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YFP 122: What Will Be the Future of Pharmacy Practice?

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What Will Be the Future of Pharmacy Practice?

Dr. Todd Sorensen, President of the American Association of Colleges of Pharmacy (AACP) and Associate Dean for Strategic Initiatives & Innovation at the University of Minnesota joins Tim Ulbrich on this episode. They talk through the workforce challenges facing the profession of pharmacy, rising indebtedness, the change.org petition, and Todd’s vision for the future of pharmacy practice including dramatically expanding the number of pharmacists working alongside primary care providers.

About Today’s Guest

Dr. Sorensen is Professor and Associate Dean for Strategic Initiatives and Innovation at the College of Pharmacy, University of Minnesota. He also serves as the Executive Director of the Alliance for Integrated Medication Management, a non-profit organization that engages health care institutions in practice transformation activities that support improved medication use. He is currently serving as President of the American Association of Colleges of Pharmacy.

Dr. Sorensen’s work concentrates on identifying strategies that facilitate clinical practice development and developing change management and leadership skills in student pharmacists, pharmacy residents and practitioners. His research and service activities have focused on working with health care organizations to implement strategies that improve health outcomes associated with chronic illness, specifically identifying leadership strategies that allow organizations to integrate and sustain medication management services delivered by pharmacists within interprofessional teams. This work has been greatly influenced by ten years of experience participating in and leading national quality improvement collaboratives for health systems seeking to optimize medication use in outpatient settings.

Summary

Dr. Todd Sorensen joins Tim Ulbrich for a conversation covering many topics such as workforce challenges facing the profession of pharmacy, rising indebtedness, the change.org petition, and Todd’s vision for the future of the practice of pharmacy including dramatically expanding the number of pharmacists working alongside primary care providers.

Todd is the President-elect of AACP and also Associate Dean for Strategic Initiatives & Innovation at the University of Minnesota. Todd explains that he believes there are two broad reasons why the pharmacy job market is changing and why the Bureau of Labor Statistics projects 0% job growth in the profession over the next ten years. One of those reasons is that there is a lack of perceived value in the medication distribution process. The other is that the professions has seen this coming for 20+ years according to a workforce projection report from 1999. In that report were new roles for pharmacists, however those roles haven’t grown as projected.

Todd discusses his Presidential address at the 2019 AACP Annual Meeting which was titled Leading in Dickensian Times.” He began the speech with the notable quote, “it was the worst of times, it was the best of times” referencing different viewpoints of pharmacists today. There is a group that sees the current state of pharmacy as the worst of times and are legitimate in feeling that way as they are experiencing job loss, wage cuts, and a saturated job market. However, others see it as the best of times because there is a lot of opportunity available.

Even though Todd falls in the second category, he says it’s imperative to acknowledge the pressures and difficulties pharmacists are facing today. Todd shares AACP’s plan to address those issues. He also sees a large opportunity for collaboration between physicians and pharmacists and envisions every physician office having a pharmacist working in it. To attain this goal, first we have to have the mindset that it is possible and shift to a model of value based healthcare. He points out that no one is as highly trained and skilled as pharmacists are in managing complex medication problems.

Lastly, Todd addresses the #ChangePharmacy petition on change.org that requests organizations such as AACP halt accepting new accreditation applications until standards are installed, among a number of other requests. Todd explains that the reality is that they are unable to do this. As we’re in a free market society, restricting or halting such openings could be viewed as restriction of free trade. Instead, Todd says that we should shift our focus to create new opportunities for pharmacists that were predicted 20 years ago. This alone, according to Todd, should shift dynamics and balance the supply and demand of pharmacists.

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 have joining me today Dr. Todd Sorensen, president of the American Association of Colleges of Pharmacy, also known as AACP, and Associate Dean for Strategic Initiatives and Innovation at the University of Minnesota. In addition to hearing about Todd’s background and career story, we’re going to focus our time together on the current workforce challenges facing our profession, including a flat job market over the next 10 years as projected by the Bureau of Labor Statistics, the student loan debt that continues to be on the rise, and his vision for the future of the profession of pharmacy. Dr. Sorensen, welcome to the show.

Todd Sorensen: Great, thanks. Glad to be here.

Tim Ulbrich: Well first of all, thank you for taking time out of your busy schedule. I know you have essentially two full-time jobs this year, both as president of AACP and associate dean at the University of Minnesota. And before we dive into the discussion around the workforce challenges that we’re facing as a profession and your vision for the future of pharmacy practice, if you could give our listeners just a brief background on your career journey and how you got to this point in time leading as the president of AACP.

Todd Sorensen: Sure. So I was a graduate of the University of Minnesota as a pharmacist in 1994. I entered practice, actually moved to Canada and was on faculty at Dalhousie University and practiced at the Queen Elizabeth II Health Sciences Center, where I was a critical care pharmacy specialist for three years while my wife and I were in Canada. It was a great experience, learned a lot there, got to experience a lot of Canadian pharmacy, which was a great experience to then bring back home, understanding similarities and differences between the two countries. Came back to Minnesota, worked for a period of time in managed care, really brief stint there, about 15 months. And then joined the faculty here at the University of Minnesota in 1998. My time here I have had kind of two distinct teaching experiences. I taught skills in our curriculum for a long period of time, physical assessment skills, was one of the instructors in our skills lab for almost 10 years. And then shifted my teaching activities almost entirely over to teaching leadership development. And my research work has really focused over the entire span of time at the University of Minnesota of how we advance the role of pharmacists in clinical areas, primarily in ambulatory care, both in community pharmacy as well as in primary care clinic settings. I would say the one thing that has really carried through my entire career starting as a student is I’ve really always been fascinated with about how leaders facilitate change in organizations and in their environments. I really got that bug in me when I was a student and saw some of the things that were happening back in the early ‘90s. And that’s what ultimately led me to focus on teaching leadership in our curriculum. I have done that in one way or another now almost, well, over 20 years I’ve been teaching leadership in one way or another. And that’s gotten me very involved in national organizations as well, which in the case of AACP, I’ve been very involved in a lot of different ways, worked my way through the different ranks and ultimately had the opportunity to run for president and get to serve in that role.

Tim Ulbrich: Yeah, and I’ve had the pleasure of attending several of your leadership sessions you presented on a national level. I’ve attended with some of my mentees, we’ve done some workshops and other things, and so I appreciate the work that you’ve done on that and the influence you’ve had on hundreds, probably thousands, of pharmacy leaders out there, students, residents, and other practitioners. And we’re going to come back, I appreciate your comment about your interest in change management and that aspect of leadership as well as your background and interest in primary care as I think that’s going to come together nicely as we talk about your vision for the future. So I don’t want to assume that everybody listening knows and understands AACP. So can you give us just a high-level overview of what is AACP?

Todd Sorensen: Sure. AACP is a national organization that represents faculty and schools of pharmacy. So we have two groups of members: We have institutional members, so all of the 144 schools of pharmacy across the country are members as institutions of AACP, and then the faculty at those schools, anyone who holds faculty appointment can choose to join AACP. We have approximately 5,000 members, faculty across the country, and again, those 144 schools.

Tim Ulbrich: So as our listeners know, and many pharmacists are unfortunately experiencing firsthand, the profession is pharmacy is changing. Many brick-and-mortar pharmacies are closing, we’ve seen a lot of news in the last year of full-time hours that are being reduced, in some places, jobs that are being cut, and I think for many, the job market is becoming more saturated than they probably have seen throughout their working career with the Bureau of Labor Statistics recently projecting a 0% job growth for pharmacists in the next 10 years between 2018-2028. Obviously, a topic that’s near and dear to my heart. To top it all off, we now see pharmacy graduates that are carrying student loan debt in excess of $170,000 on average. So from your perspective, Todd, both as the president of AACP as well as somebody who’s just had a lot of experience in the profession of pharmacy, why are we seeing such dramatic changes over the last few years? And what’s happened across I guess the last five to 10 to 15 years that’s led to these changes?

Todd Sorensen: Well, it’s a question that’s probably on the mind of just about everybody in pharmacy right now. It’s an important question, and from AACP’s standpoint and from our school’s standpoint, of course, this is a very important topic to us in terms of our alumni, all the practice sites that we work with in providing education and really just being part of the overall profession of pharmacy. And what happens out in practice, of course, does have influence and affects what happens in education as well and vice versa. What has happened? What has led to this? Well, it really is a complicated, multifaceted issue. And I don’t know that we can pinpoint any one thing. I do think there’s two broad issues that come into play. First, there is a lack of perceived value in the medication distribution process by people outside of pharmacy. Most payers and consumers, they do see medications and the process of acquiring them really as a transactional process.

Tim Ulbrich: Yes.

Todd Sorensen: And therefore, there’s little belief that any payment beyond cost of a medication should be required. And until we are able to demonstrate the value beyond that and a perception among payers and consumers, that is the reality that we live in. And that is been getting to be a tighter and tighter and tighter margin as that perception continues to drive those traditional payment systems over the last several years. And second, I’d say that we’ve really, we’ve seen this coming for over 20 years. If you go back to 1999, there was a workforce projection report authored by David Knapp (?), and eerily, some of his projections have born out to be quite accurate, particularly around some of the reductions in the number of pharmacists in the drug distribution process. What didn’t happen that were part of his projections was there was projections around new roles for pharmacists and how do we create those opportunities? And we have not seen the growth in some of the areas that were projected at that time. So I would say that there’s a number of things that happened over the last 20 years that maybe were a bit of a distraction from causing the profession to really look at what we need to do to create those new opportunities and bring value into the healthcare system in a new way. And now, we’re at that point in time where we really have to focus on that because we can’t ignore it any longer. There’s a lot of other factors that come into play that we probably don’t have time to get into. I would like to highlight for the listeners, if they are interested in really kind of getting into this in a deeper way, Dr. Lucinda Maine, the executive director/CEO of AACP, authored and published this summer a commentary titled, “It Really Isn’t That Simple” in the American Journal of Pharmaceutical Education. That is an open access journal, so anybody can access it. And she really gets into a lot more of the statistics and the numbers and the trends and the factors along the way from 1999 to 2019. And I think it’s really a good read that explains how complicated this issue really is.

Tim Ulbrich: Yeah, you beat me to it, Todd. I just had that pulled up; I was going to reference that piece to our listeners. We’ll link to that in our show notes as well. But I think the multifactorial, the reasons and discussion is really important, and I would encourage our listeners, I think this is a topic that often carries a lot of emotional aspects to it. It can feel charged based on how this is impacting your personal situation, whether that be somebody who’s impacted by job loss or just feeling the pressure of student loan debt or other things and really looking at all of the different variables and looking all the way back to some of the projections that were made in terms of the shortage and why we saw some of the expansion and, as you mentioned, some of the lack of evolution of where we thought the roles of the pharmacist was going to go beyond the dispensing aspects. And we’re going to come back to that as we talk about your vision in the future. So in your title of the piece that you facilitated in your presidential address at the American Association of Colleges of Pharmacy annual meeting this past summer in July, the title of that, which is published in AGAPE, which we will link to in the show notes, is “Leading In Dickensian Times.” And so what do you mean by that? What did you mean by this as you were choosing the topic and using that as the keynote for your presidential address?

Todd Sorensen: Yes, the reference is, of course, to Charles Dickens and “The Tale of Two Cities,” and I started out that speech with the familiar phrase that many people are familiar with: “It was the worst of times, it was the best of times. And I really feel like that is the mindset that we many have in pharmacy today. There is a group who sees this as the worst of times and probably in their personal experiences, that is a very legitimate perception to have. There is also a group who sees this as potentially the best of times, that the opportunity for pharmacists is as great as it’s ever been. I fall into that category. And so I started out the speech kind of using that traditional — paraphrasing the first paragraph of “A Tale of Two Cities” to kind of highlight this dynamic between things are as bad as they can be versus there are opportunities, and we can choose to look at where our opportunities are in a new way. I mean, I can honestly say that in the 25+ years I have been a pharmacist, the recognition of the good that can come from medication use and the harm and the cost associated with medication use is as great as it’s ever been. They may not — the people who are recognizing that now at an acute level outside of pharmacy may or may not see pharmacists as part of the solution. But that awareness is there like it’s never been before. And they’re looking for solutions, and so that creates an opportunity for pharmacy to be part of that solution in a way that I don’t think in the past 20 years have really existed in the same way that that acute understanding of where medication use is in our society and the good and bad that it can produce is a great opportunity for us to shift what we bring to the healthcare system.

Tim Ulbrich: Yeah, and I think what you just said there is so profound that the awareness piece is there. It’s finally there to the level that I think we had hoped it would be. And now the question is, are pharmacists going to be the center of that solution? And how do we as a profession begin to think about our role in that and making sure we’re advocating for our role. And that may mean shifting the role that we know or have been comfortable in for some time. So I think as there is a need for a problem to be solved, now the question is, are we willing to really pivot to make sure we’re a part of that solution? So Todd, in your address, you acknowledged that there’s some tough challenges pharmacists are facing in the current reality of our profession. So you said, “Pipeline of candidates seeking to enroll in professional programs continues to be far below optimal numbers. The employment prospects for our newest graduates are not consistent with the story we want to tell prospective students. Our alumni frequently express frustration about the nature of the work they’re expected to perform and the difficult environment in which the deliver it. The traditional model of compensation through distribution of medications is as difficult as it ever has been. So my question is, what is your vision? What is AACP’s strategic plan to remedy the challenges current and future pharmacists are facing here?

Todd Sorensen: To address that, I’d first say in presenting that information and saying that I fall into the category of people that see this could be the best of times instead of the worst of times, it is important to acknowledge that there are pressures. And so the last thing I wanted to do through this speech and through conversations like this is to send the message that I don’t recognize these issues but that they are real. They are. Now, in terms of AACP’s strategic plan, we really have three priorities related to this that we’re very focused on. First is increasing the pipeline of candidates. So regardless of where we are with number of schools, and we have been seeing a decline in the number of applicants interested in pharmacy.

Tim Ulbrich: That’s right.

Todd Sorensen: And that’s an unfortunate situation for the profession as a whole. There’s a lot of factors, again, this is also multifactorial, but for a number of reasons, individuals who are thinking about what their career choice is going to be might be looking at other options, not even in healthcare. We’re competing with lots of things in technology and other areas that are where high school seniors and into the undergraduate years of college are really wanting to focus their attention. So we have to demonstrate that pharmacy is a vibrant profession and a great career choice. And it is. So that has included a number of things that AACP has done with schools to really get the word out to candidates about pharmacy as a career.

Tim Ulbrich: Right.

Todd Sorensen: The second priority is then the consumer understanding of the role of pharmacists. And there’s a lot of misperceptions about the role of a pharmacist. And that affects, then, the pipeline as well because parents are often guiding their children in their career choices. And so a year ago this month, actually, we launched the Pharmacists for Healthier Lives campaign, which is largely a social media-based campaign targeting consumers to understand the diversity of the roles that pharmacists play in healthcare, the impact that pharmacists play in healthcare and really trying to help consumers understand how to work with a pharmacist and to proactively understand the role that they have that really, their healthcare team is not complete if they don’t have a pharmacist actively as a part of it. And then the third strategic priority for AACP is really focusing on innovation and education and in practice. That’s really where our work is focusing on this year is what is going to be the role, what should be the role of schools of pharmacy to help transform the way that we prepare practitioners for practice in the future and help stimulate the innovative practices that are going to bring value into healthcare in the future.

Tim Ulbrich: Yeah, and I’m hopeful going forward what obviously the focus of our podcast is personal finance, and so of course I have a bias here, but I’m hoping that we can see beyond just the somewhat of a grassroots movement, which is great, where we’re seeing many colleges more vested in this topic than ever before. I’m hopeful we can see some more movement on the national level, whether that be with AACP, other national pharmacy organizations. I think there’s some good models out there in medicine and vetment to really make this a priority. And I firmly believe — and we can talk about lots of reasons of why students are coming out with over $170,000 of debt, much of that is related to rises we’ve seen in tuition, much of that is self-inflicted with cost of living expenses, a whole host of reasons. However, we know that the financial literacy and education piece is so important, and we also know that if we can help decrease the burden of this financial indebtedness, I think we’re going to see more pharmacy graduates that are willing to take the risk that we need them to be taking when we need to have complex problems that need to be solved and we need solutions to solve those. So I’m hopeful that we can continue to further this conversation on a national level, and I think we’re seeing traction on that. And I’m excited to see where that goes in the future. Now, in your speech, you reference one of my favorite books, which is Gary Keller’s “The One Thing,” which I would highly recommend to all of our listeners and we’ll link to in the show notes. And that book, “The One Thing: The surprisingly simple truth behind extraordinary results,” he links success to narrowing your focus on really a single question. That single question is, what’s the one thing I can do or we can do such that by doing it, everything else will be easier or unnecessary? So how have you used this book, this concept, this method, to think of solutions to the current state of pharmacy?

Todd Sorensen: Well, you know, I’d mentioned before that the issues that we’re facing right now and the reasons why we’re facing them are multifaceted. So if you look at all those different issues and facets, it can become overwhelming. And so the premise is the book, as you described, is to really — and I know that it can sound simpler than it is, but in a very complicated world, you have to be able to distill things down to their essence, to some degree so that you can know where to go to create change. And it’s really — I think the book talks about this — it’s really ingraining in yourself a way of thinking and asking that question over and over again. What’s something that you can focus on today? What’s the one thing I need to do today to make everything easier or unnecessary? Or at the level we’re talking about, what’s the one thing that we can do to make everything else easier or necessary. So spent a lot of time with that question and really trying to not take the easy way out and just say, well, there is no one thing in this case. It’s too complicated. And from my experience, from my observations, what I landed on was the one thing that we can do to make everything else easier or unnecessary is forging collaborative, authentic relationships with physicians, that that could have more impact and more power than just about anything else that we would do that might focus on directly attacking some of these different factors that we’re focusing on, whether that be debt in itself, the job market in itself, so forth. Partnerships with physicians help us solve healthcare-related problems and create advocates for pharmacists in a way that would be stronger than we could ever be on our own. So I think it would make everything else easier or unnecessary.

Tim Ulbrich: And as I mentioned to you before we hit record, Todd, when I read this article and I listened to your speech just a few days after the annual meeting in July, you know, I think a lot of people are going to hear this and quickly start listing the objections. Well, we can’t do this because of this, this, or this. Or we can’t do this. Or what about this? Or what about this? And I think certainly of course there’s room for all that discussion, we should have that discussion, we should bat up these ideas back and forth. But the one thing I really, really appreciate is I feel like we have been lacking bold vision in terms of what are some potential solutions going forward? And so I commend you for putting a bold vision out there that leans on your experiences, and I think leans on a lot of opportunities and successes you’ve seen pharmacy have over the last five years. And so some more questions I have about this because I did my residency training 11 years ago in a physician office when at the time, you know, patient-centered medical homes were really just coming to be. So I certainly can appreciate the value of this living it firsthand and seeing many other primary care, ambulatory care pharmacists, when you see them in that practice and you see the impact they have on the patients, on the relationships you’re able to build with those other providers and the impact they can have on quality metrics, it pretty much becomes very obvious of wow, this is incredible if we could replicate this vision all across the country. But obviously, the questions are coming in terms of well, how do we scale it and how do we fund it and how do we replicate this with different state practice acts and all these other things? So couple questions for you on this vision physicians and pharmacists collaboration. What are the one or two areas that you think we need to start as you think about the potential objections or barriers that are in the way? How do we begin to forge forward when it comes to this idea of really replicating this model of pharmacists in a physician path? What are the one or two things of where we begin to do this?

Todd Sorensen: Well, I think we start with a mindset that it’s possible. And it is possible, I’ve seen it in my own state play out over and over and over again. And one of the reasons why it’s possible is the shift to value-based healthcare. If we continue to be focused on fee for service payment structures, it becomes very difficult to see how this maybe will play out in the way that we hoped it might. But when you focus on the fact that healthcare is moving more and more into paying for value, and I believe fully that pharmacists can bring value into healthcare, then there is a place for that. And so much of that value is being measured and determined upstream in that primary care area so that we can prevent the costs that occur downstream in terms of hospitalization, complications secondary to chronic illnesses, and so forth. So moving upstream to that place is where we need to be. And the healthcare system is becoming more focused on primary care than it has been in many, many, many years. So how do we align with that? The other reason I believe that it can happen, I referenced this story in the speech. I was at a conference where I saw a physician colleague who I knew by name, they were somebody that I work with that have a couple of pharmacists actually working in their clinic, and I didn’t know her personally, and I went up to introduce myself. And so I said, “Hi, my name is Todd Sorensen, I’m at the University of Minnesota.” Her immediate response without a beat of pause was, “So nice to meet you. I will never work in another clinic again that doesn’t have a pharmacist.”

Tim Ulbrich: Yep.

Todd Sorensen: And you know, that’s the vision that we need to have, that we can say the physicians don’t want to collaborate with pharmacists because there’s history, there’s been experiences that have suggested that. But the physicians that are coming through in the early parts of their career now and the pressures that they’re facing create a whole dynamic that didn’t exist 10 or 20 years ago in creating those teams. So it can happen. And so that’s where I would start, and then we could get into technicalities, different things that need to happen. But we don’t need to start with worrying about practice acts, we don’t need to start with worrying about — we have to build the relationships first. And the relationships will then create the advocacy that will make all the other things fall into place, which is, again, “The One Thing” principle. One other thing I’ll add is that we’ve done this before. The ‘70s and ‘80s schools of pharmacy were often the catalyst for creating change in acute care practice. I’m not sure if we have, as schools, maintained that same mindset that the leaders of those schools in the ‘70s and ‘80s had. And so part of this is calling for our schools, again, to see their role as catalysts in building these partnerships and creating these opportunities. We’ve done it before, we can do it again.

Tim Ulbrich: Yeah, and I think we’re in somewhat of a perfect storm environment, you know, building off of what you said. When you think of the challenges physicians are being faced with, the multiple pressures they’re being faced with, in combination with the value-based healthcare model that we’re shifting towards, I think pharmacists fit very nicely into that. And in my opinion, I think we often get caught up in the weeds of the conversations of what about practice acts? What about this? What about this? And I think starting with the relationships, starting with the vision. And I think in any time where there’s a complex problem like this where you start hearing a lot of objections that are being presented, I think that is so ripe for entrepreneurship and innovation. And so I personally think we’re going to look back and this 10-year period, whatever number of years you want to call on pharmacy and say, “Wow, a lot of cool things came out of this because these people decided to take risks towards this bigger vision and what could be achieved.” So one of the objections, Todd — and we could talk about many of these. I just want to talk about a couple here. But one of them I commonly hear and think about myself is, well, what about nurse practitioners? What about PAs? And how do pharmacists differentiate? What’s our differential advantage in terms of competing with those providers, especially when you think about factors like ability to prescribe, ability to get paid and reimbursed for those services that they’re providing inside of the clinic. So as you’ve thought about this on a bigger vision type of level, I’m sure that issue has come to mind for you and obviously from your experiences as well. So what are your thoughts on that?

Todd Sorensen: I have thought about it, and it’s a really important question. It gets back to the issue of bringing value into healthcare. We are in an environment where the practitioner or the individual that can produce an outcome at the lowest price is the one that’s going to get the business. And in many cases, pharmacists are the second most expensive person on a healthcare team. So we really have to think about what is it that we do uniquely, that nobody else can do as well as us, to be able to justify that price point and be able to demonstrate value. And there’s a couple of things that I think of. First of all, no one is trained. And nobody is as skilled as pharmacists in managing really complex medication-related problems. So that’s where we have to focus our team. For us to spend time on the majority of our time on things that are not very complicated, that our single disease-focused, others can do that. You mentioned nurse practitioners and physicians assistants. Honestly, RNs, at even a lower price point can manage essential hypertension on protocol. So we really have to be looking at where our unique knowledge and skills are different and can be leveraged in a way that exceeds that of others. The other thing that I would highlight is this was a small study, but it has gotten a lot of attention because it’s kind of put a new lens on, again pharmacist and physician teams. And one of the things that physicians are really dealing with — and of course, pharmacists are as well, which is issues of burnout and lack of joy in practice.

Tim Ulbrich: Yeah.

Todd Sorensen: We interviewed a series of primary care providers who had formal relationships with pharmacists and asked them whether or not that relationship affected their sense of burnout or joy in practice. And basically unanimously — of course that group, this was through interviews that we did this with — they said absolutely. And then we asked them why. And one of the things that came out of that that I in hindsight maybe could understand, but I hadn’t thought about it at the time, was that they said that the way I work with a pharmacist and this type of relationship is different than I work with any other practitioner. It’s different than how I work with a nurse practitioner. All these clinics had nurse practitioners in them. And the reason why was that the nurse practitioner has their own panel, and the physician has their own panel. They don’t really collaborate on individual patients. They collaborate at a population level, not necessarily an individual patient. Whereas they said with pharmacists, these really complicated, complex medication-heavy burden patients, they wear me out. They create mental burden, and often I just don’t know where to go with them. And it’s really part of what’s contributing to my lack of joy in my practice. But when I work with a pharmacist collaborative on that, it lifts much of that burden. So the way I work with a pharmacist on this select group of patients is different than the way I work with any other practitioner. And that’s starting to get to that uniqueness and to that value because we’re finding something that nobody else is doing or can do as well as a pharmacist can, and it’s bringing value. In that case, the value is in the sense of joy in practice with physicians, which will play out as an influential element in decision-making.

Tim Ulbrich: Absolutely.

Todd Sorensen: It also leads to then costs, better care, it really can lead to the quadrupling.

Tim Ulbrich: That’s an interesting angle. I’ve never heard that talked about. I’ve heard obviously the impact on value-based contracts and being able to improve quality metrics. I’ve heard about and seen studies related to freeing up physician time so they can see more patients, which certainly works in a fee-for-service model, but I think run flat longer term. That’s a really interesting angle in terms of the provider satisfaction. And it makes sense. I mean, I think back to my time in a primary care office, very much the 80-20 rule where you’d have 20% of the patients, maybe 10% of the patients, that took up 80-90% of the time in terms of the questions they have, the complexity of their care and the frequency of their visits, and so I think the pharmacist certainly could play an important role in that process. Todd, one of the things I also think a lot about is just from the academic perspective obviously living in this realm, and I think back to one of my favorite books called, “The End of Jobs” by Taylor Pearson is that I think as I hear you talking, as I listen to your vision, I read more about your vision, I think we have to find a way to better facilitate students and pharmacy graduates and practitioners being comfortable in the uncomfortable. So when I hear your vision, you know, I think pharmacists often want the A-Z checklist of OK, what do I need to do to execute this to be successful to earn a paycheck? And I think the answer is, it’s not there yet. And I think that those that are going to be successful, both practitioners now and students that will be out there in the future, in my opinion, is you have this broad framework, you have this broad vision, but now the creativity lies in the multiple pathways of solutions that can be had. So I would encourage our listeners for those that are out there, whether they’re working full-time, part-time, thinking ahead to the future, begin to think about what are the business solutions that may exist in this framework that you’re hearing Todd talk about? So Todd, I want to address — and you acknowledged this, and I appreciated it — that many pharmacists are frustrated right now with the state of the profession. And many of them are being deeply affected by the current reality. And so those that are out there listening or working today, maybe some of them got laid off, hours got cut, and they’re hearing about this longer term vision to expand pharmacists role in a primary care, they may feel like this message doesn’t do much to address the current challenges. And I’m not necessarily suggesting AACP has this responsibility alone, I think there’s a shared responsibility across all organizations and also shared responsibility by the individual as well as the associations, but any thoughts on short-term solutions or short-term strategies in addition to this longer term vision?

Todd Sorensen: Yes. You know, I would start off by saying that I think that part of the reason that we are — if you go back again and think about the 1999 and some of the projections that were in that NAP report and the factors that maybe did not allow those things to come to fruition on the growth side of the projections, I think it’s in part because it is much easier to focus on short-term initiatives in the short-term. It is much harder, even with the best of intentions, it is harder to get organizations let alone a whole profession, to really look at the long term.

Tim Ulbrich: Yes.

Todd Sorensen: The phrase, “the tyranny of the urgent” comes to mind. And many of the things that we have done over the last 20 years I think are with a short-term focus in terms of trying to pursue this payment opportunity here or even though they might not be the right thing or solving the problem in the long term. Let me give you one quick example.

Tim Ulbrich: Sure.

Todd Sorensen: I’m a particular fan of pharmacists trying to achieve revenue through annual wellness visits in primary care settings. We can’t demonstrate a clear value in net value proposition in that role because again, a nurse practitioner or even a nurse can do that. So by adjusting your service line to try to take advantage of that payment opportunity is very much a short-term focus that is not building the capacity and the direction for the future where you can actually demonstrate value. So I understand the dynamics. It’s easier, we have these short-term pressures that we have to address, so it is a balancing game that we have to consider. And it takes more discipline, and it takes more risk to be able to focus on the long term. And as you’re speaking to the audience and encouraging the idea of these opportunities in entrepreneurship, that’s the same thing. There’s the short-term of the job that’s in front of me right now. There’s a long-term of how I can be a solution and be creative and entrepreneurial to create an opportunity for the long term.

Tim Ulbrich: I think that’s such a great example, the annual wellness visits. I mean, I think it’s no different than how I treat my business and how other business owners look at things in terms of if you’re going to develop a product or a service, you want to think about, again, what’s your differential advantage? And even if this has short-term revenue gain, could this be replaced quickly by something else? I think that’s a good example where can we show a value proposition that is different than what others are doing? And I think based on the criteria for what’s involved in an annual wellness visit, I would agree with you, no. The other example that comes to mind, which isn’t going to be popular, is that even though we have a short-term urgency to focus fixing reimbursement rates on dispensing of products through fair reimbursement through some of the PBM things that are going on, all of that important efforts that we need to continue and we should be doing. It still, again, is a shorter term horizon as we think about 10, 15, 20 years, is the value of the pharmacist still tied to that product? And I think personally, the answer is no. And so I think that, again, we need to be thinking about the longer term and certainly addressing some of those issues. Todd, I want to end by talking about the change.org petition. I think we have to talk about it. For those that are not familiar, the change.org petition #ChangePharmacy, it’s been signed by almost 23,000 people now as of October 1. It probably is beyond that. And it urges the leaders of ACPE, AACP and APhA — not sure why only those three, but nonetheless, to halt and/or postpone accreditation of new pharmacy schools until 2030. So again, I have been a big advocate that we need to be having a constructive, informed conversation that addresses the challenges we’re facing today but also talks about the future and the vision that we need to aspire towards. So what insights can you provide, Todd, either from your personal perspective or AACP’s perspective, to those that signed the petition in terms of the authority for these organizations to “halt and/or postpone accreditation?” And really, what do you think the type of impact that that would have in terms of a solution and the impact on the profession?

