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Celebrating 100 Episodes of the YFP Podcast!

Posted on May 16, 2019 by yfpadmin

Celebrating 100 Episodes of the YFP Podcast!

Tim, Tim and Tim celebrate 100 episodes of the Your Financial Pharmacist podcast by reminiscing about their favorites, talking about the future of the podcast, and hearing updates from several guests and pharmacy entrepreneurs that were previous guests on the podcast.

Summary

YFP celebrates 100 episodes! Tim, Tim and Tim talk about their podcast journey so far, what’s to come in the next 100 episodes, and hear updates from guests and other pharmacy entrepreneurs.

The Tims agree that it has been incredible to witness the growth of the YFP community and extend their gratitude to all of the listeners. They find it inspiring to see how people are impacted and empowered by the content on the YFP podcast.

After discussing their favorite episodes, several previous guests come back on the show to share updates on their financial journey and they way the YFP podcast has impacted their lives. We hear from Nick Ornella, Jill and Sylvain Paslier, Derek Schwartz, Blake Johnson, Alex Barker, Blair Thielemier, Adam Martin, Ashlee Klevens Hayes, and Nate Hedrick.

The conversation shifts to why the YFP team continues to publish podcast episodes and what the next 100 episodes will consist of. Tim Baker shares that they are just scratching the surface and have so much more content and stories to uncover. Tim Church says that what motivates him to continue is when he hears stories of the transformation of people from the YFP brand. Tim Ulbrich is excited to continue moving the issue of personal finance and how it affects so many aspects of one’s life. Although the team at YFP are working hard to share the impact of personal finance, the collective community of pharmacists that have formed are where the big changes and movement will be seen.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode, Episode 100 of the Your Financial Pharmacist podcast. Excited to be here in-person with Tim Church and Tim Baker. I don’t think there’s any other way we could have done this than being in person in Episode 100. We’re going to have fun with this episode. We’re going to reminisce a little bit on the journey, we’re going to talk a little bit about what the community means to us. We’re going to talk through some of our favorite episodes, and then we’ve got some special guests coming back on to the podcast, giving us an update and talk about what Your Financial Pharmacist has meant to them in their own journey as well. And then we’re going to finish off this episode talking about what do we see as the future of Your Financial Pharmacist? And what are the hopes and dreams that we have going forward? Now, before we get in and get a little bit sentimental on, you know, what this journey has meant for us, I want to first express I think as I was reflecting over the last few weeks, awaiting Episode 100, I was trying to think of what is one word or one feeling that comes to mind when I think about Episode 100. For me, it was a feeling of gratitude, of gratitude to the Your Financial Pharmacist community that really, without this community and without the support of empowering and helping one another and being so encouraging to one another, none of this is possible. And I think as we think back to starting this journey of the podcast back in summer 2017, it was all about creating a platform that inspired and empowered people to take on the steps that they needed to take towards their journey of financial freedom, whatever that might look like in their own financial plan. And to see some of that beginning to happen, to see the community empowered and helping one another is an incredibly powerful feeling and I think one that is more rewarding for us than certainly anything else. So Tim and Tim, as you kind of think on this journey, here we are at Episode 100, what are some of the feelings that come to mind, Tim Baker? It’s been a fun ride.

Tim Baker: Yeah, it’s really been unbelievable to me. And I think the podcast has really been a great conduit to really push forward I think our vision of what YFP, what we want YFP to be and I think what YFP is really doing for a community of like-minded pharmacists. And you know, I think when we met via Twitter and we were kind of looking at those messages back and forth — maybe we’ll post those on the show notes, you know just kind of the screenshots, which are fairly funny.

Tim Ulbrich: For someday when everybody’s like, what is Twitter?

Tim Baker: What is Twitter, yeah. You know, I guess I never would have thought that like this would have been a thing. So I think that I can’t really express the feeling that I get when we get feedback, either about the podcast or just us speaking, going around and speaking with different pharmacy schools and communities. And it’s just – I said it, it just jacks me up. It gets me fired up, you know, because other people are getting fired up about a topic that can be fairly dry and boring. But I think that that’s what this thing, YFP, is really – and it’s like when we started the podcast, it was me and you. And we’re like, what’s a podcast?

Tim Ulbrich: And will anybody listen?

Tim Baker: And will anybody listen? And I think the answer to that is yes. And you know, it’s kind of figuring that out and like now, it’s kind of taken on a thing of its own. And we’ve had so many great contributions and so many great stories and voices. Like, I’m a fan of the show. And lots of times these days, I’m not part of the show. But I listen and I get inspired by the community. And you know, that’s kind of been in the – it’s kind of poured over to this Facebook group and some of these other avenues that we see interaction and engagement. So if we would have – we’re at Episode 100, so we started the podcast two years ago, essentially, like I never would have thought it would have been this. I thought, you know, I thought we would have a few episodes. I think the average podcast is like eight episodes long or something like that.

Tim Ulbrich: Seven or eight is what I’ve heard.

Tim Baker: And we’re at 100. And I think it’s a credit to you, Tim Ulbrich and really Church, I think being all three of us kind of putting out great content, in my opinion, and seeing that engagement level rise and that needle move is what we talk about.

Tim Church: Yeah, first off, kudos to you guys because I had nothing to do with the podcast in the very beginning. And just taking it from idea and vision and actually making it happen, I mean, I think it’s unbelievable. I mean, when you look back, even the quality and the organization that you guys had to make this happen has been unbelievable. And to watch that grow over time has been really cool. And the opportunity to jump in on some episodes and then now kind of getting to interview some of the guests on the side hustle edition, it’s been really fun to be a part of that. But one of the things that really fires me up too is just seeing how this has been able to get the word out that this topic of personal finance is so important. But it’s not just about, you know, getting your finances in order and growing your net worth but just that feeling of relief, peace, the passion, and of being on that journey and feeling like you can do anything beyond just getting your finances in order. So I think it’s really cool to see that. And I think the pod has just been a great way to get the message out, to get people involved, and it’s resulted in a lot of great relationships over these two years, you know, with pharmacists in the community, with even non-pharmacists, with schools of pharmacies, organizations. So I think it’s just been a fun ride.

Tim Ulbrich: Yeah, and I think that empowerment piece is so important. I mean, I’m thinking back to Tim Baker, when were at APhA in Seattle just a couple months ago, and people coming up to the booth and talking about the podcast. And you know, I think while it’s fun that people recognize the podcast, you know, that’s rewarding for a lot of the work. What gets me more excited is when somebody says with such enthusiasm, “Hey, I listened to this episode and now, my spouse and I or I did this or one step closer,” and they start to light up with energy that they feel like their finally in control of their financial plan. And it may be a baby step, it may be multiple steps, but that sense of empowerment as I think about the vision of where we were a few years ago, that’s what it’s all about. And it’s not about us, it’s about people feeling like that they are in a sense, in control of their finances and that peace of mind that comes with it. And I think that as I reflect, you know, Tim Church, when you talk about kind of not being involved as much in the podcast on the front end, like the work you’ve done with the side hustle series and as we really look back at the journey of 100 episodes, the front 50 really being focused on a lot more content and topics and we’ve shifted and done a little bit more on featuring more stories and side hustles and entrepreneurial types of journeys, we’re going to do a little bit of both going forward, but I think the evolution of the show over time has been a lot of fun. So let’s on that note, talk about favorite episodes because I think it’s fun to reflect back. And I think I have about 95 out of 100 of them memorized in terms of which episode. But I don’t think we could mapped out all the content that we’ve done. It’s been fun as we’ve had people reach out and say, “Hey, I’ve got a cool story.” And it kind of takes on a life of its own over time. So Tim Church, favorite episode? And maybe a runner-up.

Tim Church: So this is very tough. There’s a ton of them. And none of the ones that were my favorite are with me in them. So I’ll throw that out there. But Episode 057, the Power of Automating your Financial Plan, which is one that you did solo, Tim Ulbrich, which was awesome because I did one episode solo, and it’s really hard.

Tim Baker: It’s hard. It’s really hard.

Tim Church: It’s really hard to talk, but you did such a good job. And when I think about that topic, I think it’s so important to not only make it as a convenience factor, but really, that’s one of the most powerful ways to grow your net worth over time and getting that in play. And I think there’s a lot of cool technology out there that you can make it happen. But that, to me, was really powerful. And then my runner-up was Episode 073, How to Determine the Priority of Investing, which –

Tim Ulbrich: The buckets.

Tim Church: Yeah, which I nicknamed “Baker’s Buckets” because we talk about kind of the order in which you put in your tax-favored retirement plan. So that was a cool episode too.

Tim Ulbrich: Awesome. Tim Baker, what about you? Favorite and a runner-up.

Tim Baker: Yeah. I think my favorite, the one that sticks out to me, I really liked the episode with Adam and Brittany Patterson.

Tim Ulbrich: Oh, so good.

Tim Baker: Where, you know, I think Adam was the first episode in Episode 031 where he was just walking us through the journey of paying off $211,000 in 26 months. It’s unbelievable to me that to be able to achieve something like that in that short a time frame is just something that, you know, causes me to really pause and really think about that feat. And it’s impressive to me. And I think we had both of them back on Episode 059 to kind of talk through life after debt and really, the world’s their oyster. And obviously, I know Adam and Brittany. They’re actually clients of YFP Planning. And they’re just fantastic people and great to just learn more about what drives them and really help them to kind of take their journey to the next level. So I think those would be my 1A and 1B. I think my runner-up to that one, I really liked the episodes that Alex Barker, I think we had him on a couple times.

Tim Ulbrich: Three, right, now?

Tim Church: He holds the record.

Tim Ulbrich: Yes.

Tim Baker: He’s one of those individuals that, like I think when he talks, I listen. I think he has a very conversational way to kind of get his point across and his story, and to be honest — I think I’ve told him this in the past is that when I was, you know, thinking about launching Script Financial, now YFP Planning, I needed an education. I needed to really understand more about the clients for which I was to serve, and at the time, I didn’t have a lot of pharmacy clients. But I really wanted to plug into that world and see what makes pharmacists tick, what are they really looking for? And in Alex’s podcast was actually one of the ones that I reviewed and listened to. And I really like it. And the fact that we had him on our podcast so many times, and he’s a big supporter of our brand and we of his, you know, I think what he’s trying to do with Happy PharmD is just commendable. And I think I really enjoy having him on the podcast.

Tim Ulbrich: Great recommendation — sneaking in three, by the way, with the 1A, 1B. We’re going to let it slide.

Tim Baker: Yeah, you know, I’ve got to have some more.

Tim Ulbrich: You know, I would add — certainly I agree with everything you said about Alex. I think he’s a thought leader, I think he stimulates great conversation, great discussion, which we need in our profession. You know, the Pattersons, what’s so cool when I think about the journey that they’ve had, they are now out there doing education.

Tim Baker: Yeah.

Tim Ulbrich: You know, they were at their state association right now in Alabama. So I think back to the compounding empowerment, like they had such a transformation. Now they’re sharing that journey to help others along that way. And that is awesome. I mean, that fires me up.

Tim Baker: It’s inspiring, yeah.

Tim Ulbrich: That’s the exponential factor in terms of allowing the message to get out there and really having a true impact and change. You know, for me, I think that — this was really, really hard. I think about a lot of these episodes, and one of the things I’ve never talked about on the show before is I think selfishly, by doing so many of these interviews, being able to talk to these people is just an amazing benefit. It’s so inspiring and there’s stories that stay with me. They make me better as a person, as a father, as a business owner. And as I had to really think about which one of these, what rises to the top for me is Episode 060 with my colleague at the Ohio State University is Breanne Porter. And she talks so much about her lessons learned through accruing $224,000 of student loan debt. But I think why that episode stands out to me is her transparency and her honesty of what she didn’t know and what she now knows and how she feels throughout that journey. And I think that while we have featured so many debt-free stories along the way, what I really like about that is she’s not yet to the point of being debt-free. And she’s in the grind, she’s in the weeds, she’s working through it. And I think that’s going to resonate and will resonate with so many people as well. The other one that stands out to me, which I’m excited we’re going to have her back on the show in Episode 109 is we had Carrie Carlton on Episode 009. And she talked about her journey beginning to build a real estate empire. And spoiler alert: That empire has expanded. But real estate’s a passion of mine going forward and I think will be a great asset for many pharmacists to consider. And that opened up for me just a whole new area to think about of how she’s really leveraging her skill set in a very different way from pharmacy but is diversifying her income and building up assets in other ways. So those are our favorite episodes from the Your Financial Pharmacist podcast. We’d love to hear from you about what you thought your favorite episodes were and of course, content ideas you have for us going forward, always welcome it. [email protected]. At this point, we’re going to bring back some of the guests that we’ve had on the show before, some of our favorite episodes and stories. We’re going to ask them, we have asked them to give a quick update of their story, where they’re at. And so let’s hear from those guests right now.

