medicine consults too, which I think we’re going to get into later.

Tim Ulbrich: We are. And that was — part of wanting you to share that is I think often the value in a side hustle — most side hustles that often turn into successful businesses I think is where there is synergy between someone’s area of expertise in their day job and what they’re able to do. So split position, teaching as well as practice in functional medicine. Dustin, why don’t you give us a little bit of background on the work that you’re currently doing at Automatic as well as the previous work that you had in starting and owning your own business?

Dustin Hartzler: Yeah, absolutely. So I do work at Automatic now. I am on a support team, so I help people set up websites. And you might see where this is going here in a little bit, but I had a business when we moved to Dayton in 2010, I set up my own company because I wasn’t going to do my electrical engineering job, drive to a factory two hours away, and it just didn’t make sense. So I’m like, let’s see if I can start something here. And I started, and I had a business building websites for people. And so I have a lot of experience, 10 years almost, in just building websites and helping people get their websites set up. So that’s my primary focus, and that’s my primary day-to-day.

Tim Ulbrich: So you’re title, Dustin, if I pulled this correctly from your LinkedIn profile, is a “happiness engineer.” What is that? I mean, what does the day-to-day of that look like?

Dustin Hartzler: Yeah, so that’s just a name for our customer support team. And so our goal is to make everybody happy, I guess if you will. It’s mainly — it’s kind of a unique position in the fact that we’re not like a normal call center that says like, “Oh, you can only give them refunds if this, or you can only do this.” Like there’s so much flexibility in our jobs, like you know, if somebody has paid for a plugin or paid for something and it just doesn’t work, we can go outside their window to refund them or we give them extra time or give them free plugins. Like I’ve given customers who’ve spent thousands of dollars with us, just oh, this wasn’t working when you try to check out, it’s on me. Like it’s one of the cool things that we can do for our loyal customers and just try to make everybody, that experience when you’re building a website is so frustrating. And so our goal is to help people get what they need and to also just do it without having to ask for extra permission. Like, “Oh, can we give someone this $100 thing worth of value?” Just go ahead and do it, and everybody moves on with their lives.

Tim Ulbrich: So one of the things I don’t think I’ve ever asked you this and I don’t want to gloss over, Dustin, but you mentioned obviously you’re trained as an electrical engineer and you abandoned — for lack of a better word — abandoned that work, started your own company. You mentioned the long commute, but what other reasons, what other factors played into that decision in terms of leaving a career in a field that you had spent a lot of time obviously in training and becoming an expertise and deciding you want to go this route into web development?

Dustin Hartzler: I think the two things that stand out to me is one, I don’t like meetings. I worked at Whirlpool, and I would literally have like seven hours of meetings in an eight-hour day, plus have to do all my other work.

Melody Hartzler: He wouldn’t do well in academia either.

Tim Ulbrich: No, no, he would not.

Dustin Hartzler: And then I think the other thing was just the inspiration I was getting from listening to so many other business podcasts and people creating their own thing and doing their own thing, and the income level was — you were never capped. Whatever you could create, that’s how much money you could make. So I think those were kind of the two reasons besides the long commute. And honestly, I liked the commute more than the work because I got to listen to podcasts the whole way to and from work.

Tim Ulbrich: I love that. I mean, so the aversion of meetings and the advantage of not having a cap on your income certainly can be reasons to be able to start your own business. So I agree, though, Melody, academia would not be the environment for Dustin. You’ve got to love the meetings that are about the meetings. Those are my favorite types of meetings. So let’s jump in. And Melody, if you could start, and Dustin, feel free to chime in, you know, I’m always curious, obviously here we are on a personal finance podcast, but I think so much of people’s success in business or here in side hustles or side hustles that turn into businesses over time is really dependent on people having a solid financial base and foundation from which they can build. So tell us a little bit about your personal finance story and journey as an individual, as a couple, and how that has put you in a position to be strategic and on the offense when it comes to these business opportunities.

Melody Hartzler: Sure. So I probably didn’t have the best understanding of finances when we got married and even going into school. I had a lot of private loans that had a variable interest rate. So by the time 2008 came around, before the stock market crashed, some of those were at about 16% interest.

Tim Ulbrich: Wow.

Melody Hartzler: Yes. So we left, I graduated in 2009, and I had about $120,000 in debt plus an additional $12,000 that I ended up paying back to Walgreens about three years later. Maybe a little longer. And so from that point, we knew we had to pay it back, and we wanted to pay it back quickly. We really wanted to pay it back before we had kids. Dustin had a lot less, which he can talk about. But so I — even during residency, I wanted to pursue residency and I knew that I liked talking with people and I loved the idea of community pharmacy, but I knew that the way that it was going wasn’t going to work for me and my goals. And so I did my residency in an outpatient facility at the Columbus VA. And I didn’t have weekend responsibilities there, so on the weekends, just like every other resident in town, I was working on the weekends. So I worked at Walgreens every other weekend throughout my whole residency. So pretty much had four days off a month because I was working the other weekends. And you know, that helped us a lot because we were able to significantly increase even just that first year. If you think about four days a month of a retail pharmacist’s salary plus the residency salary, it almost was about the same.

Tim Ulbrich: Absolutely.