Todd Sorensen: Yeah, it’s probably — it’s not really appropriate to hypothesize what that could look like because the reality is that it can’t. And ACPE has commented on this a number of times that we do operate in a free market society, and to do anything on their part to overtly restrict accreditation of schools could be viewed as restriction of free trade. And so that’s just a reality that we have to address that the market is part of what we believe drives supply and demand in our economy. Now, in terms of the number of schools, I mean, right now, that, again, is the short-term focus is that the reason why we are in the situation we are is because we have too many schools. Well, what if we would have created the new opportunities that were projected 20 years ago? Let’s say that even just 50% of primary care practices had some sort of formal relationship with pharmacists right now. That doesn’t even mean embedding them as an employed member of the team, but relationships between the community pharmacist and the primary care setting. That alone probably would shift our dynamics to the point where we would say we might be in balance with our supply or maybe even undersupplied at that time. So we don’t want to run the risk of taking, again, the very acute issue and blaming one thing as the reason for why we are in that situation. And instead, we need to look to the future and say, what does society need? What is the value that pharmacists can bring? And we don’t really know the number of pharmacists that are necessary. I would project that if we could accomplish the aim that I would like to see us pursue that we would not then say we have too many schools. We potentially are not fulfilling the needs of society with the number of pharmacists that we need. So it all is in your perception of how you look at things. Is it the worst of times? Or is the best of times?

Tim Ulbrich: Todd, I thank you so much, again, for taking the time that you did to come onto the show. Thank you for your leadership in AACP and all the work that you’ve done for the profession.

Todd Sorensen: Thanks, Tim. I enjoyed it. Great to have the opportunity to share some of these thoughts with your listeners.

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YFP 121: Creating Another Stream of Income as an Airbnb Host

Posted on by yfpadmin


Creating Another Stream of Income as an Airbnb Host

Tim Church interviews Dr. Hillary Blackburn about how she’s monetizing her personal residence as an Airbnb host. Hillary has been able to earn thousands of dollars each year making this side hustle another consistent income stream for her and her husband.

Summary

Dr. Hillary Blackburn and her husband, Chad, have been monetizing their personal residence as hosts on Airbnb for the last five years. They use this additional income, which has totaled to over $40,000, as their travel fund. Hillary talks through what it’s like to be a host through Airbnb.

Hillary explains that Airbnb is like Uber for vacation rentals and says that it’s a great option for travelers, especially in areas where hotel prices are really high. Hillary and Chad rent their home in Nashville 14 times a year. Typically when the home is rented, they stay with family that happens to be in town or use that time to travel themselves.

Hillary explains that sometimes it’s difficult for her to share her personal space, but her husband doesn’t mind if people are there. Each year they re-evaluate whether they’d like to host their home on Airbnb and he reminds her that they can use the income for their travel fund so they don’t have to take any money out of other savings for their trips. Chad takes care of managing their profile, reservations and communicating with guests. Hillary says that this side hustle is easier on her than picking up shifts at a pharmacy.

Their home is a four bedroom, two bathroom house located in a really convenient area of the city and is generally rented out for about $600 a night. In the rental price, they’ve built in a cleaning fee and have their home cleaned by a maid once a month. The couple has friends that have bought second and third houses to host on Airbnb. Hillary explains that if you purchased a condo in Nashville and paid $2,000 in mortgage each month, you’d essentially be able to make that payment by renting it out for two weekends.

Hillary and Chad have had relatively good experiences renting their home on Airbnb. Although it’s sometimes difficult for her to allow strangers into her home, she takes precautions like locking her closet, locking the basement, and making sure certain valuables, including pictures, are secured. Her advice on becoming a host is to first use Airbnb as a guest and then simply go to the website to set up a host account.

Mentioned on the Show

Episode Transcript

Tim Church: Hillary, thank you so much for coming back on the show.

Hillary Blackburn: Yeah. Thanks, Tim. It is great to be here.

Tim Church: Yeah, I think you’re one of the few guests who has made a repeat experience, so always happy to see that.

Hillary Blackburn: Well, glad to share some more updates and some other ways that I’ve been making a little extra income and hopefully will be a good thing to share with your listeners.

Tim Church: Awesome. Excited to hear about it. But before we kind of go there, knowing that you live in Nashville, this question has just been burning that I have to ask you. OK? You have to sing karaoke. What song are you picking?

Hillary Blackburn: Oh gosh. You know, I am not always a karaoke person. I’ll tell you what my husband always sings. It’s Big and Rich, “Save a Horse, Ride a Cowboy.”

Tim Church: Ooh, that’s a classic hit.

Hillary Blackburn: Yeah. So I think he probably enjoys doing it more than me. I just like to be the backup dancers and things.

Tim Church: OK.

Hillary Blackburn: But yes, lots of good music here in Nashville. Definitely come visit and we can check out some of the spots on Broadway.

Tim Church: Love to. Love it there. So it’s been about five months since the last time you were on the show. And before we talk about kind of a different way that we didn’t talk about before on how you’re earning some extra income, can you give us a little bit of an update about what’s happening with your career and your businesses?

Hillary Blackburn: Yeah. So since May, I started an MBA course and have been doing that. That has been taking up a lot of my time. But it’s something that I had always wanted to do and really wasn’t going to commit to it if, you know, it was too expensive. Again, financial, that was a big barrier. So we have some really amazing programs here in Nashville. Vanderbilt has a very nationally recognized, Vanderbilt Owen School of Business, Belmont has a great MBA program. But I really didn’t want to commit to a $50,000-60,000 another degree already having a pharmacy degree. So found one that is online, so that’s scalable and very affordable and something that my employer was able to help finance as well. So just all wins on that front. And this one is self-paced and competency-based, so I hope to have it finished within six months. So having that existing experience in business over the past 10 years has been a lot to draw from but definitely learning in the key areas that I want to learn in. So that’s been a lot of what’s been keeping me busy. But as far as some of the other business things that I’ve been working on, of course still doing the Talk to Your Pharmacist podcast, and I do make some revenue from that. We’ve got two great sponsors, RxDestroyer, which is a drug disposal system, and Theraworks Relief, which is a topical pain foam, pain reliever. And then of course, I have just launched a new podcast called “The Natural Products Resource Center” focused on helping to educate our pharmacists and others about separating fact from fiction around natural products, particularly medical cannabis since that is certainly taking the medical community by surprise. And you know, I’ve got also a pharmacy residency boot camp online for those who are gearing up for residency. So that’s just a couple of recordings, sessions that I did last year and wanted to make those available for people at their own convenience, so it’s all online so kind of like the MBA, being able to take those chunks of learnings whenever it’s convenient for you and just kind of I was able to basically download all of these tips and things that I’ve crowdsourced from other residency directors and organizations that are actually doing the residency process. So they’re doing the recruiting and hiring, so what they’re looking for. And then just tips for navigating Midyear. So I have been staying busy, Tim.

Tim Church: I would say so. It sounds like it. I mean, I’m just blown away. I feel like you just keep mentioning new things that I don’t even know about by the time that we got on this recording. So that’s really exciting. So it sounds like the MBA is taking up quite a bit of time. How many classes are you taking at one time?

Hillary Blackburn: Yeah, so I take — the way this program, it’s Western Governors University, which is a nonprofit university started by 19 governors to really make higher ed really affordable. They set it up as six-month terms, so you can take as many classes as you want in one term. So if as soon as I pass one, then I’m going onto the next. So I’ve already hit leadership and communications and marketing, ethical leadership, accounting — accounting and financial management were definitely the areas that I’ve had to dig in and really study. But right now, my husband and I don’t have children, and so we can really — if we’re not traveling or doing something fun, which we love to do, we’re pretty buckled down on the weekends and can knock out 20-30 hours in a weekend of committing to studying.

Tim Church: So when a lot of people are binge-watching “Downton Abbey,” “Poldark,” other shows, you’re basically hustling, grinding it out, trying to not only further your education but also your businesses as well.

Hillary Blackburn: Right. Don’t ask me if you want to know the latest TV show. Although I did watch all of the “Outlander” series that are out. So I’m a big fan of “Outlander.”

Tim Church: OK, OK. Well, you mentioned to me after a call that we had a number of months back that hey, by the way, I also have another side hustle. And that’s kind of why we set this podcast up because I think it’s really a cool and somewhat I’d say — I don’t know if I want to say easy, but not as time-consuming as other things and other side hustles that are out there. But that is becoming an Airbnb host.

Hillary Blackburn: Yeah.

Tim Church: Talk about what Airbnb is for those of the people out there that don’t know what it is, even though it’s been around for a number of years, and how do you become a host?

Hillary Blackburn: Yes. So Airbnb, for those that are not familiar, it is basically like Uber for vacation rentals. So people are probably most familiar with VRBO or others. Well, Airbnb has basically helped any homeowner or apartment owner or whatnot, depending on, of course, whether your city and state allow it and whether you have to have any type of licenses and things. And if anyone has those types of questions, my husband navigated all of that. He had to go down and you’ve got to get your permit and there’s a fee for that. And then you have to take out taxes and all of those regulatory things. But Airbnb is such a great option not only for travelers — the very first experience I had with Airbnb was as a traveler. So we were going to Houston for a wedding and hotels were all really expensive. We wanted to be a little bit more affordable and booked a studio through Airbnb. And the great thing about Airbnb is that just like Uber or Lyft, there are ratings and reviews. So not only do you rate and review the accommodation, but you as a guest are being rated and reviewed. So it’s because of that review type of setup that, you know, that kind of I guess dissuades any of the fears that someone stranger is going to come into my house and mess it up because you do have that opportunity to review them. And so if you have a bad guest, you’re going to rate them bad, and they won’t ever be able to use the service again. And Airbnb does allow for you can put in for cleaning fees, you can set that into your price. You can also — they have a very hefty insurance package. And then if you notice anything that potentially does break or something, you can always charge the guest. So they have all of those things, insurances in place. But since we have been doing it with our own home for the past 5+ years, we really haven’t had any major issues. We are sensitive. We don’t let all the bachelorette parties come because we are in a residential area. And you know, we live here. It’s not a second property that we just have furnished. We actually live in the home and rent it out up to 14 times per year because after 14 times per year, then you have to start doing like the federal taxes. And for us, you know, usually it works out that if someone’s wanting to come stay, we are traveling anyway or we have family in town and we just can go and stay with them.

Tim Church: So Hillary, I want to back up just for one minute because I bet there are people listening right now and saying, ‘Hillary, are you kidding me that you are letting complete strangers stay in your own home?’

Hillary Blackburn: Yes. I am a little crazy, yes. So Tim, as I mentioned, I do have this love-hate relationship with Airbnb. So as a guest, I have loved being able to use it. Now, don’t get me wrong. If I’m traveling for work and then I’m probably going to use a hotel because work is paying for it. And I still try to be very frugal, of course, but there’s something about a hotel that you kind of know what you’re going to get. But there’s definitely some gems, some like really awesome houses. Or for instance, if you’re traveling to a city and you’ve got a big group, you could all rent out a big house and then you’re all together instead of being in a couple, you know, lots of different hotel rooms. So alright, getting back to letting people stay in our home, so my husband started doing it at our house before we got married. So he was an early adopter and had roommates, and it was a great way for them to rent out their fourth room for all these people that like to visit Nashville. And I actually did it a couple of times before we got married because I had a two-bedroom condo that the roommate, my roommate had moved out, and so I was letting people come in to that second room. I had my door locked but all of the general areas were fine. So once we got married, I’m like, OK, we’re not going to do Airbnb anymore. But it’s funny because if you start to think of your house as an asset that is just sitting here and not making any money, then that’s kind of the incentive that my husband uses. And then the way he gets me to do it is that that is our travel fund. So if anybody knows anything about me, they know that I love to travel, we love to travel together. We’ve been on some amazing trips. And a lot of the way that we’ve been able to do those is from this extra income. So we’re not using — we’re dual income, no kids, so we’re just trying to socket away for retirement, live off of one income. So we’re living off of mine. And so instead of having to steal from our retirement and our savings to do all of the amazing travel that we do, you know, we’ve got a trip to San Francisco coming up this week and then we’re going down to Mexico City in November with a group and hopefully we’re going to use our Southwest companion pass to go to Hawaii over Christmas. So those are just some of the things — but those are some of the big trips that we’ve kind of done all year. So we’re kind of all queueing those up for Q4 it seems.

Tim Church: So he knew exactly how to persuade you into this, right?

Hillary Blackburn: Yeah, you need to know your spouse. Exactly. So a lot of my friends, a lot, a lot of my friends would say, ‘Absolutely no way am I going to let somebody come into my house and stay here.’ And there are definitely times when I have had tears and we’ve had some — Chad and I have had some really difficult conversations. And it’s like every year, I’m like, never again. And then I’m like, oooh, but we want to go on this amazing trip. So it’s kind of like when I see the trip in mind, I’m like, OK, OK, we can do it.

Tim Church: And is that because just the thought of more strangers coming into the house? Or have you had some somewhat bad experiences that make you hesitant to continue on?

Hillary Blackburn: Well, I don’t know if this is just being a female, but you know, he operates very differently than I do. And he doesn’t mind if people are here at all. For me, I’m like, oh, this is my personal space. You know, this is our home, like I have all of my personal pictures, all of the furniture that we’ve gotten and different things. Like all my clothes, I do lock my closet, so that is something that I do. But you know, there’s certainly areas like my bathroom, I’m like, well, I definitely have toiletries out for guests, but people are nosy, so people could be like — but yeah. It’s just something that you kind of just have to get over. I was just listening to Malcolm Gladwell’s book, “Talking to Strangers,” and yeah. It’s like instead of just thinking that everybody is out for the bad, you’ve kind of got to think about air on the side of truth. And so I think just knowing that people want to be respectful, they’re coming to stay in your house, they know it’s a house. We do have house rules. There is a ratings system. We really haven’t had any — I think one time before we got married, we had some partiers. And the police were called once or twice during the whole weekend by our neighbors. So that was not ideal. And we’ve had maybe one other issue where we’ve had like a wine glass break, but they were cheap wine glasses. You know? And so I really haven’t had anything where like I’ve had a stain on a sofa or anything like that. But heck, if that happened, then you just charge them. And then you get a whole brand new sofa.

Tim Church: Right, there you go.

Hillary Blackburn: So part of me is like, well, before I really do a whole lot of any kind of redecorating, now’s the time. Once we have kids and everything, then that gets a little bit harder to do. So right now, we’re just really trying to utilize all of our resources and be good stewards of what we have.

Tim Church: Well I think the other thing too is that as a host, not everybody knows this, but you get up to a $1 million worth of property damage protection in case you need it.

Hillary Blackburn: Yes.

Tim Church: And so that is one of the things that I think can make it a little bit easier to let people be in your primary residence or whether you have another property, knowing that you do have some protections in place.

Hillary Blackburn: Yeah, exactly. And then on the flip side, if you are traveling, like to Nashville, for instance, the hotel prices are outrageous. There’s not enough hotels for all of the people who are wanting to visit. And you know, you can really get some great deals on Airbnb and make your vacation really affordable.

Tim Church: Definitely. I was going to get into that a little bit, but I think that’s one of the biggest reasons why it’s becoming so popular with the millennial generation. And I was looking at some statistics and that 30% of millennials, they’ve had a very positive opinion of the service. And about a quarter of them have stayed at least once in an Airbnb. And definitely I think it’s disrupting the hotel market to some degree because not only is it more economical in many cases, but I think also to especially some of the more exotic places or just different is that people get a really unique experience.

Hillary Blackburn: Exactly.

Tim Church: So let’s talk a little bit about the economics. You mentioned that your cap per year is 14 different reservations through the year. Is that correct?

Hillary Blackburn: Actually 14 nights. So I’m really not doing it that much.

Tim Church: 14 nights. OK.

Hillary Blackburn: Yeah. I mean, we have some friends here that have bought second and third properties. So a lot of people want to buy a second home and make money from that, put it on the rental market. You can honestly make more money on the Airbnb market than on the regular rental market. So say, you know, a Nashville rate for maybe a condo, two-bedroom condo, $2,000. Well, you could make that in two weekends if you were doing Airbnb. So you know, you don’t have that guarantee that it will be booked up all the time, but if you start getting a lot of great reviews, then you become a Superhost and then you get rated higher, and so people are going to find you. So that gets a little bit into the marketing of your Airbnb I guess. But we could talk more about that.

Tim Church: So are you pretty consistently booked for those nights?

Hillary Blackburn: Well, so we — since we only have like 14 nights, we leave open our calendar a little bit during spring and fall. We found that those are two of the biggest times of year. So fall being that we’re a mile away from Vanderbilt, lots of people come in wanting to stay during the fall. And then spring in Nashville is very fun. So that was just seven weekends or if we have a three-night stay or two three-night stays, then that’s five weekends. So yeah, we don’t have just 14 days out of the year. We’ll close off for the rest of the year. We have one more Airbnb at the end of the year — I mean, sorry — at the end of the month, and then we won’t do it again until 2020 if we do, which I feel like I’m getting more and more comfortable. Another thing, too — so we have Ring, which is basically I guess a webcam for your front door or something. I feel like I should be getting some royalties for all of these products that I’m promoting.

Tim Church: Yeah, exactly.

Hillary Blackburn: So Ring, we had that installed maybe about a year or so ago. And you can see when packages are dropped from Amazon, you know, a lot of time people have challenges with people stealing packages. We didn’t have that issue, but just for more security purposes, I obviously like privacy and security. And those are two values that I hold dearly. And so it’s just nice to be able to see like when there’s movement at your front door, you have a package, who’s at your door while you’re away. Maybe you’re traveling and on vacation, you want to see what’s going on at your house. Ring is great for that. But what I’ve found is that I have to turn off Ring when Airbnb guests come because for me, it’s like out of sight, out of mind. I don’t want to know who’s staying there, when they come and go, any of that. I let my husband handle all of that because otherwise, it just works me up into a tizzy. So he does all of the management for our Airbnb. He’s talking with the guest, he shows up and does a walk-through with them. Basically, I think once they know that you live there and it’s your home, then they’re going to treat it more respectfully. So he manages all of that. So that’s what we’ve found works for us.

Tim Church: So what does a typical night, what does it cost to stay in the Blackburn residence bnb? Actually, I was going to ask before you answer that, do you have a nickname for your Airbnb property?

Hillary Blackburn: Anchor Down.

Tim Church: Alright.

Hillary Blackburn: So since it’s close to Vanderbilt, it’s called Anchor Down because that’s kind of their motto or whatever because they’re the Commodores.

Tim Church: OK.

Hillary Blackburn: So yeah. So also, Airbnb has an algorithm available. So they know when there are hot markets. So you know, maybe the Labor Day weekend, Vanderbilt-Georgia game, or other weekends, like the Draft. We were out of our house for the draft weekend too. Lots of people come in. So when those weekends hit, then the price goes up. So a typical price per night is usually around $600. And we have a four-bedroom, two-bath house. It is really conveniently located, you know, close to downtown, within the 440 Loop, it’s a beautiful Craftsman-style home. So it’s amazing. We were able, fortunate to have bought this in the downturn. So my husband bought it 10 years ago, so in 2009, and so of course, the property value has just increased over the past 10 years with Nashville being such a hot market. So hopefully when we’re ready to sell, we’ll be able to do well. But yeah, so usually, it could be anywhere around $600 a night. So once they take out taxes and things, like this past weekend, we made $1,200, yeah, just under $1,200. So not too —

Tim Church: So that was the profit to you?

Hillary Blackburn: Yeah, profit.

Tim Church: Wow.

Hillary Blackburn: So it’s way easier than me going and picking up a shift at a retail store, which I still work PRN but have not been doing that as much because I have all of these other things keeping me busy. But yeah, so for changing out the linen, I change out the linens, I change out the towels, I do lock my closet, he locks our basement. We pull out a few really personal pictures, make sure that our refrigerator is cleaned out. I don’t remove all the condiments and everything. I used to be way more intense about what I would clean out and what I wouldn’t. But honestly, sometimes people end up leaving us food. They’re like, ‘Oh, we have all this extra alcohol left and we’re flying out.’ We’re like, ‘Great.’ So yeah. I mean, it’s been something that we’ve been doing for almost five years. And you know, we’ve been able to really make some awesome memories traveling and not have to steal from our other funds.

Tim Church: Yeah, so it definitely sounds like yes, there are definitely some concerns and maybe some inconvenience around being a host and doing that.

Hillary Blackburn: Totally.

Tim Church: But the opportunities that being a host gives you and affords you really outweighs all of those other things and concerns. Would that be fair to say?

Hillary Blackburn: Yeah, I would say that. And eventually, are we always going to do Airbnb? Probably not. But for right now and the home that we’re in and the time in life that we’re in, it is a great way to make some extra income.

Tim Church: And so what would be a typical yearly earning that would actually be profit for being a host for your property?

Hillary Blackburn: Yeah. So I guess anywhere like $8,400?

Tim Church: OK, OK. That’s a nice side hustle. And you said this — what year is this?

Hillary Blackburn: We’ve been married four and a half years. And he’s been doing it for six. And he actually did more than 14. They changed a lot of the rules. So I would say even conservatively with the 14 days, we’ve made $42,000 in five years.

Tim Church: So you really are making sure that your house is an asset.

Hillary Blackburn: We are, yes. And we get it cleaned. We have a maid that comes every month.

Tim Church: Yeah, that’s what I was going to ask you is so you’re changing out some of the linens, but are you paying someone to come in and clean between every time there’s a guest?

Hillary Blackburn: Yes, but I already have a housekeeper come once a month just to help me keep everything clean.

Tim Church: So you mentioned kind of the average cost per night for your Airbnb. Does the Airbnb platform automatically adjust during those points where they think you can charge more?

Hillary Blackburn: It does.

Tim Church: Or is that something that happens automatically?

Hillary Blackburn: Yes.

Tim Church: OK.

Hillary Blackburn: Yes. So it’s just supply and demand.

Tim Church: So you don’t have to necessarily guess what the best price is going to be or trying to always go higher than what the standard or recommended amount would be.

Hillary Blackburn: Right. And they allow you to set your own price and, you know, you can also block your calendar for certain dates when you don’t want people to stay. You get to talk to the people or you hear they’re for a bachelorette party, and they’re like, ‘No, we’re here for a family reunion.’ We’re like, ‘Great. We love family reunions because the moms and the grandmoms always end up cleaning before they leave.’ So yeah. For the most part, it’s been really pretty great.

Tim Church: What tips would you have for people who are interested and maybe want to get started? And what should they avoid when they first become a host?

Hillary Blackburn: You know, I would just check out the Airbnb — you know, I would be a guest first, actually. I would totally start with being a guest. Check it out as a guest the next time you’re traveling, see how it works. It’s very easy. They even have an app, so you’re like literally texting and communicating with your host. So you get that experience, and then you basically just get on the Airbnb website. They have a different profile for you if you’re a host.

Tim Church: So one last question, Hillary. What do you do or what have you done to make the guest experience memorable? Is there anything special?

Hillary Blackburn: You know, one of the things that we do is you know, we have a guide, we put bottled waters by everyone’s bed, just making sure the house is clean and orderly, and then just being a really responsive host. So I think that we do all of that and have always had really great reviews.

Tim Church: And has that got you to that superhost status that you were talking about a little bit earlier?

Hillary Blackburn: You know, we did have superhose status but only doing it for 14 times out of the year, it’s kind of hard to maintain that.

Tim Church: Well Hillary, thank you so much for coming back on and sharing a really cool side hustle. I think it’s a great way to earn extra income, whether you’re using your own residence or whether you have an additional space or property because as you mentioned, it doesn’t take as much time as going out and working an 8-10 hour shift to pull that in. Now, obviously, it’s going to depend on where you live and kind of what the rates are. And if you’re interested in learning what your space or property would rent for, you can check out our Airbnb earnings estimator, and that’s at YourFinancialPharmacist.com/airbnb. So Hillary, thank you so much for coming back on the show. What is the best way for someone to reach out and contact you?

Hillary Blackburn: Yeah, so I am on all of the different platforms. So Instagram, @talktoyourpharmacist and Facebook @TalkToYourPharmacist, I have a page as well. Also pretty active on LinkedIn. You can search for me at Hillary Blackburn and then on Twitter @hilblackburn. Oh, and of course my website, www.pharmacyadvisory.com.

Tim Church: Well thank you so much, Hillary, and looking forward to all the work and what you have ahead.

Hillary Blackburn: Awesome. Thanks so much for having me back as a guest.

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YFP 120: 5 Ways to Finish 2019 Strong

Posted on by yfpadmin


5 Ways to Finish 2019 Strong

Tim Ulbrich talks through 5 ways to finish 2019 strong. These 5 strategies will help you enter the New Year with a sense of momentum and accomplishment, setting yourself up for an awesome 2020.

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 that you are joining me as we talk about five strategies that you can employ in 2019 to finish the year strong. So last week, we heard from one of our Certified Financial Planners, Christina Slavonik, where we did our first episode of a new segment that we will be rolling out going forward called, “Ask a YFP CFP.” Of course, CFP standing for Certified Financial Planner. We had some great questions that we answered from you, the YFP community, and we’d like to tackle more of your questions in the future. So if you have a question that you would like to have featured on the show and answered by one of our fee-only Certified Financial Planners, please do us a favor and shoot us an email at [email protected]. Again, that’s [email protected].

OK, so today’s episode, five strategies, five things that you can employ in 2019 to finish out this last quarter of the year strong. The theme across all five of these strategies is intentionality. The theme is slowing down for a moment and getting out of the month-to-month rush to ask yourself, what am I trying to achieve? Or maybe to remind yourself what am I trying to achieve? To ask yourself, what progress have I made thus far? And to ask yourself, what are some strategies that I can do for this last quarter, this remaining three months of 2019 to finish the year strong and to start 2020 with a bang? You know, I’m a big believer in momentum and running into the new year with some wins. And I think this is a much different situation than just waiting for 2020 to roll around, waiting for the new year to roll around so that you can hit the reset button and get a fresh start on your financial plan on the financial year. Now, don’t get me wrong. I think hitting the reset button every once in awhile can certainly be refreshing, and it does serve a purpose. But choosing to be intentional, choosing to be intentional in this final three months, in this final quarter of the year, and digging in, that’s a growth mindset. And that is putting yourself in a position of playing offense rather than playing defense.

So let’s jump in: Five strategies that you can employ to finish 2019 strong. Now, what would an episode of the YFP podcast, what would it be without us talking student loans? So No. 1 here is reevaluating your student loan repayment option. Or maybe for recent graduates, maybe it’s just evaluating your student loan repayment option for the first time. You know, when I started Your Financial Pharmacist back in 2015, I noticed there were only a handful of pharmacists that were spending the time, the time that is necessary to navigate all of the student loan repayment options that are out there and to determine the one best option for their own personal situation. This takes work. This takes effort. This takes digging into the unknown. This takes really understanding all of the variety of the repayment options and the confusion that could come along with that. And after I graduated from pharmacy school in 2008, I defaulted into the standard 10-year repayment plan because I didn’t know what else was out there. And at the time, that was the easiest path forward, right? It’s the standard, it’s the default repayment plan. The problem was is that I could have saved significant amounts of money by either pursuing Public Service Loan Forgiveness, PSLF, as I did work for a qualifying employer, or refinancing my loans to a lower interest rate because many of my loans at the time were at a fixed 6.8% interest rate, and I certainly could have done better than that if I weren’t pursuing PSLF, which I was not. So don’t get me wrong, while I’m grateful that I eventually got them paid off, I’m grateful that Jess and I were able to work through this journey, I think we learned lots through this journey, but not knowing all of the options that were available to me and just defaulting into the standard 10-year repayment plan certainly cost me big. Thankfully, there is now a lot more resources out there in terms of helping borrowers navigate the maze of student loan repayment. And in the pharmacy space — of course, disclaimer, I’m biased here — there is no better student loan repayment piece for pharmacy professionals than the one put together by our very own Tim Church. And that is the ultimate guide to repayment of student loans. You can get that post and all of the details and all the information for free at YourFinancialPharmacist.com/ultimate. Again, YourFinancialPharmacist.com/ultimate. We’ll link to that in the show notes.

Now, for students that are listening, the question hopefully you’re asking yourself is, you know, you’re note reevaluating repayment options, you haven’t yet evaluated them, and maybe you haven’t even thought about this yet for the first time. After all, this seems like it’s off into the distance as something you need to be thinking about into the future. And so my encouragement for the students listening is to begin to learn about these options that are available. Certainly you’re going to graduate, you’re going to have the grace period, you’re going to have some time, but that’s going to come quick. You’re going to have lots of competing priorities, you’re going to be studying for the NAPLEX, you’re going to be studying for the MPJE, you’re going to be starting a new job or residency or training program, and it may seem like that’s something to worry about in the future. But I think now is really the time to start listening to episodes like this or reading blogs or other resources that are out there to understand these terms, understand what an unsubsidized versus a subsidized loan is, understand what different types of loans are in terms of consolidation and refinancing and loan forgiveness and having the vocabulary, having an awareness that when you need to choose that option, you’re in a position that hopefully does not feel as overwhelming.

I would also encourage the students listening that I think you’ve heard me talk about before on this show, I think it’s easy as a student, myself included when I was a student, to fall into the trap of worrying about this in the future, to fall into the trap of it just feels like Monopoly money, it doesn’t feel real. So I would encourage you to inventory your loans, to log on, to look at your balances, to look at the interest rates, to see how that interest is accruing, to ask yourself, what are some things that I can do, especially on my unsubsidized loans, to lower the interest that is ultimately going to be accruing while you’re in school for your unsubsidized loans and, of course, capitalizing and growing beyond that?

And then students, the other thing I would encourage you is to begin to develop a relationship with the financial aid officer at your institution. Again, really building that relationship. Now having these conversations early as possible to begin to understand the terms, understand the options that when you need to make that decision, you’re ready to be in that position of action.

Now, for recent graduates, here I’m talking to the class of 2019, this could be those that are pursuing residency or those that are out in practice already, you know very well that you are in the grace period. You have the grace period, you’re living it right now. And here we are, that grace period is going to come to an end very soon. So now is the time if you have not already done so to evaluate and compare your options. I think for myself as was true for many others probably listening to this, it’s a rude awakening when you get that statement out of the blue to say, by the way, in the standard 10-year repayment option, you need to pay about $1,800 a month for 10 years to get these loans paid off. And so now is the time, before you get that notice, to evaluate, compare your options, understand income-driven repayment, understand some of the nuances between those plans, understand loan forgiveness, understand what are your options in the refinance marketplace so that when you go into active repayment, again, you’re in a position to make an educated decision.

Now, just a separate word for residents, you know, I think the common thing among residents is an automatic decision to defer. And my question for you to consider is is deferment the best option? Have you really thought about that? Have you really determined what’s going to happen to the interest on your loans while you’re in residency? What’s your makeup of subsidized versus unsubsidized loan? And I know, it’s a busy time. It’s a busy time. You finished your orientation, you’re active in your research experiences. Many of you are probably also teaching, balancing patient care and staffing responsibilities. I understand that you’re busy. But now is the time to really dig in and understand these options. And for those that are in active repayment, my question to you is maybe you’ve never sat down and intentionally evaluated all the options that are available to you. Or maybe you at one point refinanced, but you haven’t reevaluated rates. Or for those of you that are pursuing loan forgiveness, maybe you haven’t yet submitted your employer certification form. So my challenge for those that are in active repayment is have you confirmed, have you spent time to determine that the repayment strategy that you’re in right now is really the best option for you?