Nick Ornella: Hello, this is Nick Ornella from Episode 079 of the YFP podcast. Since being on the show in December, my wife and I submitted the final payment on her student loans, so over $37,000 paid off in a little over 10 months. We took a two-week trip to Spain and Morocco to celebrate and also to celebrate our 1-year wedding anniversary. And after that little spending splurge, we started saving again, this time hopefully to start a family here in the near future. I’m still working full-time as a pharmacy manager at Walgreens, and I’ve been working hard on my blog, the Young Professional’s Guide to a year off. And as YFP celebrates its 100th episode, YFP had an impact on my own journey because Tim Ulbrich was there for me way back in 2016 when I decided to take a year-long sabbatical from my pharmacy career to travel. I found the YFP website and blog and reached out to Tim, and he was there to give me advice and encouragement. He was a big reason why I decided to hit pause on my career and to pursue my dream of traveling for a year. And that year ended up being just an incredible experience and one of the best years of my life. So I’m forever grateful for Tim and YFP for the help and inspiration that he gave me. And I think the work that YFP is doing is important because it helps young pharmacists get out of debt, become financially independent so they can live more intentional lives and not be controlled by debt obligations. You know, it allows people to take bigger risks like starting a new business or becoming an entrepreneur or doing something crazy like I did and quitting their job for a year to pursue a lifelong dream. So a big congrats to Tim and the YFP team on 100 episodes. Please keep up the good work!

Jill Paslier: Hey, it’s Jill and Sylvain Paslier from Episode 050. We wanted to give you a little update on what we are up to now. We’re still budgeting every month, and it feels really great to be saving money instead of sending so much back to the bank for loan payments. Our current spending plan has a little more room for fun stuff like traveling and enjoying our hobbies like playing music. I’m also trying to be a resource for the local college of pharmacy to help encourage financial literacy education for the students. I’m also facilitating Financial Peace University, which is a Dave Ramsey course, at our local church.

Sylvain Paslier: Being in control of our finances and becoming debt-free has given me peace of mind to actually leave my 9-5 job and launch my own business. And I think it’s working well because I could focus on the work instead of worry about the money. I even started my own podcast.

Jill Paslier: I think YFP is a great resource, especially for students and new pharmacists as we are learning how to manage our own personal finances. Many of us make the transition from making very little money to making significantly more, and I think it’s important to make this adjustment wisely so that we have a purpose and a plan for our money. I also really love the online YFP community, such as on Facebook. We can ask questions and have peer support as we continue to learn about managing our money together.

Sylvain Paslier: While there are plenty of resources out there on wealth management and personal finance, finding a specific community of people that you can relate to makes for meaningful connections and increased motivation and progress, which is great about the YFP community.

Jill Paslier: Thanks for listening. Bye!

Derek Schwartz: Hi, this is Derek Schwartz from Episode 014 of the YFP podcast. My podcast aired in September of 2017, when I was still on my journey to becoming debt-free. And my journey started in late 2014, when I made my first student loan payment, and I had over $180,000 in student loan debt to tackle. 40 months later, in early 2018, I made my last student loan payment ever. I paid off $180,000 in debt in 40 months, and looking back on it, it was such an incredible time to not do things with money because I sacrificed every dollar that I could to go into student loans. Every penny I could pinch would go back into it. And that’s the secret. That’s what you’ve got to do. I tell people, if you’re really serious about paying off your debt as soon as you can, you have to budget and squeeze out every dollar and cent you can to go back onto the student loans. Trust me, it’s worth it being on this side. Since I’ve been debt-free, I’ve been able to save money for an emergency fund, I’ve increased contributions to my retirement accounts, and this summer, I’m looking to purchase my first home. All of that couldn’t have been accomplished without paying off my student loans first. And one of the reasons I’m really excited about the YFP community is it’s a group of other pharmacists that are looking for the same goal. They’re looking for financial stability. They want to get their student loans paid off. They want to save money for retirement so they can have some. And it’s such a great community that brings in all the questions, you can get all the answers there, and it’s been amazing to have been a part of it since Episode 014 of my podcast. Happy 100 episodes of the YFP podcast! And I look forward to the next 100. Thanks, everyone.

Blake Johnson: Hey, guys, this is Blake Johnson from Episode 082 of the YFP podcast. Just a quick update on where me and my wife are. We just finished up rehabbing our eighth rental property with our business partners. And that was exciting for us because in April, that marked one year of being in business, and we were able to close, rehab and rent out our eighth property. So we’ve made good strides here in our first year, and we hope to continue to do that in the following years. However, at this time, our market is getting flooded with investors, so we’re planning on slowing down the purchasing a bit and make sure we invest wisely and purchase at the right price. Outside of that, we continue to invest in our Vanguard funds, specifically, our BTSAX mutual fund and also invest and max out my wife’s 401k. This summer, we’re going to enjoy a little trip, bigger than usual. We’re going to go over to Europe and spend a week in Paris and Prague. We both like looking at architecture and just kind of soaking in the environment and culture over there. So we’re going to enjoy that. That’s just a quick recap on where we’re at. But I just want to congratulate the guys over at YFP for celebrating its 100th episode coming in. These guys are making a huge difference, and the reason why is as pharmacists, we just don’t receive, in most schools, financial matters. We spend so much time learning about clinical decisions and learning about all of the different chemistry and pharmacology of drugs, but we never have any education on finances. And that’s a problem because we’re in a profession where it’s great, we come out making six figures, but we have no education on how to invest that wisely. And the guys at YFP are making sure that we know how to do that. When we graduate, we can take two roads. We can go on one road and just spend it all and never invest it and when we retire, have no money. Or we can take another road where we learn to live on less than we make and invest it wisely. And the guys at YFP are laying out a great road map on how to do that. They’re teaching people how to invest it wisely, how to protect ourself with insurances and make sure you know who to talk to if you don’t understand the stock market and how to invest your money. So guys, congratulations on your 100th episode, and I hope down the road as we look back 20 years from this that we see pharmacists that are retiring with lots of savings and lots of money saved up. That way, they can continue to give of their time and also of their money, just like we give in our profession now. Congratulations, guys, and I hope to see more good from you.

Tim Ulbrich: So thank you to those guests that came back on the show, took time to give us an update on your story. We appreciate your contribution, obviously, to the podcast and the community. And at this point, we’re going to hear from some of the pharmacy entrepreneurs out there that have been just incredible collaborators and partners for us over at Your Financial Pharmacist and in large part, have allowed us to be successful in the work that we’ve been doing.

Alex Barker: Hey, this is Alex Barker, the Happy PharmD founder, where we help pharmacists create fulfilling careers and lives. I had the privilege of being on Episode 007, 038 and 092. 100 episodes! Congratulations, YFP team, all of you Tims. Few podcasters reach this milestone, so this is great. But what should be celebrated more is their mission because the more pharmacists who pursue financial freedom, the more impact our profession can make. Because I believe what stops most from pursuing a dream, a goal, a great ambition, something risky, is the excuse of not having enough money. But financial freedom makes that excuse go away. And in turn, it frees up pharmacists to pursue greater and bigger things. Look, I was able to pay off $200,000 in debt. And that has financially freed my family to live our dream. And this summer, we’re actually celebrating by going around the country in a road trip. This is something that we would never be able to do if we were financially burdened. And it may seem like a long way for you to go. But trust me, we thought the same thing when we first started this journey. You can do it. Financial freedom is possible. Cheers to the YFP team and all you financial freedom-seekers.

Blair Thielemeier: Hi, this is Blair Thielemeier, founder of Pharmapreneur Academy and author of “How to Build a Pharmacy Consulting Business.” I was a guest on Episodes 039 and 089 of the YFP podcast. And as they’re celebrating their 100th episode, I was reflecting on the difference that YFP is making in pharmacists’ lives in helping them create a solid financial foundation on which they can build a business. So we all know that the job market is somewhat shaky these days. Being able to build a side hustle in pharmacy consulting is literally changing pharmacists’ lives. And having a solid financial foundation just gives you the ability to take more risks in your career and do something you truly love. So I just wanted to say thank you to all the Tims for creating this amazing podcast and doing this work in helping pharmacists change their financial lives.

Adam Martin: Hello, this is Adam Martin, founder of the Fit Pharmacist, speaker and author of both “Rx You: The Pharmacist’s Survival Guide to Managing Stress and Fitting in Fitness,” and “Scripting Your Success: How to Jumpstart Your Career,” as well as host of the Fit Pharmacist healthcare podcast. I was a guest on Episode 091 of the Your Financial Pharmacist podcast, and as Your Financial Pharmacist celebrates its 100th episode, I want to congratulate the Tim team on this monumental achievement. Seriously, job well done, guys. I believe that Your Financial Pharmacist is making a difference in our profession because as pharmacists, we are trained to perform root cause analysis to medication error review. This translates to finances perfectly, as stated in their book, “Seven Figure Pharmacist,” as root cause analysis unveils that financial problems, regardless of the specific situation, stem from the five behavioral biases that impact financial decisions: overconfidence, hyperbolic discounting, loss aversion, status quo and herd mentality. In the book, Tim and Tim share their experience with all of the pharmacists and students they have helped to overcome financial burdens through their work. Overall, they help us to overcome the most common financial pharmacy pitfalls, keeping us away from financial fitness through the work that they do. Congratulations, guys, on all you have given through investing in our profession. Wishing you great success on the interest you have compounded throughout the years. With gratitude, Adam.

Ashlee: What’s up, listeners? Ashlee here from RxAshlee. I was on Episode 095, just a couple weeks ago, with Tim Ulbrich. And I had so much fun. And when I found out that you guys are celebrating your 100th episode, I was like, oh my gosh, I have to congratulate you. I know what an accomplishment that feels like. I understand the hard work, the blood, sweat and tears that go into building a podcast, building a platform, creating such an awesome, valuable show for the pharmacy profession. I believe the work that YFP is doing is critical because of the need that we are going through in pharmacy. So many of us are graduating with student loans. So many of us are graduating with all of these questions of how do I invest in myself? How do I prepare for my future? And all three of the Tims are really meeting us there. They’re giving us what we need and that support, tips, advice on how to strategize and making sure that we can live our best lives inside the profession and, most importantly, outside. So thanks again to all the Tims, to all the YFP community, you guys are really the future of this profession. And I love, love, love supporting you. Thanks again, and congratulations! I am always going to be one of your No. 1 fans.

Nate Hedrick: Hi, this is Nate Hedrick, founder of the Real Estate RPH and frequent guest of the YFP podcast. Just wanted to take a second to congratulate Your Financial Pharmacist on their 100th episode. I really feel like YFP’s making a difference in the pharmacy world. They’re providing some much-needed financial education. Especially as someone who graduated pharmacy school with literally hundreds of thousands of dollars in student loan, it’s been really nice having them as a resource as I work toward paying off that loan and ultimately, trying to achieve financial freedom. Looking forward to partnering with you guys even more in the future, and I’m excited to see what you have in store for the next 100 episodes. Congratulations, guys!

Tim Ulbrich: So to those pharmacy entrepreneurs, thank you so much for taking the time to provide your input and know that we, the collective Tims, have so much respect for the work that you’re doing. You’re an inspiration to us each and every day, each and every week, and it’s certainly fun to be a part of this community of pharmacy entrepreneurships that are, I think collectively helping one another and hopefully paving the ways for others that want to go into this area as well. So I want to end this episode in us having some conversation about why do we keep going? So as we think about episodes 101 through 200, you know, what’s the point? What’s the purpose? What’s the content? And why do we continue to go on this journey? And so Tim Baker, as we think about the future and where we’re heading and the mission of YFP and really, I think that we believe we’re just kind of getting started on this journey, what’s the future look like? Why do we keep going from here on?