Melody Hartzler: You know, when you got down to it. So that was a blessing to still be able to have that residency experience and then be able to get paid a separate position to help us dig out of that a little bit and then ended up having one of our cars died that year, and so we ended up having to use a lot of that to purchase a reliable car to get to those jobs. So and then Dustin, I can let him talk a little bit about his strategy when we were paying off loans. He was even paying them off when we were in Ada still at Ohio Northern, so my last two years of school, I worked as a head resident — actually three years, the last three years I was at ONU, I was the head resident. And so my room was free and we had the stipend plus we got a meal ticket. So here we got married and we’re living in an apartment on campus and going to the cafeteria as a married couple because that’s what made the most sense. I mean, we didn’t have our awakening on the whole health and nutrition thing at that point, so we were still OK with eating the food there. And so that was a big savings, we didn’t have a rent to pay for our first early years of marriage because of that. And so Dustin really was able to start driving down some of those high interest loans.

Tim Ulbrich: So Dustin, give us the strategy a little bit — and obviously chime in with your own financial position as well in terms of student loan debt. But those together when I hear 16% interest loans, were those just things you aggressively paid off? Did you guys refinance those? But in addition to that, what was the motivation for you that even while Melody was still in school that you obviously had very significant intentions of trying to aggressively pay those off. Tell us a little bit about that backstory.

Dustin Hartzler: Yeah, so when I started — so I graduated. I’m two years older than Melody school-wise. And so I graduated two years earlier. And I had a full-time job, you know, a full salary engineer position, and I drove to and from work. And this was like right at the dawn of podcasts, believe it or not. And the iPod, video iPod is the first iPod with the thick wheel, and I felt like I could invest $300 in this Apple device so that I could play it through my car deck tape player.

Tim Ulbrich: Yes.

Dustin Hartzler: To and from work. Like I was commuting an hour to and from Whirlpool. And I was like, well, I just want to learn about money. Like nobody ever teaches you about money. And so I got hooked on the Dave Ramsey Show, and all of a sudden things that he was saying was making sense. And we didn’t full out Dave Ramsey — like we took vacations while we were still in debt. Like we lived life, but we still were pretty aggressive with our student loans. But what happened was I ended up with like $20,000 in student loans. I throw that number out there like, oh, just $20,000. That’s still a lot. It’s not Monopoly money, like we paid it all back. But so I ended up — he was talking about creating a budget, and this was all before Dave Ramsey has his budgeting tools and stuff online. So I had an Excel spreadsheet, and I figured out — and I don’t know if this is true or not — but as an engineer, you’re always trying to figure out how you can save the most amount of money in interest. And so like we figured that it made more sense for Melody to take out new loans for the last couple years while we paid off her current loans. And so we had about three things we had to pay for: We paid for gas for my car to and from work. We paid for renter’s insurance. And I think we paid for like some groceries for breakfast and lunches for me. That was pretty much all of our bills. And so it was like every week, I figured out that if I wanted to spend $2,000 per month towards the loans, then I could spend $500 per week. And then that last week, whatever we had left in the month, we got that, that’s what got sent over to Sallie Mae at the time. And so that was kind of the strategy and the thought process. And was it the coolest life to live? No, not really. But looking back, our first two years of marriage, we lived on campus. And I mean, I got to do all the intramural sports and all that kind of stuff, and there were still a lot of friends that I had because I had just graduated. And so it was kind of cool, like it was a good jumpstart with such a weight around our ankles, if you will, with all of the loans that we had.

Tim Ulbrich: Yeah, I mean, there’s nothing like a good date night at the Macintosh cafeteria, right? At Ohio Northern University. I mean, what I love about that though is I love the intentionality, I love that Melody, you kind of admitted that you didn’t necessarily come in with the same appreciation for that and obviously had more debt, although that’s still well below the national average of what we’re seeing now even though it was a higher interest rate. But still were really, really aggressive. And I want to follow up on that and hear from the two of you. We talk a lot on this show about the importance of having a financial why. What is your motivator for why you even care about this topic of money to begin with? And we’ve preached over and over and over again that that’s going to be different for everyone. But if you can articulate that, especially as a couple if you can articulate that, I think it makes so many other parts of the financial plan easier to work through, such as the month-to-month budget and being on the same page and all the things that cause so much heartache and a lot of difficulty for people. So for the two of you, what’s the vision? What’s the dream? What’s the why when it comes to money in terms of why you wanted to be intentional in paying down the debt? And what’s the future hold in terms of why this topic of money matters?

Dustin Hartzler: I think the first thing that really comes to mind is like, I didn’t like paying people to use their money. I don’t know, like I had never had any credit, I had never — before, it was always like, “Oh, interest. That’s what the bank pays me.” And then when we see how much the interest is making, or how much we’re spending in interest, it just like takes your breath away almost. It’s like, wow, on our mortgage or whatever, that’s a lot of money just to spend to have used somebody else’s money. And so I think that’s kind of the driving force behind it, and then kind of looking out — and I do this a lot too with trying to figure out what happens the day comes and we don’t have our mortgage anymore, like look at all of the possibilities there. Like, oh, if we didn’t have a mortgage, we could easily cash flow college for our children. Or oh, if we didn’t have a mortgage, look how much money we would have to do these other things. So I think some of the why is just giving us the flexibility to do what we want. You think about it, and I told this to Melody, I don’t know, a few weeks ago or months ago, we were driving somewhere and I was like, “I am so glad that we do not have any student loans anymore.” With all of the things that we’re doing, the pieces of the puzzle, like you start tacking on $500, $1,000 here or there doing other things, we would rather spend instead of $1,000 to Sallie Mae to pay for education, like we would rather spend $1,000 to have our kids be more bilingual and go to a Spanish immersion preschool, which they do, and a kindergarten. So those are some of the kind of the things that I can think of right off the top of my head when it comes to financial motivators for us.