And I think as we are certainly here in October 2019, we’ve seen interest rates come down, we’ll talk about that here in a moment with refinance, when it comes to student loans, that means we often see the interest rates on a refinance become a greater differentiation or separation from the interest rates that you’re going to get offered through your federal loans. Now, we’ve said many, many times before, refinance is not for everyone. There’s certain considerations and benefits that you have in the federal system that you may not have in the private system, although that gap has closed. And certainly if you’re pursuing Public Service Loan Forgiveness, absolutely you do not want to pursue a refinance. But for those that have decided that is the best option for them, I think now is a good time to check rates. Certainly if you’re just getting initial quotes, it’s a soft pull on your credit, and that’s not going to have an impact until you actually go through the full application. You can learn more at YourFinancialPharmacist.com/refinance to learn more about the refinance process, who we think it’s for, who we think it is not for, and ultimately to check and compare rates. Again, YourFinancialPharmacist.com/refinance. So that’s No. 1 is reevaluating or evaluating your student loan repayment options.

No. 2, it’s hard to think about the holidays here in October, but if we’re going to finish 2019 strong, we need to set a budget, have a plan, and save for the holidays. And that’s No. 2. Now, we talked about this in detail all the way back in Episode 023. That was a long time ago, and I don’t know about you, but I know that I could use a reminder, and I’m guessing that’s the same for you, that we could all use a reminder about by the way, we’ve got to be thinking about the holidays and the impact that has on your financial plan. So of course, ideally, we’re saving throughout the year, that’s the thing we should be doing. But if you, like me, find yourself looking up at the calendar as we roll into October saying, ‘Is it really time for the holidays again?’ then we need to develop a plan as soon as possible to avoid the stress and the debt that often comes along with the holiday season and impacts how we start the new year. After all, the data shows that on average, on average, those who take on debt accrue approximately $1,000 of new debt from the holidays alone. So if we’re going to be in an offensive position going into the new year, we cannot let the holidays derail our financial plan. So the question here is, how can you have a painless financial holiday season?

So I think first thing that you can do is list all of your holiday expenses. Now, I’m talking all of your holiday expenses. And I know, here we are, it’s October. It’s not even Halloween yet, and we’re talking about later in the year holiday expenses. But this is important, right? Because it sounds easy. But from my experience, I’m sure from your experience, a lot of frustration comes from understanding what really are the true expenses when you reflect back on it. And I think we often underestimate these true expenses. So you know as well as I know it’s not just the gifts for family and friends, although that’s where we typically stop and end with the budget for the holidays. It’s the gifts we often buy for coworkers, it’s the gifts for those that are hosting parties we attend, it’s the gifts and the things associated with various work outings. It’s the expenses associated with hosting family and friends. Of course, it’s the travel, it’s the house decorations, it’s the cards and the postage, and the list goes on and on and on. So I think where we start is listing each item, holding true to that, and hopefully eventually coming up with a budget for each line item to come up with in sum, what do we need to be planning for the holiday season?

Second, for each of those categories, once you get everything down on paper, you know, begin to think about and identify are there some ways that since here we are planning well in advance, are there some ways because of your preparation and because of your diligence that you can be more intentional and save money during the holidays? For example, perhaps an electronic letter with a photo compared to printing cards or shopping in advance to be more intentional and to give yourself time to price shop around and compare. Or maybe it’s taking up those gift cards that have been unused or cashing in on travel or credit card points to help fund gifts or putting a cap on gift amounts with family or friends. And again, the list goes on and on. But the point is if we can plan here in October as we talk about finishing 2019 strong and we don’t wait until the last minute, we can be much more intentional and I think reap the benefits of that going into next year.

Now we have a guide we developed all the way back in Episode 023 if you want more information to help you think about this further and even start to work through the budgeting process of this. Head on over to YourFinancialPharmacist/holidays to get started. Again, YourFinancialPharmacist.com/holidays. So that’s No. 2: Set a budget, be intentional, save for the holidays. s

No. 3, evaluate a mortgage refinance. So for those of you that currently own a home, you know, here we are at the time of this recording, early October 2019, and we have seen a significant reduction in mortgage interest rates compared to this time last year. And I think there’s even talks of further reduction in Quarter 4 of 2019. So as an example, this time last year, my wife Jess and I moved down to Columbus from northeast Ohio, and interest rates on a 30-year fixed loan 12 months ago were north of 4.5%. So 12 months ago, we saw interest rates on 30-year fixed loans be above 4.5%. We actually closed on a loan at 4.625%. Now, today, we are seeing rates, a year later — depending on credit scores, of course if you buy points in the process and other factors — we’re seeing 30-year rates that are below 4%, high 3’s, and we’re seeing 15-year rates that are in the low 3’s. And I’ve even seen some offers in the high 2’s, especially if you’re buying points in the process. Now, it may not seem significant, but when you talk about a percentage, percentage and a half, even three-quarters of a percentage, depending on your mortgage, depending on where you’re at in the repayment process, this can be significant, especially over a 15- or 30-year term. So what I encourage you to do is take a moment to stop, look at the interest rate, look at the current market of rates — you can look at that without having to impact your credit score — and calculate a break-even on what this would mean if you would refinance your home. How much would you save relative to how much you would cost, how much you would spend in the closing process? So pretty simple, you can run a calculator. We’ve got some great resources on our site. If you go to YourFinancialPharmacist.com/calculators, we’ve got lots of resources that can help you here. But essentially, you do a simple calculation to say OK, if this is my current balance on my loan, here’s my current interest rate, here’s the rate I’m assuming in a refinance, how much would I save per month? And obviously, you have to make this as close to an apples-to-apples comparison as possible because if you currently have 26 years left on your mortgage and you’re going to refi to a 30-year, obviously you need to account for that time difference. There’s certainly calculators that can help you do that. So once you calculate the savings over the life of the loan, then you want to ask yourself, well, how much are you going to pay in closing costs, in fees? And this would include things like bank fees, title costs, third-party costs, appraisals or attorney fees, escrow charges and so forth. What’s your total cost to close? And based on your monthly savings, when will you get to a break-even? And typically, what you see like in the situation where Jess and I are in right now, if we had a 30-year mortgage that we just closed on a year ago of 4.625% and we can get a 30-year in the low 4’s or the high 3’s, then certainly we’re going to see a significant return on investment in a fairly short period of time. So that’s No. 3 is evaluating a mortgage refinance if you haven’t looked at that in awhile.

Now, No. 4 is one that’s near and dear to my heart, and it’s something I’m becoming more and more passionate about as I really understand the power and value in continuing to have a mindset of professional development and learning and learning and learning. No. 4 is making a commitment to read at least one book per month. Some of you may already be doing that, some of you that may seem a stretch. It’s just a place, a recommendation of where to start. Now, where does this come from? My wife and I are recently watching the Bill Gates documentary on Netflix, which is fantastic, by the way. It’s called “Inside Bill’s Brain,” and one of the things you’ll notice in that documentary is he just carries around this sack of books. He’s constantly reading and reading a wide variety of things. And his passion to learn, his desire to learn is so evident as a part of the fabric of who he is as a leader. And we’ll link to in the show notes, he actually has a summer books 2019 reading list, a suggestion of books if you’re looking to get started. But he’s reported to read approximately 50 books per year, and he’s quoted as saying, “You don’t really start getting old until you stop learning.” And when you look at some of the most successful people that are out there — and here I’m defining success by a combination of both net worth as well as the impact they have had and the work that they’re doing. This could be business related or philanthropic related, which certainly Bill Gates would fall into both of those. And what you see among these people is a common thread of a quest for knowledge, a deep desire to learn more and the humility to accept that what they know is only a fraction of what there is to learn, no matter where they are in their career. And so this just got me thinking, why is this so for such famous, successful people like Bill Gates, Oprah Winfrey, Warren Buffett, all of whom are worth billions of dollars, extremely busy, have lots of competing priorities? How in the world do they have time to read, time to learn more? And why is that such a significant priority for them? In many of these leaders what you see, as I’ve already alluded to, is that despite being extremely busy, they set aside at least an hour a day, five hours a week, over their entire career, or at least most of their career, for activities that could be classified as deliberate practice or learning. And this has been written about, it is known as the “Five-Hour Rule,” this five hours a week, and there’s a 2016 article that was written by serial entrepreneur and bestselling author Michael Simmons, and he quotes these individuals as exhibiting these behaviors and habits: Warren Buffett, for example, which is referenced in the Bill Gates documentary as well, spends 5-6 hours per day reading five newspapers and 500 pages of corporate reports. Not sure how he stays awake for that, but he does. Bill Gates reads 50 books per year, I already mentioned that. Mark Zuckerberg reads at least one book every two weeks. Elon Musk grew up reading two books a day, according to his brother. Mark Cuban reads more than three hours every day. Arthur Blank, co-founder of Home Depot, reads two hours a day. Dan Gilbert, self-made billionaire, owner of the Cleveland Cavaliers, reads 1-2 hours a day.

So my encouragement to you is to start making a habit of reading and learning more, whether that is the old-school book-in-hand method, maybe it’s a Kindle, an audiobook, podcast. Make this commitment to learn more of a priority. Set a goal for the number of books — I gave you an example as we started here point No. 4, one book per month — but set a number of books that you want to read for the remainder of 2019 and do the same for 2020. So we’ll link in the show notes to Bill Gates’ Summer of 2019 reading list if you’re looking for a place to get started. And I hope that you will share with the YFP community and our Facebook group what you’re reading and what you’re learning. And of course, if you’re looking for a good financial book to get started, I have to mention “Seven Figure Pharmacist,” I have a bias for that. Also I will throw out there, “I Will Teach You to Be Rich” by Ramit Sethi, “Rich Dad Poor Dad” by Robert Kiyosaki, “Friend of a Friend” by David Burkus, which we recently interviewed on the podcast, and one if you want to get ready for an interview you’re going to be doing in the future is “The Behavioral Investor” by Daniel Crosby. It talks a lot about the behavioral aspects of finance and has built a career with his PhD studying this information about how behavior impacts our financial plan. So there’s some ideas to get started. So that’s No. 4. No. 4 is making a commitment to read and doing so with reading at least one book per month.

No. 5 is start visualizing what success will look like for you in 2020. You know, several years ago, I read a book called “The Miracle Morning,” and one of the activities they talk about in “The Miracle Morning” by Hal Elrod, it’s a great book, great process, is this concept of visualization. Pat Flynn talks about this a lot as well in his book, “Will It Fly?” And they talk about this process of not only setting goals but visualizing those goals becoming a reality and then revisiting those goals each and every day or maybe it’s once a week or maybe it’s several times a month. And when you do that, an amazing thing happens between you start with the goal that maybe feels like a hope or a dream or a wish, and then you articulate it, and then you become more specific, and then you put a number to it, and then you start to repeat that and see it and think about what would this feel like? What would this look like if this were to become a reality? And you begin to convince yourself through visualization that it will become a reality.

So I want you to answer this question as you think about visualizing success for 2020. And that question is, at the end of 2020, finish this statement: I will feel like I am winning financially if… So write it down. Look at it. What is happening for you at the end of 2020 that you will feel like you are winning financially if these things happen? The more specific you can get here, the better. Maybe it’s a certain amount that you want to have paid off of debt, credit card debt, student loan debt. Maybe it’s a certain amount that you want saved for a rainy day. Maybe it’s a certain amount for investing or for paying on a mortgage or for starting to get invested in real estate. And I would encourage you in addition to just writing these down, maybe some things that come to mind that you’re already thinking about, set one big, audacious, stretch goal for 2020. One thing that may seem like, you know what, it’s a hope or it’s a dream, it’s out of sight, it’s out of touch, but this is something I’m going to put down on paper, and I’m going to begin to think about that if I get these other things achieved, I’m going to be in a position to work towards this bigger goal.

So for Jess and I in 2019, this was real estate. We said, you know what, we want to invest in our first real estate property. We want to do that in 2019. Now, at the time, we had a big $0 invested to do that, but we knew it was a goal. We were able to articulate why that was a goal for our family. We created a sinking fund in Ally that had a big $0 for a long time, but it was a constant visual reminder of why we needed to achieve the other things within our financial plan that were ultimately going to allow us to unlock this part of it. We’re going to talk more about what that process was for us and our first property and hopefully soon our second property in the next couple weeks.

So I want to finish here with a quote from Seth Godin that I think really gets to this concept of visualizing for the future, really gets to this concept of setting big goals and often that our limitations are internal, our limitations are the variable that we can’t see a big enough picture to be able to realize what we’re actually capable of. And this is really this concept of a growth mindset. Seth Godin says, “Not the limit of our skills, not the limit of our knowledge, not the limit of our physical capacity. It’s almost always the limits of our internal narrative, our guts, our willingness to be kind, to believe, to care enough to lead. We can’t do anything about the limitations of physics, and we can never do enough to change the limitations of our culture.” But Seth says, “But we can begin today on changing the internal limits we place on ourselves. Yes, it’s your turn.” I love that from Seth Godin.

So there you have it. Five ways to finish 2019 strong. I hope you can take away one of these five, maybe all of these five, and as always, I’d love to hear what your thoughts are and would love to have you share your progress with the Your Financial Pharmacist community over at the Your Financial Pharmacist Facebook group.

Before we wrap up today’s episode of the Your Financial Pharmacist podcast, I want to again thank today’s sponsor, the American Pharmacists Association. Founded in 1852, APhA is the largest association of pharmacists in the U.S. with more than 62,000 practicing pharmacists, pharmaceutical scientists, student pharmacists, and pharmacy technicians as members. Join APhA now to gain premier access to YFP-facilitated webinars, financial articles, live events, resources, and consultations. Your membership will also allow you to receive exclusive discounts on YFP products and services. You can join APhA at a 20% discount by visiting pharmacists.com/join and using the coupon code A19YFP. For more information about the financial resources we offer in partnership with APhA, visit pharmacists.com/YFP.

And one last thing if you could do us a favor, if you like what you heard on this week’s episode, please leave us a rating or review in Apple podcasts or wherever you listen to your podcasts each and every week. Also, make sure to head on over to YourFinancialPharmacist.com, where you’ll find a wide array of resources designed specifically for you, the pharmacy professional, to help you on the path towards achieving financial freedom. Have a great rest of your week.

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6 Ways to Protect Your Cash Flow as a Pharmacist

Posted on by yfpadmin

6 Ways to Protect Your Cash Flow as a Pharmacist

The following post contains affiliate links through which YFP or its team members may receive compensation.

What would you do if your next paycheck wasn’t deposited?

How long could you survive if you just stopped getting paid?

If you’re a recent grad, new practitioner, or potentially even a seasoned pharmacist, the answers might look something like “use a credit card and not long.” This is especially true if you aren’t the only one who depends on your income.

Despite having a good income, it’s not that uncommon for pharmacists to live paycheck-to-paycheck. With massive student loan payments, living costs, lifestyle creep, and other priorities, unless you have substantial savings, having consistent cash flow is essential.

An emergency fund can only buy you so much time if something happens with your job. Therefore, protecting your primary means of income is key.

There are some moves you can make that can help reduce the interruption in your cash flow.

pharmacist network, side hustle, side hustle for pharmacists, make extra money as a pharmacist

1. Have a side hustle

The most obvious way to prevent any significant change in cash flow is to have multiple sources of income. Even if you feel your job or position is relatively secure, there’s always the potential it might not be there. Unfortunately, many community pharmacists have already experienced this with large numbers of brick and mortar stores closing and the decision to downsize pharmacist presence in large companies.

By having a second or multiple income streams, you will reduce the probability of not being able to pay your bills and living expenses even if one source of income becomes affected. This could be as simple as moonlighting at another pharmacy, writing a book, or even creating a legitimate business that makes six figures a year.

If you want some ideas, check out this post 19 Ways to Make Extra Money as a Pharmacist in 2020. You can also check out the YFP podcast as we frequently have pharmacists on the show who talk about side hustles they started.

2. Make yourself indispensable

How many people do you know that work just hard enough to keep from getting fired?

There’s no question that burnout and unfulfillment run rampant in our profession, but does that mean you shouldn’t work hard, take on new challenges, and embrace opportunities?

Make it difficult to get fired.

What can you do to stand out from everyone else? What skills and knowledge can you acquire that make you a linchpin in your company or organization?

I’m not just talking about board certifications and additional credentials, but rather demonstrating the ability to solve problems or reinvent existing systems and protocols that provide value and improve outcomes.

make more money as a pharmacist

I work in a primary care clinic with a focus on type 2 diabetes management. Most of the days are pretty full evaluating patients but I’m fortunate there are a few hours per week given to work on continuing education or to come up with ideas to improve patient care.

Taking full advantage of this time, I studied how to manage very complex diabetes patient cases such as those with suspected LADA, patients who need u-500, best practices for carb counting, and how to optimize the use of continuous glucose monitoring. This has enabled me to become a go-to resource when colleagues or other services encounter difficult cases.

In addition, I have created population management protocols to identify patients with diabetes who are not receiving guideline-directed medical therapy and those at high risk of hypoglycemia.

I then I took it a step further and created an action plan on how our team of pharmacists could intervene and set up appointments to directly impact these opportunities. Because we have been so successful, these practices have been discussed and utilized by other institutions within the organization.

None of these things I described were necessary or required of me in order to maintain good standing in my position. They were gaps and opportunities I identified that would not only improve our current practices but further my skills and value within in my role.

Even if you become a linchpin and still get let go, chances are you will be in a much better position to make a job transition and will be able to better articulate your value to prospective employers.

3. Have adequate disability insurance

With a six-figure income, you are going to have projected lifetime earnings in the millions. Besides losing your job, becoming disabled is one of the biggest potential disruptors in cash flow.

I know what you may be thinking, “As a pharmacist, something pretty bad would have to happen to me to not be able to work.” That may be true. After all, most pharmacists just require their cognitive faculties to be intact, and therefore accommodations could be made in the event of broken bones or limited mobility secondary to an accident.

Remember, you are not invincible!

The Social Security Administration predicts that more than 25% of today’s 20-year-old Americans will become disabled before the age of 67. However, almost 70% of those working in the private sector do not have disability insurance.

Beyond car accidents, think about insidious diseases like Parkinson’s disease, dementia, cancer, or MS. There are a lot of health-related scenarios that could occur at a young age and either force you out of the workplace or reduce the time you are able to work.

Disability insurance for pharmacists is really income insurance. It provides you with money in the event that you are unable to work because of an accident or illness.

Besides being able to afford typical bills such as food, mortgage, utilities, etc, think about your student loans. If you still have federal loans then you don’t have to worry because these are discharged in the event that you become permanently disabled. However, what about private loans? Or ones that you refinanced?

Therefore, unless you already have substantial wealth or have additional income streams and don’t require an income as a pharmacist to live, you need disability insurance.

Even if you have some coverage through your employer, consider an individual long term disability insurance policy. It doesn’t matter where you work or if you change jobs because it follows you and you don’t have to get another evaluation of your health status.

For a more detailed discussion on disability insurance, check out the post Disability Insurance: The Ultimate Guide for Pharmacists.

disability insurance for pharmacists

4. Be ready to make a move if needed

Motivational speaker Les Brown often says “It’s better to be prepared and not have an opportunity then to have an opportunity and not be prepared.”

What if you lost your job tomorrow? Would you be ready to start applying and submit an up-to-date polished CV? Would you be ready to interview?

It’s easy to submit your CV once and then just forget about it for years.

Brandon Dyson, pharmacist and co-owner of TL;DR Pharmacy, wrote about his experience with hiring a part-time employee at an outpatient oncology clinic. Within 6 days, he closed the posting after receiving 49 applications. Well, sort of 49. I say sort of because he mentions a number of applications were not filled out completely, were missing elements such as a cover letter, and clearly did not update their CV.

That is really unfortunate and inexcusable in our profession. Don’t eliminate yourself from the running right from the start by not following directions and being prepared. At the very least, have someone else you trust to review your application and contents if you are not 100% confident.

You can also check out Brandon’s post for more suggestions and tools for getting prepared for your next job.

5. Maintain your license in good standing

This one should go without saying: you can’t practice if you don’t have a license. Well, you can, you just may face fines or even felony charges. For most pharmacists, this means just doing the bare minimum continuing education and any other requirements.

However other situations that could affect your license and ability to practice include complaints made to your respective board of pharmacy or malpractice suits.

You know mistakes can happen. If you work for an employer, they likely offer some protection if you’re functioning within your scope of practice. However, their main concern is protecting the organization, not you.

Besides actual damages, liability or malpractice insurance can help cover litigation costs, costs for representation for board of pharmacy hearings, and lost wages. The latter is particularly important especially if you’re involved in a complicated suit that lasts months and your employer is not assisting.

Coverage is relatively inexpensive (~$12-$20/month). Proliability, Pharmacist Mutual, and HPSO offer policies for pharmacists up to $1 million in liability coverage per incident and $3 million aggregate limit.

6. Grow your pharmacy network

I was recently on LinkedIn and saw firsthand the power of and the difference between having a strong network and having a bunch of weak connections that someone blasts information to.

Whenever someone asks to connect with me, I always ask for the reason they reached out. It’s a great ice breaker and also helps to find some common ground. But what is surprising to me is that the first thing some pharmacists say to me is “I’m looking for a job and trying to expand my network.”

Now there’s nothing wrong with that, but there is usually no attempt to learn more about me, what I do, or how I may even be able to help them. In other words, the primary intention was what they could from me.

pharmacist network, pharmacy network

These are usually the same people that literally blast their CV on a LinkedIn post multiple times per day expecting to get results. Contrast that to someone who is well connected and within hours of them explaining their situation and intention to seek other employment already has multiple leads. That’s why it’s important to make it more about relationships than it is about connections.

Brandon Dyson nicely sums this up: “If you just joined a group and you start asking everyone for favors, you come across as self-serving and desperate. But if you’re already a part of that community, people will go out of their way to help you.”

Whether it’s through LinkedIn, professional organizations at the national, state, and local levels, Facebook groups, or other channels, you should be building your pharmacy network now. Not when you are in a dire position and urgently seeking a job but before you’re actually in need.

I also highly recommend checking out podcast episode 116: Transforming Your Life and Career Through Networking where bestselling author David Burkus shares the science of networking and discovering your hidden networks.

Conclusion

One of your greatest financial assets as a pharmacist is your ability to generate an income. Unless you already have substantial wealth or have multiple streams of income, you’re probably going to be in a tough spot if the next paycheck wasn’t there. Changes in the job market have resulted in less security and many pharmacists have already experienced being laid off or had their hours cut.

Protecting your cash flow is essential to not only paying your monthly bills but also making progress on your savings and long-term financial goals. The key ways to do this include creating multiple streams of income, protecting your existing main income source, and preparing yourself to make a job transition to reduce the time of interrupted cash flow.

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YFP 119: Ask a YFP CFP®

Posted on by yfpadmin


Ask a YFP CFP®

Christina Slavonik, CFP® at Your Financial Pharmacist, joins Tim Ulbrich for a new installment of the YFP podcast, Ask a YFP CFP®. Christina answers financial questions from the Your Financial Pharmacist community covering topics such as student loans, investing and the inverted yield curve.

Summary

Christina Slavonik, CFP®, is a team member of Your Financial Pharmacist and offers fee-only comprehensive financial planning. In this podcast episode, Christina answers questions from the YFP community in a rapid fire format.

To start, Christina explains that fee-only financial planning means that we’re not getting extra commissions as many traditional firms are. Christina explains that YFP believes the best way to measure non-conflict of interest is to provide fee-only services where clients are only paying for the advice they receive. YFP also upholds to the fiduciary standard where the clients’ best interests are really the focus.

Christina answers several questions from diverse topics such as student loans, investing and the inverted yield curve. Two of the asked questions are below:

Andre asks if he’s sacrificing a lot of immediate short term investment opportunities like having a house or saving for retirement in order to pay off student loans more quickly through refinancing. Christina explains that it really depends on your goals and life plan. While there may be some comprises that have to be made, YFP believes there should be a balance of today and tomorrow so that you’re enjoying your life along the way to meeting your financial goals.

Amanda asks, “I’ve heard that given the inverted yield curve as well as many other factors that we may be entering a recession. How can I best prepare? Should I be picking up lots of extra shifts at my 2nd job to boost my emergency savings (currently 3 months) or should I continue focusing on student loan debt?” Christina responds by saying that there will always be recessions. There have been 47 recessions in the U.S. and the average recession lasts about 1 ½ years. She explains that the markets are cyclical and recessions are part of the process. The best way to cover yourself in any situation, whether we’re in a recession or not, is to be diversified in your investments and also your income. Having a second job or side hustle and having an emergency fund with 3 to 6 months of income for emergency expenses are all good practices.

If you have a question you’d like answered, email [email protected] or send us a message on Facebook or Instagram.

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, excited to be here live on Facebook for the first installment of a new segment that we’re doing, Ask a YFP CFP, standing for Certified Financial Planner, where we’re going to be taking your questions on a regular basis going forward, and we’re going to ask those questions to one of our Certified Financial Planners, Tim Baker or joining me this evening, Christina Slavonik. So Christina, thank you so much for joining.

Christina Slavonik: Yes, thanks so much for having me, Tim. I’m excited.

Tim Ulbrich: Excited to do this. We’ve got some great questions that we’re going to answer this evening. And before we jump into those, I know some of our audience and community members with your background you’ve had — you’ve been on the show before — but some may not be, so give us a quick introduction and talk about some of the work that you’re doing over at YFP.

Christina Slavonik: Sure. Well, I’ve been in the industry doing various roles for the past 13 years and really just hit the planning piece the last several years, became a Certified Financial Planner in 2017 and was working with the more traditional side of investment management, which you hear about fee-based and fee-only, this was a little bit of both mixed. And so when I had the opportunity to come on board with Your Financial Pharmacist, it’s a niche. I love working with younger professionals, and it just seems like a great segway into the next stage.

Tim Ulbrich: Well, we’re certainly excited to have you as a part of the team. And you mentioned fee-based, fee-only, we talk a lot on the show about the importance of the credential of Certified Financial Planner but also the importance of being fee-only. Break that down for us real quick. Why is fee-only so important? And what does the credential CFP even mean?

Christina Slavonik: Sure. So fee-only, when that comes to mind is you’re paying us just for the advice. We’re not getting any extra commissions, no extra fees being paid on Assets Under Management, which is how a lot of traditional firms are paid and a lot of advisors. Nothing wrong with that, but we just believe that the best way to measure a non-conflict of interest is to provide that fee-only service, which is you’re just paying us for our advice and being a Certified Financial Planner, we are held to that higher standard, the fiduciary standard, so to speak. And we’re supposed to be holding our clients’ best interests at heart.

Tim Ulbrich: Yeah, and I think one of the examples I use often that is in the pharmacy world, you know, we tend to think that OK, everyone is licensed as a pharmacist, everyone has their doctorate of pharmacy, and therefore, we’re all obligated to act in the best interests of our patients. That’s what we do. And so it was a shocker to me when I first entered into this just over about four years ago to really learn that the industry in the financial planning world is very much not the case, even that really the opposite. And for those of you that want to learn more about this topic of fiduciary, fee-only, we’ve got lots of information on the website. But I think also John Oliver has a great segment on fiduciary and fee-only that I think is worth watching. And he really breaks this down in a way that’s easy to understand. So if you’re not already familiar, we offer fee-only comprehensive financial planning over at Your Financial Pharmacist. As I mentioned, we have two Certified Financial Planners, Christina and Tim Baker. And you can learn more over at YFPPlanning.com. And so we’re going to be taking your questions on a regular basis. Some of the questions that came in this evening came via email, our Facebook group, Instagram, so you can reach us at [email protected] or you can shoot us a question in one of those social media outlets as well. In terms of format, I’m going to rapid-fire these questions to Christina, so I’m going to put her on the hot seat. We have lots of questions, student loans, investing, inverted yield curves, which is the cool term these days, so we’re going to talk about lots of different things. And certainly, if you’re on live now and you have a question, throw it out there and we’d love to answer that as well. You ready?

Christina Slavonik: I’m ready. Let’s get going.

Tim Ulbrich: Awesome. Let’s do this. We’ve got some good questions, so this is exciting.

Christina Slavonik: I’m very impressed with the lineup.

Tim Ulbrich: So Andre — first question comes from Andre, and he has two questions. He’s a new member of our Facebook group, so Andre, welcome to the community. We’re excited to have you. His first question is traditionally, most people pursue PSLF, standing for Public Service Loan Forgiveness, or refinance their student loans. But his question is are there other, non-traditional methods to consider beyond PSLF or refinance?

Christina Slavonik: Yeah, this is a really great question, Andre. So one of the things that we’re seeing more and more is non-traditional method. Some employers are actually offering reimbursement to help you pay off your loans faster in various forms and fashions. So that’s actually something to look into with your current employer. And there’s always the non-PSLF forgiveness. I know some people kind of forget about that one. Of course, you would have to pay the tax hit once that forgiveness is sent your way. It is counted as income on your tax return. But still, it is a forgiveness. And I think some people forget about that kind of forgiveness. Side hustles, you know, other nontraditional ways, I know some people have talked about giving away plasma. I wouldn’t go as far as selling an organ, but hey, you know, the sky’s the limit if you’re that committed to paying off those loans. Cutting certain expenses, just fairly small changes can move the needle in a big way over a sustained period of time.

Tim Ulbrich: Yeah, and one of the things we preach, Christina, you know this in working with clients is that unfortunately, when it comes to choosing a student loan repayment strategy, it’s probably way more complicated than it needs to be. Multiple options in the federal system, income-based repayment, standard monthly payments, extended, graduated, forgiveness, non-forgiveness, PSLF, non-PSLF, and then you’ve also got the whole host of options you see in the private market with refinance.

Christina Slavonik: Right.

Tim Ulbrich: And I think because of that confusion, I know what happened for me in my personal journey, I see with lots of pharmacists, is there’s often that paralysis by analysis where people default into the standard 10-year or maybe go into income-based repayment but wander into that and don’t really think about why or what they’re trying to do. And if you’re talking about six-figure+ student loan debt, we now know the average graduating student is facing about $173,000 on average, which is mind-blowing. But this is not a decision that you want to wander into. And we’ve seen with clients, with individuals, intentionality in this choice can be the difference of tens of thousands of dollars, especially when you consider in the context of the rest of your financial plan. So I would point our listeners, if you haven’t already checked out — shoutout to Tim Church, he did an awesome job on this piece — if you go to YourFinancialPharmacist.com/ultimate, he’s got the ultimate guide to repaying back your student loans. It talks through a lot of those options and gives you additional information. Second question from Andre, Christina, he asks, “Am I sacrificing a lot of immediate, short-term investment opportunities such a house, retirement, kids, etc. in order to pay off student loans more quickly through refinancing?” What are your thoughts on that?

Christina Slavonik: Yeah, that’s always a tough one to navigate, especially when it’s staring at you right in the face. Hard to put a price tag on that clarity and peace of mind, totally get that. But being able to be with an accountability partner that can help you put all these things on the table, it all goes back to your life plan, what goals you have for yourself. And your financial plan should be built around that life plan. Once we kind of get that clarification, it’s much easier to see where the other things will fall into place. And it can be quite a transformative experience, and your priorities become more defined. Some of the questions I ask myself is trying to find that balance, what keeps you awake the most at night? And kind of prioritizing it that way and then working with this through a Certified Financial Planner or a life coach that can help you navigate which path you should take. There’s some compromises that may be worth sacrificing up front. Just some ideas, especially little kids. I don’t know how old your children are or if you’re just planning to have kids, but there’s so many ways you can have fun when they’re young, and you don’t have to spend a whole lot of money. So there’s just different ways to think out of the box when it comes to those opportunities.