Tim Baker: Yeah, so you know, I think sometimes it’s hard with the day-to-day, you get so busy with what you’re doing and obviously working with clients and things like that it’s sometimes hard to slow down and reflect, which is a little bit — I don’t want to say it’s hypocritical, but what I try to do is force clients to do that on their journey and with their financial plan and really take stock of where we’ve been and where we’re going. But you know, there’s a few times recently — obviously with this episode that you think about just where the heck we were a couple years ago and I think where we’re at. But I think more recently, you know, when we were at the APhA conference in Seattle, we had a booth there, and I wish Tim Church was there with us because he would have ran through a wall after that experience because he would have just been so fired up about I think the buzz that we saw there. And literally, I don’t even know how long we stood there just meeting different people that walked by our booth. But it could have been two or three, four hours, I have no idea. It felt like two minutes because you just talk to people — and I think one of the things that’s really crazy about the podcast is that you feel — people speak to you as if they know you. And maybe they do because they’ve heard us so much on the podcast. And you know, I don’t take that lightly. And I think for me, it’s just like you said, seeing people fired up about a topic that they maybe weren’t fired up about it two years ago. And I think about all of the content that we have out there with the podcast and the guides and the blog posts and things like that, but I really think that we’re only scratching the surface. I think that there’s so many things that we have yet to uncover, and I think the scope of what we’ve talked about it broad, but I think even doing a deeper dive or even expanding our scope and our discussion. And I think wanting to be thought leaders, you know, in and around the profession of pharmacy I think is important to us and really, ask those good questions. So I just get really, like I said, I get really fired up about thinking about where we still I think need to venture and go. And like I said, it’s been a great ride. Like I kind of reflect on my own personal journey, and I think about how grateful and how lucky, really, I am to have come across you guys, you know, Tim and Tim. And I think without you guys, like none of this is really possible. And I think like when we start to go down the path of saying, hey, we’re doing this podcast and we’re doing financial planning and the book and all this stuff, and I think the mindset from Day 1 is can we row this ship in the same direction, this boat in the same direction and one Tim looking out for the benefit and the interests of the other Tim has just been, it’s been an honor, really. Not to sound cheesy, but I know I’m exactly where I need to be because none of this feels like work to me. It feels like I am perfectly positioned to be doing what I’m doing because I enjoy working with pharmacists as a financial planner as much as I enjoy trying to figure out the business and where we’re going to go with YFP and, really, the direction that’s still ahead of us. So thank you guys. That’s my thought.

Tim Ulbrich: Tim Church, what gets you jacked up about the next 100 episodes?

Tim Church: Yeah, it’s been a really fun ride. And I think that the one thing that really gets me fired up — and you guys kind of mentioned that already — is just the transformation. There’s been a number of people that have said as a result of interacting with our brand, whether it’s the podcast or some other form, that a change has happened for the better and that they’re in a better position than they were before they heard of us, before they listened to some piece of content, before a story was told. And so I think there’s a lot more people out there that need to hear some of these stories to get inspired and motivated because I think it can have just an incredible amount of change and movement across everybody in the profession. I think one of the other things that really fires me up is when schools and organizations reach out to us to come in and really be able to cater to a larger group. And I think that’s really a cool thing when we’re able to make a bigger impact in that way. So I think those things are really interesting and motivating to me to kind of keep things going.

Tim Ulbrich: Absolutely. And I think one of the things we’ve talked a lot about this weekend together is while certainly we are running a business, I think what gets us more excited is actually moving the needle on this issue. So as we all know that personal finance is such a thread of every part of your life that if your financial house isn’t in order, it impact lots of things. It impacts marriages, it impacts relationships, it impacts your quality of life, your satisfaction at work. And I think really moving the needle with helping on these transformations and helping people put their financial house in order is really what we want to hopefully continue to do and look back and say, ‘That was a really fun journey in doing it.’ And one of the things I think we’re super passionate about is this education around personal finance and financial literacy needs to be in every college of pharmacy across the country. And we’ve begun to pave that road, but we have some exciting plans hopefully to continue that into the future, but making sure that every graduate is coming out with some basic skill level and understanding of what they need to do as it relates to their financial plan. And I should say that the only way we’re going to move the needle on this issue is not through the three of us running as fast as we can. The way we move the needle on this issue of personal finance and everything that comes with it is through the collective community of thousands and thousands of pharmacists saying, we care about this topic and we want to do this a different way than maybe it’s been done before. And that’s what it’s about. It’s about empowering the community to collectively move this issue forward. And we’re not going to do it as the three of us. It needs to be this group as a whole. And so I want to also thank — you know, I think just to echo Tim Baker’s comments — I mean, without the three of us, I think the collective power of what we each bring, you know, this wouldn’t be where we’re at. So I think us working together and running the same direction is where we need to go with the community alongside of us. I think we also would be remiss if we didn’t thank Shea, Andrea and Jess for — this takes a lot of time. I think we’ve been spending three or four hours this afternoon putting together a couple episodes, and that means sacrifice, it means time away from family. And that’s not easy. And I think for them, allowing us to pursue our dream and our passions, you know, I think it goes without saying that we love you guys and certainly appreciate what you do. And Caitlyn and the entire team at YFP, Caitlyn, Paul, Frankie, Tom…

Tim Baker: Christina.

Tim Ulbrich: Christina, I mean, as we think ahead to the future, hopefully more on the team as well. We’re so grateful for your buy-in to the vision, your commitment to what we’re trying to do. And again, it’s about the team, and the team is really I think moving everything in the same direction. So let me wrap up by saying to the YFP community, we thank you. We’re grateful for your continued support of the work that we’re doing. We’re excited to be here at Episode 100, but I think we’re more excited about what lies ahead for the next 100 and beyond.

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The FIRE Prescription: How to Retire Early as a Pharmacist

Posted on May 14, 2019May 2, 2023 by yfpadmin

The FIRE Prescription: How to Retire Early as a Pharmacist

The following is a guest post from Dr. Jeffrey Keimer. Dr. Keimer is a 2011 graduate of Albany College of Pharmacy and Health Sciences and pharmacy manager for a regional drugstore chain in Vermont. He and his wife Alex have been pursuing financial independence since 2016.

If you’ve started going down the internet’s personal finance rabbit hole, you’ve no doubt crossed paths with the FIRE movement. FIRE (financial independence, retire early) is a concept that’s been gaining a lot of traction lately. What was once considered a fringe topic, mostly covered by blogs such as Mr. Money Mustache or Early Retirement Extreme, has morphed into a widespread movement with mainstream coverage. Some are even calling it “the ultimate life hack.”

But what is it and why should it matter to us, pharmacists?

What is FIRE?

FIRE is based around the concept that it is possible to retire early (ie. before 65) by living off the income generated passively through investments. This is not a new concept. All throughout history, people have done this. You might think of this crowd as the 1%. So why all the buzz now?

Because it turns out, you don’t have to be a 1%’er to make it happen. Say what?!

How?

Because one of the core tenants of the FIRE movement is that the amount of money you need for retirement is purely a function of your expenses and NOT your income. You can control your expenses.

Should You Join the FIRE Movement?

But what about us? As pharmacists, we’ve sunk a lot of time and effort into getting where we are. So much so, that when people ask you what you do, you don’t respond with “Well, I work for company _____ in the _____ department,” you respond with “I’m a pharmacist.” What we do is embedded in our identities. So, you may ask yourself, why should I get into the FIRE movement? Surely, this whole retire early business is something only a cubicle worker who files TPS reports all day would dream about right?

Maybe, maybe not.

Maybe you feel burned out or you’ve just become disillusioned with our profession. That’s what one pharmacist, Jason Long of Tennessee, felt and decided FIRE was the way to go. In a NY Times article covering the FIRE movement, Jason cited burnout and job dissatisfaction as the primary reasons why he adopted a FIRE mindset and called it quits early.

He’s not alone in his feelings about the profession either. According to a recent article in Drug Topics, job satisfaction in pharmacy overall isn’t great with 29% of respondents to their survey indicating that they’d be looking for a new job in the next 12 months. Reasons cited: increased work volume and less help to do it. Factor in a more saturated job market, lower compensation packages, and the potential for Amazon to disrupt the whole industry with its Pillpack acquisition and there are plenty of reasons for a pharmacist to feel like their profession is on the ropes.

But maybe that’s not you. Maybe you love your job and love being a pharmacist. What then? Well, FIRE has something to offer you, too. In a word: options. Personally, I love being a pharmacist (I even work retail if you can believe it). Financial independence without the retire early angle can give you the flexibility to get more from your career. Mid-career residency? Part-time by choice? Want to start a business? In short, there’s a lot of power in not needing a paycheck.

How to Retire Early as a Pharmacist

Now that I’ve talked it up, it’s time to get down to brass tacks and layout a roadmap for FIRE. There are a few important concepts to understand, but before we get into that, I think it’s important to highlight some of the things that FIRE isn’t:

A get rich quick scheme
Some guru’s course
A set formula
Easy

That last one is the big one. FIRE is not something to go for on a whim or halfheartedly. It will not happen overnight. It will involve sacrifice and, probably, a fundamental change in your relationship to money. You need to have a good reason for pursuing FIRE if you’re going to be successful. In short, you’re going to need one heck of a WHY.

Got it? Great.

So how does it work? Like I said before, there are a few concepts that form the basis of the FIRE movement and here’s a good order to introduce them:

Safe Withdrawal Rates and the “4% Rule”
Reducing Expenses and Increasing Savings Rate
Investing
Drawdown

Safe Withdrawal Rates and the “4% Rule”

As mentioned before, FIRE philosophy focuses on expenses being the main variable in determining how much you need to retire. But the question remains: how much do I need? Luckily, the academics have provided that answer with what’s called a “Safe Withdrawal Rate” or SWR.

So what’s that? First, the long answer.

SWR refers to the rate (expressed as a percentage) that a retiree can realistically take out of their retirement portfolio, adjust for inflation every year, and never run out of money. Based on academic research, notably the Trinity study, this number has been said to be 4% when applied to a portfolio consisting of 50% stocks and 50% bonds. In that study, the authors looked at different mixes of stocks and bonds over different 30 year stretches from 1925-1995 to determine the probability of portfolio failure (ie. running out of money) when different withdrawal rates were applied. In all those scenarios, it was determined that a person who took out 4% of the portfolio and then adjusted their subsequent withdrawals for inflation going forward had a 0% chance of running out of money at the end of the 30-year period. From this, we get what’s known as the “4% rule.”

In short, if you divide your yearly expenses by 0.04 (or multiply by 25!) you come up with a portfolio balance (your FIRE number) that can provide a stream of income to cover your expenses for at least 30 years, if not indefinitely. Now, this is somewhat of an oversimplification, which is why 4% being a “rule” needs to be taken more as a guideline, but you get the gist. In today’s environment, SWRs might be lower, but for now, you can estimate your FIRE number like this.

Yearly Expenses*25 = FIRE Number

For perspective, that means $1,000,000 can provide you with a $40,000/yr (plus inflation) forever.

Reducing Expenses

Since how much you spend is what determines how much you need to save, cutting expenses really accelerates the whole process. Frugality is your friend. Just think, if you’re spending $100/month on cable and decide to cut the cord, that’s an extra $30,000 you DON’T need to save. What about a car lease payment? Or a McMansion? Then we’re talking in the hundreds of thousands to MILLIONS less.

Note too, that by cutting expenses, you also free up money to save. The rate that you save (taken as a percentage of income) is what really determines how long it will take for you to reach financial independence. To illustrate this point, we’ll use an early retirement calculator.

Assume Bob is a 24-year-old new practitioner making $120,000/year gross with no prior savings and a 5% rate of return on investments.
If after taxes and expenses, Bob can save $18,000 per year (15%), he will hit financial independence in about 43 years at the age of 67. This is pretty standard retirement savings advice, by the way.
However, if Bob can jack up his savings rate to 30%, he can now retire in 28 years at the age of 52.
And, if Bob goes all-in on FIRE and gets that rate up to 50%, he can retire in a little under 17 years. Just after he turns 40. Bob wins.

See, math can be fun!

But cutting expenses isn’t just about choosing to go without cable or driving a more sensible car, it’s also about getting out of debt. Debts are expenses just like any other and should be dealt with as part of your FIRE plan.

Unfortunately, this is the stage of the FIRE journey that involves the most pain. In a way, it’s like committing to losing weight. Your budget is your diet and you’re only going to get the results you want by sticking to it. Thankfully, maintaining a budget is easier than ever thanks to apps such as YNAB and Mint.

Speaking of debt, even if you’re not fully sold on FIRE, getting out of debt is transformative and something everyone should strive for. I don’t agree with Dave Ramsey on much, but he is right when he says, “the borrower is a slave to the lender.” Debt such as student loans, car loans, credit cards, etc., chains you to work in a way that’s just unhealthy. You can have the greatest job ever, but if you need your whole paycheck to service your debts, your relationship with your work is going to suffer and you’ll probably start resenting it.

That said, there’s one important caveat to getting out of debt that pharmacists should keep in mind. Bringing the full-on beans and rice diet intensity to your student loans may not be the best course of action if you can qualify for loan forgiveness. With FIRE, optimization is key. You may find it more profitable in the long run to forgo paying off your student loans outright if you qualify for some of these programs. Check out this YFP podcast episode on how to optimize forgiveness.