Melody Hartzler: The other thing too is that we’re Christians and we’re also passionate about giving and serving, and so we feel called to give back. It’s not really our money to begin with. And so how can we be a better steward of that? And so paying it down quicker as far as the debt that we had and even with our mortgage now is important to us so that we can be better stewards of the finances that we’re given and the opportunities that we have. We do give at least 10% of our incomes to our church and to various ministries in our community, even through the things I’m doing on the side hustles, the blogs and things like that. I also make it a priority to tithe those and things like that as well. So that’s important to us. Travel is also important to us. So I love, I’ve been to 49 out of 50 states. And so I grew up — and a lot of times, my parents didn’t have any super fancy we did, timeshare travel and different things like that where we’d cook most of our meals throughout the week, but hey, we were at the beach. And we did a lot of trips where we’d drive to the Grand Canyon or drive to Yellowstone and stopped at a lot of places along the way. And so I sort of got the travel bug and then like Dustin said, even when we were paying off debt, we were still traveling. So we went to Hawaii. My parents had gifted us two timeshare weeks out there that we were able to line up sort of back-to-back. But you know, when we were out there, we definitely used a Red Lobster gift card in Honolulu. And we totally ate peanut butter sandwiches at the feet of waterfalls. And so it was OK. We saw the beautiful creation that we were there to see. And obviously if we went back now, it would be a little bit different. But we laughed at that, and again, before our healthy food awaken, but we still have great memories of that. And even when we went to Europe before we got pregnant with our daughter, we went with another couple, we split Airbnb’s, so we weren’t out there spending — when I look at the Travel & Leisure magazine, I just sort of read it like, oh, this is beautiful. I’m never going to stay at these places. It has cool places to go, but never am I going to go on this place that costs $3,000 for the whole week just for one person. But yeah, so we really do want our kids to be exposed to travel, and that’s also important. And we like to — even each year, we like to go someplace by ourselves to sort of just disconnect from the day-to-day and I guess you could say the rat race sometimes. And then we like to take our family on a trip as well. So we just got back, actually, from St. John. But even within that, we went on Marriott points, and we got a good deal on flights. So it wasn’t like we’re just still — we’re still trying to be budget-friendly because we still are in debt with our mortgage and trying to be good stewards of our money.

Tim Ulbrich: Yeah, and I think you guys have been great examples that you can enjoy something that both of you are very passionate about in terms of traveling and exposing your kids to that but also do it in a way that fits in your financial plan and is reasonable to do in terms of how much money you have. And what you all are going to remember, obviously, is the experience. Right? I mean, not necessarily using a Red Lobster card, although that’s a great story. I mean, the meals and the food and all that are good, but obviously the experience and the time you have with one another and with your family is going to be what you’re going to remember in the long run. So let’s talk business because I wanted to lay that foundation because as I mentioned on this show and I say often, being able to aggressively pursue business opportunities, whether it’s a side hustle, whether it’s investing in another business, whether it’s buying real estate, whatever it be, doing so when you have clarity on the things that we just talked about I think allows someone to be able to pursue that opportunity with confidence and to do it in a way that’s not going to add on stress. And I think that’s so important that we all know the stress that can come from our own financial situation. And when you think about things like debt and not having emergency savings and obviously you put kids into the picture and expenses go up and home prices, all those things, and if you want to then pursue business opportunities but you already have those stressors, obviously this could be one extra layer of stress rather than hopefully something that can produce additional income and also allow you to pursue something that you’re passionate about. So what I would like to do is talk through two businesses I know that you’ve worked on, and we’ll talk about the one a little bit more in detail that you’re getting ready to launch, the virtual symposium, the functional medicine CE, but I also want to talk about your other venture in farm-to-table. But before we jump into those two, help me understand — obviously, we’re going to talk about two pharmacy-specific oriented businesses, but Dustin, obviously you’re not a pharmacist. We’ve learned you’re an electrical engineer, you’ve got a web design background, so what is the role that each of you play when it comes to the business ventures that you’re working on?

Dustin Hartzler: Yeah, so the thing about working at Automatic, it’s an awesome company. It’s the — WordPress.com is the company behind that, and there’s a specific little thing in my contract with them that I have a — it’s a conflict of interest for me to build websites for other people and charge money for it. I can out of the goodness of my heart for as many people as I’d like, but the time doesn’t really — I don’t really have the time to build websites for the goodness of my heart for many people. And so I think one of the really interesting things with that conflict of interest, you know, I was always trying to think like, OK, what can I do as my side hustle? Or what can I do that I’m really passionate about? But everything I’m passionate about is WordPress and websites, developing code and stuff like that. And so that’s one of the things that really, it was kind of once I started at Automatic back in 2013, it was like for a few months and a few years, it was like, well, I don’t have to do anything else. I’ve got this good-paying job, let’s not worry about it. But then that itch continues to be there. And then Melody comes up with these ideas, it’s like hmm. So I can build something for free, and I get revenue from it, essentially. So like I was talking to some people at we have an all-company meetup. It’s once per year; it was back in September. And I was telling people like, oh yeah, I built this. I was using WooCommerce and my wife is making all this money with this website. And they’re like, well don’t you mean you? And I was like, no. My wife is making all this money. So I think that’s a really good blend of what we can do as a couple because I can’t create that kind of thing on my own, mainly just because of the conflict of interest. Like had I — if I leave Automatic, I can go and do whatever I want. But I really like my job, and so this just gives me the opportunity, it scratches the itch of I get to build things but then I’m also getting the benefit of building this by as much as Melody can fill.