Tim Ulbrich: Yeah, and I love the approach that you and Tim take on this that there has to be a balance of today and tomorrow. Right? I mean, we have to take care of our financial house today, but if we do a great job with that for 30 or 40 years and we never enjoy it along the way, then I think we’re losing, right? We have to find this balance between living a rich life today and living a rich life in the future. And I think that happens through asking some of those probing questions that really get at the things, you know, what do you care about most? What are you passionate about? What really gets you excited each and every day? And ultimately, why does this whole topic of money even matter? And I think that’s a great question to ask before you even get into the x’s and o’s of your financial plan. And I’ll never forget, I think it was Episode 032 and 033, maybe 031 and 032, where Tim Baker interview Jess and I, talking about this concept of find your why. When you really start to challenge and say, OK, we’re paying down debt, we’re saving, we’re doing all of these things, but why are we doing these things? What are the things that really matter? And I think that’s what Andre is getting to in this question here. Alright, next one’s a big one. So to Christina from Christina, and it’s a really multi-part question that’s got some investing pieces, student loan pieces, FSA dependent savings account, so I’m going to break this down and collectively, we’ll tackle this one. So Christina asks, “I just started working at a not-for-profit hospital. As soon as that happened, I switched to PAYE, Pay As You Earn, loan and have already submitted my PSLF loan forgiveness employment verification form to the DOE, Department of Education.” Lots of acronyms here in this question. “I maxed out by 403b so that I can hit the $19,000 limit.” The question from Christina is, “Can I also contribute to my traditional IRA? Or is it one or the other?”

Christina Slavonik: Well, my answer is yes, Christina, from Christina, you can contribute to max out your 401k or 403b up to that $19,000 as well as max out an IRA. So the way I like to think about it is one is provided by your employer, the other is provided personally to yourself. So both have maximum limits. The IRA, of course, you can choose between a Roth and a traditional. You can only max one of those out or just a combination of those two. But yes, to answer that question, you can.

Tim Ulbrich: Yeah, so great point. I mean, 401k, 403b, those are employer-sponsored, one for-profit, one not-for-profit. IRA, the I standing for Individual, right? So that’s your individual retirement account. So second part of this, then, is, “I am also a working PRN” — nerdy pharmacy lingo here — so “as needed at my retail job. And I left that at a 6% contribution for my 401k since that is what they match. What happens if I get extra shifts and end up contributing more? Is there a penalty? I tried to calculate and plan on watching it very closely, but I would like to know in the event it happens.”

Christina Slavonik: Well, yeah, it’s good that you’re being proactive and not waiting. You really have until your tax filing deadline of April 15 to make any corrections if you need to. And yes, there is a penalty involved. There’s typically a 6% excise tax as well as some other double taxation issues if you cannot get that amount out in time before you file your taxes. So yes, just keep tracking on both pay stubs, maybe even getting your HR person involved if possible. But yeah, you may just have to totally not contribute to one of those altogether for the rest of the year since the year is almost over and approaching that tax deadline.

Tim Ulbrich: And I think relatively a good problem to be thinking about, right? If you’re worried about exceeding the maximum contribution.

Christina Slavonik: Yes.

Tim Ulbrich: So let’s not lose that fact, Christina, great job on making these contributions. Next part of this is, “There was also a dependent FSA, Flexible Savings Account, offered that I opted into for child care expenses. I’m trying to max as much as possible so that I can decrease my AGI, Adjusted Gross Income, for my PAYE, Pay As You Earn, loan. How do you determine when to file married separate or married jointly?” This is a great question. We get this all the time.

Christina Slavonik: Yeah, it is a fabulous question and one that’s best suited for someone, an enrolled agent or CPA that deals with taxes on a regular basis. There are so many pieces that wag the tax dog. And it’s just hard to give a specific recommendation without seeing the whole situation. Sometimes, it does make sense to file separately when doing the Pay As You Earn as the other spouse’s income does not count. But again, there are other factors to consider as well.

Tim Ulbrich: And I think for me, that’s the take-home point when I get a question like this is that making sure that those that are in an income-based repayment plan, especially those that are pursuing Public Service Loan Forgiveness, that you understand there can be a difference. And from there, you really dig deeper with an enrolled agent, with a tax professional, because they can look at the rest of your financial plan to understand the rest of your financial situation, understand what might be best. And we’re also grateful that we have Paul on our team, who is an enrolled agent, that can supplement the financial planning services that you and Tim are doing as well. OK, last part here from Christina is, “And for dependents’ savings account that are offered through your employer, is there a max that each person can use? Is it $5,000 per family and only $2,500 per person? Or can one do the full $5,000?”

Christina Slavonik: Sure, this is a really good question and one that we’ve actually seen before. Yes, the maximum is $5,000 to contribute. But really, any person in that family can utilize that. I know Tim Baker has mentioned that there are state-specific rules when it comes to FSAs, but in general, you can use it on qualified expenses for the physical care, the day care, child care, yeah. Just keep the receipts, keep good records of what you actually used it for. And one other side note with that: I know you’re wanting to lower your AGI by doing this. And sometimes, employers will also offer the Health Savings Account component for a high-deductible health plan. Sometimes having a limited purpose FSA will allow you to have an HSA as well, which can increase the deduction you can put towards lowering your AGI, so that’s another way to check into some more tax savings.

Tim Ulbrich: And good news we got back from Christina as a follow-up to this question. She says, “We max out our deductions for a total of $55,000 going into the 403b, TSA, IRAs, DSA, which should bring us to just under $100,000 of Adjusted Gross Income for the year. Thank you for reaching out and for all the help with the group.” I love that because I think that what I see through Christina’s questions is intentionality. And I see her digging in, I see her trying to understand the tax situations, understand what’s going on with the rest of the financial plan as it relates to student loans. And let me encourage those that are listening that they hear 401k, 403b, Roth IRA, FSA, HSA, DSA, and you’re following, great. But for those that are hearing some of those terms for the first time, we have a lot that we’ve covered in the investing realm on the podcast. Episode 072-076 back in fall 2018, we did an entire series on investing for this reason, so I would encourage you to check that out and certainly get more information that will help you with the rest of this decision as you’re looking at loan forgiveness and some of these situations. OK, from Stephanie, this question comes from Instagram: “Recommendations for personal loan lenders for the intention of consolidating credit card debt?” What are your thoughts on that one, Christina?

Christina Slavonik: Sure, well, congratulations, Stephanie, being one of the 2019 graduates. Like many graduates, I’m sure you’ve had your share of transitional expenses, such as the job moving, job search, budget changes. While we can’t generally recommend any specific lender, we do recommend starting with a current banking relationship as the best way to tackle that, including a credit union. They can normally give you pretty good rates. Try being careful. Some things to look out for when consolidating credit card debt is make sure that there may be a minimum that you have to consolidate. And sometimes you may not meet that minimum. So having to make sure you know that. Try not to take more than five years to pay off that loan just because the shorter we can keep that, the better. And know if there are going to be any origination fees or what those flat fees or any flat fees that are involved. Sometimes it’s a percentage of what you consolidate, sometimes there isn’t. And don’t — try not to use the credit cards once you consolidate. I know that’s one of the hardest things, but I’ve seen that happen time and time again. And I know the snowball method — now we’re venturing into Dave Ramsey territory, that’s one of the things he says — once you’re paying off those credit cards, try not to use them. You’re trying to get rid of that debt. So other items to consider, maybe a home equity line of credit is another way to approach that. And revisiting the budget. If you can avoid taking on a consolidation loan altogether, the extra steps are worth it and just finding ways that you can walk through your budget and maybe cut some extra expenses. I do want to give out a shout to Tom Eraz (?), he’s our accounting budgeting nerd at YFP Planning. And he’s helped many, many of our clients with questions just like this, what should I do in this situation? And he’s been very helpful with giving some suggestions.

Tim Ulbrich: To say Tom is a budgeting nerd is an understatement. I mean, he gets jacked up about budgeting.

Christina Slavonik: Yeah, I’ve never seen someone so excited about spreadsheets.

Tim Ulbrich: Yeah, I think he loves helping people in that area. Alright, time to get nerdy, and we’re going to talk about inverted yield curves. And I swear about a month ago, this was like the cool thing to talk about on NPR and the Wall Street Journal. Everybody was talking about inverted yield curves. So Amanda asks, “I’ve heard that given the inverted yield curve as well as many other factors that we may be entering a recession.” So the question is, “How can I best prepare? Should I be picking up lots of extra shifts at my second job to boost my emergency savings currently at three months? Or should I continue focusing on student loan debt? Thank you for your help.”

Christina Slavonik: Sure, Amanda. Yeah. And I know sometimes it’s hard not to listen to the talking heads and the people when they comment on inverted yield curves and what those indicators may mean. Typically, it may or may not say that a recession’s on the way. That’s just one of the indicators that we kind of look at. But again, it’s not something to hang your laurels on. There always will be recessions. I know we’ve had about 47 recessions in the U.S. history. Average one lasts about one and a half years, so just a little bit of feedback on that. The markets are cyclical, so what goes up will go down. That’s just part of the process. But just know that I believe you are already covering yourself the best way you can. Recession or not, it’s always great to be diversified, not just in your investments but also how you have your cash flow coming in to you. So even though you’re picking up those side hustles, working those second jobs, you’re not getting stuck in the 9-5, which is fantastic. Having a second side hustle or flow of income coming through and having that emergency fund already saved up at 3-6 months of emergency expenses for those non-discretionary items. These are great behaviors just to keep consistent during good and bad markets. So never really a bad idea to keep paying towards debt as it overall increases your net worth over time. And just be careful to keep reevaluating your lifestyle creep is a good exercise as well. So very good. Very good.

Tim Ulbrich: Yeah, I agree. When I saw this question, I mean, I think boosting emergency savings and paying down debt is good practice regardless of a pending recession or not. So I think it’s important to think about those foundational items. So Jeff asks, again, kind of along this idea of low interest rates, potentially a pending recession, “How should a prolonged period of extremely low or even negative interest rates be considered in your financial plan?”

Christina Slavonik: Sure, and one thing I like to think about first is where are you at in your life cycle? Are you approaching retirement? Are you a retiree who would have to look at those cash alternatives such as a bond ladder, which is where you can match cash flow with the demand for cash via multi-maturing layerings, and that’s a whole other topic. But yeah, mostly when dealing with young professionals, you’re generally saving for those long-term goals and objectives, so saving for retirement. And the period of a downside should really have little consequence with the long-term strategy, so I try not to get too wrapped up if you see prolonged periods of market drops. Generally, if you’re trying to borrow money, now would be a great time to do that, an extreme or low, negative interest rate environments. And capitalize on the securities and the equities, especially during the down times because you’re buying at a bargain. And so by the time the market does go back up again, you know you’re going to be well ahead if you had decided not to do that, instead take your investment ball and go home. So again, just really determining your objectives and having an investment allocation that matches that objective. Short-term goals, you may need to dial back a little bit, CDs, Money Market funds or whatnot. But yeah, just in general, I wouldn’t worry too much if you have a long-term strategy.

Tim Ulbrich: Yeah, I think that’s an important point: long-term strategy. And building off of the previous question with the inverted curve and looking at interest rates and other things, I think it is hard to take the noise out of it. I mean, I meant to keep them and I forgot to do so, but I’m still that guy who gets a newspaper delivered at home every day. And literally, you know, I was thinking back in December, January, it was like every day, it was the front page of one day the market was going up, the next it was going down.

Christina Slavonik: It’s always going on.

Tim Ulbrich: And the projections of why this was going on, and even though I’ve got a plan and I’m sticking to it, like it’s still hard to ignore the noise, and it starts to have that subconscious effect over time. But I think your point’s a good one here when we talk about negative low interest rates, really think about — the two areas that come to mind, especially for a lot of our community members, would be mortgage interest rates and whether it’s a new home or refinancing on a home, I think now is the time is probably to be looking at that if you haven’t done so in awhile. You know, when you look at a 30-year mortgage, a point on that loan can be really significant on a $300,000-400,000 house and looking at what would be your break-even on a refinance, and then also refinance on the student loans. We preach over and over again that refinancing student loans is not for everyone. So if you’re pursuing Public Service Loan Forgiveness, absolutely not. There’s certain provisions you want to consider and be looking for when you’re doing a refinance. But for those that the math makes sense and they’re really doing all of those things they need to be thinking about, you know, a point or two on your student loans obviously can be really significant. And as we see student loans still at 6, 7, 8% for many graduates, and we’re seeing refi rates continue to come down. I think it’s a good opportunity to look at those. OK, Kelsey asks, back into the student loan category, “Question about re-certifying my IBR income-based replacement income — income-based repayment income. I’m seeing that PAYE and RePAYE may be a better option for those that qualify. I’m due to re-certify for IBR this month. But would changing to PAYE or RePAYE affect anything in regards to qualifying for PSLF in the future? I’m five years in, and I don’t want to mess anything up. I’ve read the horror stories from those who’ve submitted for forgiveness, and they say not to change anything. But I’m hoping to make my payment a little lower this year if I can. Any thoughts, suggestions, or advice?”

Christina Slavonik: Yes. Three words: student loan analysis. This is one of those bigger picture things. So yeah, looking at the bigger picture, definitely changing from an IBR to a Pay As You Earn or RePAYE would not affect qualifying for the student loan forgiveness itself, but you would need to figure out which loans in particular would qualify and how to navigate that process. So that’s probably where people say if it’s not broke, don’t fix it. Stay where you’re at. So I wouldn’t want you to consolidate as that could restart the forgiveness clock all over again since you are five years in. I typically wouldn’t touch it unless you’re willing to do a little more digging and get that analysis done. As a side note, we did have a client that did go through the analysis, and she was in the IBR, went through the analysis program, and we did discover that she would be a good candidate to switch to the PAYE or RePAYE. And we were able to walk her through the steps. So in general, yes, the PAYE, RePAYE, can be more beneficial, meaning it can lower your payments, but it’s hard to say a firm yes or no without looking under the hood of the car, so to speak.

Tim Ulbrich: Yeah, and I think most of the horror stories that I’ve seen and heard and read about have been because of the consolidation piece that for many people, restarted the PSLF clock. Certainly, there’s been some qualified employer issues that have been out there. But I think if you really dig deep on this — and we talked about this in Episode 078 where we broke down is pursuing Public Service Loan Forgiveness a waste? And this really came out of the NPR story that was famous that we still have questions about. Every time we’re speaking, we’re quoting 99% of applicants that were denied. And really, when you dug into that a lot deeper, we talked about that on that episode, you know, many of those were incomplete applications, many people that weren’t in a qualifying repayment plan, and many people that ran into issues around consolidation or other things. And I think it’s important to reiterate here that this program, in terms of those that are actually qualified and eligible for forgiveness, is still relatively new. So 2007, this program was started, meaning 2017 was the first group that was up for forgiveness to take place. And I think the information that people have today and a lot of things we talk about in terms of what you need to be doing to cross your t’s, dot your i’s, is very different than the information that was available before. So I think our take is as we talk about many times when it comes to student loans, look at all your options, do the math, see how you feel about it, and make sure certainly if it’s PSLF that you’re doing all the details that you need to do to make sure you qualify. Alright, last question we have here, of course, somebody, we had to talk about the Dave Ramsey baby steps and the Dave Ramsey program. So Andrea asks — and it’s a good one — “Here’s my question. I’m starting the Dave Ramsey program at my church tonight. What are good points in his program” — so I’m pretty sure she’s referring to Financial Peace University — “that I should really focus on. Are there parts of the program that you disagree with or have a different opinion? I love his baby steps but not knowing exactly where to start.” So what are your thoughts on the Ramsey baby steps and the Ramsey plan?

Christina Slavonik: Yeah, and Andrea, I’m so excited. I love Dave Ramsey and what he has done in society in general just making people more aware on the forefront that you can get in control of your finances. And this is, I mean, a tremendous, huge first step, especially for those that have had no prior experience getting back to the baby steps, getting into the habit of saving and paying down debt, starting with that $1,000 emergency fund is a really key component to jumpstarting that. And I love the snowball method. That is one thing that we do preach on here is the debt rolldown and how to tackle that debt. We do focus more on the emergency fund part, you know, if you’re comfortable having a $1,000, that’s great. But we try to have at least three months, maybe $10,000 as a buffer, depending on what kind of income you have coming in just to forebode any huge, unexpected things coming your way. And then getting the match in your retirement plan, we think that’s a great thing. I know he preaches that. Getting basic term life insurance, we do recommend just getting basic. There’s no way you can beat that. And then working on what’s the next steps? I know he is a big component of paying down the mortgage. I guess that’s probably one of the places we may deviate a little bit from. And of course, you know, again, what keeps you up at night? It all comes back to that emotional factor. If you feel like paying down your mortgage as soon as possible is the best way to go, but most times, you can be earning a whole lot more putting that extra payments into the market or to another savings goal. You can, however, shave off 10-15 years off of a 30-year loan by just making an extra payment or two each year. So just trying to balance that out. He can be a little extreme in some of the methods he tackles, but again, it’s great. I have nothing bad to say about Dave Ramsey. And he’s really done a great service to many, many people.

Tim Ulbrich: Yeah, I’m not sure, as you know, I went through Financial Peace, Jess and I did, and it was a great experience for us and listened to his podcast for awhile. And I, like you, I think that it provides a great framework. But certainly, there’s nothing that evokes a greater emotional reaction than talking about Dave Ramsey’s baby steps, right? And I think what’s important to remember — and I actually had a chance to go visit Ramsey’s office when I was at the American Pharmacists Association in Nashville a couple years ago and quietly was able to talk to one of their team members who certainly was willing to open up and say, ‘Hey, the reality is Dave’s talking to 5+ million people every day, right? And so when you’re teaching that many people every day, there has to be a simple framework and model.’ And so he’s talking with people that have maybe an income of $20,000-30,000 but of course people that have incomes of $300,000 or more per year. And of course, their situations are going to be very different. But at the end of the day, it’s a stepwise approach, and I think you have to remember that it’s meant for that general audience. I think you also have to remember that it’s predicated on the fact that behavioral aspects related to your financial plan are really what’s going to get many people hung up. It’s not necessarily always the math, but it could be the behavioral piece. And for even the people here listening tonight, I think some people, that model and framework as is may be great to have the discipline, even if it means leaving some of the dollars, some of the math on the table. For other people, maybe that’s not an issue, and they’re going to really adjust, move things around, and create a plan of their own. So I think it very much depends on how much do you need that stepwise approach? How much does that model really resonate with you? And where are you at in the financial planning? Do you really feel like you need that motivation and reminder along the way? I, too, like you — and we talked about this Episode 068, we went back and forth a little bit on the pros and cons of the Dave Ramsey steps, and we hope to have him on the show someday, maybe doing that episode if he were to come on the show, I don’t know.

Christina Slavonik: That would be great.

Tim Ulbrich: But one of the things we talked about, of course, was employer retirement match, which is something that I disagree with him on that. For most people with few exceptions, I think we’re talking about free money. And I think the other thing that you mentioned, the mortgage. I think for some people, paying off the home really makes a whole lot of sense. I think for other people, depending on your interest rate, depending on what’s going on else in your plan, maybe not so much. I think some people are taking that home out 30 years at a low interest rate so they can free up money to do other types of investing, and they’re calculating risk appropriately. Other people maybe not so much. So again, it depends. And I think of course, the big variable and difference is that Dave’s audience is not on average facing $173,000 of student loan debt, right?

Christina Slavonik: Very good point.

Tim Ulbrich: So that’s a very unique factor. And when you think about his framework and model, baby steps, really paying off all debt before you build up a full emergency fund, I think we would agree that some of that needs to be happening in tandem because somebody may be in debt for 10+ years paying off student loans. So great stuff there, Christina. We actually had another question come in that I’m going to read. And just a reminder to those that are on live as well, if you have a question before we jump off, we’d love to answer it. Question relates to PSLF and picking up extra hours at a non-qualifying employer. So question is, “Can you work on the side at a retail pharmacy, which would be a for-profit, non-qualifying employer while enrolled and working with the Public Service Loan Forgiveness employer?” So imagine a situation here where somebody’s working full-time for a not-for-profit hospital, and then they’re picking up extra shifts at a for-profit. Is there extra penalty for making more money from the side retail job? Of course besides it having an impact on your Adjusted Gross Income and therefore, impacting your payments.

Christina Slavonik: Yeah, that’s a good question. And the answer is no. As long as you’re working at a 501c3, the forgiveness should still be OK. I mean, you have many people out there pursuing different side hustles and whatnot just to help make ends meet. And so yeah, the short answer would be no, it shouldn’t affect the PSLF. Is that what was the question?

Tim Ulbrich: That is. I think the other obvious component here if I’m understanding this correctly would be making more money of course would increase the AGI.

Christina Slavonik: It would.

Tim Ulbrich: Which would change the monthly payment, right?

Christina Slavonik: It could, definitely. Yeah. So that is one aspect of that.

Tim Ulbrich: Awesome. Well, Christina, thank you so much. We’re going to be doing this hopefully a lot more often in the future. And just a reminder to the community, shoot us your question that you have, we’d love to have it answered by Christina or Tim Baker, again, our Certified Financial Planners. You can shoot us an email at [email protected]. You can hit us up in the YFP Facebook group or on Instagram as well. And again, as I mentioned at the very beginning of the call, if you’re not already familiar, we offer fee-only comprehensive financial planning over at Your Financial Pharmacist. So you can learn more about that and working with Christina or Tim over at YFPPlanning.com. So Christina, thank you so much. And to everyone else, have a great rest of your night.

Christina Slavonik: Thank you so much, Tim.

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YFP 118: What Would You Do With an Extra $1,000 a Month?

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What Would You Do With an Extra $1,000 a Month?

On this week’s podcast episode, Tim Ulbrich takes you through an exercise to envision what you would do with an extra $1,000 a month and what steps you could take to make it a reality.

Summary

Tim Ulbrich flies solo on this week’s podcast episode to take you through an exercise to envision what you would you do with an extra $1,000 a month and what steps you would need to take to make it a reality.

The context behind this exercise comes from Andrew Yang, a 2020 Presidential Candidate. Yang proposes the Freedom Dividend, or Universal Basic Income, in which every U.S. citizen 18 years or older would receive $1,000 a month. Your Financial Pharmacist does not endorse Andrew Yang and does not want the focus of this episode to be about politics or the implementation of the Freedom Dividend, but instead encourages listeners to dive into the questions posed,

Tim begins by asking this question: What would you do with an extra $1,000 a month? The more you think about it or write your answers, the more that come to mind. Perhaps you’d put the money toward paying off debt or maybe you’d save it or donate it or invest it. Maybe you’d spread it over multiple competing priorities. Maybe you’d use the additional money to pay off your mortgage sooner. Tim shares several responses to this question from the YFP Facebook group in which he hears dreams, hope, peace of mind, and accelerated financial plans. In these responses, he also hears that some may feel that their goals, hopes and dreams are out of reach.

So, how can you change your financial position so that you have an extra $1,000 a month? Tim encourages a mindset shift from what if to how, from I hope so to how can I, from I wish to one step to make this happen is….

Tim explains that this fundamental mind shift may allow you to explore opportunities to bring in additional income that you may not have thought about before. He also suggests that the focus doesn’t have to be to gain $1,000 extra a month but instead aiming for $100 or $200. Refinancing your mortgage or student loans, taking on a side hustle, working extra shifts or moonlighting, trimming your spending, downsizing your home or selling a car you don’t really need, or asking for a raise are all potential avenues to help increase your income each month.

To close, Tim reshapes theses questions: 1) What will you do with an extra $1,000 a month and 2) When will it happen, what will it look like, and who will hold you accountable to get there? The team at YFP has created a lot of resources to help, including offering fee-only financial planning services with Tim Baker or Christina Slavonik, who are both Certified Financial Planners.

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 before we jump into today’s show, I’m excited to announce that we are going to be taking more of your questions on the podcast through a new segment we’re doing called Ask a YFP CFP. Yes, one of our CFPs, one of our Certified Financial Planners over at Your Financial Pharmacist, Tim Baker or Christina Slavonik, will be answering listener questions on a regular basis. So we’re ready for your questions. You can send them in by shooting us an email over at [email protected]. Again, that’s [email protected]. And in the subject line, you can write, “Ask a YFP CFP.” Please don’t be shy. Likely if you’re thinking of a question, I’m sure many others of our listeners are thinking the same.

OK, so for this week, I’m flying solo to talk about two questions, two questions that I’m encouraging every listener to consider. No. 1, what would you do with an extra $1,000 per month? And No. 2, what steps do you need to take to make this a reality? Again, No. 1, what would you do with an extra $1,000 per month? And No. 2, what steps do you need to take to make this a reality?

So let’s start with some important context for where this idea, where these two questions are coming from. And I’m going to intentionally be very brief here as I have no intent for this episode to have a political slant, but rather I want to use an idea that was recently presented by one of the presidential candidates to help spark a conversation. So I’m not, YFP is not, endorsing this presidential candidate or his ideas. So I would ask that you fight the urge to rebuke the idea and rather embrace the exercise. This is a conversation that is not necessarily about the implementation of this candidate’s ideas but rather using this idea as an exercise to dream a little bit, to think about what would it look like if you were to get out of the rut that often we find ourselves in month-to-month and take a step back and dream about the bigger picture and the goals that you have as it relates to your financial plan.

So who am I talking about? What am I talking about? After watching one of the recent presidential debates, there was 10 candidates who were up on stage. One of those candidates was Andrew Yang. And he has out there a proposed Freedom Dividend. And essentially, this is a form of universal basic income, and what he’s proposing is that it would provide all U.S. citizens over the age of 18 with $1,000 per month. So again, that’s called the Freedom Dividend, and it’s a form of universal basic income. And he’s proposing to provide all U.S. citizens over the age of 18 with $1,000 per month, regardless of income, regardless of current financial situations.

So when I heard this, it got me thinking about what would I do with an extra $1,000 per month? So again, regardless of politics and whether or not you agree with this concept of a Freedom Dividend, this is a fun exercise that I think we can walk through together. And for those that want to learn about this concept, we’ll make sure to link to some information in the show notes.

So first question here: What would you do if you had an extra $1,000 per month? So regardless of the source, whether it was the Freedom Dividend, whether it was a major slashing of taxes that were to happen — obviously, that would have to be pretty major — whether it was a significant raise, whether it was investing in real estate, whether it was maybe starting your own business or starting a side hustle, maybe it’s walking into an inheritance. Whatever may be the case, regardless of how this came to be, the question here is what would you do if you had an extra $1,000 per month? And I want you to take a moment and think about this question. Now, for those that are driving, I don’t want you to think too hard. But for those that are listening at home, I want you to write it down. Again, what would you do if you had an extra $1,000 per month? And I think this question is an interesting one. And the more you think about it, I think you’ll find that similar to me, the more ideas that will come to be, the more ideas that will come to mind, dreams will get bigger and the excitement starts brewing.

So would you put it towards one area? Maybe it’s paying off student loans. Maybe it’s paying off a credit card or paying down a mortgage early. Maybe it’s saving for a rainy day or giving or putting more towards investing. So would you put it towards one of those areas, or would you try to spread it out over multiple priorities that you’re working on? I think it’s important to get specific here as when we talk about the second question, which is how will this become a reality? Getting specific will then put you in the mindset to begin to think about what would it look like, what would it feel like if this were to become a reality?

Now, I want you to think about — and as I mentioned, I want you to think about and ultimately ask yourself, how would you feel and how would this accelerate or change your financial plan? So for example, if you were wanting to put this money towards making extra mortgage payments, let’s say you currently have 20 years left on your mortgage and you put an extra $1,000 per month, run a calculator. What would that look like? How would that change your payoff date? And again, how would that make you feel?

So I posed this question to the YFP Facebook community this past weekend. And in short, it really was incredible to see the responses that were out there. And the engagement from that post really told me something about the power of asking questions such as this one, which allows you to dream a little bit about your financial plan. And here’s some of the responses that came in from the group.

Tyson said, “I’d put the $1,000, I’d put a little bit of it towards debt, charity, and save. It would take away the living paycheck-to-paycheck of life.”

Katie says, “We’d pay off medical and student loan debt.”

Isaac says, “I’d use it to kickstart my own company.”
AJ says, “Student loans, helping parents retire, and charity.”

Joe says, “I’d use it to enroll in online education to pursue my dream of becoming an animator. I refuse to go through a traditional school and put myself into a crazy amount of debt.”

Jacob says, “It would lower the risk of financial ruin and allow my wife and I to pursue several business ideas as well as construction projects around the house.”
Debbie says, “10% to my church, 70% to my debt, and 20% to travel.”

Beth says, “To pay off debt, pre-pay bills, home repairs, vocal lessons for a child, dental, vision, and savings. Definitely spend each month in my community,” with a heart.

Hartley says, “The first thing I would do is get a better vehicle. We currently have a quickly falling apart truck he drives to work, and I walk. My work is closer to where we live. Next I’d begin paying off debts, get my credit in order. And third, I’d put opening our business finally into the works.”

Rebecca says, “I’d pay off my house a lot faster and become debt-free sooner.”

Tiffany says, “I’d pay off personal, medical, and student debt, get my son into some activities, buy new shoes I’ve been putting off, put money into new house savings, retirement, and my son’s savings. Probably actually go on a vacation once a year, not cringe when I pay $200 for my son’s inhaler. Lots of stuff.”

Jimmy says, “12,000 a year plus $12,000 for my wife=$24,000 a year straight to debt. We save enough for projects, funds, and travel outside of this, so $24,000 would be a nice chunk to battle all debt and still enjoy the quality of life.”

Joe says, “I’d create more jobs as this would allow me to take more risks with my ideas without threatening my family’s security.”

And Holly says, “I’d pay off my house within three years and then travel and put away more for retirement.”

Robert says, “I would invest it in real estate.”

And Denise says, “If I had $1,000 per month, I would get long-awaited treatment for my injuries I had to put on hold while helping three injured daughters with medical issues. They are nearly grown, and treatment would allow me to have longevity and start working on dreams I could not work on while raising six children into adulthood alone, working two and three jobs, putting myself through school with minimal child support. Yes, I would heal first, then get an e-commerce business more profitable to fund my philanthropic endeavors.” Wow.

Do you hear what I hear in these responses and in reading between the lines when we asked the question, what would you do with an extra $1,000 per month? I hear dreams. I hear a sense of hope and excitement. I sense peace of mind that $1,000 would take off the edge, help people get caught up, help accelerate a plan or help to invest in starting a business. I hear people getting out of the month-to-month mindset and rut that is so easy for all of us to get stuck in, myself included. I hear people that have intentional goals in mind, who have thought of this. But I also hear in a sense that some feel those goals, hopes and dreams are out of reach, that there’s no different path than the one currently being taken. That short of something like the Freedom Dividend, these goals aren’t going to become a reality, which takes us to our second question. The first being we discussed what would you do with an extra $1,000 per month? The second question is how can you change your financial position so that you have an extra $1,000 per month?