Another way to reduce your expenses could be refinancing your student loans or mortgage. Lowering your monthly payment on your mortgage or student loans will likely save you a lot of money each month. With these additional savings, you could put even more toward knocking out your debt! While student loan refinancing isn’t for everyone especially if you’re pursuing PSLF or non-PSLF loan forgiveness, you could earn up to $800 in a cash bonus from a reputable company YFP has partnered with!

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Investing

The umbrella of “investing” covers a wide range of topics but in this article, I’m only going to briefly touch on the two major types of investments most pharmacists will encounter on their journey to FIRE: paper assets and real estate.

Paper assets are those such as stocks and bonds that you can invest in using 401(k)s, 403(b)s, 457s, IRAs, and brokerage accounts. These are the types of assets that generate truly passive returns and, with a properly diversified portfolio, can make FIRE possible. That said, there’s no one way to go about investing in these.

Within the FIRE community, index investing strategies (aka. indexing), such as those advocated by JL Collins, are quite popular. Central to indexing is the focus on low-cost index mutual funds. What are those? Without getting too much into the weeds, they’re mutual funds that give investors a diverse basket of stocks or bonds (sometimes all of them) at little or no cost. In general, these strategies call for a gradual decline in the proportion of stocks (high risk, higher return) to bonds (low risk, lower return) over time. And, while this isn’t different from the conventional approach to investing, the emphasis on using funds with low costs can make the whole process more efficient. Is indexing the best way to go about FIRE? Maybe, maybe not. However, it is one of the most accessible and can get you started.

Beyond stocks and bonds, many FIRE devotees choose to invest in real estate. In addition to acting as an asset that isn’t correlated with either the stock or bond markets, real estate investing can provide a level of passive income that can decrease the amount of money you need to save in paper assets. While not necessary to FIRE, many investors find real estate to be a worthwhile pursuit and can accelerate your path.

Drawdown

Finally, after amassing your war chest, you need a way to get at it. Since the primary vehicle most people use is a retirement account, how do you get the money out before regular retirement age? Fortunately, the FIRE community’s good at finding loopholes. Between Roth IRA laddering, 72(t) distributions, or simply taking the money out at a lower tax rate and paying the penalty, there are ways to jailbreak your money in a way that makes sense.

How to Join the FIRE Movement

So how do you get started? First and foremost, make a commitment to taking control of your finances and making them a priority. Second, get your spouse or significant other on board (super important!). Third, take action in a way that makes sense for you. Lastly, join others in the FIRE movement by connecting with groups online. FIRE isn’t just a movement but a community.

So, if this all sounds good, I invite you to take charge and change your life.

Welcome to FIRE!

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YFP 099: Key Financial Moves for Pharmacy Graduates

Posted on May 9, 2019November 2, 2022 by yfpadmin

Key Financial Moves to Make as a Pharmacy Graduate

Tim, Tim and Tim discuss several key financial moves to make as a pharmacy graduate.

Summary

Tim, Tim and Tim are live for another episode of the YFP podcast. On this episode, they discuss several moves every pharmacy graduate should make as they are transitioning into new practitioner life (based off the blog post: https://yourfinancialpharmacist.com/20-financial-moves-every-pharmacy-graduate-should-make/ ).

Two important first moves pharmacy graduates should make is having an emergency fund and eliminating credit card debt. Tim Baker explains that you should eliminate credit card debt as it’s the most predatory with high interest rates and doesn’t allow you to build wealth on your own. Creating an emergency fund gives you a cash reserve so that you don’t get into more credit card debt. He suggests having a 3 to 6 month emergency fund.

Long-term disability insurance is an important move to make because you never know what is going to happen. Disability insurance provides you with income in the event of an illness or an accident causing you to not be able to work.

Determining a student loan strategy is always a decision that new graduates are faced with. However, the answer depends on many factors including how you feel about the loans, what type of loans you have and whether you are going to work for a qualifying employer (PSLF), among others. Tim Baker reminds listeners to be intentional and to find a professional that understands loans to help guide your decision making.

Another important move to make is to begin investing in your company’s 401k, 403b or TSP retirement fund by at least contributing to the match. As mentioned many times before, an employer match provides essentially free money that you are unable to go back in time to get. Tim Church also shares that lowering your AGI by contributing to a retirement fund could lower your student loan payments, thus allowing you to simultaneously build wealth.

Considering a side hustle is important during this time as so much is changing in the job market. Many pharmacists are experiencing pay cuts as full-time hours are changing from 40 hours to 30 hours/week. A side hustle utilizes your skills to bring in other income, whether it is through pharmacy work or another passion you have.

Lastly, the Tims discuss the importance of avoiding lifestyle creep.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode, Episode 099 of the Your Financial Pharmacist podcast. One episode away from Episode 100. We’re going to talk about financial moves we think every pharmacy graduate and every new practitioner and even others should be making when it comes to their own financial plan. Now, we’re going to talk about a handful of things that come from a great blog post that Tim Church wrote, “20 Financial Moves that Every Pharmacy Graduate Should Make,” and that entire list of 20 and that blog post is available over at YourFinancialPharmacist.com/20. Again, that’s YourFinancialPharmacist.com/20. So when I pulled up this blog post, Tim Church, there’s a lot here. I mean, how long did this one take you to write?

Tim Church: That one took awhile because you guys had some input on that as well and we kind of went back and forth and tried to hit all the key moves that we wanted people to know about.

Tim Ulbrich: Absolutely. And you know, as I think about back to graduating from pharmacy school — I’m sure you feel the same way — this would have been a list of, wow, I wish I would have known these things at graduation, right? So that’s the goal. I think a lot of lessons that we’ve learned along the way, lessons we’ve heard from the community, wanting to help out graduates and new practitioners as they’re making this critical, important transition into new practitioner life. So Tim Baker, the first two that I want to talk about are what you referred to in Episode 026 of the Your Financial Pharmacist podcast, which are around emergency fund and eliminating credit card debt, which you call “baby stepping” into your financial plan.

Tim Baker: That’s right.

Tim Ulbrich: So talk me through why those are so important in terms of getting started with a financial plan.

Tim Baker: Yeah, I think those are really the two things that I look at when I look at someone’s financial situation is what do we have in cash reserves and what’s the consumer debt look like? You know, typically from a consumer debt perspective, the debt’s going to be the most predatory. You know, paying high interest credit card for balances that you’re carrying, you’re never really going to transition to the ability to build wealth on your own. We talk about the eighth wonder of the world is compound interest. You’ve got to make that work for yourself, not for a credit card company. So that’s probably, you know, from the get-go, what’s that picture look like? And almost everything else stops — almost — maybe everything. I’m thinking of like an employer match, but almost everything else stops if that’s a thing because it’s just, like I said, it can be tough to get out of. The second, basically once we get out of that predicament, the second thing is having some cash reserves a la an emergency fund so we don’t get back into the credit card debt. There’s a stat out there that says 40% of Americans can’t cover a $400 emergency. That’s super scary. So for that percentage of Americans, what is their emergency fund? It’s the Mastercard. It’s the Visa. It’s the American Express. And then we kind of just repeat the cycle. You know, I have clients that they have a ton of credit card debt, and then they consolidate down into a personal debt, they wipe the slate, and then they clear it eventually, and then they do it again. And hopefully, now that they’re working with me, we’re going to break that cycle. So the emergency fund really allows you to do three things. First, it gives you peace of mind. Knowing that you have cash money in the bank allows you to sleep better at night. The second thing it does is it really allows you to avoid that predatory credit card debt. You know, like we said, most people will reach for the Mastercard, the Visa, to get out of those emergency situations. And then finally what it does is it allows you to get your money working in the investment world and keep it working without having to basically withdraw that in the event an emergency happens.

Tim Church: So Tim, where do you recommend your clients keep their emergency fund? And how much do you recommend that they have?

Tim Baker: That’s a great question. So you know, typically what we say is you want to have 3-6 months of non-discretionary monthly expenses, which is just a really a fancy word to say expenses that are going to go out the door regardless if you work or not. So those are going to be things like your rent or your mortgage, groceries, utility bills, your loan payments. So if you’re a single income earner, and you have $5,000 of those expenses after you add them all up, then you’d take $5,000 times 6 months, and it’s a $30,000 emergency fund. If you’re a dual income earner, you typically are allowed or should, recommended to have closer to 3 months. So it would be in that situation, $15,000. And the idea is that, you know, a dual income earner, you’re not putting your proverbial income eggs in one basket. Typically, both spouses or both partners are not going to lose their job at the same time. So that’s basically how you calculate it. Now, where to put it is a great question as well. So you want, typically you want something that is liquid that you can get to it at a known price, which is cash is best. Maybe not too easy to get to, something that bears some interest, but that’s not typically the point of the account. So when I started advising clients on emergency fund, I looked at a lot of different routes, a lot of different banks, actually. Ally, Synchrony Bank, Capital One, to name a few. I really like Ally; that’s what I use. I typically recommend that. It’s just easy to use, easy interface, app is clean, website is clean and easy to use. And it gets 2.2%, which I like. So that’s typically the high-yield savings account that we’ll look at for the emergency fund.

Tim Ulbrich: So as we think about the graduate coming out today, May 2019, they’re facing $150,000-200,000 of student loan debt, overwhelmed, likely, with that and what it means, lots of other competing priorities. And now they’re hearing 3-6 months worth of expenses and all of a sudden, they might look at their budget and figure out this is $10,000-30,000, and they say, “Thanks, Tim, Tim and Tim, but here’s the reality of what I’m working with.

Tim Baker: Yeah.

Tim Ulbrich: So the question is, where do I even get started with this? And what’s the baby step I can take to begin this process?

Tim Baker: I think you want to phase, you have like a phase plan. So as an example, if I’m looking at $10,000 worth of credit card debt, which I see all the time for a P4 or resident, I really don’t have anything cash at all, I sit down with a client and say, “OK, let’s build a baseline emergency fund.” So maybe it’s $2,500. Maybe it’s $5,000. Maybe it’s $10,000 of, in that case, a $25,000 or $30,000 emergency fund. So I think building a baseline emergency fund, a target that we can get to that once we achieve, then we can kind of look at the credit card debt and be gazelle-like, if you want to say, laser-focused, and really plow through the credit card debt. Now, and the reason that we do that is because, you know, obviously in an ideal world, we’d like to snap our fingers and all of a sudden, we have cash reserves for credit card debt. But the reality is is that that’s not going to happen overnight. So typically, my recommendation is to take bite-sized pieces, get to a baseline emergency fund that you feel comfortable with, and once we achieve that, then go to Phase 2, which is turn off the emergency fund contribution, apply that completely to the credit cards, hustle, side hustle, listen to Tim Church in that regard, and really start making moves towards that. And then once that phase is over, let’s get back into the emergency fund and get that going.

Tim Ulbrich: So we talked about several important things around emergency fund, 3-6 months of expenses, we talked about you want it liquid, you want it when you need it for an emergency, get it out of your checking account so that you can hold some of that temptation of pulling from it from your day-to-day expenses. One of the things we didn’t mention is just the power of actually naming it an emergency fund.

Tim Baker: Yeah.

Tim Ulbrich: So I think we often talk with pharmacists — which I’m sure you see this with clients — where they say, “Hey, I’ve got this lump savings account,” and in their mind, they have five or six things they’re saving for. But really, the power of calling it an emergency fund, which is really true with any other goal.

Tim Baker: Yeah, I mean, it’s so true because the psychology says that you’re less likely to steal from your emergency fund if you call it an emergency fund if it’s not for an emergency. It’s just like we talk about with a travel fund, it’s great to have a travel fund, but if you can actually call it where you’re planning to go next, you know, Disneyworld, Iceland, wherever that is, you’re less likely to steal from Minnie and Mickey Mouse because it’s named “Disneyworld” if I want to go buy something that I’m not necessarily, that that fund is not necessarily for. So I think it’s important to do that. You know, we kind of do the mental accounting. I see a lot of clients that have cash in an account, and it will be $20,000, and I’ll say, “What’s that for?” And they’re like, “Well, I think it’s an emergency fund. I don’t know.” So my thing is clearly delineate what it’s for. And if there’s a travel fund mixed in with the emergency fund, break it out, you know, separate those funds.

Tim Ulbrich: So first two moves that we’re talking about here are eliminating credit card debt, coming up with a plan, and establishing an emergency fund. Again, we’re pulling from the “20 Financial Moves that Every Pharmacy Graduate Should Make” over at YourFinancialPharmacist.com/20. Next one, Tim Church, is get long-term disability insurance. So you know, I think this one is tough. Nobody likes to think about a situation where hey, for whatever reason, I’m no longer able to work as a pharmacist because of a car accident, chronic illness, whatever. And certainly, this isn’t as exciting as paying down debt or building wealth, right? Nobody likes to send in insurance premiums. So why should pharmacists, even young pharmacists and graduates, be thinking about having disability income protection in place?