Tim Ulbrich: Hey Melody, I know how big of an asset that is, you know. For us, we have the magic bullet of Tim Church. You have the magic bullet of Dustin Hartzler that can do all of that. But the web design piece, the opt-ins, the lead magnets, the format, that can often consume people when they’re trying to just get their idea off the ground. So what an incredible resource. So building on that, it sounds like based on what Dustin said, you’re often coming with the vision, the idea, and then are you batting that back-and-forth with Dustin? Is he helping on the execution? Help me understand how you’re fleshing out a business idea that you come up with.

Melody Hartzler: Yeah, so normally, honestly, it’s a lot of conversations in the car when we’re driving places because if the kids are watching something on the iPad and you can’t do anything else when you’re driving, that’s when we have a lot of our business discussions. But I think a lot of times, it’s like, hey, this is what the need is that I’m seeing. And then like we’re just sort of going back-and-forth about how we can meet that need but also turn it into that side hustle and generate revenue from it.

Tim Ulbrich: Yes.

Melody Hartzler: And so for example, with the functional medicine CE, I all the time was seeing people saying, “Hey, I want to learn more about functional medicine. Where can I go?” And there’s a lot of great organizations teaching about functional medicine. The challenge is not a lot of them are providing pharmacist CEs. So if people are looking to meet their Continuing Education requirements with this education, that wasn’t happening in a lot of those situations. And also, the conferences are sort of expensive. And so when you’re looking at Institute of Functional Medicine, which is a great organization, and I’m hopefully going to be — I want to go to their conference next year at some point. It’s a great organization, but there’s no pharmacist CE currently, and there’s also — it’s a couple thousand dollars, if not more because you’re talking plane travel and really nice hotel stay for five days. And that all adds up really quickly. And so you know, a lot of people are too like I’m not sure if I’m ready for that. What can I learn to before I get to the point where I want to spend a couple grand on this. And so a lot of the other functional medicine programs out there, there’s Functional Medicine University, which is a great site that’s a couple grand to do their certificate program, which is actually one of the lower cost ones for getting a whole certificate. But anyways, so if you’re talking like IFM, you’re talking maybe $20,000 by the time you’re done with all the things you need to do to get that certificate. So I thought, you know, there’s got to be a better way to do this. So with my background in education, I’ve developed a lot of Continuing Education as well over the years as a faculty member. And I thought, you know, we can teach people, and we don’t have to have them go anywhere. You know? We’ve got webinar, you can Zoom software, and the ability to work with — I work with CEI, which is a great CE company. And so the ladies there that I’ve worked with have been fabulous. And so I’d already been working with them a little bit, writing for them. And so I thought, you know what? I can do this but host it on my own site and then I can still pay them to certify the CE and get this sort of going. And so I started talking about this with Orthomolecular, there’s a pharmacist that works for Orthomolecular, which was like, hey, that’s a great idea. We could sponsor it. And I was like, awesome. And so you know, the more I talked about it, the more people started to say, OK, yeah, we can do this. And so I had a lot of support. The speakers that are speaking this time around are all awesome and have been sharing a lot about the conference, and so Lauren Castle (?) is the founder of FMPhA. It’s funny because I was on maternity leave with my son, I think, and I saw the flyer for OPA that year. And it was this Introduction to Functional Medicine. And I was like, who in the world is giving that talk? Here I am holding this baby. So I looked at it, and I looked her up and I called her and we started connecting, and so that’s been awhile now. It actually might have been when I was on maternity leave with Kinley now that I think about it, about five years ago. But then now she lives like 10 minutes down the street from me. So —

Tim Ulbrich: Small world.

Melody Hartzler: It is a small world. But it’s been fun to help encourage her and what she’s doing in the functional medicine world and also have her support for what I’m doing as well.

Tim Ulbrich: So we’ll link to this in the show notes as well, FunctionalMedicineCE.com. The first virtual symposium is starting on Nov. 9. So for those of you that are interested in the topic, obviously check it out. Also I would encourage for those of you have an educational idea that you’re batting around and wanting to get a feel for what a virtual symposium is, I would check that out as well. You guys did a great job with the website setup, Dustin. Nice work. And I think it looks really clean, you’ve got great speakers on there, and I think it’s a great model that others can look at and build off from as well. So let me — couple more questions. I want to dig into this business model a little bit further, but for those of our listeners that maybe aren’t as familiar with functional medicine, give us the down-low on what is functional medicine? And why is it a topic that you care so much about? And why as a pharmacist do you think you have a lot to offer in that space?