So now that we have a sense of what the goal is with an extra $1,000 per month, I would challenge you to shift the mindset from ‘what if’ to ‘how,’ from ‘I hope to’ to ‘how can I,’ from ‘I wish’ to ‘what’s one step I can take today to,’ from ‘I hope the Freedom Dividend comes’ to ‘I’ll figure out my own Freedom Dividend, and if it comes, it will be a bonus.’ There’s a fundamental mindset shift in those statements. One that is a sense of waiting, one that’s a sense of hoping and dreaming but also has a sense that it may not become real. The other being a sense of action, a mindset of making that dream a reality. So again, how can you get an extra $1,000 a month is the second question that we’re reflecting on. Of course, we aren’t necessarily talking about a clean $1,000 per month. Maybe it’s that, but this is one example. Maybe it’s starting with $100 or $200 a month and going from there. As John Ackhoff says, one of my favorite authors and he that wrote the book “Start,” you just have to start. So maybe it’s $100. Maybe it’s $200. Maybe it is $1,000 that’s going to make this become a reality.

So how can you get an extra $1,000 per month? I want you to think about that question, reflect on that question, and write it down. Maybe it’s refinancing your mortgage or your student loans. We’re in historically low interest rates, and maybe that’s an area you haven’t reevaluated. Perhaps you bought a home, let’s say a year and a half, two years ago, at an interest rate of 4.5%. You might be able to get that down lower to 3%. Maybe you have student loans that are at 6-8%, and if refinancing is a good fit for you, there may be significant savings there that can happen month-to-month. So maybe it’s refinancing your mortgage or student loans. Maybe it’s starting a side hustle or a business. Maybe it’s picking up extra shifts with your employer if that’s an option or even moonlighting at another institution. Maybe it’s trimming your spending, and these be small cuts here or there, cutting the cable or lawn service. Or maybe, maybe it’s a more dramatic move like downsizing the home, selling the car, offloading the boat. Maybe it’s asking for a raise besides accepting cost of living adjustments. Really evaluating what value do you bring to your employer and really asking for appropriate compensation for that if you feel like that’s warranted. Maybe it’s spending a little to earn more, such as investing in real estate. But rather than just one of those, likely it’s a combination of one or more of these factors or others that I didn’t even list in that short list. I hope it’s a combination of both growing the income, growing the top line and cutting expenses because I think that’s where the magic happens. While cutting is good, I think cutting without a mindset for growth can be a dead end. And I think that’s important to say again: Cutting has its place. Cutting is important, and it can be good and it can be necessary, but cutting without a mindset for growth can be a dead end, can have a ceiling to what you’re able to achieve.

As with almost anything in life, I think this comes down to finding a balance. Here, we’re looking for that balance between what would it mean, how would it feel, what would it look like for you to achieve this goal that we’re talking about of what you would be doing with an extra $1,000 per month and balancing that against what would you be giving up. For example, if $1,000 per month is what you’re going to put toward paying off the mortgage and that would change your payoff time from let’s say 25 years to 15 years, so you cut 10 years off and you decide that in order to make that a reality, you’re going to pick up extra shifts and cut expenses to grow the top line, cut expenses, the question is, is it worth it? Is that extra time invested, that extra money earned and what comes potentially with a sacrifice of time, is it worth it to cut 10 years off your mortgage? And I think the answer is it depends. It depends on how much you value your time, how important it is to pay off the home early, and how much you enjoy the things that you’d be giving up. There’s no right answer here.

So let me wrap up our time together by reshaping the questions we started with and then letting you know how we, the YFP team and the YFP community, are here to help. So remember, we started with the question, what would you do with an extra $1,000 per month? And we followed that up with how can you change your financial position so that you’d have an extra $1,000 per month? So instead of what would you do with an extra $1,000 per month, I would encourage you to shift that to what will you do with an extra $1,000 per month? One implies a hope, a wish, a dream that may or may not become a reality. The second is a different mindset of a plan of making that come to be. And second, not just how you can change your financial position, but when will that happen? What will it look like? And who will be keeping you accountable in that process?

So in terms of YFP, how are we here to help as a team and as a community at large? First, we’re here to support you through a host of resources that we have on our website, everything from free guides, calculators, extensive blog posts on a variety of topics, your weekly podcasts such as the one that you’re listening to here right now. Our mission at YFP, you’ve heard us say it before, is to help you as the pharmacy professional on your path towards financial freedom. And we talk about that term financial freedom all the time. And for each person, I think that can mean something very different, something unique, and I’m hopeful that through this exercise today, you’re one step closer to determining what financial freedom means to you. Second, we can help you through our Facebook group, which is now more than 4,000 pharmacy professionals that are committed to helping one another on this journey towards financial freedom. This community is there to help, whether it’s to answer a question that you have or to give you a place to share a win or keep you accountable on your own journey. So if you’re not already part of the community, I hope you will join us over at the Your Financial Pharmacist Facebook group. And third, we at Your Financial Pharmacist offer fee-only comprehensive financial planning that is customized to the pharmacy professional. So whether you want to pay off your student loans, whether you want to make the right investment decisions, or you simply want to build a solid financial plan, our certified financial planners Tim Baker and Christina Slavonik are here to help you get your income working for you. And you can learn more about that at YFPPlanning.com. Again, that’s YFPPlanning.com.

So as we wrap up this week’s episode of the Your Financial Pharmacist podcast, we need your help in spreading the news about the revolution that is happening among pharmacy professionals that are committed to taking control of their financial future. And you can help us with this by helping others find our show that we release each and every week. And you can do that by leaving a rating and review in Apple Podcasts or wherever you listen to your podcasts. As always, thank you so much for joining us, and we look forward to having you join us again next week. Have a great rest of your week.

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YFP 117: Three Bold Predictions for the Future of Pharmacy

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Three Bold Predictions for the Future of Pharmacy

Blair Thielemier, PharmD, founder of BT Pharmacy Consulting and creator of the Pharmapreneur Academy, joins Tim Ulbrich on this week’s podcast episode. Blair shares about how she unexpectedly lost her full-time job as a clinical hospital pharmacist when she was 6 months pregnant, how she dove into entrepreneurship with MTM consulting, and her three bold predictions for the future of pharmacy practice.

About Today’s Guest

After graduating with her Doctor of Pharmacy from the University of Arkansas for the Medical Sciences in 2011, Blair unexpectedly lost her full-time income as a clinical hospital pharmacist in 2014. She was asked to serve as an independent Medication Therapy Management Consultant Pharmacist, a niche position that was entirely new to her at the time but would be instrumental to her future success and entrepreneurial journey. For the past three years, Blair has been focusing on elevating the profession of pharmacy through advanced clinical services. In 2015, she founded a pharmacy consulting business BT Pharmacy Consulting, LLC and currently trains and coaches other pharmacists looking to start their own consulting businesses through an online e-course and membership site at the PharmapreneurAcademy.com. In April 2017, she launched the first online pharmacy conference in the industry. In 2018, based on the success of the first summit, she hosted a five day encore event in partnership with the National Community Pharmacists Association’s Innovation Center. The Elevate Pharmacy Virtual Summit featured pharmacists of various backgrounds practicing pharmacy at the peak of the profession. She is also the author of the Amazon bestselling book How to Build a Pharmacy Consulting Business.

Summary

Blair Thielemier, founder of BT Pharmacy Consulting and the creator of the Pharmapreneur Academy, joins Tim Ulbrich to discuss her three bold predictions for the future of pharmacy practice.

First, Blair shares how she lost her full-time job as a clinical hospital pharmacist in 2014 when she was 6 months pregnant. She describes that she felt disillusioned when she was working as a clinical pharmacist; she didn’t love her job but was terrified to lose it. Now that she had, she didn’t know where to turn. She started working with independent community pharmacists and fell in love with doing MTM. In 2015, she built BT Pharmacy Consulting, a MTM consulting business that works with independent community pharmacies that are doing MTM programs and helping get clinical programs set up. Blair enjoyed it and wanted to grow the business.

Blair says that pharmacists are experiencing a “career climate change” and sees that the job market is shrinking or is becoming saturated, there are more graduates coming into the workforce, older pharmacists are being pushed out due to ageism or because of their high salaries, and new graduates are forced to take lower paying jobs because they have no choice. She explains that pharmacy is currently a product centric business which is a commodity. She says that what isn’t a commodity is the drug knowledge and skills that pharmacists have. Blair explains that pharmacy needs to shift to a service centric system and has to be rebranded. The questions pharmacists need to ask themselves are, “How can we add value? What do patients want? How can I leverage what I know and create programs people want?”

Blair then dives into her three bold predictions for the future of pharmacy. Her first prediction is that dispensing of medication and the distribution process have a high likelihood of becoming automated. She says that instead of fighting this, new revenue streams need to be added like services. She also explains that pharmacists can shift away from dispensing medications and that there are opportunities in preventative medicine.

Her second prediction is a shift to an appointment based model. Blair shares that innovative community pharmacists are already doing this, but her vision is that pharmacists can help counsel on health, wellness and prevention.

Blair’s third prediction is that pharmacists will be embedded in every primary care setting. She explains that primary care physicians have issues with medication related quality metrics that pharmacists can help with, such as medicine reconciliation, pharmacogenetic tests, and creating aligned programs.

Blair then discusses her Business Blueprint in the Pharmapreneur Academy that teaches the places pharmacy entrepreneurs can make the biggest impact, identify pain points and learn how to start conversations. There are modules for narrowing opportunities for pharmacists to three pathways: physician/office, pharmacy/clinical and patient pay.

Mentioned on the Show

Mentioned on the Show

Tim Ulbrich: Hey, what’s up, everybody? And welcome, as I have a special guest with me today, Dr. Blair Thielemier, who you may have heard from before on the podcast, episodes 039 and 089. We’re going to have her share some of her story for those of you that may not be familiar with her work. But we’re also going to spend most of our time talking about her bold predictions for the future of pharmacy practice. Obviously, a timely topic as we’ll outline here in a few moments. She’s got some great ideas about where we’re heading as a profession into the future, so much so that she was hosting a webinar recently on this topic and as we’ve found out, it’s not just Ralph that breaks the Internet, it’s also Dr. Blair Thielemier that breaks the Internet. So Blair, how are you doing?

Blair Thielemier: Doing well, yes. That was a blessing and a curse, I guess.

Tim Ulbrich: It was the first thing I thought of when you sent out some of those messages about, we had over 1,100 people register and we literally broke the Internet. My boys love “Ralph Breaks the Internet” movie, but certainly obviously I think that shows the importance of this topic, and it’s something that we need to continue having a conversation about as a profession in terms of what are some of the challenges that we’re facing as a profession but also what is some of the innovation that’s happening in the profession? With any challenge comes opportunity for innovation, for entrepreneurship, and I think certainly this is the case for us here in 2019, and so we’re going to talk about your bold predictions and then also what people can begin to do to think about how they can put themselves on the path towards being a part of that innovation. So why don’t we start, again, you’ve been on the podcast before, episodes 039 and 089, so we’ve talked a little bit about your journey, the Pharmapreneur Academy, but some listening may not know that story in terms of how you got started in pharmacy but then also how you jumped into starting your own consulting firm and then the academy. So why don’t you take us through some of that.

Blair Thielemier: Yeah, so I was one of those people — we’ve been hearing about Walmart cuts, we’ve been hearing about Walgreens closing — I was one of those people that my position was eliminated. And this happened back in 2014, so this was awhile ago. I was about six months pregnant with my daughter at the time, and I got the news: “Mrs. Thielemier, we regret to inform you that your position is being eliminated. All your benefits are being removed, and you’re cut back to peer in status.” So you know, at that time, being six months pregnant, I was like, “Oh my goodness, what am I going to do?” And I was really disillusioned. It was like one of those things that I talked about on the call last night was as much as I didn’t really love my job and what I was doing, I was still terrified of losing it. And I think a lot of us can relate to that too. It’s like even if you’re lucky enough to have a position right now, you may not be feeling fulfilled, you may not be 100% satisfied. But then also you’re scared of what’s on the other side of that. So I was forced into entrepreneurship. I didn’t go willingly. What happened afterwards, though, it definitely changed my life because I started working with these independent community pharmacies and then in 2015, I built this MTM consulting business where I was going out, working with independent community pharmacies, doing their MTM programs and helping them get set up with clinical programs. I enjoyed that so much that I said, “This is going to be something I want to do. I want to grow this business. How do I do that?” And that’s where this really led me to this billable pharmacist services. What are the opportunities that we have for building innovative programs leveraging our existing clinical skills, so that really led me to MTM consulting and eventually billable pharmacy services in the ambulatory care setting as well.

Tim Ulbrich: And so we’ll talk later on about your academy as I certainly think that’s a great example of a community that is really being innovative in their approach and that you’re really fostering that innovation and sharing of ideas as people I would say kind of moving this next evolution of our profession. And while you were kind of forced into it, I think there’s many that are listening right now or certainly I’m sure many that were on your webinar as well that are finding themselves maybe in a position of I haven’t had my hours cut, I haven’t lost my job, but I feel this itch — right? I mean, it’s called the entrepreneurial itch — I feel this itch to do something different or to supplement what I’m doing or I really see this problem that could be solved, and I really feel like I have a solution, but I don’t necessarily know where to start. I don’t know what it looks like and I’m scared and all of those questions that come from that. And we’ll talk about those here in a few minutes. One of the things I love — and I’ve shared this with you before, I’ve shared with others, and I have a lot of respect for the work that you’re doing — is I think there’s so much negativity right now in the profession. And what I love about your approach is that I think you are honest with what the data says. I mean, if we look at the data around the market and in terms of where we’re at with jobs and the reality of some positions getting cut and others losing hours, I mean, those are facts, right? And we’re certainly seeing new graduates that are struggling in some areas, but with you, the conversation doesn’t stop there. And that’s what I’m excited about here today is that it’s about, OK, so what are we going to do about it? How can you as a pharmacist potentially reinvent yourself, re-pioneer the work that you’re doing, what’s the skill set that you’ve been given, what are the opportunities that area head? And as you and I both know, when it comes to any great movement, idea, or business, it always comes down to solving a problem and in finding a solution and a solution that is one that people care about. And I think as we look at some of the challenges we’re facing today in terms of the dispensing process and automation and PBMs and all these things, two ways of looking at that. One is certainly it presents a problem; the other is there’s great opportunity for innovation. So what do you make of the climate today? I mean, just to rattle off some of the facts that come to mind, we think about some of the announcements we’ve heard around Walgreens, around Walmart, Kroger and Harris Teeter cutting hours. I was recently reading the AACP Graduating Student Survey where about 22% of graduates said they strongly disagreed or disagreed with the statement that they would reenter pharmacy school if that were to be their choice all over again. We know the average student loan debt is $173,000. So it’s easy to look at all that and say, “Wow, we’re dealing with a lot.” I mean, what do you make of that data and also the opportunities that we have going forward?

Blair Thielemier: So I call this career climate change, and I think it’s occurring right now for several different reasons. I think Tim Baker said on the recent Your Financial Pharmacist podcast that pharmacy’s really right-sizing right now. So what I’m seeing is the job market shrinking or at least becoming saturated, more and more people graduating, older pharmacists being pushed out of their positions due to ageism or just too high salaries and then new graduates who are graduating being forced to take these lower paying positions because they don’t have a choice. They’re drowning in debt. $175,000 in student loans is absolutely insane. And so there’s not a lot of other options. So what I see in pharmacy having this kind of product-centric business model is it’s a commodity, right? What isn’t a commodity is our drug knowledge, is our medication management knowledge, our pharmacokinetics and pharmacology and biochemistry. How can we leverage and take what we already know and already understand, how we’re trained so differently from any other healthcare provider, and create programs that people actually want? You know, I think that pharmacists, we don’t articulate our value very well.

Tim Ulbrich: Yes.

Blair Thielemier: And a lot of times, it’s like, well I’m the medication expert. Well how does that really help anyone else, you know? That almost makes it sound like you’re the most important person in this scenario when really, it should be the person in front of you, so whoever you’re wanting to help and wanting to buy this service. And so that’s really what I’ve tried to shift the idea and rebrand pharmacy as like how can we actually add value? What are the quality metrics that physicians in primary care are being graded on now in the new pay-for-performance model? What are things that payers want in terms of preventative services for patients? What are things that patients want? You know, anti-aging and help with nutrition and weight management. So shifting this idea of like people are going to come to the pharmacy when they’re at their very most sick to what can we actually do before those people get to that point and what are some programs we can create that will help them that are innovative, that are entrepreneurial? Because my great-grandfather was a pharmacist in Chicago in the 1940s, and I think that kind of getting back to our roots, the drugists back then, they were entrepreneurs. Like they had to market and sell their services. They built the industry mostly on independent community pharmacies. So this whole idea of a chain pharmacy is a relatively new concept, but as we’re seeing kind of the job market right-size, as Tim said, what are other opportunities and what are other avenues that we can still take our drug knowledge, take our clinical skills, and apply them to things that people actually want, programs that people want to buy?

Tim Ulbrich: Yeah, and as you mentioned, I think that’s a stark difference. Even though it goes back all the way to the roots, it’s a stark difference for how many of us were trained. And we’re seeing an evolution that’s happening in PharmD education to have more of those entrepreneurial types of training and skill set. You know, I firmly believe that every graduate today needs to come out ready and prepared to know how to justify a position that they’re in, which means aligning yourself with quality metrics, which means communicating value, which means making yourself an integral member of the team, all the things. But if we think back to our PharmD training, that wasn’t what we were doing, right? I mean, we packed knowledge into our brain. And I know for me, graduating in 2008, we were walking out into a market that was basically, you as the graduate were calling your shots. So whether we can consciously or subconsciously admit it, I think there very much was a climate that I was a part of and others where you didn’t necessarily have to figure out how to justify and learn some of those skills. And I think we certainly are seeing a shift of that, and it reminds me — I don’t know if you’ve read the book, “End of Jobs,” but I recently read it. And it talks about how to your point about a commodity and kind of shifting from where we are to where we are today, he talks about this concept that here we are today, really in an age of entrepreneurship. And I really believe that the term ‘entrepreneurship’ I think for many pharmacists makes them feel very overwhelmed, you start to think about the Mark Zuckerbergs, the Elon Musks of the world, maybe one that hits a little bit home for us, the TJ Packers of the world, some that it’s unattainable, I have to start my own business. But it’s really about the entrepreneurial mindset, whether you’re starting your own thing or you’re working for a big-box pharmacy, that’s the skill set, as he articulates in that book, that’s the skill set that today’s graduate needs. And I think a lot of the work that you’re doing and we’ll talk about here at the end as well the Academy members I think is really starting to address that mindset and skill set. So let’s jump into your bold predictions. So three bold predictions for the future of pharmacy. And No. 1 here is we’re talking about this concept of the dispensing of medications and the distribution process and the likelihood of much of that becoming automated in the future. So tell me more about your prediction here.

Blair Thielemier: Right, you talked about my boy. That’s Elon Musk. So I am a big fan. I mean, I love everything he does.

Tim Ulbrich: So he sent a Tesla into space. What do you got? Are you going to send something pharmacy-related into space then or what?

Blair Thielemier: That’s a good idea. I mean, I did bury a time capsule of these three predictions, so maybe I should shoot one into space as well. But yeah, this is my time capsule of these three predictions. If you saw that silly Facebook video of me, I ran ads too, I was burying this time capsule in my backyard with my three predictions for the future of pharmacy. So yeah, the first one was definitely that dispensing, the process, a lot of it can be automated. So you mentioned we’re seeing the tech model and technician verification. We’re only a few steps removed of that even being remote verification and things like that. So my thing is instead of fighting this, instead of saying, “No, we are hanging onto dispensing, we’re hanging onto our current product-centric business model,” looking at, OK, let’s just say what would happen if we let that go and free up time for other types of services? So what I’m suggesting is shifting or at least adding a new revenue stream so it’s not just dispensing services only is the only way that pharmacies make money. So dispensing plus services to make money. And so that’s what I mean by shifting from the product-centric to a service-centric business model.

Tim Ulbrich: So one of the things — to play devil’s advocate to that, you know, I think of the recent workforce survey. I think it’s 44-45% of all practitioners are in the community setting and most of them in a traditional chain setting, maybe a smaller portion in an independent setting, so when you think about that much of the workforce — and certainly, as you mentioned, we’re seeing some right-sizing correction of that potentially, and then you think about what’s happening with Amazon’s acquisition of PillPack, the challenges we’re having with PBM pricing and transparency and a lot of medications being dispensed in terms of under-reimbursement of what it costs them to do that, so the sustained ability of that business model I think is very much in question. So one of the counterarguments, which I think is great that we’re having this discussion here is so what is the timeline of this? You know, my wife and I have this conversation all the time that her and I order pretty much anything we can first on Amazon. So I’ll be the first to admit that I am probably, my kids, me, are probably not walking through the doors of a pharmacy to get my medication unless that looks different in some way, shape, or form, which I think is kind of what you’re getting to in terms of some of the clinical services and add-on things to the dispensing process. But how far away do you think are we from that? And then what does that mean for 44% of the workforce?

Blair Thielemier: So that’s a great question. And you know, I think what we’re seeing too is this shift away from the dispensing model. I mean, we’re talking maybe in the near future the possibility of 3D printing medications in your own home. So if that is a possibility and the Walgreens are going away or at least moving into more like a mail-order type of model, what can we do in the community, in the local community setting to add value to patients? I mean, people aren’t getting less sick. People aren’t taking less medications.

Tim Ulbrich: That’s right.

Blair Thielemier: There’s opportunities in preventative services as well. I think that the interest is growing in things like nutrition and functional medicine, and those are things that are not easily scalable. I mean, Amazon’s not going to figure out how to help you with a personalized DNA recommendation or pharmacogenomic report anytime soon. So where I see pharmacy is having this opportunity to shift and create new revenue streams and also create new jobs is going back to this less scalable model, which is helping patients more one-on-one.

Tim Ulbrich: Yeah, and I think it’s your second bold prediction around really the evolution from a product-centric service to a clinical service and more specifically, appointment-based model. So tell us more there about what you’re envisioning for the future. And I find it interesting you say less scalable because I would agree at a surface level from dispensing, but from an impact level, especially if you think of value-based contracts and where things are going, that’s where I really feel like you start to make true inroads into being a valuable member of the team that sticks. So tell us about the appointment-based evolution model and what you see there in the future.

Blair Thielemier: So I think that innovative community pharmacies are already this to a point. So looking at, like I mentioned, things like functional medicine, helping counsel people on health and wellness and adding these preventative type services. The biggest thing I hear people say about cash-based services is my patients won’t pay for that. And what I think is interesting about this is from a community and population health standpoint is the same patients that are coming into your pharmacy that are on six or more medications with two or more chronic diseases aren’t exactly the same people that are going to be enrolling in your weight management and your anti-aging functional medicine or BHRT programs. So we’re actually talking about a new customer, a new patient, that you can attract and bring into your pharmacy world. So there’s a time and a place for MTMs, for Medicare beneficiaries, but for the most part when we’re talking about preventative type services, especially cash-based services, I’m talking more the younger patient, catching them 15-20 years before they develop these chronic conditions.

Tim Ulbrich: You know, what I like about that idea and that thought is when you think of market share, you’re now talking about expanding the market of people who would traditionally walk in the doors of a pharmacy, right?

Blair Thielemier: Exactly.

Tim Ulbrich: We’re talking about not just sick care, but the other side of that spectrum. And I think we would all agree, we’re trained to be ready to help in that area in terms of prevention. And we can’t forget the assets and the strengths that we have. You know, I think it’s easy to stop the conversation at the distribution side, but one of the arguments for the brick-and-mortar pharmacy is obviously accessibility, you hear that over and over and over again how accessible pharmacies, how accessible pharmacists are in both hours, in terms of location. So I think there’s certainly the assets that are there and then also back to your point about what is and is not a commodity, I think that’s an excellent discussion for us to brainstorm and think of further because as you think about logistics companies and people like Amazon and PillPack and others, they’re looking at scalability and automation of processes, right?

Blair Thielemier: Right.

Tim Ulbrich: So what is currently happening that is valued by payers that can’t be replaced by that, and how can we grow and scale that and align that with value-based contracts and other things? And as I mentioned to you before we jumped on, we’re working on implementing a new community-based pharmacy course for our Masters students here at Ohio State, and while we tend to lump together community-based practice, I think we’re really doing a disservice when we often do that. I mean, the spectrum of innovation that is happening in community-based practice is really unbelievable and I think we tend to start and stop the conversation around big-box pharmacies and dispensing lots of medications, but there’s really a lot of innovation, as you mentioned, in the community space. And we can’t forget, even though we’re seeing great innovation in the hospital inpatient setting — what is it, 99.9%, whatever percent of time people are spending out in their community at home, whether that’s in their community, at their place of worship, but that’s where they are. So we can meet them there and provide services. No. 3 here, which I think is a really bold vision around where we’re going to see pharmacy going, has to do with pharmacists being positioned and placed in primary care settings. So tell us here what you see for the vision.

Blair Thielemier: So you know, I said on last night’s webinar really, if we’re looking at pharmacy practice in September 2029, my vision is to have an embedded clinical pharmacist in every single primary care practice. So a few things that I have to work with is primary care is — they are having issues with medication-related quality metrics that pharmacists can help with. From a quality care coordinator standpoint, they are having to do medication reconciliations. They now have access to these pharmacogenomic tests with not really sure how to use them, how to integrate them into their practice. So they’re getting more and more data and more and more information, but being able to put it together and create a program that aligns with the quality metrics, that aligns with what the payers want to see as well in the new pay-for-performance thing, they don’t have a member on their team that can do that. And I think that’s where the pharmacist can really come in and a lot of value. So a lot of times, pharmacists in the hospital settings will be on the team that’s making sure that we’re meeting the quality metrics on the hospital team. So did the patient get an antibiotic started within two hours of admission with a diagnosis of pneumonia? That’s one of those things. Or on metoprolol after a STEMI. So looking at pharmacy from a quality standpoint, it’s like how can we add value for payers and physicians’ offices by focusing on quality? That’s where I think we can make the biggest impact. And so I always share that my mom is actually a nurse practitioner, works with a clinic, like an FQHC, and she goes to a lot of primary care conferences. And one of the ones she went to last year in D.C., she came back and she said, “Everyone is talking about pharmacists and speech therapists in primary care.” And so that just made me feel good. It’s like oh, well, I can get behind that.

Tim Ulbrich: Absolutely.

Blair Thielemier: And someone said recently that there was a Florida pharmacists meeting. They actually sent a representative from the American Medical Association to the pharmacists meeting, saying, “Hey, guys, we want more pharmacists trained up to work in primary care, to work with physicians. Let’s try to figure out how we can make this really happen.” And so that’s exactly what we’re doing in the Academy is building business models around preventative services in community pharmacy, in building business models around consulting programs in primary care.

Tim Ulbrich: And I think if you think of that vision of having a pharmacist in every primary care provider across the country, and as I’m sure you’re also aware, the incoming AACP president mentioned a similar vision for the future, and when I think about impact and where things are going from a pay-for-performance and where you have a pharmacist positioned to be able to impact those quality metrics and how they’re intervening in a way that is post-diagnosis but before a patient shows up at the pharmacy, right, where you’re often kind of working back issues and challenges, so I think there’s a huge role there and where we think about, again, pay-for-performance contracts. And I think scalability, you think about OK, the infrastructure is there, there’s opportunity there across the country, but just as quick as you can begin to think and brainstorm, the objections start coming out and people shoot down that idea, right? So how do we scale this when we have NPs and PAs that are a cheaper resource and their enrollment is increasing, they have billing privileges and so forth. How do we scale this when every state has different regulations and requirements around collaborative practice agreements? And the list goes on and on, right? And I think that what we’re doing here is beginning a conversation to say, well, that’s obviously not going to happen tomorrow, but there’s some best practices in cases that are happening, that you build momentum, just like any other model. You know, I think about I’m sure the history of NPs in clinics and how they evolved to be commonplace and depended upon. I’m sure a similar conversation was happening 15, 20, 25 years ago with similar objections. So what do you say to some of those objections that people may point at and say, “It’s not realistic, Blair. It’s not going to happen.”

Blair Thielemier: Oh yeah. I mean, I’ll state all the objections for them. We’re too expensive, we’re not providers until federal Medicare, physicians won’t want to work with me because we’re challenging their turf, they don’t want to see pharmacists add these clinical services or get prescriptive authority or whatever. For every objection, there are pharmacists working in primary care centers right now, and there are physicians saying, “This is helpful to me. It’s helping me be more productive, it’s helping me be more profitable. It was not what maybe I thought it was like in the beginning before we started this pilot program, but now I just want to keep adding to this pharmacist. Like we’re looking for more pharmacists to join the team now.” So that’s what really keeps me going is yes, there are absolutely challenges. There’s state scope of practice challenges, there are federal challenges around billing for pharmacist services in primary care. But for those challenges, we’re still seeing pharmacists doing it, and we’re still seeing them getting great results and having a lot of positive feedback from providers. And part of that I think is having the confidence and being able to go out and pitch your services. And that’s what I’ve really built with this new course in the Pharmapreneur Academy. It’s called “The Pharmapreneur’s Business Blueprint,” and what it does is it teaches you the places you can make the biggest impact, but it also helps you to identify those pain points. It’s like, yes, there’s these challenges here. What are some ideas for overcoming them? And how to start these conversations. So a lot of pharmacists say, “Oh man, I’d love to reach out to my local physician and see if we can collaborate on something, but I just don’t know what to say.” I’m like, “Well, you never know if you don’t ask.” So we’ve got literally scripts for cold calling, like calling up the practice and saying, “Hey, can you meet for a lunch? Or I’ll bring donuts one day and we can have a conversation about this.” So the way that I like to talk about it — because like you mentioned, there’s so many different innovative opportunities — is narrowing them down to the three paths. And we call these the three pharmapreneurial paths. So the first path is the physician’s office path, and in the course, say you’ve chosen to do the physician’s office path, you’ll only go through that module track for the physician’s office path. And it helps you put blinders on. It’s like, yes, there’s a lot of opportunities in functional medicine and cash-based stuff, but I’m on the physician’s office path.

Tim Ulbrich: Which is so important when you’re getting started in anything, right?

Blair Thielemier: It really is.

Tim Ulbrich: Because it’s very easy to go in any direction.

Blair Thielemier: And then your second is like the pharmacy clinical service path. If you’re an independent pharmacy owner and you’re looking at how can we add services here in the pharmacy. And then the third would be the patient pay path. So it’s really kind of like a choose-your-own-adventure of like put your blinders on, just take the first steps to call your potential leads. We have like a framework that we use for customer development interviews that walks them through the four A’s of selling your services so that you can feel like you’re selling and able to articulate your value with confidence, and it doesn’t feel sleazy selling like sales pitch-y.

Tim Ulbrich: And I’ll mention this link again at the very end before we wrap up, but if you go to YourFinancialPharmacist.com/academy, YourFinancialPharmacist.com/academy, that will take you over to learn more about the Pharampreneur Academy, and you can also get $50 off your first month of membership. So again, YourFinancialPharmacist.com/academy. So Blair, I’m thinking of — back to earlier in our conversation, we had mentioned a lot of things we feel like we don’t traditionally get in a pharmacy education, and it feels to me a lot of what we’re talking about here in terms of marketing and selling and justifying and aligning with quality metrics and communicating and practice management and business infrastructure. And I know you just recently went through a renovation — or not a renovation, but an evolution of your course. Talk us more through why you did that, what were you seeing, and the need for some of the additional content that you added.