Tim Church: I was one of those people for awhile that felt that, you know, nothing was going to happen to me. I’m young, I’m healthy.

Tim Baker: Invincible.

Tim Church: Not much is going to happen. But the reality is when I learned a couple pharmacists that I knew that I was working with, they were unable to work, at least temporarily, because of autoimmune diseases, accidents that they had in their cars. I mean, the reality is stuff happens. When you look back, how much time, energy, focus, money, did you put in to become a pharmacist and be able to practice, be able to make an income? So when you look at that, all that was put in to get there, I mean, don’t you think it’s a good idea to protect that? And that is really where long-term disability comes into play. And long-term disability insurance, it’s really income insurance. And what it does is it provides you with money in the event that you’re not able to work because of illness or accident.

Tim Baker: Yeah, and I think a lot of people, they forget that one part is most disabilities occur because of an illness, not because of an accident. And you know, like I always tell pharmacists is like, you’re not going to like it. You’re not going to like paying premiums for a disability policy because quite frankly, they can be expensive.

Tim Church: Yeah, a lot of times, even more expensive than life insurance that you’re trying to —

Tim Baker: Yeah. But the fact is that you’re more likely to be disabled than to have a premature death. You’re more likely to have way more expenses when you’re disabled versus a premature death because alive, you probably have medical issues that you have to deal with, so this is doubly important because it’s one of those things where you always think it’s going to happen to somebody else. And the fact of the matter is, you’re right at the precipice of your career and really, your earning potential, and you want to protect that. Becoming a PharmD is — I don’t know firsthand — but I understand it’s very difficult. And you spend a lot of blood, sweat and tears to get to where you’re at. So you want to protect that ability to earn.

Tim Church: Yeah, and I think one of the questions that often comes up is well, my employer provides it. So I don’t really need to worry about it or need to get that. And you know, that may be the case, and I think there are some situations where you may have enough coverage and you may be protected, but I think a couple things that you want to consider is that even if you do have something through your own employer, the couple things you want to consider is No. 1, is it portable? Because the days of working for the same employer for your whole entire life, that may not necessarily be the case now. So if you move and change jobs, you know, is your new employer No. 1 going to offer it? But what if your health status changes and you need to get coverage on your own? So a lot can change. And the second thing is just because your employer provides it, it may not be exactly what you need. So one of the things when I was working part-time for a hospital, I was checking out what was offered based on my fellow employees who were working there, and what we found was that they only offered own occupation coverage for two years. So own occupation is one of those riders or add-ons, sometimes baked into the policy, that you really want to be aware of. But essentially, what that is is if you can’t work as a pharmacist, you’re going to get a percentage of your pay every month as a benefit. Whereas other policies and other coverage, they’re having any occupation, which means if you can do any kind of meaningful work, you’re not going to get that monthly benefit. So that sometimes is a little bit even more expensive as well but something you want to keep in mind.

Tim Ulbrich: Yeah, and unfortunately, navigating the selection of a disability insurance policy isn’t always super easy, just the way these products are sold and the options, the riders you mentioned, the time periods, the elimination periods, and so we’ve got some great resources that we would point you to. Episode 045, we talked about how to determine your disability insurance needs. And then also, if you go to YourFinancialPharmacist.com, at the top, you’ll see an option that is “Protect Your Income.” We’ve got some great information about life and disability, which connects you with our partner for both of these, which is PolicyGenius. And I just recently went through this process of purchasing additional disability insurance as well as life insurance, very easy, very transparent, a great process to follow. So make sure to check out those resources if this is something that you need. Alright, Tim Baker, we’re going to take on the, probably the No. 1 question we get from new graduates is, what the heck should I do with my student loans? I’ve got $200,000 of student loan debt, I’ve got all these options available to me. Unfortunately, it’s incredibly confusing, forgiveness and non-forgiveness, federal and private. You know, as you talk with clients and specifically those that are just coming out of pharmacy school, where do you start in terms of this question of determining a student loan payoff strategy?

Tim Baker: Yeah, it can be a monster. You know, it can be a monster topic, a monster thing to kind of wrap your arms around. And you know, a lot of times, I’ll have a pharmacist that will talk to me, and they’ll say, “Hey, this is my situation. What should I do?” And I’m like, “It depends.” You know, it depends. And like I said, I always say that’s the worst answer ever, but it truly does. And there’s so many ways to kind of tackle the student debt. And part of it — the question I would ask first is like, how do you feel about the loans? And you know, it’s probably a question that you know the answer to, but you probably haven’t asked yourself. So you know, if you’re feeling like, meh, the loans are there and I’ll pay them off when I pay them off and it’s kind of like, I view it as like a mortgage debt that I’m just going to pay off over time, and I’m cool with that, versus I can’t sleep at night, it’s a weight on my chest, I get anxiety about this. And these are all like real-world answers that I’ve gotten to that question. That’s going to affect the ultimate strategy, the strategy that you ultimately pick in the end in terms of how to attack the loans. So I think having an inventory, an emotional inventory, of the loans is I think a good first step. But then transitioning to an actual, physical inventory. And I’ll tell you what, like I think back when I first started advising pharmacists on the student debt. And I’d say like, “What do you have?” And they’re like, “I don’t know.” You know? And there was no awareness or there was less awareness than I think that I see more pharmacists that kind of walk in my door — virtual door, I guess — but I think that having a physical inventory of what you have, who you owe, when that starts, is important as well. And then from there, I think you start selecting a strategy that fits your needs and kind of what you want to do, whether it’s a forgiveness strategy, a refinance, like be aggressive with it, which might coincide with refinance. There’s a lot of ways to kind of go about this. I think one of the things that I would be cautious about is really twofold. One, you want to be intentional. You don’t want to get out of school and meander and be like, oh, like I’ll figure it out later because later happens, and you’re still in the same amount of debt that you started with. The second thing is that if you’re working with a professional, if you have six figures worth of debt, and you’re working with a professional that doesn’t understand loans, find a professional that understands loans. There’s so many — so going on another rant — there’s so many young professionals that I talk with, and they say, “Yeah, I’m working with an advisor at Blah, Blah, Blah, and the advice is that the loans will figure themselves out.” And I want to like fall on the floor because literally weekly, we show pharmacists that the path that they’re on could potentially cost them six figures in difference. And I think it’s like, I’m incredulous. I’m incredulous.

Tim Church: Yeah, I mean, I think you make a good point. And I’ll attest to that personally because I was one of those people that made a huge mistake, you know, not pursuing the Public Service Loan Forgiveness program cost me over $100,000. Now, you know, the benefit is that my loans are paid off now, and I can tell other people about it. But you make such a great point that — and I don’t think we can emphasize this enough — is you really have to lay out all of the options that are available to you. And you have to kind of complement those emotions behind the loans with also the math, right? You have to couple those two together to figure out, OK, what is the best plan going to be? And then I think even kind of taking it a step further is when you look at the average student loan debt that a pharmacist has, we’re talking $160,000, which could be a lot more if you go to a private school, is if you’re able to get forgiveness through the Public Service Loan program, then go for it. I mean, the math really makes sense there. And that could actually have a lot to do with the job that you choose or that you ultimately go from your first one.

Tim Ulbrich: Yeah, and I think this really is the time that we have to emphasize further what Tim Baker just said is it’s about intentionality of choosing an option and a plan. You know, I spoke with a group of probably about 120 students last week, and when we get to this topic, I think what they want often is a slide that I know I wanted as a student, which is the “here’s the best option.” And the reality is when it comes down to these variables like how do you feel about it? What’s the rest of your personal situation? You know, do you work for a qualifying employer or not? You know, what are the interest rates? What’s the goals? What are you trying to achieve? Are you a nontraditional student? All of these factors go into choosing the one best repayment strategy for you as an individual. And that might be different than your classmates and others that are out there. And so I think what we’re really advocating here, especially to those that are coming up on graduation, you’re going to enter the grace period, which is really everything but gracious when we think about interest continuing to accrue during that time period. But using this time so that when that notice comes to you that says, “Hey, by the way, here’s your payment, Johnny,” that you’ve already come and decided upon a plan that is best for your situation. And I think that this concept of intentionality goes well beyond just student loans but empowering yourself and putting yourself in a position that I have done the work, I’ve done the research, and I know that this one option is best for me. And now, you’re on the trajectory to get those paid off or whatever the plan might be around forgiveness as well. I can also speak, Tim Church, as I think about the forgiveness and costing, I think you and I did the calculation the same weekend we were together, but also PSLF-eligible, and as I tell many people, for me, wandering into the standard 10-year repayment plan, keeping my loans at 6.8% was probably the worst thing I could have done. You know, refinancing certainly would have been a better option than what I did, Public Service Loan Forgiveness would have been as well. Alright, so finding a student loan repayment strategy, and credit here to Tim Church, I can’t even count how many resources we have on the website around student loans. We have multiple podcast episodes, we talked about PSLF, we talked about the recent news with PSLF. And if you go to YourFinancialPharmacist.com/ultimate, Tim Church wrote the blog post of all blog posts on how do you evaluate the strategy of choosing the best loan repayment option. We’ve got a quick-start guide on student loans, we’ve got calculators.

Tim Baker: We’ve got a quiz.

Tim Ulbrich: Got a quiz. So head on over to the website, YourFinancialPharmacist.com, where you can get started today. Alright, next one we have here as we continue to work through financial moves that every pharmacy graduate should be making is begin the process of investing in your company’s 401k, 403b, or TSP. So Tim Baker, talk us through briefly, if we’re thinking of a new graduate coming out, they start to work for an employer, find out that they have this retirement option, maybe they have a match, maybe they don’t, they’re probably asking themselves the question of, what do I do with this? Where do I begin? And how do I evaluate the balance against debt, emergency fund, and all these other things?

Tim Baker: Yeah, and sometimes, you don’t have to do anything. You know, President Obama was in office when they really started to put forth an auto-enroll feature. So a lot of the psychology behind that was we’re more likely to participate in something if we don’t have to opt into it. It’s more, given the option to opt out, it really pushes participation rates up. So for a lot of retirement plans, you know, you start with a job, and eureka! You’re starting to contribute after maybe a certain period of time, and you’re beginning to see a balance into a 401k, a TSP, a 403b, which is a great thing. And sometimes, you don’t even have to pick the funds yourself. It’s just a target date fund. So what I would say to this is absolutely, if you have access to a 401k or any type of retirement plan, get with your HR department and try to learn as much as you can about them. Sometimes, you’re not going to need to do anything, but the big question that I would ask is, what is the match? And that should be something that you probably should be evaluating as you’re looking at employers. So what is the match? And 9.5 out of 10 times, you should be at least contributing to the match. I don’t care if every other part of your financial house is on fire, most of the time, it’s free money, we talk about it. You want to be contributing up to the match. Now, if you do have, if you’re in a lot of trouble with credit card debt, and it’s almost too much to get out of, that might be a situation where you don’t do that. But at least contribute until you get the match, and then in terms of looking at the funds, that’s less important. It’s time in the market, not necessarily time in the market or picking the individual funds. That’s kind of next-level stuff that I do with clients. But you know, you’re going to want something that’s low-cost in terms of expense. You know, it might be out of the scope of this particular episode, but I would definitely look for things like index funds and that type of thing to really buy the market rather than try to beat the market.

Tim Church: Yeah, and I think Dave Ramsey probably would fundamentally disagree with what we’re saying right now because —

Tim Ulbrich: Is he listening, do you think?

Tim Baker: Maybe.

Tim Church: Because we’re basically saying that most people should be in the match, regardless of your student loan debt. I think one of the caveats is that if you look at the amount of student loans that the typical graduate’s going to have, it’s not going to be a quick fix in one year, two years. I mean, we’re talking this could be a decade-long, maybe a little bit longer or could be a little bit faster, depending on the track you’re on. But the big thing is you can’t go backwards in time and get the match and make up for those years that it was available to you. So I think that’s really big. And then the other point that I would make is depending on what student loan repayment strategy you go in, that if you’re in PSLF and you’re all-in or you’re even doing the non-PSLF forgiveness, you may actually be going way in on your 401k, your 403b, because by doing that, you can actually lower your adjusted gross income, which ultimately will lower your income-driven repayments that you have to make and so you can basically be simultaneously be building some incredible wealth while you’re paying off your student loans.