Melody Hartzler: Sure, that could be a whole hour conversation, so I’ll try to not do that. But so essentially, functional medicine is really looking at the root cause of disease. And so we do that really well when we talk about infectious disease, you know, we have a treatment, it gets rid of it, we’re gone. But as far as the chronic disease model in this country, when we think about chronic disease, we really don’t have a lot of cures for most of our chronic diseases. It’s just something we manage with symptom management, and I do that every day in my practice too. I manage diabetes with medications, but I also try to incorporate some of these functional medicine principles as well. But essentially, it’s acknowledging that patients are individuals too I think is a big component of it. So just because something works in the population health, it doesn’t mean it’s necessarily going to work for this person sitting in front of you. And so trusting that what the patient is saying about their symptoms and using information that’s evidence-based is part of it, so it’s not like we’re just throwing these supplements that don’t have any science. It’s so much biochemistry, I wish I would have really paid a lot more attention in biochemistry. I give these reports, I do this one report from Genova Diagnostics called The NutriEval, and you literally get the kreb cycle printed out with all the different components of it of the patient’s actual body, and then it tells you what nutrients you need to make that cycle more efficient. And I was like, man I should have — and it seems like such a long time ago too. So it’s good — that’s why education, Continuing Education, is so important to try to keep brushing up on those skills. But I think the best example that I like to give is functional medicine approaches IBS. Irritable Bowel Syndrome is not just constipation or diarrhea. Like there’s something causing it. But the drugs that we have both of those conditions, whether it’s IBSD or IBSC, are just symptom-managing drugs.

Tim Ulbrich: Right.

Melody Hartzler: They’re not actually correcting any of the issue. And so typically, IBSD is often caused by a dysbiosis or an imbalance in the microbiome, which is why we do now have a prescription agent that is an antibiotic. But there’s also challenges with that because it’s only 60-70% effective after one course. And so there’s other things that we have to think about. And then as far as constipation, we don’t really have anything that addresses a lot of the root cause. And so when we are looking at someone with IBS, we’re thinking about is there a potential pathogen that’s causing this? Is it a parasite? Is it a microbiome imbalance? Or is it inflammation? So even some of our IBS patients, their fecal count protectants (?) is really high, so there’s a lot of inflammation going on there even though you wouldn’t classify it necessarily diagnostically as IBD. And so looking at some of those things, is food intolerance related? And so we organize sort of our thoughts based on the patient. There’s this whole timeline piece of functional medicine. So they look back questions that we’re asking patients on our intake survey: Were they breast fed? Were they born prematurely? What kind of stressors did they have early in life? Was it parents went through a divorce and then all of a sudden these abdominal symptoms started to appear? And so there’s different points in your life that this cycle piece and the stressors also sort of turn over the epigenetics. So epigenetics is, you know, you have this genetic code at the beginning, but then the influences in your life turn on and turn off different things. And so everyone is unique in that aspect because we’ve all had different influences in our lives, whether that’s chemical or external stressors from family circumstances and things like that. So my stressor that led us to functional medicine was actually the birth of our daughter. So it was quite the experience, and we sort of planned for this natural birthing experience, and our doula was in jail, so that’s a podcast for another day.

Tim Ulbrich: Oh gees.

Melody Hartzler: So from that, it turned into a pretty stressful induction, long labor and the first five weeks of her life, she was super colicky and tongue-tied, and it took us awhile to realize that. And so all of that stress I think just sort of set my bad diet, probably poor microbiome balance, sort of over the top. And then, you know, about a year later, I started to have this abdominal pain that wasn’t going away. And everybody was like, oh, you’re fine. Yeah, basic interventions type things. Even then GI specialist was like, no, there’s no reason to scope you, you’re completely fine. I was like, well I literally have this pain every single day in the same exact spot. And so I finally found some functional medicine practitioners and turned out it was probably dysbiosis, probably CBO — I never actually did the breath test, which I don’t always do for our patients either — but did some of the comprehensive stool testing and took some antimicrobials. I even tried the laxin (?). It was a long journey, so it was about at that year point from her life for about a year and a half that we were still sort of going through the journey. I even went to the Cleveland Clinic Functional Medicine Institute. And I felt a lot better at that point, but I had finally made it on the waitlist, and so I was like, you know what? I’m going to go and learn from them. So let’s see what they have to tell me because at this point, I knew functional medicine was something that I wanted to incorporate, but I wasn’t sure exactly how to do that because I was working at the time in a federally qualified healthcare center, which was a little bit challenging because, you know, the cost of a lot of these interventions right now is really only available to people in the middle class and above. So I think some of the things other people are doing in this community to try to make these resources more available to the masses is awesome. So but at this point, it was challenging for us to do a lot of that testing. But there’s still a lot of basic things we can do, not only in community pharmacy but also in settings like that, you know, as far as testing vitamins and using probiotics and doing nutrient supplementations to help to heal the gut. And so even in that practice, looking back, there’s probably a lot more that I could be doing at the time, but I didn’t have enough experience to know what that was. And so — but anyways, so at about that time, it was right before, actually, we got pregnant with our son that we decided that I needed to go part-time with my faculty position. And that was coming from a lot of the stress with not only not knowing what was going on in my body and trying to — I was like, if I’m going to have another child, like I really need some extra time during the week. And I also in my head also had a lot of these ideas sort of out there, that I would like to do the blogs and stuff like that. And so made that decision and then started my part-time position with Cedarville and also at that time then, transferred offices to work in a different family medicine office, which that was really I think one of the pivotal points for my career because the family medicine physician that I work for is wonderful. And he is very open to a lot of these things, and so when myself and actually my best friend is one of my colleagues there who’s a nurse practitioner, and we sort of went to him together because he needed a new nurse practitioner. But we had also heard that he needed someone to manage his diabetes. And so I was like, well she may not want to manage diabetes, but I can do that. And she didn’t want to do something else, so we sat with together and sort of said, this is what we can do, that we both have this interest in functional medicine. And then fast forward to today, we have a functional medicine service that patients see her, sometimes they see me as part of that. And so we’re starting to be known in the Dayton area for our functional medicine service, so it’s pretty exciting. And so I really feel like had we not made that decision to go part-time, like that really wouldn’t have been where we would be landing right now. And so yeah. So it’s exciting and I really think the passion for sharing about functional medicine is because of that experience that I had as a patient, and I think that’s a lot of pharmacists that are involved in functional medicine had some kind of personal experience, whether it was them or it was their spouse going through something or their child. And even with our daughter, I’ve learned a lot about pediatric approaches to functional medicine through some of her journeys with allergies and asthma and things like that. And so a lot of my initial blog post that I have on farm-to-table are based on a lot of those topics that I was sort of walking through and researching anyways for our own personal health.