Blair Thielemier: So whenever I was first building the course, it was all about information around billable pharmacist services. There’s no clinical anything in the Pharmapreneur Academy. It’s focused solely on business models. And what I was building in the beginning is what pharmacists were saying they needed, which was information on CPT codes and diagnosis codes and note templates for the EHR, for documentation, things like that. So over the past four years, I had created that stuff, and then I realized pharmacists were getting stuck in the overwhelm. They were getting stuck in that how do I put blinders on and focus? I want to do all these things at once. So I went back, and what I’ve created in the beginners’ blueprint is this model, this framework that you can go through, and it helps to lead you to the right decision for your business. So I said last night, a lot of people start their business with a logo and a business card.

Tim Ulbrich: I’ve talked about that before, yes.

Blair Thielemier: I am so against business cards. No. I’m not against them, but I think that that’s not the first step. That’s not even like in the first 10 steps of building their business.

Tim Ulbrich: No. Yep, agreed.

Blair Thielemier: So it’s really about identifying which path you’re on, which is essentially identifying your target market or your ideal customer avatar if you’re familiar with that language. So what we do in the beginning is walking through those. We talk about essentials of each paths and timelines because the timeline for starting a program in a community pharmacy setting is much shorter, actually, than starting a program in a physician’s office or really getting momentum in a cash-based service. So looking at timelines, if you need to add a revenue stream like yesterday, it might not be a good idea to try to build a functional medicine cash-based business if you don’t have 6-12 months to build up your clientele. So it helps you avoid these common missteps.

Tim Ulbrich: Yeah, and I think as you and I have talked about many times before, I think when somebody’s excited about a business idea, whether that’s a side hustle or they’re going to jump ship and do something different or work two jobs, whatever, there tends to be the falling back on well, I need to get my corporation set up, and I need my business card, I need my website. And I think sometimes you just have to start, taking one step towards developing the framework, the solution to the problem that you’re working on. It may mean seeing a patient without having a full process fleshed out. There’s so much to learn as you go through that process that will inform what ultimately the business will look like in the future. So who are you seeing that’s coming to the Academy and contributing to the group? Is it people that are looking to start a side hustle? Is it people that are already in their own business and kind of spinning their wheels? Those that are looking to jump to start their own business? What’s the variety of folks so those that are listening might have a better idea of who is a good fit for the Academy and what you’re working on?

Blair Thielemier: Yeah, that’s a great question because what we have tried to create is this kind of peer-led conversation around here’s the opportunities that are out there — and I encourage the Academy members to introduce themselves, to talk about the opportunities that they have in mind. So you know, the most recent post that I responded to this morning was two different pharmacists who had said that they felt like their biggest opportunity was to collaborate with local physicians offices, that they’d actually been approached by local physicians offices about these types of services but just didn’t really know how to implement them and how to put these programs together. So mostly, I would say it’s independent pharmacists who are looking to build these types of practices, whether it’s reaching out to a local private practice physician to go to work in their office or it’s partnering with a local chiropractor to offer nutrition or pharmacogenomic testing in their office. Generally, it’s the individual person. We do have some independent pharmacy owners in there as well who’s looking at OK, I’ve got this pharmacy, but now we are wanting to reach out to physicians and collaborate or offer like point-of-care testing services or tobacco cessation programs or whatever. And they’re looking at how also do I train my staff members to be able to sell these services and offer these services so that I’m not the only person that’s doing them? So we’re seeing a lot of owners also use it to train their staff members as well in these opportunities for these clinical programs. So I’m excited about that too.

Tim Ulbrich: So last question I have for you is September 2029, so we’re going to have hopefully a similar conversation. I don’t know if Facebook Live will be a thing or not, whether we’ll be doing podcasting or whatever.

Blair Thielemier: It will be holographs or something or holograms like on our watches.

Tim Ulbrich: Who knows at that time? What will we be talking about? I mean, do you think that we as a profession are going to face the next 10 years with confidence and really reinvent ourselves and in some way, redefine the role? Or do you think we’re going to see a significant shaping the other way and kind of an evolution towards maybe even further separation of the profession in terms of what an inpatient pharmacist role looks like and a pharmacist who’s in an ambulatory setting? What do you see happening even beyond that 10-year mark?

Blair Thielemier: So really interesting. Someone commented, it was in the Pharmacist Moms Facebook group, and I was talking about this subject and switching from this product-focused business model. And she had mentioned that the banking industry went through similar changes back in the 1800s when their primary method of revenue was selling gold and silver. And when we moved away from the gold standard, they didn’t really have a business model anymore. And they kind of transitioned to now these services and in financial services that what we now think of as the banking industry, if you went in to ask them to buy gold or silver, they’d probably look at your like you were crazy.

Tim Ulbrich: Yeah.

Blair Thielemier: So I’m excited about that. I’m excited about starting these conversations, about reimagining what pharmacy looks like and how do we rebrand pharmacy? So most of the pharmacists that I talk to, they’re like, I want to get my patients off medications. And that’s so counterintuitive because, you know, everyone comes in like, oh, you must be rich because my medications are so expensive. Like no. Anytime somebody asks me for a recommendation for an over-the-counter stool softener or something like that, I’m like, well how much water do you drink? Like that’s usually how I start the conversation is like, let’s talk about water and let’s talk about fiber and let’s talk about all these things. And your last-ditch effort might be an over-the-counter product. So I think a lot of pharmacists can identify with that is that we’re not pushing medications. We’re pushing to get people off medications. We’re looking at how can I — this person’s on 11 medications. How can I combine some of these? Which of these are being used to treat side effects of other medications? How can we get them on the most optimized medication regimen and the least amount of medications as possible for this patient? That’s the conversation I think we’re going to be having in 10 years is like, well, I took my patient from 10 medications down to four. You know? And that’s where I believe we can add value. That’s something that the patients want to see, that’s something that the payers want to see. And physicians, they’re going to be getting better outcomes. They’re going to be seeing reduced readmission rates for their patients. And hospitals, that’s what they’re going to need as well.

Tim Ulbrich: Yeah, and it would be interesting to see — I mean, you used deprescribing as an example, but even more consistent reimbursement for deprescribing, right?

Blair Thielemier: Yes.

Tim Ulbrich: Because I think counterintuitively, obviously you’re reducing revenue to the pharmacy, which is an area I think about if you think about pharmacists in every primary care provider across the country, you know, in theory, that really changes the interaction of a patient coming to a pharmacy. Right? Because you think about ideally, a pharmacist’s role post-diagnosis and then being involved in the prescription process, that really changes a lot of what now is time spent at the pharmacy kind of working back with the physician or providers or you think about a traditional medication therapy management visit, ideally, a lot of that could be happening at the point of prescribing. So how do those intersect and work with one another? What impact do they have on one another? I think what you and I both agree on is that we need more opportunities for constructive, innovative dialogue about what does the future of the profession of pharmacy look like? And I think that there’s unfortunately kind of two camps: one of extreme negativity without constructive dialogue and brainstorming and one of somewhat of an optimistic, idealistic standpoint that doesn’t necessarily acknowledge some of the challenges that are here today. And I think we need both, and we need a space where at Pharmapreneur Academy, at Your Financial Pharmacist, at colleges of pharmacy, at national organizations, in communities that we can have a conversation about hey, if we were to rethink, reinvent pharmacy, all ideas on the table, what might that look like? How could we get reimbursed for it? And what’s the value that we can bring as a profession? And I think that often, these conversations start with a lot of baggage and a lot of loaded opinions, and so I know one of my hopes here today in continuing is to stimulate a conversation and get people thinking more about what the profession holds. So thank you so much for joining. Thank you for your three bold predictions. And again, if you want to learn more about the Pharmapreneur Academy, go to YourFinancialPharmacist.com/academy. You can learn more about what’s involved in the academy, what the community is all about, and what you’ll get. Again, YourFinancialPharmacist.com/academy. And you can get $50 off your first month. So Blair, thank you so much for joining.

Blair Thielemier: Thank you so much for having me.

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How to Save Half of Your Income

Posted on by yfpadmin

The following post contains affiliate links through which YFP may receive compensation.

Live on less than you make. The quintessential maxim when it comes to personal finance. It’s incredibly simple advice and touted by just about everyone. But as you know, it’s easier said than done.

Otherwise, couples 34 and younger would have more than $4,727 in savings and those in their 30s would have more than $45,000 in retirement accounts.

While student loans are one of the biggest culprits for these staggering statistics, it’s certainly not the only factor.

You’ve likely heard the rule of thumb to save and invest 10-15% of your income in order to retire at a reasonable age. While that may work for many, it’s way below the typical amount needed for those pursuing FIRE. In fact, it’s not even close!

FIRE stands for Financial Independence, Retire Early where people pursue having enough money so that they are able to, you guessed it, retire early. Those on the path to FIRE usually have the intention of achieving it in their 30s, 40s, or even 50s. You can get a nice overview of FIRE from this post.

To attain FIRE, most people target saving 50-70% of their income and investing it in index funds and or real estate.

Crazy right?

“How is that even possible!?” you may be thinking.

Cue people living in tiny homes, growing their own food and making bicycles their primary means of transportation.

While there are definitely some taking this movement to that extreme, most pharmacists don’t need to do that to make it work. But it may require A LOT of sacrifices depending on how fast you want to achieve FI!

Assuming you’re single and make the median pharmacist salary of $126,000, after an effective tax rate of 30% (federal/state/local/FICA), you are looking at a net income of $88,200.

So in order to save $44,100 a year, you’re looking at $3,675 a month.

Impossible?

No, but certainly not easy!

If you have a non-working spouse or significant other and kids, that can certainly make things even more challenging but there are many people out there who have achieved FIRE making much less than a pharmacist.

So if you’re not quite at the point of saving half your income, here are some key moves to help get you there.

Eliminate credit card debt ASAP

No one ever plans to go into credit card debt. It’s often the result of either overspending or unexpected medical events or emergencies.

Having credit card debt is really a financial emergency in and of itself given the typical ridiculously high-interest rates. If you’re in this situation, you should make it a priority to get rid of it as soon as possible. Remember, you want compound interest working in your favor!.

Pay off student loans or optimize forgiveness

For most pharmacists, this is going to be the biggest barrier to saving at least half of your income. Assuming you were in the 10-year standard repayment plan with an average student loan balance of $170,000 and a 7% average interest rate, your monthly payment would be $1,973.

Talk about a major FIRE hazard!

There’s no single prescription for taking down student loans when pursuing FI but there are some key considerations.

First, if you have a small student loan balance relative to your income and can knock it out fast such as 1-2 years or less, then, by all means, destroy it ASAP.

However, if that’s not the case and assuming you have exhausted the options of any federal, state, or employer tuition reimbursement programs then you have a couple of options.

First, if you’re eligible for the Public Service Loan Forgiveness (PSLF) program that’s great news because it’s very conducive for those on the early retirement path. Since any amount remaining on your loans after 120 monthly payments is forgiven tax-free, your goal should be to pay the least amount as possible in order to maximize the benefit.

Plus, by contributing and maxing out a traditional 401(k), 403(b), or TSP, you can actually lower your adjusted gross income and subsequently your payments since they are income-driven.

If PSLF is off the table, then refinancing can be a great move. The lower the interest rate, then a greater percentage of your payment will go toward principal and can help to accelerate the payoff. And you can do this multiple times if you can continue to get a better rate. Plus, you also get paid to refinance as companies often offer a cash bonus or as an incentive. We have partnered with several companies that have bonuses up to $800.

Even if you refinance student loans and are making extra payments, you are still going to want to be simultaneously contributing to tax-favored retirement accounts if it’s going to take you a number of years to pay off the loans. Remember, time is the most important component when it comes to compound interest and you can’t go back and contribute to the years you missed out on beyond what’s available when you reach 50.

Lastly, if you happen to be in the unfortunate situation where you have a very high debt to income ratio such as 2:1 or greater, then you may actually consider opting for non-PSLF forgiveness. This is where you can have your balance wiped out after making income-driven payments for 20-25 years through the federal loan program.

refinance student loans

However, the caveat is that any balance forgiven will be treated as taxable income, therefore you have to prepare for that extra bill along the way. Even with this, it still may make sense financially, especially if it allows you to maximize your retirement accounts.

If you need help figuring out the best student loan strategy for your situation, you can reach out to one of our financial planners for a customized plan.

Work on reducing housing and transportation costs

You’ve probably heard multiple financial experts say you need to stop getting lattes every day because of the significant opportunity cost. While that may be partially true, focusing on bigger wins like reducing the cost of living and transportation can move the needle significantly more and get you closer to your savings goal. That is unless you are frequenting Morton’s Steakhouse.

Beyond downsizing to lower mortgage or rent payments, many people in the FIRE movement have opted to move to places where there is a lower cost of living, sometimes referred to as Geo-Arbitrage. This can be a really tough decision especially if it requires moving away from family and close friends and means leaving a job you really enjoy. However, out of everything you can do save more money, this could be the one that has the greatest impact.

Another thing to consider is refinancing your mortgage. If you are in an adjustable rate mortgage or have a really high fixed rate, getting better terms could save you a couple hundred bucks per month.

Car payments are another big barrier for many to achieve significant savings. Plus, if you’ve got a gas guzzler, your annual operation costs are not going to be cheap. Beyond that cars depreciate and your goal should be to build assets. Many times, it takes a lot of self-reflection about how you view your car. Most people pursuing FIRE think of it as a means from point A to point B and don’t care what anyone else thinks about it.

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You can pay off your cars to eliminate any payment but, depending on your situation, you could also sell or trade in your car and downgrade. If you have more than one vehicle, you could consider eliminating one. Depending on where you live, you may be able to get around on a bicycle, e-scooter, or public transportation.

Review recurring monthly expenses

Are there any subscriptions or monthly services you could nix? Be honest with yourself. Are there some that you don’t use anymore but just haven’t sent the email or made the call to cancel? I’m definitely guilty of that.

While some of these expenses can be pretty small, the sum can add up quickly. These include TV (whether cable or streaming services), internet, gym memberships, Amazon Prime, audio streaming (such as Audible or Spotify), your mobile plan, wholesale club memberships, cloud storage, etc.

I really like the apps Clarity Money and Trim as they can connect to your bank account and identify these expenses and even give you the option to cancel right from the interface.

Eat more at home

Going out to eat can one of the biggest budget busters. One dinner for two could cover a week or more of groceries. Consider meal prepping and packing your lunch.

If my wife and I go out to eat, we try to look for a Groupon or go somewhere during happy hour when the food is cheaper or just get appetizers.

Keep entertainment free or low cost

One of my favorite things to do on the weekends is spearfishing off the beach. It’s an incredible workout, a great way to spend time with friends, and the best part is that it’s free, that is once I bought all the gear. Plus, if I’m successful with harvesting some snapper, my grocery bill goes down.

I also check out free concerts in the area such as the Petty Hearts, which is a Tom Petty and the Heartbreakers cover band. For those of you who don’t know, Tom Petty was a rock icon known for songs such as Freefallin’, The Waiting, and American Girl.

There are a lot of activities you can do for free or that are relatively inexpensive. If you really focus on the things that bring you the most happiness, you’ll probably discover that you don’t have to shell out much cash to do them.

Now if you’re someone who loves to travel you may have to scale back or get creative on how your trips are financed. There is a whole other movement of travel hacking, where people use different credit card points and offers to fund vacations.

Pursue additional income streams

If you’ve made all the moves above and are still struggling to hit your savings goal, you have another lever to pull. Even though your salary may be fixed, your income is not.

Many pharmacists have been featured on our podcast who have one or more side hustles in addition to their full-time position to help fund their financial goals. Some have used their pharmacy skills and knowledge in their side hustles, whereas others have other passions and hobbies they have been able to monetize.

If you need some ideas on how to make additional money, check out the post 19 Ways to Make Extra Money as a Pharmacist in 2020.

Conclusion

Whether or not you’re part of the FIRE movement, you can use many of these tactics to improve your savings rate. While I know there was nothing presented that was particularly profound, hopefully, it made you take a look at your current savings percentage and analyze the actions you need to take.

What I have found after about 5 years of putting 50-60% of my income toward a combination of student loans and savings, it’s all about contentment. Initially, I was concerned that a dramatic shift in my spending would cause my happiness to go down, but in reality, the opposite occurred and made me focus on what’s most important.

What is the one thing you could do that would immediately get you closer to saving half your income?

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YFP 116: Transforming Your Life and Career Through Networking

Posted on by yfpadmin


Transforming Your Life and Career Through Networking

Best-selling author David Burkus joins Tim Ulbrich to talk about the science of networking and how the advice we have been given on how to effectively network needs to be seriously reconsidered and likely thrown out the window. David and Tim talk about his book Friend of a Friend and what the research has to say about a surprisingly simple approach to understanding your hidden networks are key to transforming your life and career.

About Today’s Guest

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

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

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

Summary

David Burkus joins Tim Ulbrich on this week’s podcast to talk about his book Friend of a Friend, what the research has to say about a simple approach to understanding your hidden networks, and how the advice we have been given on how to effectively network needs to be seriously reconsidered.

David began studying organizations and learning about how to make working at them better. He learned that every organization is a network leading him to discover network science research. He dove into studying research articles written by physicists, mathematicians, psychologists, sociologists or whoever was studying networks. From there he came to understand that there were two types of work written about networking: advice books written from an autobiographical standpoint and fascination books written by researchers. David felt that there was an unoccupied space in the middle to teach people how networks work and avoids the advice trap.

David discusses that people often think strong ties or close relationships are the way to grow your network, but in reality weak ties are the most helpful. Strong ties are people that you interact with often, like close family, friends, neighbors or coworkers. Weak ties are people that you know but haven’t talked to in a long time. Perhaps they are people that come into the pharmacy once a month; you don’t know them well but you talk to them occasionally. If a situation arises where you are looking for job leads or have another type of emergency, you’ll connect with your strong ties but they don’t have as broad of a network as your weak ties do as they interact with more people you don’t know outside of your connection. Only reaching out to a weak tie in an emergency situation like this would make for awkward conversation. David suggests that you should be regularly checking in with weak ties so that when something comes up that you need help with, it becomes part of a normal conversation instead of a cold one. In short, he says to make weak ties like your old friends.

David delves deeper into weak or dormant ties and also discusses structural holes, super connectors, and meaningful and authentic engagement.

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, where I have the honor of welcoming David Burkus onto the show. David is a bestselling author, a sought-after keynote speaker, and associate professor of leadership and innovation. And his newest book, “Friend of a Friend: Understanding the Hidden Networks that can Transform Your Life and Your Career” offers readers a new perspective on how to grow their networks and build key connections, one based on the science of human behavior, not broke networking advice. He’s delivered keynotes to leaders of Fortune 500 companies and the future leaders of the United States Naval Academy, and his TED Talk has been viewed over 2 million times. Also a regular contributor to Harvard Business Review, and his work has been featured in Fast Company, Financial Times, INC Magazine, Bloomberg Businessweek, and CBS This Morning. David, welcome to the show.

David Burkus: Thank you so much for having me.

Tim Ulbrich: So really excited about your work and your book “Friend of a Friend,” and before we talk about that book and the research and the impact that it has on us as a community of pharmacy professionals, the work that you’ve done on networking science, I’m curious and want our listeners to know a little bit more about your background. Why study this topic? Why make a career out of it? What intrigues you so much about networking?

David Burkus: Yeah. Well, the jury’s still out over whether or not I make a career out of it. I sort of have intellectual ADHD a lot of times and jump from different subjects. But ultimately, my background, I study organizations or I like to say I study how to make work not suck, right? And that’s in the realm of leadership and management but also creativity and innovation. And in each of those fields, I ran into some of the most powerful research on how organizations was network science research because every organization is a network. And in fact, most organizations you could describe as two different ones. You have the formal org chart network, right? And then you’ve got the informal who actually knows who, whatever. You don’t have to work in an organization to realize — like here at Ohio State, you don’t have to work in an academic institution too long when you realize that the department secretaries are more powerful than the actual chairs and deans, right? Because they know what’s really going on. And all of that is explained by networks. And so that got me in this path where I was just following the rabbit trail of studying all of these different research articles from the physicist, mathematicians, psychologists, sociologists, etc., who were studying networks. And I started to realize that there isn’t really a place for — there really isn’t a place being occupied for a work that would teach people in practitioner terms how to leverage this network science, right? Basically, when you say the word ‘networking,’ you had two categories of books available to you. The first were the sort of advice books. These are great. These are “How to Win Friends and Influence People,” and “Never Eat Alone,” and “How to Work a Room,” and they’re all great. But they’re all advice. And the shortcoming of advice is that it’s autobiographical. It represents the person, usually the man, sometimes the woman, what they did to grow their own personal network and then the promise that if you do this, it’ll work for you. And then that doesn’t address the sort of awkwardness of being someone else, right? You read that, you go to the networking event, you try and implement whatever it is, how to give an elevator pitch or how to say somebody’s name three times so you remember it — that’s never worked for me, by the way, the three times thing — and then you feel inauthentic first because you’re pretending to be somebody else because you read the advice book and you’re pretending to be him. But then sometimes it just doesn’t work because you’re not that person. So that was sort of the norm, most networking books. Then way over in almost published by the scholarly journals and things, you had what I call the sort of fascination books. These were books by the actual researchers, people like Nicholas Christakis and James Fowler, Duncan Watts, and what have you. And they’re fascinating, but they’re fascinating in that way that you watch a TED Talk and you go, wow, that’s fascinating. I have no idea what I’m going to do with my life.

Tim Ulbrich: What do I do with that? Yeah.

David Burkus: Right? But wow, that’s fascinating. So therein was the idea. Hey, there’s this unoccupied space in the middle that maybe if we create something that teaches people how networks work, which is what the fascination books do, describe the network that somebody is in and avoids the advice trap because it’s just saying, this is universally true of all networks, so I know it will be true of your network, but does it in that same practitioner language of one of those advice books. Maybe there’s an opportunity there. And so that was the big bet. About two years ago, we made that bet, started writing the book, put the book out there, and I wish I could tell you here that I’ve sold as many copies as “How to Win Friends and Influence People,” but I’m probably never going to hit that mark because that book is in the bazillions it’s sold. But the letters, the emails, the messages — ironically, mostly on LinkedIn — that I’m getting, the feedback that I’m getting, tells me that we really sort of hit that sweet spot, which is really kind of encouraging about a year after the book came out to hear people go, yeah, I never looked at my network that way or I never looked at the network that I’m a part of that way, thank you so much, that’s been awesome. So you know, we may not have as many people as Dale Carnegie on our side, but we’re teaching people every day how networks work and then how they can put them to work for them.

Tim Ulbrich: Yeah, and I’m really excited to get this out to the pharmacy community. I think we as a profession — I shared with you before we hit interview — we as a profession are really in a unique time where we have some significant pressures that we’re facing in terms of a shifting and evolution of our roles and people that are finding themselves in that job loss, and maybe they thought, forever I’m going to be in this secure position, or I have my hours cut, or I don’t like my job, whatever be the case, and this topic of networking and how to do it effectively and how to really shift your mindset around maybe the traditional advice you’ve always been given isn’t really the best advice, and maybe after all should be thrown out. And one of the things you mentioned that really hit me when I read the book is this concept that all advice is autobiographical. And I think that is so true, and it was really even humbling for me to think about as I’ve mentored other students, like I tend to tell them networking advice based off of what’s worked for me. Well, that may not be very effective for them, for obvious reasons. And so I think this concept of rethinking networking, especially for us in pharmacy where I would say is “traditional networking” is so prevalent, this idea that you’re at a national association meeting and you walk into a big room and you meet people cold and you hope that’s really going to advance your career and you’re going to have that two-way benefit I think is certainly a stretch. So let me start, David, in the beginning of the book, you talk about Adam Rifkin, who’s an entrepreneur that was named by Fortune Magazine in 2011 as the world’s best networker, which I really didn’t know was a thing, which is pretty awesome. So I mean, if somebody is called the world’s best networker, like who is this guy? And what was it about him that made him so successful when it comes to networking?

David Burkus: Yeah, well, so that’s the thing, right? Even if you hear the term, “world’s greatest networker,” you picture like the Dos Equis guy, right? Like this smooth-talking, tall, handsome, dark — I got those in the wrong order — wearing a three-piece suit, able to flip business cards out of the shirt sleeves at a moment’s notice, etc. You think about that person, and Adam Rifkin is not that person. If you ever met him, Adam Rifkin, I mean, he’s average height, he is definitely not average girth, he’s a little bit overweight, he likes to wear hoodies, most often a black hoodie with a white T-shirt underneath, which makes people think of him as a panda bear. And I say this because Adam has actually sort of adopted that term. Like he started a company called PandaWhale. Like he was the panda, his partner was the whale, right? Like he plays to this motif often, which is fine. He’s not that type of person that you would think would be the world’s greatest. He’s not charismatic, etc. What Adam is is Adam is someone who has a PhD in computer science and began to look at the way people interact the same way you linked up computers. And this is what’s amazing about networks is that some of the studies in “Friend of a Friend,” by the way, were not done with traditional human networks. They were done with networks of hyperlinks and computers and all of that sort of stuff. But what’s amazing is that there are certain principles that are universally true of all networks. And this is what Adam really focused in on. And particularly in Adam’s case, the thing he focused most in on is a term called resiliency in network science, that a network or a community is stronger the more links there are going between them. In other words, we think that it pays to be that sort of power broker person who only dishes out introductions seldomly and only makes connections when he or she can control what’s going on and get a piece of it, etc. And that model works a little bit, but it doesn’t work as well as focusing in on taking care of the whole community. So that’s what Adam started to do, started to connect people that he already knew. Eventually, it turned into actually these regular meetings. He was the first person in this Silicon Valley community to start regular meetings. Now, like I get invitations to meet up all the time. But this was 20 years ago when nobody was really worried about this. He started a community called 106 Miles, which is the term for the stretch of highway that is Silicon Valley, and started this community that now has thousands of different tech entrepreneurs and employees and venture capitalists, and all sorts of people coming together on a regular basis to meet each other. And that’s elevated Adam’s status not because he’s the one at the center of the network running the show but because he cared about the actual network, and then it just so happened that people became connected to Adam because they joined into this community that he built. And so fast foward to 2011, Fortune Magazine’s trying to say, well, outside of people who work on LinkedIn, etc., who is the most connected person on LinkedIn, and it was Adam Rifkin. What I think is funny is in truth to Adam Rifkin’s networked ability, the magazine did this experiment, the senior level editors who were at the magazine never really connecting — they’re editing, they’re not running beats, etc. — they were like, I’ve never heard of this person. So they hand it over to the writer who’s assigned to cover Silicon Valley, and they say, “Can you go look into this person, Adam Rifkin, he’s apparently connected to everybody.” And the journalist who covers Silicon Valley was like, “Oh yeah, I know Adam.” Right, because everybody does.

Tim Ulbrich: Right, right.

David Burkus: And I think the big lesson for a lot of us in Adam’s story is twofold. One, pay attention to the network that you’re around, but also take care of that network. Build what we call social capital in that network and trust that it will take care of you over time as well.

Tim Ulbrich: Yeah, and I love that in the book. I think for many pharmacists, this concept of networking is very overwhelming. They may be introverted by nature, and so when you talk about him himself saying, you know, I’m not an extrovert and it’s often not something that he’s thinking about intentionally interacting in those ways, maybe a little bit shy and awkward, but what he does have, to your point, is this understanding of how networks work and the effectiveness that they can serve. So one of the main takeaways I had, David, was this concept of strong ties versus weak ties. And you know, while it may seem counterintuitive, why weak ties tend to be more valuable. And this is something I think I forever will hold with me from this book. So can you define the two? What’s the difference between strong and weak ties? And why is it the case that weak ties may be more valuable?

David Burkus: Yeah, so if you think about your network — or actually, better stated, if you think about the network that you are a part of because it’s not yours, it belongs to the industry or the community, we’re all one big network of 7.4 billion people, right? But if you think about the network around you, you have various different types of relationships. Some are these what we call strong ties, they’re your close contacts, the people you see every day, the people you work directly with, they’re your friends, they’re your family, they’re the people you usually go to first when you have a question or problem or you need to learn more information about something. In a job, again, the people that you work with on a regular basis, maybe they’re assigned to your location, so they’re the people that are on your team, maybe you just see them on a regular basis because of what you do. And then there are the people that you don’t interact with that often — that either you don’t interact with that often or you do, but you don’t know them that well. Like I think about weak ties can be both people you know and used to know well that you haven’t talked to in a really long time — we actually use the term ‘dormant tie’ as a specific sort of subset of weak tie. But these are also the people that like you think about pharmacy, for example, these are the people that come in on a monthly basis and have for the last four or five years. You know them, you might even know their disease, but you don’t know them that well. You don’t even know what they do, what their occupation is, etc. Right? In a lot of organizations, I always make the joke that your weak ties are the people, in terms of an organization, they’re the people you know, but you only see them when there’s cake in the breakroom. Right?

Tim Ulbrich: Yeah.

David Burkus: And because of it, it turns out that when it comes to looking for new information, new ideas, new perspectives, etc., there’s a lot of redundancy among your close contacts. Right? You think about your team, the group of people on your team, well, your team’s already all connected to everybody. Right? And those people are highly likely to be the same people that they’re talking to all of the time. So you’re not going to get a lot of diversity of perspectives, you’re not going to get a lot of potential introductions or referrals through those people because the likelihood that you already know who they’re going to connect you to or what they’re going to recommend to you if you’re thinking about job leads, for example, they’re probably only going to know stuff you already would have known about anyway. So it’s actually your weak ties or your dormant ties who are in a close group of other people that are not you and are not your community that are more likely to be different from you, and hence, they’re more likely to have differing information, different opportunities, different potential introductions, sort of all of that. And the lesson of the strength of weak ties really isn’t this idea of like, OK, when you’re faced with an emergency, right, like oh, now I’m out of a job, go back and reach out to weak ties, which is how other people have talked about this concept of weak ties in the past. The problem with that is that it gets kind of awkward, right? You haven’t talked to someone in two years, and now you’re reaching back out to them because you just were invited to be successful at a different company by your organization or something like that. That can be an awkward conversation. So to me, the lesson of weak and dormant ties is to actually be regularly checking in with a lot of those people that you’ve identified as this is not someone I talk to often, but I could be important to them, they could be important to me, let me put in a system where I’m checking in with them on a regular basis, every three months, every six months, maybe it’s just once a year, whatever you’re doing to make it a little bit less awkward when they have an issue that they want to come to you to or when you have something you want to come to them with. It’s just another conversation in a series of conversations. The goal is to make weak ties like your old friends, those people who you could pick up the phone and call, and it just feels like no time has passed since the last time you’ve talked to them. The goal is to get to that level of rapport with a lot of different people so that when you’re faced with an issue, you have a lot of different people who have different information and different perspectives to go back and reach out to.