Tim Baker: Yeah, so that’s kind of like, the next step in terms of an inventory of your loans, selecting a strategy and optimizing that strategy. Really, that’s what we’re talking about here is getting the most out of the strategy and from the forgiveness perspective, the more that you can into those pre-tax buckets that lower your overall adjusted gross income, the better. You’re paying your future self, but then you’re AGI, which lowers your payment and maximizes your forgiveness.

Tim Ulbrich: Yeah, and I think what we’ve often seen with new graduates, new practitioners, is that evaluating what your options are inside of your retirement plan, you know, we talk about on the podcast about fees and asset allocation and calculating your next egg, and all that can quickly become very overwhelming, but I think your point is such a good one to emphasize. Again, get it started, take the match, begin to build that time for compound interest to work, certainly make an investment to learn more about this. And I’d point here too, we spent a lot of time really detailing — I think it was chapters 12, 13 and 14 of “Seven Figure Pharmacist” — all about investing. We tried to write it in a very fundamental, basic way of understanding the strategy, but just beginning that education, whether it’s “Seven Figure,” the podcast or some other resource, making that commitment to long-term knowledge. And I think investing is one piece. But not letting that component of, hey, I don’t have all the knowledge, be a barrier to start in the first place. OK, the last one I want to talk about before we wrap up here, since we have the king of side hustles here, Tim Church, is for new graduates to be thinking about considering a side hustle. And Tim, you’ve done an awesome job with the podcast, the side hustle series. We’ll link in the show notes to an article, “14 Practical Ways to Make Extra Money as a Pharmacist in 2019.” But why should a pharmacy graduate today be thinking about a side hustle?

Tim Church: It’s a great question. And I think in 2019, a lot of things are changing with pharmacy, in terms of the job market. A lot of pharmacists are experiencing pay cuts because, you know, what’s considered full-time may be cut down to 30-some hours. And so I think that’s one of the things that is why people are getting more excited about this topic, but I think it’s really risky in no matter what job that you have, to really rely on one income source. And I’m not saying that every single person needs to go out and have eight jobs. But I think it’s important to look at other ways to diversify how you’re getting that income. We have a great blog post on there called “14 Practical Ways to Make Extra Money in 2019,” so if you go to YourFinancialPharmacist.com and you click on “Make More Money,” there’s some suggestions there. But a lot of them are pharmacist-related, so really taking the skills and the knowledge that you already have and kind of utilizing that to look for other ways to bring value and eventually bring income. But I think also, one of the things that I would have you consider is really looking at do you have other skills even outside of pharmacy that you can monetize?

Tim Ulbrich: Absolutely. And I think one of the things that doesn’t get talked about enough with a side hustle is just an opportunity, you know, some of the things could be creative outlets, they could be things that you’re passionate about, and some certainly make more money than others. But you know, what is that worth? And what is that value of having that opportunity to create and to be innovative and to think of some entrepreneurial opportunities? So I would agree, and we won’t get on the career soapbox right now, we’ll save that for a later date. But I think that in 2019, I’m not sure — and at least as long as we’ve been in the profession, you know, for 10-15 years — I’m not sure there’s a better time to be taking some entrepreneurial risk than there is right now. You look at some salary compression, you look at a healthcare market that’s very complex, when you put any of those two together, that means it’s ripe for innovation and entrepreneurship. And so I think we’ve been in a period where pharmacists have been very comfortable in their salary, and I think that often diminishes the need to feel like they need to take some risk, but I think we’re seeing that changing. And while that may be a difficult period, I think there’s some excitement to be had there as well. So again, make sure to head on over to the website, YourFinancialPharmacist.com. As Tim mentioned, we’ve got a section on that about “Make More Money.” We’ve got the side hustle series on the podcast. And the last thing we would mention here is in avoiding lifestyle creep. And we talked about it in Episode 098 of the podcast, but I think it’s just fundamentally important for every graduate, new practitioner and I think in general to be thinking about it. What can you be doing to avoid lifestyle creep? And when we talk about retirement savings and contributions, at the end of the day, your expenses is really what drives much of that. So what can you be doing to live off less than you make and be balancing the things we talked about on that last episode of taking care of your future self but also enjoying some things today?

Tim Baker: Yeah, I think one of the things to highlight here is, you know, there’s probably a lot of people out there that are listening that are saying, “OK, Tim and Tim and Tim, you want me to have a huge emergency fund, and you want me to pay off my credit card debt, and you want me to buy disability insurance. There’s a long laundry list of things that you’re saying I need to do. How am I supposed to do that?” And you know, I think the thing that I enjoy about working with students and residents who are in that transition process is guess what? Like you’re a resident, you’re making $40,000, you’re probably going to be making quite a bit more in the coming months when you kind of transition away from residency. Or if you’re a P4, and you’re going to work for a community pharmacist or whatever that looks like, you’re going to be making more than you’re going to make as a student. So let’s imagine a world where you’re not making $110,000 or $120,000. You’re making $70,000. You’re making $80,000. And these goals and these things that we want to check off become a lot more workable, a lot more manageable. And that really requires some doing. It requires some — what we essentially are doing is stepping into the income. And we’re paying ourself first in the emergency fund, checking off the block with the disability. We’re building that into the budget because what often happens is that we go and we say, man, I’m going to get that large new apartment, I’m going to drive the Beamer, I’m going to do all those things. And then it’s like, oh, I need an emergency fund. Oh, I need to pay $120 a month for my disability policy? And it’s so much harder to go back. So if we can step into it — and this is like, remember when we were talking to USC this time last year, whatever it was, I was like imploring, I was like, this is for you P4s, you know, this is a perfect time to really put a plan together and be intentional and step into the income because it’s so much harder to go backward in that spending behavior.

Tim Church: Yeah, and I think it’s a great opportunity to basically let people know about your services and what you’re doing because I think one of the things that you do really well is you take all of these things and you help break it down for people in a way that’s easy to digest because I think it can be really overwhelming. I mean, I know when I was graduating and trying to figure this out, I didn’t figure it out at first. I made a ton of mistakes, and then it cost me, you know, doing that. So I think if you’re somebody who feels like just overwhelmed with all these different moves that we’re recommending that you make, I think you should definitely reach out to Tim Baker and book a call. See if you guys are a good fit. Not everybody is going to be a good fit, and not everybody needs that extra attention. But if you’re somebody who feels that way or just interested in learning more, I think it’s a great opportunity to do that. And if you want to book a free call, you can do that YFPPlanning.com.

Tim Ulbrich: Awesome. So we’ve covered I think six or so of the 20 financial moves that you talk about in that blog post. Again, we’ll link to that in the show notes. It’s YourFinancialPharmacist.com/20. So if you’re a regular listener, maybe you’re not a graduating student, maybe you’re not a new practitioner or a year or two out, do us a favor, share this with somebody that maybe you have somebody, a student on rotation, maybe you know a student, an intern that you work with, but you know, one of the most common things we hear is hey, I wish I would have known these things sooner. And that’s exactly what this list of 20 is all about. So as always, we appreciate you, the YFP community. Thank you so much for taking time to listen. If you like what you heard on this week’s episode of the podcast, please head on over to iTunes or wherever you listen to your podcasts each and every week, leave us a review. We’d love to have a rating as well. And certainly we hope you will join us on next week’s episode, Episode 100 of the Your Financial Pharmacist podcast.

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Debt Free Story Q&A with Jeff and Alex Keimer

Posted on May 6, 2019 by yfpadmin

Debt Free Story Q&A

Jeff and Alex Keimer share their debt free story in this special Q&A format.

Jeff received his PharmD from Albany College of Pharmacy in 2011 and moved to Vermont to pursue a career in retail pharmacy. There, he met Alex, his future wife, who graduated from Cornell with a Master’s in Food Science in 2012. Jeff racked up about $150,000 in student loans and also purchased many items after graduating on his credit card, including the down payment for a brand new Subaru WRX. Alex managed to pay for grad school and accumulated only $50,000 in debt. The couple shares their journey of paying off their student loans, car loan and credit card balance while working toward financial independence.

Jeff, tell us a bit about your background and education and how much you accumulated in debt upon graduating with your PharmD.

I’m originally from the town of Guilderland, NY (a suburb of Albany) and got my PharmD from Albany College of Pharmacy and Health Sciences in 2011. In terms of career, my path has always centered around retail pharmacy. I’ve worked in a retail pharmacy ever since I was in high school and love it. No joke.

During school, I didn’t think about my loans. I knew they were there, but like many of my classmates at the time, I never thought they’d cause a problem since I was “guaranteed” to make the big bucks after graduation. Understand that this was a time where P3’s were getting 5 figure sign on bonuses, so most pharmacy students weren’t worrying about their loans.

All in all, I came out of school with a little over $150,000, which I believe it or not, thought was low. I distinctly remember someone in my class said they were in the $300k club, so I felt like I got out cheap.

Alex, what about you? What type of education do you have and how much debt did you accumulate while in school?

I have a Bachelor’s in Food Science from the University of Delaware and Master’s in Food Science from Cornell. A small portion of my undergrad was paid for by a scholarship and the majority of it was paid for by my parents. I paid for grad school myself and accumulated around $50,000 of debt from it.

Jeff, what was your parents’ or family influence on your money habits?

Growing up, both of my parents started their own businesses and worked from home so they could be there for my sister and I when we got home from school. We were taught a respect for how money was earned but not much was said about how it was managed. When money was tight, I remember my dad saying that we were going on the “austerity budget” and when money was good, we bought things and went on vacation. But, that’s really about it.

Alex, what about you?

I remember both of my parents working a lot. My mother was an accountant and my father was an administrator for a community college in Long Island City. We were always buying things on sale and using coupons. When I would ask my mom why we couldn’t have fancy clothes or why we couldn’t buy a boat like my best friend’s parents, she would say that we save our money so that we can go on vacation. She always stressed the value of experiences over material things. To be fair, we did travel a lot. While most of my friends were having Sweet 16s, my family and I were going to Hawaii. We travelled to California, Europe, and the Dominican Republic, just to name a few.

My mother would always talk about how important it was to save money. She would tell me that you never know what is going to happen in life, so it is important to have a healthy savings. When we were younger, she helped us set up CD’s and savings accounts and we would watch our money grow. This rubbed off on my because when I was in college, I remember her sending me money in the mail with a note saying “use this for something FUN, do not put this in the bank.” She knew that all of the extra cash I had was going in the bank and I was sacrificing time out with my friends.

Jeff, you mentioned to us before that you spent your money on a lot of nonsense as a new practitioner.

Where to start? Well, first I had to deck out my new apartment so I spent several thousand on new furniture. OK, that sounds mildly sensible. How about another grand on a new 3D TV? Another couple thousand on some new firearms? Or, my personal favorite, >$5,000 in a year spent on craft beer? All of it on a credit card that had been carrying a balance since I graduated. Just for good measure, I also bought a brand new Subaru WRX in 2013 that cost around $32k which I financed for the next 5 years. Oh, and lest I forget, I also put the $2,500 down payment for that car on that same credit card since I didn’t actually have any money.

I may not have been great at saving money, but I was a savant when it came to building negative net worth.

With all this debt getting piled on, you would’ve hoped I had a plan to get rid of it. But I didn’t. Even though I was starting to feel the pinch from my student loans, I didn’t have much motivation to get rid of them. I just assumed that they were there and I would have them kicking around for the full 15 years of my payment plan. The credit card was more egregious anyway. But, I managed to give myself a false sense of security about that. I figured that if I was paying more than the minimum on it every month, I was good. Never mind the fact that the balance was growing.

Alex, when you and Jeff started to get into a more serious relationship and talked deeper about your financial burdens, what were your feelings about his indebtedness?

I have never held a balance on my credit card and I have never paid a cent of credit card interest. When Jeff told me what kind of balance he was carrying on his credit card, I think the look on my face made it clear that we would not be combining our finances until he got serious about getting rid of that enormous debt. At this point I wasn’t really interested in helping Jeff out. I was pretty much like, “You get your house in order and let me know when you’re good.” It definitely didn’t take him as long as I thought it was going to. Turns out when you have a 6-figure salary and aren’t buying a ton of crap, it’s pretty easy to pay down your debts.

When did you start getting serious about paying this debt off?

I can’t remember the exact time I decided it was time to clean up my act, but I do remember it was as Alex and I were starting to take our relationship to the next level. We were starting to plan a life together and I while I knew she loved me despite my faults, I didn’t want her to have to live with all of them. And, like Alex said before, she really wanted me to get my house in order.

My debts at the time were three-fold: credit card, car loan, and student loans. Since we both knew the credit card represented both the highest interest rate and a monument to my stupidity, I decided that needed to go first. And, I needed to do that on my own.

Jeff, how did you decide that creating a budget was what was needed to pay down your debt?