Tim Ulbrich: And what I love about this is one, just great example of — I think great businesses are made out of identifying a problem that needs to be solved that people actually care about, and you’ve checked that. Obviously, there’s lots of concerns people have out there about their own personal health and diet and exercise or not getting successful treatment plans with traditional medicine. It also has a combination of certainly your expertise, so an area of practice and an area that you’ve experienced firsthand, an area that brings your educational background as you’re looking at building CE and online courses and things like that. And then obviously, it has a personal component as well. So I think as people are out there hearing this, I think it’s just a great example of as you’re thinking about a business, you’re thinking about a side hustle, is there something out there — you mentioned you and Dustin talking in the car where you often say, OK, well, there’s a need here or there’s a problem that’s here, something that needs to be solved. That’s where it starts, and then it’s trying to figure out what is the solution? And is it a solution that you can bring value to based on your previous experience and personally? Or based on your experiences and expertise in what you do every day. So before I ask you a question about the business model of this, Dustin, as I look at the website, which again, is incredible, as I look at the website if I’m somebody listening to this podcast and thinking, oh, I have this idea and I need to build this site whether it’s a site for a CE program or whether it’s just a site for what they’re trying to do, I look at this and say No. 1, I could never do this. I don’t have time or this is way too expensive. So give us a ballpark. Like what would be involved here if somebody were building a site in terms of time and roughly expense to get something like this off the ground?

Dustin Hartzler: Sure. And this was one thing that — I mean, you mentioned it earlier. Like Melody’s able to do these things because she doesn’t have a lot of upfront tech costs because like that’s my thing. But honestly, I bought a — I didn’t do all the design, I didn’t have time for that either. But I bought a $20 theme online and I did some customizations and I did some things with it, and you need a website and you can get hosting for $5-10 per month or $50 a year or so. You can even go to WordPress.com. We’ll do a little promo there. But they have the ability for $100 a year or $300 per year, you can get live chat support and do all kinds of things online. And you can have somebody physically help you if you run into things like that. So I would say all in all, with my development time if you were to pay somebody to do it, I probably have 20 hours in the site and just because it was a lot of tinkering, and there’s probably 20 more hours of things that I want to do because I know — I want to be able to do this multiple times. Like that’s kind of our goal. We want to have this virtual symposium and then another one and another one. And a lot of the stuff that’s in there is kind of hard-coated. It’s like built right into the theme. And so if Melody needs to make a change, I have to do it. And I don’t want that, I want her to be able to do all the changes because I want to make it easier for me in the future. And so I don’t know, I would say you — if you would invest like $500, you could get a pretty decent website up and running to test a business idea or test a model out or something like that. You could go a lot less than that if you are a little bit techy and you’d rather do a little sweat equity if that’s something interesting to you. You know, a minimum if you bought a theme and you have some hosting, you could get by with about $100 investment. And so I think anywhere between the $100-500 could get you a pretty decent website up and running to start testing that idea out.

Tim Ulbrich: Yeah, and I think that’s great. That’s what I want our audience to hear is that we’re not in an age where you have to be paying $10,000 or $20,000 to get your site off the ground, right? When you look at themes and you look at some of the things that are out there in terms of plug-and-play and what you can do with e-commerce, whether it’s them digging a little bit deep to read and learn on their own or ultimately hiring that out, it shouldn’t be an expense that is unbearable, even if they don’t have a Dustin Hartzler on their team. It should still be an opportunity they could pursue. So Melody, let me ask you a question or two in terms of the business model of this. And I want our audience to hear kind of your thought and vision of where this is starting and where this could go in the future. So I’m on the website right now, FunctionalMedicineCE.com. I see you have a symposium on Nov. 9, and I see you have a silver package, which essentially is the live option that people can tune in for seven hours of CE, it’s live only, $129 all the way up to a platinum pass, which gives them both the live as well as the video recording and then a post-conference networking. So what, as you were putting this together, what is the business model? What’s the goal in terms of running this? And I know there’s other virtual symposiums that have been out there that offer a free option and then they offer a buy-up option and then they’re promoting additional products and services. So as you started this way, why did you start this way? And where do you see this going in the future?