Tim Ulbrich: Yeah, and I’m so glad you brought that up of the importance of maintaining them all along and regularly engaging and being intentional and not just coming when there’s an emergency situation of a job. We can all relate to the situation of you get pinged on LinkedIn, and somebody’s classmate from 10 years ago, and they say, “Hey, you live in an area where there’s jobs available. Can you help me connect with somebody?” And it’s like, I haven’t heard from you in 10 years, right? So I think that regular engagement and maintenance is so important for our listeners to hear that even if you’re in a position where all things are going well and you’re not necessarily currently looking for a job, that you’re being intentional about regularly maintaining those. I want to spend a minute, David, on this concept of specifically the dormant ties as a subset of these weak ties because I found this really interesting, and I’ll share with you in a moment how I have practiced this over the last 3-6 months since learning about your research and work and how powerful it’s been, but in the book, you talk about that the research really shows the benefit of the dormant ties has more to do with the fact of their dormancy than with the perceived expertise of those individuals. So what is it about the dormancy that really brings the power in what those connections can bring?

David Burkus: Yeah, so I mean, ultimately, whether we’re thinking about job leads, we’re thinking about trying to think of a solution to a problem, whatever it is, ultimately what networks provide us is information. It’s why human networks and the network of the world wide web are so analogous to each other is that both are looking for information. You’re looking for new information, different perspectives, yeah, OK, potential referrals to new introductions, etc. And because those people are, you haven’t talked in awhile, it’s not like they don’t exist. To use like a gaming term, they’re not non-playable characters. They’re real people too. They don’t just sit around waiting for you to interact with them. And so because of that, they’re running off somewhere else in the network, interacting with a different group of people, and the likelihood that because of that dormancy, they’re interacting with people who are different than you, who don’t see the world the way you see it, who are aware of opportunities that you’re not aware of, etc., that likelihood increases the more dormant or the further away they are in the network from you. That’s where you end up with a lot more diversity, right? So the dormancy is what provides that. Even if you feel like oh, OK, there’s this other person, and he lives in my city, and yeah, he’s an expert in this exact area. I mean, the mere fact that he lives in your city means that you’re probably going to talk to that person more often and have already benefited from their knowledge. So just in the moment, you’ve already sort of gleaned a lot of it. But in terms of opportunities, perspectives, etc., it’s highly likely you’re going to have a lot more in common than the way, way out dormant person. So it’s a better idea to start with that person. And again, like you said, it’s not a good idea to just start with that person when you’re desperate. It’s a good idea to start with that person on a regular basis checking in with them, recognizing that it’s OK to not talk to everyone all of the time. Some people need to be dormant. That doesn’t mean you ignore them.

Tim Ulbrich: Yeah, and the visual that I have in mind is I’m envisioning these spiderwebs of networks that have the potential to be connected, but we tend to stay in our own lane, and we tend — I’m thinking my own situation of if an opportunity comes up or I’m looking at something in the future where I think about, OK, I need to lean into my network, we tend to go to those strong ties whereas the bridge really lies in the dormancy and the weak ties that’s going to open up other networks and opportunities. I think that concept is really cool. So now the question is, how do you engage with these folks in a genuine, authentic, meaningful way? I mean, is there an opportunity here through social media, through LinkedIn, through Facebook, that that to me would appear to be individuals that if they’re my strong ties, if they’re my closest network, I’m probably regularly interacting with them in a way that’s beyond LinkedIn and Facebook and other mechanisms of social media. But this may be an opportunity to really leverage social media to say, OK, these people are already in my network, and now I can open up that door and further the engagement.

David Burkus: Yeah. So the way that I like to say it is that social media is a supplement to, not a replacement for, your offline networking efforts. But you’re exactly right. When it comes to these dormant ties specifically, it’s a great way just to identify who they are. Right? If you think about Facebook, for example, if you pull up a list of your friends on Facebook, it’s already sorted by how frequently you interact with those people. And in of other places, you can ask for it to sort your existing connections that way. So scroll all the way down to the bottom, boom, we’ve already found some of your dormant ties. Right? Now, there are — the most common probably thing that people do on Facebook to reach back out to dormant ties is the birthday thing. On LinkedIn, it’s the work anniversary thing. Like if you’ve ever had one of these, you get inundated with messages that are actually usually just people clicking a button because Facebook asked them to click the button.

Tim Ulbrich: Canned message, yep.

David Burkus: We don’t necessarily want to do that. If you’re going to wish them a happy birthday — I’ve got a good friend, Derek Coborn, who also wrote a book on networking. And it’s also great, but it’s also advice. Derek Coborn does this thing where you see the birthday thing, and he records a 30-second video on his phone and then direct messages it to the person. Right? Because he’s at least rising above the noise. My favorite thing to do is just not worry about it at that time. People aren’t going to see that you clicked on something, or they’re not going to see that you put one thing in the comments where there’s 100 comments, right? Either take it offline or find a different time. What I like to do is put that person in my mind. I have identified my dormant tie, sometimes I used to go as far as putting their name on my calendar as an all-day event. You know how it sort of floats above the rest of your activities and you see it? And what’s amazing is if you put someone in your mind, you will find things throughout the day that remind you of that person. You’re reading an article, and you’re like, oh, you know, this reminds me of that time we were talking about x. Now you take the 15 seconds to send the article to them. Or you think of a conversation with them or an answer that you never gave or something like that. You end up thinking of this sort of organic reason to reach back out to them by a more personal means, direct message, email, text if you’ve got it, etc. What I tell people, so you get all the way to the end of the day, and you haven’t thought of something, you can send a three-sentence email that will — believe it or not — jumpstart a conversation. The three sentences are: I was thinking about you today. I hope you’re well. No reply needed.

Tim Ulbrich: Oh, that’s great.

David Burkus: The “No reply needed” one’s a little counterintuitive. When you say “No reply needed,” you’re basically saying, “I don’t have an agenda. I’m not looking for a job. I’m not trying to sell you into my new company and recruit you. I have no agenda. I just was thinking about you, and I hope you’re well.” And it sounds weird, but I’ve never been on the receiving end of someone telling me they wish me well and responded with spite.

Tim Ulbrich: Or nothing.

David Burkus: Or responded with awkwardness — or nothing, right? I’m going to reply with something. And more often than not, that turns into a conversation. Now a caveat here. Everything I just said in the last like two minutes, at least 90 seconds, is advice, right? So it may or may not work for you. But it’s a system that I put in place for myself after doing a lot of this research. It’s the way that I applied the research. And the big lesson is whatever is unique and authentic for you that is a system where you’re regularly checking back in with these dormant ties, that will work. You’ve got to be comfortable doing it. But once you do it, stay consistent with it so that over the period of a year, you’ve checked back in with all of those dormant ties. And the next time they need or you need them, it’s not an awkward ice-breaking conversation. It’s just another conversation.

Tim Ulbrich: So building on that example, couple examples you gave there of thinking about people and interacting with them, looking for opportunities, things they’re posting already, naturally, people are putting content out there, photos out there, they’re opening the door to have that conversation. You mentioned putting a holding place on an Outlook calendar. I want to talk for a moment more about this idea of operationalizing this research and making it practical and maybe even what you do in terms of a system because I think that the manual process of thinking of people, putting them on an Outlook calendar, could work for some time. But all of a sudden, you identify hundreds of these dormant ties and you want to engage them maybe on a quarterly basis, twice a year, even more. Are there systems, tools, things out there that can help people or maybe that you even use in this process of trying to both identify and engage with these individuals?

David Burkus: Yeah, so there are. There are a bunch of different digital tools. There’s two that come to mind immediately. There’s a tool called Levitate, which basically sits on top of your email and monitors who you’re talking to and how frequently you’re talking to them. And there’s a tool called Contactually, which does the same thing plus I believe Twitter, and they’re working on LinkedIn. So they’re trying to have it penetrate into social media too. And the idea is you then tell the system, you pull up your whole list of contacts, and you tell them, here’s how frequently I want to make sure I’m interacting with that person. And you’ll get an email — I mean, if you’re really off, you’ll get an email every single morning that says, “Here’s the new people that it’s been 90 days or six months or a year since you’ve spoken with.” And now you know who to put in the front of your mind for that day or those couple days. The interesting thing is I find that — so I’ve used a lot of those. I’m a big fan of Contactually, the founder is a friend of mine, etc., so that’s my full disclosure type of thing. And they work really, really well. What I’ve found is that if you use them for a year to two years, you start to not need them because you start doing that organic, you know, this person popped into my head and I took the 20 seconds to fire off an email or a text message to them. We’re not talking about a huge amount of time and a computer reaching back out to everybody all at once. We’re talking about a couple seconds every single day to check back in with people. And then yeah, making the time to have a conversation a couple days later, etc. And so what I’ve found, like on Contactually, for example, I still get an email every morning because I set it to do that. And every morning, I get an email that says, “You have zero tasks today.” I mean, every once in awhile, I’m like, ‘Oh, somebody fell through the cracks,’ and I actually get a reminder, which is great. But if you start to develop that habit, right, of slowing down when a name pops into your head and just taking the 20 seconds to reach back out to them, you end up not needing a lot of these tools. They’re a great place to start, they eventually teach you that habit, and then you’re good to go.

Tim Ulbrich: So as I mentioned to you earlier, before I had a chance to talk to you, I wanted to practice this after learning about your research. And so I was out there doing a little bit of a search, and I didn’t run across Levitate. I think I saw Contactually, and I also ran across a tool called UpHabit. And what was incredible is it identified people, you know, to this whole idea of dormancy and weak ties, it identified people that at one point in time, these were individuals that I maybe spent a year with on a longitudinal leadership program or I’d worked on research projects with or I’d worked with, had very strong relationships, had invested in making those relationships, and just out of the busyness of life, moving, and other things, haven’t kept in touch with them. And just the simple messages you alluded to reaching out to them sparked an entire conversation and even led to other things and collaborations. And so I would encourage our listeners, you know, whether you do this manually, whether you find a tool, give it a try for three months, six months, and see what happens. And I think really seeing your research come alive in practice has been a whole lot of fun for me personally and I think will be the case for others as well. So David, it just makes me think as we talk about tools and apps and systems to build connections, some people out there may be thinking, oh, this feels kind of impersonal, like I’m really trying to get people to be a part of my network and really see what value I can get out of it, which I don’t think is what you’re saying. What would you say to those that say setting up a system or trying to identify who you have to have contact with and scheduling them and those types of things just doesn’t feel very personal?

David Burkus: Yeah. Yeah, yeah, yeah. I get it. It’s one of my anticipated questions whenever I give a talk is the, ‘Well, this feels inauthentic.’ And I totally get that. But let me take you back from the dormant tie over to the close contacts. Right? I have reminder on my phone, I have my wife’s birthday on my phone, and then I have a reminder set seven days out of when her birthday is. Why? Well, I need to make a restaurant reservation, I might need to look for a gift, etc. Right? The fact that I set that reminder, does that make me inauthentic? No. I care enough to make sure that I don’t forget. And that’s I think the same thing that applies to those tools. We put systems in place to make sure that we seal out of our close contacts in our — for lack of a better term — real life or in our friend and family life — that’s why actually the book is called “Friend of a Friend” as opposed to any other sort of work term. The big lesson is that it’s about the whole network. There is no work and life bucket. It’s all just friends of yours, connections of yours, and we take the time to care enough about these other people, and sometimes it means putting a system in place. Why wouldn’t we do that with our professional contact as well? It’s not that we’re doing this so that we can be inauthentic. Now, you can use these tools to be inauthentic by just, again, doing the thing where you’re just saying happy birthday every year or clicking the little button that says, “Congrats on your work anniversary” on LinkedIn. You can do that. What we’re talking about is setting systems in place to remind you to then organically, authentically, and with intention, reach back out to people because you’ve declared that your relationship with them matters so much that you’re willing to put in the effort.

Tim Ulbrich: Yeah, I love that, the idea that creating a system and operationalizing the system really shows the value and the effort in the relationships and how much you care. One of the concepts in the book, David, you talk about is referred to as structural holes. And I find this very interesting and timely for our profession of pharmacy where I think it’s easy that we get caught up in connecting with like-minded pharmacy professionals when really, in fact, I believe we need to be branching out beyond the walls of pharmacy to other healthcare professionals, the business community, others beyond that, to really be able to effectively address the complex problems that we’re facing in healthcare. Talk to us more about this concept of structural holes.

David Burkus: Yeah. So networks are not egalitarian, right? You already figured it out because you have close contacts, and you have weak ties, that people cluster. We cluster by — I mean, the No. 1 way we cluster is literally proximity. So you work in a university system. Two fascinating studies of universities shows that professors, the people that are most likely to co-author a paper with, are the people they work in the same office with. And like literally if I move you to a different floor, the likelihood of collaboration drops. So proximity is one, right, but then even by function, it’s easier to have conversations with people who were trained in the same thing that we do, work in the same department with us, and so we end up spending a disproportionate amount of time. Over time in an organization, that creates the silos, the politics, the turf wars, all of that sort of stuff. In the bigger network that is our industry or our country or our world, people still tend to cluster around similar ideas, similar ideologies, similar training, similar backgrounds, etc. That creates what the sociologist Ronald Burt coined the term, structural hole, a gap in the network where there isn’t someone connecting one cluster to another cluster. And these are a huge problem for information flow because, I mean, ultimately, like I said, the idea about networks, networks exist to transfer information. That’s why you want to get involved in. You need information. But you also have information to share. And the other thing that happens, we know about — my first book was about creativity and innovation. We know that innovation is much more likely when you have a diversity of ideas and voices contributing to something. So structural holes become a huge problem. So if you take it upon yourself to close one of those structural holes, there’s a tremendous amount of value that gets unlocked for you. We would call you a broker in that situation, someone who’s decided to broker the connection between one cluster and another, to build a bridge. Usually, you start it through looking at those weak ties, those people you know who are in a different part of the healthcare industry, for example, or a different part of the organization, and being deliberate and intentional about reaching back out to them, that builds the relationship, and now suddenly, this cluster is better connected — both of the clusters are better connected to each other than they were before. That puts you in a broker relationship. Ronald Burt, actually — I love this quote — Ronald Burt wrote that the people who sit in the gap, the brokers that occupy the structural holes, are at the greatest risk of having great ideas. Right? So you think about the pharmacy industry, for example, it used to be that it never changed. It was a pretty consistent model. Right? It was the same thing as medicine. My wife works as an ER doctor, same deal. It used to be that nothing ever changed. And then suddenly, boom, everything is shifting around, the roles are shifting, it’s a much consultative role than it was before and we’re using AI and machines to outsource the stuff that doesn’t take a lot of highly critical thinking, etc. What will be the currency of navigating that change will be ideas. It will be information, and so the people who are at the greatest risk of staying employed are going to be those people who are occupying those structural holes.

Tim Ulbrich: That’s what I was just thinking about as you were talking about structural holes and those that broker it is that if somebody’s listening and they want to make sure they’re an invaluable asset to the community, to the organization they live in, or even if they decide to leave, you know, they’re going to be that much more valuable when they go to their future employer and they’re negotiating that opportunity is find a way to fill those structural holes. I think here at Ohio State, we have a university of 50,000+ students and just in the health professions, you’ve got medicine and pharmacy and optometry and vet med and dentistry, all relatively siloed. But there’s very few people, but they exist, who really can intentionally sit in those gaps. And it’s amazing what happens when you really start to open up those opportunities for collaboration through filling those holes. You also talk about — and this builds off of the example we mentioned at the beginning in terms of those that really have a disproportionate to connect with others. And you refer to them as ‘super-connectors.’ And I think this is interesting. When I first heard this concept, the first thing I thought of was the concept of compound interest, obviously relating to finance, and that really, over time kind of takes a life of its own because as you connect with more and more individuals, especially if you get to a certain level, of course, those networks are then going to be reaching out to you, and it just begins to take on a life of its own. So talk to us about this concept of super-connectors and who are those people and why they become that.

David Burkus: Yeah. So it’s actually sort of two concepts in one, right? So super-connectors, those are the people that are already well connected in an industry. These are the people you look at and you’re like, ugh, networking comes so easy to them. These are the people you silently hate, even when you cheer for them to succeed because it all just comes so easily to them. They’re the people who have a disproportionate amount of connections, the 80-20 Rule, the Power Lull, etc., exists when we graph the number of connections that individuals have. A small group of people are connected to lots of people, and the rest of us fit the down the long tail of that distribution. What’s interesting to me isn’t that super-connectors exist, what’s interesting to me is how they got there. And that’s where another phenomenon in network science called preferential attachment starts to develop. And it is literally compound interest, if you want to think about it that way. What happens is that as networks grow, evolve, as new people enter the network — just think about it in your own organization. As new people enter a company, who are they most likely to meet? Well yes, they’re going to meet the people they work directly with, but within the first week, they will probably meet the best connected person in that organization.

Tim Ulbrich: Absolutely.

David Burkus: Why? Because all of those other connections are going to introduce them to that person. So what we find is that super-connectors grow their network to a disproportionate level. It often happens organically because they have managed to hit this sort of critical mass where now everything compounds without them having to work. And if you talk to — like from the book, I profile a couple different friends of mine who are these sort of super-connector persons, and I specifically wanted to write about them because I wanted to address a thing they say that I always hated, which is they’ll say things like, “Oh, the key to a good network is subtraction, not addition.” Like well, yes. That’s easy to say when you have tens of thousands of people on your phone, right? For the rest of us, we’re like, I can’t even figure out how to get connected to someone at Walgreens. So super-connectors are the people who are leveraging preferential attachment. The good news, however, is that preferential attachment, it’s kind of like gravitational pull, it’s kind of like compound interest. It doesn’t matter where you start, it accumulates over time. So if you start to be consistent and deliberate about connecting with new people and also nurturing the relationships that you have, preferential attachment comes into play. So yes, there are definitely people who make it look easy. But they make it look easy because at a certain point in time, it wasn’t. And they put in the work to build to that critical mass to let it take over.

Tim Ulbrich: Yeah, and some of the people I think of as super-connectors in my own world — and you talk about this in the book and you give examples to your community as well — again, this concept of networking is a two-way street, right? It’s not about building your Rolodex, it’s about providing value back to the community and back to the network as well, and we talk about that with social capital. But these people, what I notice they do really well, is they also are constantly connecting people into others within their network or across networks to provide value and service or to help them solve a problem that they’re struggling with. So I think you talked through examples where if you’re in conversation with somebody or somebody else is in conversation with somebody else that they may not necessarily be the best one to be able to solve that problem, but they can help connect them with somebody else, which in turn, obviously expands their network further.

David Burkus: Yeah, that’s exactly right. So if you think about, again, the purpose of networks is information, and if you think about you’re standing in front of somebody, whether you’re talking to them for the first time or the 500th time, they’re facing a problem, they’re facing an issue, just the statistical likelihood that you are the person that has the information that they need is very, very small. You’re telling me about a problem you’re having with your electric work at your house, I’ve got nothing. I’ve got a phone number of a guy you should call. That’s all I got. Right?

Tim Ulbrich: Yeah.

David Burkus: But in reality, that’s all of us almost all of the time. The likelihood that our experiences are going to be what could help them is small compared to the likelihood that we know someone who actually has that expertise. And so the best way we can provide value to individuals is usually through the network, the group of connections that we’ve already built up, the people that we already know, and offer to make that introduction. Now, what’s amazing about that is that also helps the network when we make those connections. This goes back to Adam Rifkin and the idea that a network, the more resilient it gets, the more people interconnected inside of that community, the stronger it is. It also builds what we would call social capital, the value of all of the connections you have, and it builds your own reputation as sort of a generous person as well, which makes it more likely that new connections are coming your way. You don’t have to be that sort of — Adam Grant would use the term “Master” where you’re, ‘I introduce you to somebody, now you owe me.’ You just take care of the network, and over time, the network takes care of you.

Tim Ulbrich: Yes. Absolutely. One of the common sayings connecting this to personal finance is that someone’s network will ultimately be reflected in their net worth. And I was thinking about why that may be the case. I mean, there’s so many potential reasons from some of the things we’ve talked about where as you meet more people and you’re building that network and providing value and vice versa, that’s going to take on a life of its own, which of course is going to open up more doors, you’re building your personal brand, you’re probably increasing your confidence and that can translate to negotiation and all types of things. Do you think there’s a direct connection between somebody’s network and their financial position and where that may come from?

David Burkus: Yeah. I mean, I generally love to debunk trite phrases like that, but this is one where it does tend to work out that way. And the reason, again, is that information idea. It’s twofold, right? You’re looking for information to grow your own career, you’re looking for a new — I don’t know — investment opportunity, whatever it is, you end up having access to more information and hence, more options because of that. The other thing is that, quite frankly, people rub off on other people. We respond to the social norms of the people that are around us. There’s some research that actually suggests this is not just our close contacts, but it’s a ripple effect out three degrees of separation, so the people that they know and the people that they know. So the communities that we’re a part of have a big effect on this as well. The example, Tim, to use an adjacent field, to go into my wife and I in medicine, there’s a lot of people, especially in ER, who work a ton and have zero net worth. Right?

Tim Ulbrich: Yeah.

David Burkus: And the reason is that they bought the boat and the lake house and all that other stuff, and they figured out like, oh, I can just work extra shifts, I can do overtime, and I can pay for it all. And the irony is then they’re in the community of people that own the boat and do the lake house and do the whatever, right?

Tim Ulbrich: That’s right.

David Burkus: And it’s actually the people that are pulled out of that community that are in the well, what matters is paying off my house. What matters is getting rid of all of this student loan debt, all of the stuff that got us there, those sort of things matter. That community that you’re a part of shapes your decisions as well. So and that’s the short term. The short term is that it shapes your decisions. The long term is that when you’re looking for opportunities or opportunities just find you, they’re much more likely to find you when you’ve got a broad, diverse network — again, I should rephrase that — when you’re a part of a broad and diverse network of people.

Tim Ulbrich: So David, in addition to getting a copy of your book, “Friend of a Friend,” which is available on Amazon, Barnes & Noble, Indiebound, where can our listeners go to learn more about the work that you’re doing?

David Burkus: Yeah, so the single best place to go would be the Your Financial Pharmacist podcast show notes.

Tim Ulbrich: That’s right.

David Burkus: Because my website’s great, it’s DavidBurkus.com. But if you can’t remember that, Burkus on Google, I’m like the only one with a web presence, which has been amazing and probably won’t last. But there’s a bunch of different links that you can click, but they’re going to be in the show notes anyway. While you’re there, you might even click over and leave us a rating if you really liked this or click over and buy the book because if you liked this, you’ll love that too. If you hated it, you’ll hate that too. So I would actually say go there first. And then yeah, if you want to go to DavidBurkus.com too, that would be great.

Tim Ulbrich: Well, I really appreciate it. I thank you so much for your time. And again, genuinely, your work, your research, has had a positive impact on me. And I know that’s going to be the case as well for many of our listeners. So thank you so much.

David Burkus: Oh, it’s my pleasure. Thank you again so much for having me.

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YFP 115: Financial Considerations for Job Loss or Reduced Hours

Posted on by yfpadmin


Financial Considerations for Job Loss or Reduced Hours

On this week’s episode, Tim Ulbrich and Tim Baker talk through financial considerations for those that find themselves in a financial hardship due to job loss, hours being cut or wages being reduced. With the recent news of some big box pharmacies planning to close stores and cut their workforce and many other employers cutting back hours for full-time pharmacy employees, this conversation of how to navigate a current hardship or be ready to weather a future storm is more important than ever.

Summary

Tim and Tim talk through several financial considerations for job loss or reduced hours. Some pharmacists are facing potential job loss, cut hours or a reduction in wages. Companies like Walgreens, Walmart, Kroger and Harris Teether are either closing their pharmacy doors or reducing hours significantly, leaving many pharmacists to question how secure their jobs are. If you’re in this position, what should you do or be thinking about? Tim and Tim discuss emergency funds, what to do with your student loans during a financial hardship, health insurance, what to focus on with retirement savings, the value and importance of a side hustle and networking.

Tim Baker shares that while many of this is out of a pharmacist’s control, you can start by looking at your foundation. How much credit card debt do you have? Is your emergency fund where it needs to be? By reducing credit card debt and having an emergency fund to cover 3-6 months of non discretionary expenses like rent, utilities, mortgage and loans, you’re setting yourself to be protected in case you face financial hardships like many are in the field today.

Next they discuss federal loans and when to use forbearance, deferment, or choosing an income based repayment plan. Tim Baker says that first deferment should be explored and then forbearance if needed as your interest will capitalize greatly with the latter.

In regards to health insurance when losing your job or having a change in your benefits, there are several options to consider including COBRA, short-term health insurance, exploring the federal marketplace, healthcare sharing, or HSAs.

When looking at retirement savings, Tim Baker says that typically, if you are in your 30s, there is plenty of time to right a ship that’s off course but that it’s also important to keep the fees associated with your investments low. They also talk about the importance of diversifying not only your investments but also your income by taking on a side hustle or entrepreneurial venture. This allows you to make money and also put the extra money into different savings goals depending on your passions. Tim and Tim also talk through how networking can help in times like these and the membership offer APhA has to those facing financial hardships.

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 I have with me back on the mic the one and only Tim Baker, fee-only Certified Financial Planner for Your Financial Pharmacist. Tim, it’s been awhile. How are you doing?

Tim Baker: I’m doing well, Tim. How are you doing?

Tim Ulbrich: Good. So before we jump in, it’s been awhile since you’ve been on the show. And big news for the Baker family with the addition of a baby. Give us the good news and tell us how everyone’s doing.

Tim Baker: Yeah, everyone’s doing well. And August 2, we welcomed Liam Baker to the fold. So we have Olivia who’s 4, turns 5 in October. And now we have Liam. And everyone’s doing well. I’ve got to give major props to my wife, Shea. She experienced 40 hours of labor, and we finally got to meet him on the 2nd. So it was a lot of stress I think leading up to it, but we’re happy and healthy baby, healthy mom, and now we’re kind of going through the storm of — I shouldn’t say storm, that’s probably a bad way to say it — but in-laws here and family here and trying to get into a routine and everything like that. So all good things, though, and thanks for asking.

Tim Ulbrich: Yeah. When people ask about like the birth of a child, I always feel like it’s easy to think of it as like the most chaotic, most joyous moments of your life, all wrapped into one.

Tim Baker: Yeah. And I’ll tell you what — and this came I think straight from you guys, you and Jess, like I don’t think I could have done it without our doulas. So shoutout to our doulas, our doulas were unbelievable and I think if I looked back on that experience, if they weren’t there to support Shea and myself, I think we would have been lost. And it’s just one of those things where you don’t know what you don’t know. It’s almost like a financial planner, you know, these individuals are just lovely people who are there to help coach you and advocate for you and in a world sometimes in labor and delivery where it’s almost like it’s very medicalized, if that makes sense, and sometimes, the things we manage to the lowest common denominator — obviously we want a healthy baby — but do we have to do this procedure? Do we have to do this? Or it gives us some time to think about it, and I think that really when we compare Shea’s birthing experience for Olivia versus Liam, they’re so different. I think the doulas are a big part of that. So not to get on a tangent about that, but that was a great process or great to have them on the team.

Tim Ulbrich: Yeah, and the value of a coach is real, right? Especially in this situation and this exciting time in life but also very stressful one. And a shoutout to YFP team member Caitlyn, who helps us with the podcast and lots of things with YFP who is also a doula, helping people up in the northeast Ohio area. So let’s transition and talk about this week financial considerations for those that are facing potentially a job loss, hours that are being cut, a reduction in wage, and this topic I think is really more important than ever in the profession if you think about the recent announcement by Walgreens and its plan to close 200 stores in the U.S. Obviously, we have others; this isn’t an isolated story. WalMart had made similar announcements. We have many others that have cut hours, notably would Kroeger and Harris Teeter. It seems like 32 is really becoming more of the norm when it comes to a community pharmacy practice, and we’re seeing certainly wages that are being reduced as well. And so I think this conversation about what should one be thinking about if they find themselves in this situation, whether that be a job loss, whether that be hours cut, or whether that be a reduction in wage. And oh, of course we’re not seeing a slowing down of the student indebtedness with the most recent data from the class of 2019 showing now an average just over $172,000. So Tim, before we jump into the strategies and what one should be thinking, what do you make of all this and what we’re seeing out there in the profession?

Tim Baker: It’s a great question, Tim. I mean, I am not — I think you and I have stated multiple times and just in our view on things is that I think we are very much the optimist. But I’ve seen it with clients that have come through my door where they’ll — it’s like OK, we’re talking about their financial plan and their net worth and income, and I’ll say, “OK, what’s your annual income?” And I work with two full-time community pharmacists, and they’re making in the $70s each. And you know, at the end of the day, I think this is all cyclical. Like I think right now, we’re in a position or the profession is in a place where it’s kind of right-sizing, and I think we’re going to see that from a job perspective, probably even an education perspective. So I think that this is something that we definitely have to I think talk about and talk through. And I think that’s where YFP I think can play a role is kind of talk through these issues and what we can do financially, but I think also what we can do as a profession — and this is me as an outsider speaking about pharmacy. But it concerns me, I think. You know, when you’re looking at a full-time job of $70,000-80,000, and you still are carrying $170,000, $270,000, $300,000+ in loans, which I see, that’s concerning, you know. And the political climate out there is such that our leaders, at least what you see on the Democratic side, and we’ve heard it from President Trump, I think there’s attention that is at least being paid to this crisis, or whatever you want to talk about. But at the end of the day, there’s a lot of things that we can’t control. And there are things that we can control, and I think what we want to do is kind of shine a light on the things that we ultimately can control and at least get something to think about and to chew on, and I think that’s really our purpose in this episode.

Tim Ulbrich: Yeah, absolutely. And we’re going to jump into those things that we can really focus on and one can control. And before doing that, I want to give a shoutout to Richard Waithe from RxRadio. And him and I talked on our podcast last week and also on his show about the debt cancellation that’s being proposed by the 2020 candidates. But what I want to mention here — and we’ll link to our show notes — I think he did an awesome job, to your point about starting and sparking a conversation, he wrote a great post on Medium that we’ll link to that talks about some of the WalMart news and other cuts and what we should be thinking about as a profession and those within that profession. And I think I’m with you. We need to have a constructive conversation, and I feel like there really isn’t a great venue for that to happen right now. But I think that’s where we’re going to see really a lot of creativity and innovation in what we can be doing going forward. So let’s jump in. What can people control? And I think No. 1 what comes to mind, Tim, for me is really developing a sound financial base. So here, I’m really thinking prevention that if somebody were to find themselves in this position, if they have their financial house “in order” or those that aren’t yet in this position but maybe find themselves in that position in the future that they can really weather a storm like this or maybe even put themselves in a position to be more opportunistic if they’re dissatisfied with their work or they want to find something else to do. And we talk on this show all the time about having a sound financial base, having your financial house in order. So when you’re working with clients, what does this really entail in terms of putting yourself in a good position?

Tim Baker: Yeah, so I think the thing — and we talked about this in Episode 026, Baby Stepping Into a Financial Plan, which I look back at I think with this episode is it’s so long ago that I think we talked about it, it’s worth bringing up again. I think the two things that I look at when I first kind of do a once-over to someone’s financial situation is what does the consumer debt look like? So I’m not even really concerned about the student loans as much because there’s a lot of things that we can do to kind of mitigate the cash flow or the repayment of those loans. The thing that I look at is what essentially do the credit cards look like? And unfortunately, I feel like more and more pharmacists that come through my door, we have a good amount — I’m talking $10,000 or more — of credit card debt that we have to really reconcile. So you know, I think figuring that out is probably first and foremost. I think secondarily is it goes back to the emergency fund. So typically when we don’t have an emergency fund, that’s when we’re reaching for the credit card when something comes up. So the emergency fund really allows us to have peace of mind so we have cash money set aside in case something were to happen, it allows our investments to keep kind of working. So we don’t want to be pulling money out of our 401k or any of our investments that are really tailored to more of a long-term approach.