Just like it’s common sense that getting on a diet and exercise plan is what you need to do to lose weight, I’ve always known that I needed a budget to control my finances. But like many people with wanting to diet or exercise, I chose not to do it since I thought it would be hard. The idea of having to plan out all my spending ahead of time and restricting myself to what I’d planned for just never sounded appealing.

But, I had to do it. At first, I decided to make a traditional type of budget. I made categories and used the Mint app to help me track my spending. This worked to a degree, but I still couldn’t see myself adhering to this type of budget long term. It just felt so foreign to me.

What I was used to was living paycheck to paycheck. So I decided one day to try and make a budget that took that lifestyle and would make it work for me instead of against me. Like all great ideas, I think it came to me in the bathroom. Instead of figuring out how much I have leftover at the end of every month to throw at the debt, why don’t I just send money there first and give myself a smaller paycheck to live off? In the end, I created a budget that’s sometimes referred to as a “reverse” or “pay yourself first” style of budget.

In the months that followed, I was able to get rid of the credit card debt and use the same budget to start saving money for an engagement ring. With Alex’s help (she started packing me lunches) and forgoing the things that I knew were nonsense, adhering to my new budget was relatively painless.

You mentioned to us before that in the marriage process, you and Alex read The 5 Love Languages by Gary Chapman.

Yes, before we got married, the priest we worked with had us read it as part of a premarital course. We ended up reading it to each other rather than on our own which I think was a great way to do it. What we learned was that we shared a lot of common ground when it came to what our love languages are. Quality time, for one, topped both of our lists, and gift-giving was at the bottom. Looking back, I think this realization was what set the stage for the next chapter in our financial journey.

You mentioned that you are pursuing financial independence (FI).

Yes! Shortly after we got married in late 2016, I stumbled on the blog Mr. Money Mustache while doing some internet research on investing. The name sounded ridiculous so I had to check it out. What I found there was pure gold. In that blog, Pete Adeney (aka Mr. Money Mustache), describes how a combination of frugality, hard work, and unconventional retirement planning allowed him to “retire” at the ripe old age of 30 and that early retirement is something anyone living in this country has a shot at. This was my introduction to the financial independence/retire early (FIRE) movement.

While I love being a pharmacist, I love being able to spend more time with Alex. What I read in his blog and others was that making more of that time was entirely possible through financial independence. So for me, I was sold. If this was a way for us to get more out of the finite amount of time we have on this planet, then that’s what I wanted to do.

I plugged our numbers into some of the calculators online and found that if we were able to start maxing out our retirement accounts and tweak our budget a bit, we had a decent shot at financial independence in the next 15 years. Needless to say, Alex was skeptical at first. I clearly remember her saying in a thick Long Island accent, “You don’t know this man on the internet,” and that this all sounded a little far-fetched. But, to her credit, she said that if I wanted to give it a try she would support me.

So I got to work adjusting our budget and adapting it to a higher retirement contribution rate. Thanks to the tax deduction, it wasn’t that hard. Once that was in place, I set our debts in the cross-hairs.

How did you pay off the rest of your non-mortgage debt? What was the total you paid off and how long did it take you to pay it off?

When we decided to get out of debt, we had 3 different debts: my car, the student loans, and a loan we took out to finance a solar array we put on the house. In order to tackle them, I thought it best to go after the highest interest debts first. But before that, let me tell you what went down on November 28th, 2016.

I had been reading Mr. Money Mustache now for a few months and had been coming around to his way of thinking, particularly around cars. The dude hates them but realizes they have a place. That said, the supercharged rally car I was using as a daily driver on paved roads didn’t fit with the overall FIRE mindset I was getting into. It had to go.

So, the morning of November 28th, I got up and started looking online at replacements that were more sensible, but still had a stick shift (not giving that up). I texted Alex that morning telling her that I found a Toyota Corolla for sale across the state that looked like a good deal and wanted to check it out. She said OK and I drove over to the dealership. While there, I did a test drive, negotiated a trade, and signed over my WRX for the Corolla. I got rid of the car debt in a day and felt awesome. Did I forget to talk to Alex before getting a new car? Absolutely. I learned some things about marriage that day.

So with the car debt gone, we decided to go after the student loans. Alex’s loans at this point were a little under $7,000 total, so we used the money saved from our budget over the past year to kill those in one shot. Now, it was time to fight the good fight and get rid of my loans. Using our budget we put money toward the debt with every paycheck.

Over the next 19 months, we got rid of the student debt totaling $105,560.86. Most of it came from those incremental payments with every paycheck. Also, a little over $10k came from cashing out a variable universal life insurance policy that I took out in 2012. Finally, since our budget has us saving money simultaneously, I was able to take money that we had been saving for a new car for Alex to finish them off in June 2018. We bought the car though, so there’s more debt.

After the student loans, our other debts didn’t seem so big. The solar loan only had around $11k and the car loan started out at around $20k. Whatever, they needed to go. So for the rest of the year, we focused on those two debts, clearing them out finally on 12/22/18.

Overall, from the day I sold the car our payoff looked like this:

In the end, with interest payments (not reflected above), the total amount paid toward debt was $138,017.37 from November 28, 2016, to December 22, 2018.

Amazingly, we didn’t really feel deprived throughout the whole process. We still went out to eat and still went on vacations. Even though we were putting a huge amount toward debt, we didn’t feel it much since we did everything we could to optimize our expenses. Not having my car payment and replacing the life insurance policy were huge (~$800/month), but so were little things like getting rid of cable (~$75/month), sharing streaming services with family, and preparing meals ahead of time. We also tried our hand out at travel hacking which has been quite lucrative.

Now that you are debt-free, how do you feel?

When people say that getting rid of debt is like having a giant weight lifted, they’re not kidding. Getting rid of our debts, particularly the student loans, has been incredible. It’s even me more joy at work knowing that I’m not chained to my paycheck and has given us the ability to be more flexible in our career paths.

As far as near-future financial goals are concerned, we would like to get rid of the PMI on our mortgage this year, continue to maximize contributions to our retirement accounts, and possibly buy a rental property. In the end, we’re going for financial independence, so keeping our savings rate high is what we plan to do for the long haul.

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YFP 098: Lifestyle Creep: The #1 Threat to Growing Your Net Worth

Posted on May 2, 2019November 2, 2022 by yfpadmin

Lifestyle Creep: The #1 Threat to Growing Your Net Worth

Tim Baker, Tim Church and Tim Ulbrich talk through avoiding lifestyle creep, a simple but powerful philosophy for achieving wealth.

Summary

Tim Baker, Tim Church and Tim Ulbrich are in-person due to a quarterly YFP retreat for the recording of this episode. They talk about how to avoid lifestyle creep, something many new practitioners face.

Tim Church begins the episode by sharing an anecdote of a coworker, Serena. Serena was a residency trained pharmacist who had a great career, as well as a side job, and made $140,000 a year. She drove a Mercedes Benz, had a nice house, went on the best vacations, and ate at nice restaurants. It appeared like Serena had everything together financially, but she expressed to Tim Church that she was going into foreclosure on her home. When her hours were cut from her second job, she couldn’t pay all of her bills.

Tim Baker dives into becoming balance sheet affluent instead of income affluent. Income affluent means that your salary or income is good, but the money that comes in goes right back out. He explains that many pharmacists have the notion that because they will be making 6 figures, they don’t have anything to worry about in regards to their debt. However, a shift to being balance sheet affluent must occur, meaning growing your assets and net worth.

Tim Ulbrich explains that there are two reasons pharmacists feel like they are living paycheck to paycheck, despite making a great income. Lifestyle creep is a main reason and is caused by present bias and comparison to others. Present bias, as Tim Church explains, refers to the tendency to favor what is happening today or tomorrow versus several years from now. Tim Baker sees present bias affecting clients as it’s hard to picture yourself 10, 20 or 30 years older, but stresses the importance of placing yourself on a success timeline to envision what success looks like to you in the future. To combate present bias, things like automation can be effective.

The other factor affecting lifestyle creep is comparison to others. Tim Ulbrich explains that this can be subtle, but it’s impactful. Some items or experiences will temporarily bring you happiness, but it’s important to look at what a wealthy life is to you and work toward that without trying to be or emulate what you see others purchasing or doing.

Mentioned on the Show

Airbnb
7 Figure Pharmacist by Tim Church, PharmD and Tim Ulbrich, PharmD
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko
The Next Millionaire Next Door: Enduring Strategies for Building Wealth by Thomas J. Stanley and Sarah Stanley Fallaw Ph.D
YFP Planning
Switch: How to Change Things When Change is Hard by Chip Heath and Dan Heath
YFP 057: The Power of Automating Your Financial Plan
Join the YFP Community

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast, episode 098. We’re two episodes away from episode 100. We’ve got some exciting things planned, which is going to be a lot of fun. But here we are, live in Columbus, Ohio, at the Ulbrich household. We’re going to talk about avoiding lifestyle creep, what we think is the #1 barrier to new pharmacy graduates achieving long-term financial wealth. So what’s it like? Here we are, Columbus, Ohio, live in person.

Tim Baker: Yeah, checking out the new digs since you moved to Ohio State. So last time, we were in Rootstown, Ohio.

Tim Church: Wait. Correction. It’s The Ohio State.

Tim Ulbrich: Oh boy.

Tim Baker: Sorry. I am a Buckeye fan, so I should know better. Yeah, I mean, lots going on. I feel like every time, every time we get together, and we get together — what? Quarterly? There’s just so much to talk about, so much to do. Just a lot of juice and buzz around I think kind of where the brand is headed and yeah, I always get so jacked up about meeting with you guys.

Tim Ulbrich: I think it’s going to be a fun episode. And we’ve got a great one coming for you next week as well. We’re going to talk about financial moves that we think every new pharmacy graduate should be making. Great time of year, obviously, graduation right around the corner. But here, we’re going to talk about this idea of avoiding lifestyle creep. But also, we have to mention, this is the first time we’re doing some video on the podcast as well. So while we haven’t yet done so, make sure to check our brand new YouTube. I don’t know if we even have a subscriber yet, but we’re going to build that up over time.

Tim Church: I don’t think we have any.

Tim Ulbrich: So you’ll be seeing more video from us, that’s a Tim Church goal in 2019. And so here we are, in person, live in video. I kind of feel like an old man a little bit, not going to lie. I think it’s — Joe Rogan and Elon Musk are smoking weed on their podcasts. And we’re drinking coffee like old men.

Tim Church: From a Dr. Juice mug.

Tim Ulbrich: Yes, from a Dr. Juice mug. Yes.

Tim Baker: Mine has brown in it. Brown coffee. Not brown liquor.

Tim Ulbrich: Alright, so Tim Church, let’s start about just this concept of barriers to a net worth mindset. And as we think about avoiding lifestyle creep, and I think in the book “Seven Figure Pharmacist,” you had a really neat story that really highlighted and I think sets a tone for this topic, and that was about a pharmacist named Serena. So tell us a little bit more about Serena and some of the background and into the concept of lifestyle creep.

Tim Church: Sure. So when we talked in the book about Serena, she was a pharmacist in her 30s, and she was doing extremely well in her career. She was residency-trained, had an amazing job, and she even had a side job working at another pharmacy. So she was making a lot of money. She was making about $140,000 a year, and that was even a couple years ago, which was way beyond what the median pharmacist’s salary was. So if you look at kind of her lifestyle and what she had going on, she drove a really nice car. I think she had a Mercedes Benz. She had a nice house, and she always dressed well, went on the best vacations, went out to nice restaurants. So on the outside, it really looked like she had everything together with her financial picture. But the reality was is that one day, she knew I was working with some personal finance and working with YFP, and she asked to talk to me about her personal situation. And basically what she expressed to me was that she was going to go in foreclosure with her home. And I just let that sink in for a minute. I just thought, wow. She’s making $140,000 a year. She’s a pharmacist, so obviously she’s very intelligent, knows a lot about pharmacy. But she didn’t really know that much about personal finance. And she was in a situation when her second job hours were cut, she was no longer able to make all of the payments that she had. She not only had a mortgage, but she had student loans, she had credit cards, she had her car payment. So she had all these payments going on, and then basically once that job was gone, she wasn’t able to make those.

Tim Ulbrich: So Tim Baker, when I hear that story of Serena, I think of “The Millionaire Next Door” and “The Next Millionaire Next Door,” you know, in their most recent book, really outlines this concept of being income affluent versus balance sheet affluent. And when I hear Serena’s story, which is true I think for many pharmacists — no judgment, something that I struggled with as well — but making a good income but is that income actually converting into long-term financial success? So tell us a little bit about that concept of income affluence relative to balance sheet affluence.