Melody Hartzler: So we started this way because looking at what other people were paying for functional medicine education, this is still much less than that. Even the weekend, I went on a Saturday-only symposium, that was Pharmacy CE in Indianapolis in September, which was great. But it was like the conference fee was $499 for the day. And then there was a discount code that got it to $299, but then we stayed at the Marriott downtown and the gas to drive there and a lot of people flew there, and so it added up to probably $1,000 pretty quickly for a lot of people. So we knew that — and there was I think 115 pharmacists that were there that day, and so I knew that if people are willing to fly across the country for this one day event, I feel like there’s enough people out there that would pay a fraction of that to be able to learn this information from people that are experts in the field. And so that was sort of the thought process by not having a free option upfront, and also I think the cost of the CE was part of that too and having to pay for accrediting the CE, AACP-accredited. And so we didn’t want to lose money on our first adventure in this, and so that’s part of the reason. We do offer discount codes, and we actually did make a YFP code as well. So if anyone’s listening to this and wants to sign up, YFP will get you 10% off. And so our future plan is to move forward with more of these virtual symposiums. And so our goal is to have three or four a year but then also eventually have a membership to the site where you would get all of those included in your membership throughout the year. So we’re looking at doing our second one probably late February, maybe early March, focusing on pain and inflammation. And we’re also going to try to have a session on CBD since that’s something that’s very popular right now and a lot of pharmacists have questions about because their patients are asking questions. And I think that’s the other thing about functional medicine that’s so important is whether or not you’re interested for yourself, a lot of your patients are interested and they’re asking you questions about way more herbal supplements and different products than they probably ever have. And so really being able to have the tools to answer some of those questions I think for a lot of people is important. I just kept hearing over and over, like hey, where do I get good information about this? And so I really just felt like we needed to try to provide that.

Tim Ulbrich: So when you think of threats to this, I think of the concept of how do you bulletproof your business, right? So you mentioned membership, which I’m guessing is maybe one answer to this, but what thoughts do you have in terms of the next person who comes on and says, “Well, I’m going to offer a free symposium, and I’m going to offer it for $79.” Like what’s the differential advantage that you see here? Because I think that’s an important aspect people need to think about when they’re working on a business idea is of course there will be competition, but what differential advantage do you have to this business model that you think will allow you to be successful in the long run?

Melody Hartzler: Well, that’s a good question. I think overall, the having a team of people of that have expertise in this subject, I mean, there’s a lot of people growing and learning more about functional medicine, so I anticipate that there’s going to be other opportunities. And I think the membership piece, we might morph into having a certificate program as well because I know a lot of pharmacists are looking for a lower cost certificate training program compared to some of the other options that are out there. I think developing a community is also important in trying to keep people engaged in your business versus looking at other places, and so I’m hoping that after this conference, we’re going to develop even just a Facebook group to start out with for people that all attended and just sort of stay connected and offering discounts for the next conferences for those that attended. And so I think trying to get the community built around it, I mean, you guys are a great example of that with the community that you’ve built around YFP. And so I think that’s really important to being able to continue to drive what you’re trying to do.

Tim Ulbrich: Yeah, I really like that aspect. And I think the book that comes to mind if people want to learn more on that, one of the books that will never leave me that I always think back to is called “Tribes” by Seth Godin. He talks about exactly that concept of how do you build a community? Another article out there is around the concept of superfans and 1,000 superfans. But building a community that are passionate about this topic, which I’m guessing people are that are engaged here, either because of personal experience or because of the outcomes they see with patients that they’ve worked with and how do you create that platform and community that they can engage with each other all the time, throughout the entire year as well as these events that may happen throughout the year. So let’s jump into some fun questions to wrap up here. And we didn’t get to talk to as much but I want to reference our listeners to you also have another site you’ve worked on, which is Farm to Table, FarmtoTable.life, where they can learn more about the blog and the work that you’re doing over there. But I want to talk about some more of the fun, lighthearted questions on the business. And Dustin, I want to start with you because obviously, you’ve gone through this process of owning your own business. You started your own media company, and I’m sure there’s many people that are listening to this podcast that have some type of business aspiration, whether it’s big, small, medium, anywhere in between, they’ve identified maybe a problem that they see as unsolved, the process that could be done better or differently, or maybe there’s others that are just out there feeling stuck and they don’t even have an idea formulated but know they want to do something different. So from your experience of both starting a business and now working with Melody on this, what advice would you have to them in terms of next step that they may be able to take?

Dustin Hartzler: Yeah, I think it all really depends in your life is like, it depends on how much time you have. Like if you’re young, you’re right out of school, like you have so much time available to you that it’s kind of silly that you say you don’t have enough time. But I think really, the big thing is just spending some time thinking about it and just starting. Ask some people. Like when Melody figured out this thing was — she’s seen all these people commenting on Facebook and relationships and connections she has, like she saw the need there. If you find a need — you know, I found a need. I wanted it to help people have less horrible websites online, and that was a passion of mine to do that. But then also, I wanted to learn more about tech. And so the two things really came together for me, which was super nice. And so the advice is just start. I mean, it’s so hard to just start anything. But if you have a passion, you have an idea, like come up with a little thing that you can do. And I think the other thing that’s a big that was always a big thing for me was like, let’s just work on it for five minutes. Like five minutes goes by really, really fast when you’re working on something. And then all of a sudden it’s 10 minutes, and then it’s an hour. And then it’s like, wow, I spent a lot of time on this today, and I’ve made progress. I’m moving forward in the right direction.

Tim Ulbrich: And Melody, let me follow up with a different question. But you know, often people are interested in side hustles, of course, in part because they’re passionate about the idea and helping others but also the idea that there’s additional income that can be used for other financial goals and things that they’re working on. So for the two of you and your family, what are you hoping to do with the additional income that you’re earning through the business side hustle?