Tim Ulbrich: Right.

Tim Baker: And it allows us to avoid the credit card debt, so we’ve talked about at length of why this is important, and this is typically 3-6 months of non-discretionary monthly expenses, which are just a fancy way to say if you lose your job or your hours get cut back, these are the expenses you’re going to have regardless: your rent, your mortgage, utilities, your loan payments, that type of stuff. So I think at the end of the day, those two things, from a foundational standpoint, is the consumer debt in check? And you know, is the emergency fund in place or at least phase one? Sometimes I’ll say, “Hey, client, you need $30,000 in an emergency fund,” and they’re like, they might have $10,000 worth of debt, so we kind of take it in bite-sized chunks so we can achieve that goal.

Tim Ulbrich: That’s one of the things you boo, right? Go home, Tim Baker.

Tim Baker: Yeah, yeah. And the thing about it, and I kind of talk about this at length with regard to the investments, it’s really boring to pay off a debt, right? It’s just boring. There’s nothing exciting about it. It’s really boring to save money in an account. I mean, I like doing it because I like to see my interest payments go up, I know interest rates have gone down, so we’re big Ally nerds, and I think their interest rate has gone down to 1.9%, but it’s still 20 times better than the next guy. But that’s really not — a lot of people would compare it to watching paint dry. But I think sound financial planning for the most part is super boring. So yeah, I might get booed off the stage when I say, “Hey, pay off this debt,” or “Save this money,” or “Be really, really boring with regard to your investments,” but at the end of the day, I think it’s kind of the best interests of the client.

Tim Ulbrich: Well, I think there’s a great opportunity for people to reflect, myself included, yourself included, that you know, while you may not have been impacted by some of the recent cuts or job layoffs, any one of us is vulnerable to this at any given point in time.

Tim Baker: Yeah.

Tim Ulbrich: And obviously, there’s things we can do to help protect ourselves, but if you can envision a situation where if you find yourself in a job loss or hours cut or wages reduced, and you imagine Scenario A where you’ve got $20,000 of credit card debt, no emergency fund, Scenario B where you’ve got no credit card debt and a fully funded emergency fund, the stress associated with those two scenarios is very, very, very different. And so I think that’s a great reminder, as you mentioned, Episode 026, we talked about it. The other thing I think worth mentioning here — and we talk about this a lot in terms of budgeting and really thinking about the future — is these are moments where, again, even if you haven’t been impacted, to just take a step back and say, “What can I do to create margin in the month-to-month?” so that if I were to find myself in a position like this, either you can weather it or it may not necessarily hurt as much or you can work through having several months where you may not find yourself having an income coming in. So again, you think about if somebody’s in a situation where they’re used to making $7,000 of net income per month, and they’re spending $7,000 or more of net income per month, versus somebody’s who’s maybe only spending $3,000 or $4,000 of that net income per month because of house payments and car payments and all of the other things that we’ve talked about before, obviously, again, those are two very different scenarios. So I think there’s wisdom in all of us hearing this message and taking a look at our financial plan to say hey, what can we do to build margin and take some of the pressure off if we would find ourselves in a situation like this.

Tim Baker: Absolutely. Yeah, I mean, one of the things that we kind of brushed over here recently is about interest rates. I mean, some of that margin could come from just restructuring debt. So you know, if you bought a home, and your interest payment is 4.75%, you might be able to — if we consider closing costs and things like that, it might make sense for you to do something like that. I mean, that’s something that doesn’t really test your kind of putting you outside of your comfort zone, so a lot of things when we examine inflows like making more money or outflows, cutting expenses and tightening the belt, it’s typically outside of our comfort zone, and we don’t like to do it. But it might be something as savvy as that, taking advantage of where interest rates are to kind of create that margin. But there’s lot of ways to do it.

Tim Ulbrich: Second area I want to talk about is potential need for deferment or forbearance of loans. So obviously, we have people that are listening that have been impacted by this, may currently find themselves in a position where hey, I don’t have work or I have such reduced hours or wages that I just cannot make the payments that I have. And so here inserts this option of potentially deferring or forbearing loans, which we know is not the ideal scenario but may be the reality for some people. So talk us through what is deferment, forbearance? What’s the difference? And what are some of the considerations here?
Tim Baker: Yeah, and when we typically talk like deferment, forbearance, grace period can be like also rolled up into this, it’s essentially periods of time where you don’t have to pay off your loans, where you’re basically out of school, sometimes you might be in additional training, so that’s where we talked about — and this is one of the things that I love we talk about, Tim, moving the needle. I rarely come across a resident that I work with that will automatically say, “Oh, I’m deferring my loans,” which makes me happy because I know when we first talking on the subject, I would ask a resident, “Did you defer your loans during residency?” or “Are you doing it?” Yeah, I feel like the majority of them would. So I feel like that message has come out. So like we say about the grace period, it’s not very gracious, you know, the deferment and forbearance, they’re not good. We’re really look at these as really stopgaps, like you said, Tim, when we can’t make the payment. So I typically follow the alphabet and go, deferment first — D before F — and then forbearance, typically because of how interest accrues. On some loans like Perkins and subsidized Stafford loans or direct loans, in the deferment period you may not be responsible for paying off the interest that accrues. And typically, it accrues during those deferment periods or forbearance periods and then the interest capitalizes, meaning it moves from the interest column to the principal column. And then when you’re paying back that amount of money is now bearing more interest on the bad side of things. So you know, the big thing to remember is that ultimately, one of these is typically going to be available to you, either deferment or forbearance. And I would say look at deferment first, go to forbearance second, because typically, the forbearance is for a financial hardship, that type of thing, but the deferment will be a little more gracious. So I would say if this is a you need to do this, which I would advise against, but sometimes you have to do what you have to do, go that route because it’s going to give you a little bit more runway to get your financial house in order, try to figure out ways to make the income, find a job, side hustle, whatever it is. The big con is ultimately not only are you not putting a dent into the loans, they’re growing, unfortunately. And for the amount of loans that we’re talking about with pharmacists, it can grow substantially. So you could wake up — and the terms vary. Sometimes it could be 12 months, I think some deferment periods can last up to three years. That’s a long time for you to be sitting on a loan that on average, 6-6.5% interest, that can really add up over time. So at the end of the day, what you want to do is on the federal side of things, with federal loans, this is a no-brainer. This is actually one of the benefits that the federal loan system provides is that if during a hardship or during a period of time where you can’t make the payments, they’re going to work with you. And the reason for that is that loans are not discharged during bankruptcy proceedings, so they’re not going away. Even if they do, the federal loan program is backed by the full faith and credit of the U.S. government, which has us as taxpayers to be able to support the. So this is kind of a no-brainer. And at the end of the day, the government collects more in interest the longer that you pay off or the longer that you defer. On the private side of things, it’s a different ball game altogether.

Tim Ulbrich: Yeah, and I think that’s worth noting because when we talk about on the private side of things, obviously you’re now at the mercy of the private lender — and mercy may not be the right word, that makes it sound terrible — but the reality is that we talk about this all the time: When it comes to refinancing your loans with a private lender, full transparency, you have to consider both the pros and cons in that. And while many of these lenders have really come into line with having all of the benefits — or many, if not all — of the benefits of the federal system, one of them that you have to consider is one important one here that we’re talking about is if you were to find yourself in this position, what’s going to be the option if you don’t have a deferment/forbearance option with a private loan? So how have you handled that with clients? Or what advice might you have for them? Because they’re probably not going to just throw this out there and market it and say, yes, we’re going to offer you forbearance or deferment. So you’re probably going to have to dig a little bit deeper here.

Tim Baker: Yeah, one of the risks moving from — although we believe that — so when I first started advising clients on student loans, basically, what we were told is never have the client move from the federal system to the private system. So never have them refinance. And obviously, the big reason was because of all the federal protections: They forgive upon death or disability, there’s forgiveness, there’s lots of different plans that you could pay off the debt, that’s also hardship. Now, because this is a $1.5 trillion issue that affects 45+ million Americans, a lot of these companies have said, hey — the CommonBonds, the SoFis, the LendKeys of the world — have said, “Hey, we’ll match those benefits. We’ll forgive upon death and disability, we’ll try to make you basically as similar to the federal system as we can.” Now, one of the things where I think they fall short a lot of times is a lot of these companies don’t necessarily advertise that they’ll work with you on a hardship. Kind of behind closed doors, I think that they will because at the end of the day, they want what you want. They don’t want you to — you can’t really default on the loan. Well, you can default on the loan. But it’s not going to go away. So eventually, what the companies will do is they’ll sell the loan for pennies on the dollar to a collector, and then they kind of hound you for it. They don’t want that because they want to get as much of the interest and principal paid back as possible. So what I would say to someone that has private loans that is struggling to make the payments is just level with them. I think pharmacists have a little bit more cash because you have a professional degree, you have the ability to make a good income, even if it’s not now but in the future once you kind of get sorted out. So to me, it’s just level with them and say, “Hey, I want what you want. I want to be able to pay this back, but I need some time to figure this out, or I need some grace.” And I think more often than not, they’ll figure it out. But at the same time, they are running a business. And they are not backed by the full faith and credit of the U.S. taxpayers, so sometimes they might call you on the loan, and then you’re kind of left paying with it. So it’s a little bit of give-and-take. Obviously, when you move from the federal system, you’re getting a better rate, but there’s a little bit less flexibility in repayment. And sometimes, a hardship is chalking that up to that.

Tim Ulbrich: Yeah, Tim, I think that’s a great point in terms of the private companies and at the end of the day, they’re running a business. I think this is also a good time to remind our listeners that are in the federal system that maybe haven’t refinanced their loans to the private sector that before they go through and pursue a deferment or forbearance option, is to see whether or not one of the income-driven repayment plans, if they’re not already in an income-driven repayment plan, would allow them to right-size their payment to match the income in terms of the time period that they may have a reduced wage or have lost their job. Of course, deferment/forbearance always being an option, but not overlooking the income-driven repayment plans that might provide some temporary relief without having to go into a deferment or forbearance situation.

Tim Baker: Yeah, and I think one of the — we often talk about — especially on the federal side — there’s lots of flexibility in repayment, and I often say it’s almost too much flexibility because there’s so many different options with the different repayment plans and deferment and forbearance. And what it typically does is it just confuses people in terms of like what they should actually do in practice when things are normal. But when they’re not normal or when things aren’t going as well from an income perspective, it’s actually a good thing on the federal side. And just to recap, like I said, the private companies, they do want you to pay back the loans, so they’ll try to work with you I think the best they can. But sometimes, they’re not going to be as flexible as the federal system. So again, lots of flexibility in the federal system. But I think there’s typically an avenue for everybody that might hurt the long-term gain or long-term approach to the student loans but can give you some relief in the short term.

Tim Ulbrich: Yeah, and I think to wrap up this section here as we continue to reemphasize the importance that when you’re refinancing student loans or looking into refinance, of course, interest rate is a big variable. You want to calculate the savings. But it has to be the savings plus looking at some of these other variables. And I think that’s more important than ever now as we see rates continue to drop. Those refinance offers are going to become attractive. Here we are in September, end of August 2019, that making sure you’re looking at OK, what are some of these other benefits that you may be losing from the federal system, although you’ve talked about those have really equalized across the board. But certainly it’s not an apples-to-apples comparison between the two.

Tim Baker: Sure.

Tim Ulbrich: So again, as we continue this journey talking about financial considerations for those that have potentially a job loss, hours cut, or reduced wages, we’ve talked about first developing a sound financial base, really the prevention aspect. Then we talked about loan deferment or forbearance. I think the next thing, Tim, we need to talk about is if somebody ends up in a situation where they lose their job or potentially they get hours cut to a part-time where they no longer have access to health insurance benefits, or I know we have several side hustlers out there that may make the decision to say, hey, I’m going to jump ship from my day job and ultimately, they carry the responsibility of health insurance coverage. But this factor, especially if you’ve always been used to having employer-provided health insurance, is a huge consideration. I mean, the cost of this is no joke, right, Tim, when you look at this relative to the rest of the plan?

Tim Baker: Yeah, absolutely. And this is one that’s going to be dependent on the region or the state that you live in in terms of the coverage. This one’s a hard nut to crack, and I’m of the belief hopefully that eventually, the employment will be separated from this benefit and that everyone can get coverage separate from who their employer is because I think it is one of those things that sometimes, it prevents people from moving away from a job that isn’t necessarily a good fit for them and they feel stuck. But it’s either looking at the exchange per state — and some states, you can really find something that can fit your needs, and other states, there’s almost nothing available. But the big one — and Tim, I think you have some experience with this here recently — is going to be COBRA and what that basically provides for people in kind of a transitionary period.

Tim Ulbrich: Yeah, and I think this question’s really interesting because I think it’s just a good activity for everyone to look at, even if you’re not foreseeing a situation where you leave a job is to look at what you’re paying out of pocket per month for your plan and what percentage that is of the overall cost. I mean, most likely, the employer is carrying about 90% of that, right? You know, varying degrees, obviously less or more, varying degrees depending on how catastrophic the coverage is or not or high deductibles, all those things. But at the end of the day, again, it’s easy to get lulled into this is one of the real benefits, just like we’ll talk about here in a moment with retirement where if you have a match provided and then all of a sudden that’s fully on your back, you’ve really got to factor that in, especially for those that are thinking about making a jump that’s of their own choice, especially to pursue some type of entrepreneurial option or side hustles. You’ve really got to factor this in when you’re thinking about your business, pricing your services, all of those things because often, people will say, “OK, I’m making $100,000. I need to replace $100,000.” And obviously, we know it’s probably more like $150,000-200,000 when you factor in all those other things. So yeah, Jess and I actually had a little bit of experience with this last year when we made the transition down here to Columbus from northeast Ohio, and we were looking at, OK, what are our options for health insurance coverage? And the reason why we were looking at this is we made a really specific decision for our family that we’re going to take two months off in the transition, which was awesome. And then we had the holy cow moment of oh, wait a minute, we have three kids, and we’re not going to have any health insurance, so what’s the game plan? So the most obvious option we ran into is Cobra, which is essentially extending your employer coverage that is offered to you for a period of time, but you’re going to really foot the bill for doing that. And this allows you to take out the plan you have now, you know who’s in network, you know who’s not in network, especially if you’re staying in the area, you’re comfortable with the offering of what’s there, so it’s essentially the continuation of your coverage that was being fully funded by your employer or a combination of employer and you, and now you’re able to continue that offering, have access to that offering, but really, the cost is going to be on you to do so. And the reason we didn’t go through this — and this is really a good bridge option for many people, especially if this is only a 3-6 month period is that the plan that we had offered at my previous employer was so rich and we necessarily weren’t really using a lot of those benefits that we looked at the cost and said, “Wow, like we don’t really want that,” and I think this really highlights us having the opportunity to talk about the importance of an emergency fund that if you have a fully funded emergency fund and you’ve been relatively healthy, you may not necessarily want to pay out of pocket for an expensive Cobra coverage. Or if you’re looking at options in the exchange, you may be able to take on something that has a little bit higher deductible or that has more catastrophic coverage because of the other savings and funds that you have. So Cobra is certainly an option. The other option that I honestly, Tim, wasn’t aware of, is short-term health insurance. And we ended up doing this when we took a couple months off between jobs because at the end of the day, it was cheaper than Cobra, and for us, it really just provided what we needed, which was catastrophic coverage. So the cost of this was really, really significant in terms of the savings, pretty simple to get signed up, simple to find, so for those that are relatively healthy, have a good savings in place, I think this is a good option. If you’re looking longer term, I think of course the exchange, all those you mentioned, state-to-state you’re going to see a significant variety. From my experience looking at some of those, those policies, many of them are very expensive, even just for catastrophic type of coverage. But obviously, healthcare.gov is a place to go to look there. Then the other one that I think is often overlooked are some of the healthcare sharing service organizations that are out there. You probably have heard of terms such as MediShare, Liberty HealthShare, these are essentially individuals that are coming together, a lot of them are faith-based organizations that come together with the idea that you as a community are, through contributions, sharing in the cost and essentially pooling together money and resources that can help fund one another. So that, of course, has upsides and downsides. And then if somebody moves into the route of being self-employed through opening up their own business, then of course, you have the opportunity to open and provide health insurance coverage through yourself and the tax advantages and benefits that come with that as well. So I think at the end of the day, for most people that are listening that may find themselves as one of those pharmacists that either is losing their position or is getting cut down to part-time hours, doesn’t have healthcare coverage, most likely, they’re going to be looking at either Cobra coverage for that transition period or potentially some short-term health insurance really would probably be the two predominant options.

Tim Baker: Yeah. The other thing that we talk about more is almost like a longer term stealth IRA is the HSA where that’s something that if push comes to shove, you can use for medical expenses in the near term. We talk about as a triple tax benefit account that can almost act as a secondary retirement account. But if push comes to shove and we need to dip into that, I mean, by all means. I think having that as part of the overall thing to tap into is something to look at as well.

Tim Ulbrich: That’s a great point. Next bucket, Tim, is this idea that people in this situation may find themselves with a loss of the option of saving for retirement through an employer-sponsored account. So if they no longer have their job, they can no longer access a 401k or 403b, maybe they’re losing the match, or even just the option to contribute to that beyond the match or even in the absence of a match. So if you’re working with a client who’s in this situation, how would you handle this in terms of evaluating, OK, are we just going to put on pause through this temporary time of hardship, and what are the things we’re going to be looking at? Or if we do want to continue to save, what are the other options that are out there?

Tim Baker: Yeah, I mean, typically, when we’re looking at a situation like this where it’s either job loss or maybe even significant cutback in hours, you know, this is kind of an emergency situation where we might not look at even getting the match. Most of the time, I would say, get the match as best you can. But I think this is where some people can get in trouble with kind of the longer term because it’s really hard to put numbers and calculate, OK, if this happens, what are the long-term repercussions? So one of the exercises that I think we do at YFP Planning, which I really think kind of turns the light on, is actually just taking a client through a nest egg calculation and showing them, OK, if we give a set of certain assumptions and kind of we can see what your current savings rate is, what you have saved, how long we have until retirement, we can kind of see are we on track or off track? And then we can take some of those variables and change them to say, OK, if before, we were putting 8% in and now we drop that to 4%, how does that change the overall bottom line? So I think if I was working with a client, that’s essentially what we would do. And most of the time — I wouldn’t say all the time — but most of the time, given the fact that the majority of the pharmacists that we work with are kind of in their 30s, there’s a lot of time between now and retirement to kind of right a ship that’s not necessarily on the right track, but my belief is that from an investment perspective when it comes to retirement investment is trust in the market. It will take care of you over long periods of time. So my thought is to be fairly aggressive with those accounts and make sure that expenses are low. So I think when you couple those two together — I had a couple recently that they felt, I think they were in their late 20s, didn’t have a whole lot saved for retirement, just getting started out, and we kind of went through the numbers, and I think they were like flabbergasted that they weren’t like 10 or 20 years behind. So I think when we actually do the numbers, it can be a powerful reassurance to see if the variables change, how that changes the overall thing. But you know, I think, again, this wouldn’t be something that I would necessarily fret at in the short term if we were in this scenario because I think at the end of the day, this could be figured out.

Tim Ulbrich: So Tim, I think it’s worth talking through here, you know, somebody who finds themself in a situation like a job loss, maybe even a time period before they find another opportunity, so they have this 401k or 403b account that’s sitting there. What do you typically advise — or maybe better yet, what are the factors or variables you’re helping a client think through in terms of determining, do I leave those monies there as is until I may have a new position that I can make that decision to compare what I might get in an IRA versus what my new employer offers? Do you move forward with a rollover into an IRA? How do you typically work that through with a client?

Tim Baker: Yeah, so to me, this decision really begins and ends with expense. So in a 403b, 401k environment, I always say that we have to operate within the sandbox that the employer and the custodian, whether it’s Fidelity, Vanguard, whoever it is, allows us to basically play in. So in those retirement plans, you typically have 20 or 30 different investments that you can put your money towards, and that’s it. In an IRA environment, the world’s your oyster. You can invest in just about anything that you’d like. So but I think the big difference is that in the 401k, 403b environment, it’s not as transparent as we would like. So most people, they sign in, they say, oh, I’m putting 5% in, here’s x amount of funds, I like these four or five or six funds, and then that’s it. But what they don’t know is there’s typically a lot of fees that are associated with that that are very opaque to them. So I actually did an analysis with a client here in Baltimore. He’s one of the clients that is not a pharmacist, but he has a 401k with a major company here, and basically, when we went through his analysis, I had not yet analyzed his 401k yet, but he has an IRA with us, and I say, “Look. Depending on when we do the analysis, depending on what comes back in terms of like how expensive your 401k is, is going to really determine if we should contribute future dollars to the 401k or to the IRA.” So when I did the analysis this morning, and his 401k was about five times more expensive than the IRA that we have. So basically, the move was to keep his 401k contribution static, so basically get the match. And then as he increases his contribution to his retirement account, it will go into the IRA until we max that out. So this is kind of — and sometimes, this can be shades of gray. This is like looking at expense ratios of .1% versus .05%, so it’s very, very minimal. But if we’re talking hundreds of thousands of dollars or even millions of dollars over the course of a career, that stuff definitely adds up. So the decision, longer answer, Tim, the decision to move those monies is going to be dependent on the actual plan themselves. You know, if you’re in a TSP, as an example, those are really efficient funds. But what most financial planners will say is they’ll say, “Hey, move the funds for me to manage,” because that’s typically how they get paid is the investments that they’re managing. So it’s typically sound advice, but not advice that is not necessarily in the client’s best interest. So I say it just depends on what the analysis shows, if that makes sense.

Tim Ulbrich: Yeah, absolutely. I appreciate the insight. I think fees, at the end of the day, we’ve talked before on this show, the impact those can have. And with a few exceptions, I think you mentioned the TSP being one, and maybe there’s a couple others out there. I mean, more often than not, what we’ve seen is that employer-sponsored accounts just typically don’t always have as low of fees as you can get out there in the open market through index funds and other things. But I think being aware of where the advice is coming from is really important as well. The next one we have here is the value and importance of a side hustle. And obviously, we’ve talked at length on this show, we’ve had lots of examples as recent as Brett Rollins coming on the show to talk about his two side hustles in writing for Pro Football Sports and then doing some work around expert witnesses and his area of expertise. But when it comes to side hustling, especially for those that are potentially in a time period of loss of job, reduced income, reduced wages, what do you see as the value of this side hustle in addition to, of course, just what they’re going to get from potentially the monetary income?

Tim Baker: Yeah, you know, when we talk through like a savings plan for a client, when we do goal-setting, we’ll talk about things like, what are the things that are important to you? And a lot of people will say, you know, it could be travel, it could be starting a side business, it could be whatever that — retiring at a certain age. So we typically like to marry up what they’re actually passionate about in life and what they want to do with kind of how we’re deploying our savings and our money. So one of the things I like to kind of point to is basically a savings plan. So the baseline or the bedrock of that is going to be the emergency fund, but it might be where we have a savings plan for our trip to Disney World. We have a savings plan for Benji, our dog, so when he gets sick or he needs grooming. So one of the things I really like about the savings plan is that it clearly shows where the money comes from. So for nine out of 10 of us, it’s going to be like a paycheck, right?

Tim Ulbrich: Right.

Tim Baker: So when we talked about at length with Shea and I, when we basically funded our trips to Disney World, Brazil, and Iceland through Airbnb and Rover, in our savings plan, that’s what we outlined was that everything else was paycheck except for those two things or that one thing was all going to be from those dollars. So what I like to clearly show to clients is that typically, all of our proverbial income eggs are in one basket. It’s going to be WalMart, like we talked about in the beginning of the show, or it’s going to be a hospital, or it’s going to be CVS, whatever it is. We’re at risk because if a decision is made in a boardroom in some city in the country, it can affect all of us. So my belief — and I understand that I’m biased because I’m an entrepreneur, Tim, you’re an entrepreneur — but it should be to not only diversify our investments but to diversify our income streams. One of the conversations that we’re having in our household is, Tim, is about YFP profit distribution. So as we distribute profits to the business owners, Shea, what should we be doing with this money? So like for me, it’s like, I really want to buy an RV and travel the United States. So that might go into an RV fund. Or it might be, we really need to catch up on retirement, so it might go strictly into retirement. But I like to clearly delineate lines of income for a purpose. And part of that is to show that most of us are very susceptible to kind of a one-income or two income streams if there’s two people in the household.

Tim Ulbrich: And one of the things I love that you do with your clients — and Jess and I have experienced this firsthand in working with you — is you mention as you’re working through that savings allocation worksheet, if you have a prioritized list of what you’re working on, when that extra income comes in the door, boom. Like there is no question about where that is going. It doesn’t go off into the ether of no-man’s land or expenses come here or there. So I think the clarity, and obviously, that then gives you that feeling of acceleration of your financial goals, which fuels on itself and I think helps things move forward. The other thing I really love — and we’ve experienced this personally, and I know we’ve heard this over and over again from the guests we’ve had on the show — is that while there’s not a direct monetary value necessarily from it, but that value of having a creative outlet, you know, where you can really contribute to something that you’re really passionate about and that you want to implement and to have the fun in terms of the creative side of the business and working through the problem and the challenges. And I think especially for people that find themselves stuck or dissatisfied in their day job, I think beyond the cash, there’s incredible value in being able to have that creative outlet while you may be pursuing other opportunities or even just working through that difficult time.

Tim Baker: Yeah, and I think one of the things that is worth mentioning — and I remember something that I think Tony Guerra said that I’ll paraphrase — is like, he almost set his schedule off the bat at like a 32-hour schedule so that he could have one day of just thinking or working on different progress.

Tim Ulbrich: The entrepreneurial 8.

Tim Baker: Yeah, exactly. So to me, a lot of people sometimes bemoan the fact like, oh, I can only get three days this week or four days this week. To me, I would flip that on its head. It’s like, well now you have a day or two that you have capacity to do something else that you can monetize your time in a different way. So and sometimes, it’s just getting there and getting outside of your head or maybe doing something that you would never do. Like I said, like when I launched my business, Tim, I drove Uber. And it was one of the best jobs because I love to drive, and I love to talk to people. But for me, when I was launching my business, I was just stuck in a room and I was kind of bouncing off the walls. But when I got out and looked at the world in a different space and talked to different people, it made all the difference. But to me, it was to earn income so I could pay my rent and feed myself. But it was also to think through a problem or work through a problem or do something that’s kind of outside your comfort zone. So I think sometimes with a lot of pharmacists that we work with, I say, “Hey, look, whether you’re growing top-line revenue, top-line income or cutting expenses, typically, both of those things are going to be outside of your comfort zone. But I think doing a little bit of both is good, especially to tighten the belt if you’re expecting hey, I thought I was going to make $120,000, but now I’m only making $80,000-90,000. So I think capacity in your workweek is something that we should value and really try to figure out ways to go from there.

Tim Ulbrich: I agree. And one of the last things I think about with a side hustle, which takes us into our last plan around networking and professional development, that I don’t think it’s talked about as much as the extra income and the creative outlet is this idea that as you pursue a side hustle, as you get yourself out there, as you meet more people, you’re naturally going to expand your network, right? And you’re going to take yourself out of your comfort zones, you’re going to have to really talk about the work that you’re doing and why you have a solution to a problem that needs to be solved. And those are skills that if you’re working in a 9-5, let’s say a traditional community pharmacy job is one example, you’re probably not forced to do those things. And your opportunities to expand that network may be a little bit limited unless you take that step above and beyond yourself. So I think this last point here of networking and professional development — and this timing is really good as next on the show, we’re going to have David Burkus, the author of “Friend of a Friend,” to talk about this concept of hidden networks and really redefining how we think about networking and why networking is so important, not when you need it in the moment of holy cow, I don’t have a job, I now need to tap into my network, but why you should be fostering and developing that network all along. So stay tuned to next week, we’re going to talk about that a lot more. I think this is also a good chance, Tim, for us to highlight what APhA is doing here as we continue to partner with them and value their partnership, is they just a couple weeks ago announced that they’re offering complimentary APhA membership to those that have found themselves in a position where they have been laid off or work hours have been significantly reduced, and they’re really positioning this as for people, whether they need CE, whether they’re looking to network, they’re trying to find new opportunities, pursue new skills, that this membership that they feel like will help them do that. And I really commend them for doing that. I think there’s been a lot of discussion nationally about hey, national organizations, where are you in this difficult time? And this is really somebody stepping out there and saying, we’re going to invest in this. And this is one way we’re going to show this is a priority. So for those that find themselves in that position of either a job loss or hours that have been significantly reduced, you can email the APhA membership team at [email protected]. Again, that’s [email protected]. Or you can call APhA as well, and it sounds like they’re going to be able to move that forward, which we’re excited about. So networking, professional development, when you think of your journey, Tim, and the work that you’re doing obviously now with YFP, but formerly Script Financial, I mean, how important — I hear you talk about a thousand cups of coffee all the time, right? I mean, this concept of networking.

Tim Baker: Yeah. No, it’s true. I mean, when I kind of had this Eureka! moment, I’m like, I’m going to start a fee-only financial planning firm for pharmacists for Gen X, Gen Y pharmacists, I’m like, I’ve got a lot to learn. So that 1,000 cups of coffee really put me on the path so when I sit in front of prospective clients, and I say, “Hey, prospective client, these are typically the things that I hear, and by the way, we have a solution to kind of hope ease some of that pain,” most of the time, they’re like, “Wow, Tim, you just described my life. Yeah, I’m struggling with debt. And yes, I’m unsure about my budget or my long-term projections and things like that. So to me, it’s so huge. And I think that any way you can expand your network, not just for — I think looking at it from like how you can help others is the best approach, not necessarily being in it for yourself, is the way to go. So I’m looking forward to that episode.

Tim Ulbrich: Well, great stuff, Tim. I want to remind our listeners if they’re not already aware and if they’re here listening at the very end of August, we’ve got a few days left in our exciting giveaway for the end of this month. So for those that are interested in pursuing something entrepreneurial, building off what we talked about today, or a side hustle, but if you’re not sure where to get started, we’ve got a giveaway for you this month that includes some awesome books and resources that will hopefully help spark some ideas and remove some of the barriers to getting started. So for three different winners, you will receive a copy of some great books: “Will It Fly?” by Pat Flynn, “Failing Forward” by John Maxwell, “The $100 Startup,” “The Freedom Journal,” and, of course, a Hustle Mode T-shirt. What would this be without a Hustle Mode T-shirt? So giveaway ends end of August, Aug. 31, 2019, and for those that are interested, you can sign up at YourFinancialPharmacist.com/giveaway. Again, YourFinancialPharmacist.com/giveaway. And if you’re hearing this after the end of August 2019, don’t worry. You can go to that same URL, and it’s likely we have another giveaway that’s ongoing right now. So Tim, as always, great stuff and looking forward to connecting soon on future episodes.

Tim Baker: Yeah, thanks, Tim.

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