Melody Hartzler: Well, should I say the truth? Dustin wants a new pair of running shoes.

Tim Ulbrich: Yes.

Melody Hartzler: We definitely want to invest back into the business as part of that. So anything from this first conference, honestly, we probably won’t do much with personally but invest into this concept and continue to grow it. We may set aside some for our emergency fund or car funds because our one car has got 245,000 miles on it and something is loud in the back that needs fixing bad. So there’s that. But you know, that’s part of the financial goals. And we’ve always driven used cars and we would still buy a used car with the next step, but that’s part of how we are able to afford travel and things like that. But I think also, we want to give. We’re going to be giving back to the people that are sharing about this conference too. And so all of our speakers that are promoting the conference have a specific code and even your code and whoever’s, we’re going to be giving a percentage back to those people because again, we want to create that community and everybody is a part of that for promoting this. And it’s not just our work that’s helping to spread the word.

Tim Ulbrich: And I want our community to hear from the two of you. I sense — and Dustin, you alluded to certain podcasts that you turned your car drives and your commute essentially into an additional education or two that you received along the way — I think it’s so important for our audience to hear, what are you reading? What have you read? What are you pulling inspiration from? So Dustin, let me start with you. Is there a book or a podcast or a resource that you would reference people to that was really helpful in your own journey?

Dustin Hartzler: I have so many of these. Like I could go on for hours. I’m looking at my podcast archive here, and I’ve got hundreds that I’m subscribed to and just listen to ones that are encouraging to me. The ones that — I’m still a Dave Ramsey subscriber. Like he just gives me inspiration like hey, look what you can do when you have your financial life in order. It’s all about you don’t make money to — how does he say it? He says something along the lines of like, you really want to — look how generous you can be when you have more money and you have your life in order. So that’s one of the things that I like. So the Dave Ramsey Show is one. I listen to a bunch of podcasts that are tech-related to give me inspiration of how I can become a better developer and how I can — some of the tech tools that I can do.

Tim Ulbrich: Sure.

Dustin Hartzler: And then I’m also reading a book that was a recommendation from a podcast. But it’s called “PsychoCybernetics,” and it’s a book written by a guy, his name is Maxwell Maltz. And he’s an MD, and it was written a long time ago, before digital technology. And so it’s kind of a cool thing, it’s talking about your brain and how you can — some experiments of like thinking through the visual success. Like they did experiments with people shooting free throws. The first group — you shoot 20 free throws every day for a week and see the results at the end of the week. And you have one group that shoots 20 in the first day, and then shoots 20 on the last day and see how they have improved. And then the third group was like, they shot 20 on the first day and then they did nothing but imagine shooting 20 free throws every day. And then their percentage improved by 50-some percent, even though they never actually made a shot. So it’s kind of an interesting book. I’m still at the very beginning of it, but it gives me some inspiration of like, hey, here’s some things that it’s not all about your life and your circumstances, like how you think about things. And I think that’s really interesting.

Tim Ulbrich: Yeah, mindset and visualization. Those are great takeaways from that resource. Melody, how about you?
Melody Hartzler: So most of the podcasts that I listen to are functional medicine content podcasts. And so I really love Kara Fitzgerald’s New Frontiers in Functional Medicine. It is a good one that — she’s an MD, but she interviews people all over the country that are researchers, that are MDs, that are PhDs, that are clinicians, like doing the work of functional medicine, and goes through great protocols and just getting people’s opinions about different things and how they would treat things. Some of the people she interviews are even, you know, the lady I was listening to yesterday on my drive to Columbus for the OPA meeting was a nurse practitioner in New York that was treating a lot of weird patients and just gleaning insights from that. So I like those. I also love from a faith standpoint, “Dayton Women in the Word.” It is a local organization here. The podcast obviously airs wherever there is Internet, but it’s been a good, you know, like hey, I need to listen to something that’s about — get me away from all the business ideas because I’d drive to work and just think about all this stuff and what I need to do. But it helps keep me grounded in what my true purpose is. So obviously our church and things like that have podcasts. But sometimes I even forget to turn on the podcast when I get in the car because I — sometimes, I’ll use that time to pray and sort of reset my thought processes for the day and just pray over the people that I’m going to interact with.

Tim Ulbrich: Which is always important before you get home, especially with young children and kind of entering that space. So thank you so much, both of you, for taking the time to share your journey. And I think it’s going to be an inspiration to many. And again, I would reference our listeners to FunctionalMedicineCE.com, virtual symposium beginning Nov. 9, as well as the work they’ve done over at FarmtoTable.life. So appreciate the time that you’ve taken. And as always, I would ask our listeners if you like what you heard on this week’s episode of the Your Financial Pharmacist podcast, please do us a favor and leave a rating and review in iTunes, Apple podcasts, or wherever you listen to your shows each and every week. And as a last reminder, make sure to head on over to YourFinancialPharmacist.com/giveaway. For those that are pursuing residency training and are going through that application process, we have the ultimate residency prep giveaway going on for the next couple weeks where we’re giving away over $349 value in resources to five different winners: information on residency interviews, how to effectively write letters of intent, we have a boot camp course, and a great resource from TLDR Pharmacy as well. So again, YourFinancialPharmacist.com/giveaway. And until next week, we appreciate you joining us.

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