Tim Baker: Yeah. So I mean, I guess the first thing when I hear a story like that is that I look at Serena’s case, and even though she’s in a tough situation, I respect the fact that for a very intimate subject like finance, that you’re willing to lay the cards on the table and be vulnerable. In a position like a pharmacist or someone who is very highly educated, sometimes, it’s really hard to like say, “I don’t really know what I’m doing,” or “Maybe the people or ideas that I’ve surrounded myself with aren’t necessarily the right way to go about it.” So one of the things that I really try to impress upon clients is really shifting that mindset from income statement affluent to balance sheet affluent. So essentially, you know, in the case of Serena, the income statement affluent, that would describe her, someone who the top line revenue is coming in. $140,000, we understand that that’s well above the average household income in the United States. But nothing’s sticking. It’s all a sieve. You know, the money that comes in goes right out. So — and I think part of the problem that we see from the issues that we see is that pharmacists buy into that. It’s like, hey, my worries are going to be all gone when I start making that income, and I have nothing to worry about. And I think one of the things that we are trying to key in on is the well, not so fast — if I use my Lee Corso impression — not so fast with that. So I think it’s shifting the mindset to balance sheet affluent where, you know, money comes in. Income is the lifeblood of the financial plan. But what actually sticks is growing those assets and minimizing those liabilities and growing that net worth over time so the balance sheet grows over time instead of money coming right in and right out. So I think having that mindset — and I’ve seen clients that make $140,000, $240,000, and be very much income statement affluent where it goes in and it goes right out, and I’ve seen clients that make $40,000 or $50,000 and be wealthier relative to that comparison because they just get the fact that hey, I’m going to pay myself first. I’m not going to take on consumer debt, which is very predatory. I’m going to be intentional about my student debt. So I think it’s a mindset that we’ll probably talk about FOMO and YOLO a little bit later. It’s so hard to, you know, not compare yourself to others and think that that’s normal. And you know, “The Millionaire Next Door,” when he studies millionaires, the millionaires aren’t the people you would think are millionaires. A lot of that consumerism, it’s really facade. It’s a house of cards, Tim Church. So you know, it’s important to be aware of that.

Tim Ulbrich: Yeah, this hits home for me. As I think back to the journey Jess and I took is 2012 was really the pivot year for us. I graduated in 2008, did a residency in 2009. 2012, as I look back on that journey, had earned about $500,000 of income, but I had a net worth of -$225,000. I mean, it’s just a classic example of income’s coming in the door, but it’s not being converted.

Tim Baker: Right.

Tim Ulbrich: And we talk about this all the time on the podcast, when we’re doing presentations, a pharmacist’s income is an incredible tool. But that tool has to be put to work towards paying down your debts, growing your long-term savings, building income protection plan, and certainly lifestyle creep and what we’re talking about here today I think plays so much into that.

Tim Church: And I think what we are talking about is it’s going to be normal coming out of pharmacy school for most people to have a negative net worth. I mean, that’s, unfortunately, the reality for most people when they start out. But I think what’s more important is looking at that and looking at the change over time. You know, how much year to year is that net worth growing, trying to get to the balance sheet affluence?

Tim Ulbrich: Yeah, and that’s one of the things I like when we talk about the financial plan with you, Tim Baker, is net worth is top of mind all the time, right? So I know when Jess and I log onto the platform that you use, front and center, net worth, what’s growing over time? And I think that that’s a great indicator of your overall financial health.

Tim Baker: When we were tooling around Columbus today, I kind of went on a big rant, so there’s Tim Ulbrich in the driver’s seat, Tim Church in the passenger seat, and Tim Baker in the back like a little kid ranting. I’m like, “Why don’t more financial planners look at net worth? Like why isn’t that a thing?” And I think it’s because the industry is so focused on product and investments and things like that that it’s — I don’t get it. It was kind of a rant that I was going on. I don’t understand why that isn’t more of a measurement that financial planners use to help clients show progress and really value. I don’t know — to me, again, income is — our jam at YFP Planning is really how can we help you, the client, grow and protect income, which is the lifeblood of the financial plan, and grow and protect net worth, which is what sticks, while keeping your goals in mind? And to me, like anything outside of that, like I don’t get. Investments and insurance, it’s important, but it’s part of what feeds into all that. So yeah. Rant over.

Tim Ulbrich: That was a rant. And you know, normally I have three kids ranting in the back of my minivan. And today, it was Tim Baker ranting in the back of the car.

Tim Baker: Yeah, sorry about that.

Tim Ulbrich: So Tim Church, let’s talk about Parkinson’s law because I think that’s so much of this concept of lifestyle creep is Parkinson’s law. So what is that? And how does that play into pharmacists and ultimately, this concept here?

Tim Church: So this is a well known principal, and it’s been applied to many different areas. But initially, this was expressed as essentially, the work will expand for the amount that you have available. In other words, however long you have to get a task or something done, that’s how long it’s going to take. And I think probably many pharmacists and students out there can relate to that based on when you have an exam or when you have an assignment or a project due that sometimes, people will procrastinate. That’s just human behavior to normally do that. But the reality is that concept and that principal has been applied to many other areas. It’s been applied to eating and even whatever is on your plate or whatever you have in front of you, that’s what you’re going to eat.

Tim Baker: Small plates versus big plates.

Tim Church: Yeah. I think there was actually a study in I think it’s the book “Switch” by Dan and Chip Heath, and they talked about, they were doing an experiment about people going to the movie theater. And they wanted to see what their behavior was based on how much popcorn they gave them. And what they found was they gave people old popcorn, fresh popcorn and it didn’t even matter. It mattered how much they actually put in the size of the bucket in terms of how much they had to eat. But I think that concept really is exactly what we’re talking about here is that lifestyle creep is that tendency to spend whatever you make and even go above and beyond that. And I think that’s where we see a lot of famous people out there that they’re even in really high amounts of debt, despite making millions or even billions.

Tim Baker: Expenses rise to the level of your income. Right? So and I think we see this in lottery winners too is a lot of people will say, “Oh, I wish I made — my worries would be over if I could make 25% more.” But the science says that you’re going to spend 25% more. We see it even with tax refunds. Some people spend that even before it comes in the door. So you know, and this is why when we go through the foundation of the financial plan, it’s like, this is why budgeting is so important because we have kind of limits. We have a plan. It’s not intentional. I know that we’re talking about the podcast and coming up on episode 100, Parkinson’s Law was real for me to get the podcast edited early on. If I knew that we had a Thursday deadline, and I was running around with my hair on fire with clients and things like that, I would take all that time, sometimes more if you go back. Now we have Caitlyn, who’s awesome and keeps us on deadline.

Tim Ulbrich: Rockstar.

Tim Baker: But yeah, it’s a real thing. It’s absolutely a real thing.

Tim Ulbrich: And I think this really speaks to probably one of the most common things that we hear is “I feel like I’m living paycheck to paycheck, despite making a great income.” And you know, that’s getting pressed even further right now as we see some salary compression happening, the job market shifting a little bit, and so obviously lifestyle creep I think is more relevant than ever to pharmacists today and to pharmacy graduates today. So we’re hoping to capture those that are getting ready to graduate here in the next month, those that are still out even transitioning, never too late, but trying to do everything you can to lower those expenses and prevent that creep. So really, two big reasons why lifestyle creep occurs: present bias and the comparison to others. Let’s talk first about present bias. What is that concept? And how does that relate to lifestyle creep?

Tim Church: So present bias is really the tendency to favor what is happening today versus what is happening tomorrow or several years down the road. There’s a concept that’s also been described as hyperbolic discounting where we discount things that are going to happen in the future or that we anticipate that are going to happen. So it sort of makes sense that we want to enjoy ourselves today, whether that be with clothes, with purchases, with going out to eat. That’s the reality of kind of what’s happening there.

Tim Ulbrich: So Tim Baker, from the financial planning perspective, the concept of present bias, I mean, how do you see this play into reality each and every day while you’re working on a client with the financial plan? And what are some of the strategies that you use in helping them combat some of the aspects?

Tim Baker: Yeah, so you know, it’s so hard for us to really empathize with or really even picture our 30-year-older self. Right? So it’s hard for us to kind of get into that mindset. So one of the things when we talk about goals is really to lay out like what’s the path? What’s the success timeline, we call it? So Tim Church, you’re my client, I say, “Hey, Tim Church. What I want you to do is let’s get into my imaginary time machine.” So we get into the Delorean and we hit the dial for April 2021. We get out of the Delorean, you’re two year older, you’re two years wiser. What does success look like? And you know, we do that for five years, we do that for 10 years. And it’s hard. And at first, when I would do this practice, it’s like pulling teeth almost. It’s just hard for us. And the further out we get, the more it’s like that image of ourselves fades. I can envision myself at — let’s see, I’m 36 — I can envision myself at 38. Can I envision myself at 41? Maybe. At 46? No. But that’s kind of the exercise that I started to do is I would start to put you in that age. So I would say, you know, now you’re 10 years older and 10 years wiser. And at 46, these are all the things that kind of come into my mind that I want to achieve. So I kind of backwards plan it, and I try to transport you into that time and place. But it’s hard. It’s hard. And the further out it is, the more that we discount it. And I feel like what I say is, again, we’re trying to help grow and protect income, grow and protect net worth, while keeping your goals in mind. And if we don’t feel the push and pull between taking care of yourself today and your 30-year-older self, we’re probably doing something wrong. So it can’t just be about pedal to the metal, spend, spend, spend today, and we’ll just worry about it later on.

Tim Ulbrich: Absolutely.

Tim Baker: But it also can’t be stick your head and achieve a $10 million net worth for a purpose without enjoying your boys growing up or whatever that is. So it’s threading that needle, and how do you do that?

Tim Church: Well, that’s what I was going to ask you. So when you’re walking through this exercise with your clients, you know, obviously this is one of the biggest points that comes up with how you manage your money, right? Because these decisions, these micro-decisions that are being made are having a compound effect over time. So when you’re assessing clients’ situations, how do you ensure that both of those things are happening simultaneously?

Tim Baker: I think at the end of the day, it’s just asking good questions and getting the (bleep) out of the way. In reality, I joke around about that. But I think that’s what it is and really have the client or clients kind of have a period of self-discovery. And sometimes it’s not like a “Eureka!” moment. It’s a process. It’s a conversation. It’s, “Hey, we kind of left it at this. Did you guys mull it around? Where are we at with it? What’s the update?” And I think having a forum, an open forum for partners or really one-on-one to be able to talk through those issues becomes, it lays out a path for you. But it’s not like — it’s the same thing as like, should I invest? Or should I pay down debt? It depends. It’s kind of the same thing. And it’s a process. And you know, it’s not going to be a binary, this is what you should do.

Tim Church: Right. And I think that that’s one of the key concepts is that a lot of these things in terms of whatever the financial position one is currently in at the moment could be a culmination of habits that have manifested over time.

Tim Baker: Right. Compound effect.

Tim Ulbrich: Absolutely.

Tim Church: So it’s not just the individual decisions that come up. I mean, somebody could be used to spending x amount on restaurants, on clothes and things like that, month after month after month, and that’s just kind of the normal. And I’m sure that that’s probably sometimes hard to discuss with clients that you have to really take a hard look at that budget and what percentage of that is going towards your net worth?

Tim Ulbrich: Yeah, and I think this is a good time too to talk about what can you do to be combating present bias, right? What can you be doing in your plan each and every month to actually take some steps forward if this is something that you’re struggling with? And I think for me, this comes to the concept of automation a little bit in your financial plan.

Tim Baker: Yeah, get out of your own way.

Tim Ulbrich: Yeah, get out of your own way. And when I think about — there’s just a natural human behavior that if you go out and spend money, name the thing you like to enjoy, it’s a rush, right? I mean, I love buying books. I love shopping. I love doing lots of things. And that is things that you get positive feelings. That is a natural human behavior. Me stashing away an amount of money for 40 years in the future in my 401k, like dopamine surge does not happen, right? It’s just not as exciting. I mean, there’s maybe a few people that are listening —

Tim Baker: But isn’t that the one example, though, where it’s fairly automated for everyone? Especially with auto-enroll these days. Because that’s what I was just thinking when you brought that up is when you talked about automation, for most people, when they start a job these days and they have a 401k, their employer is going to automatically enroll them into a 401k. So you are completely on the sideline. You really don’t have to do anything. You don’t even have to pick the investment. You’re probably going to be defaulted into a target fund. So the fact that you’re kind of sitting on the sidelines, but then you wake up in five years, and there’s $100,000 there or whatever it is, like that’s kind of what we’re talking about. But to do it even more deeply in your financial plan with regard to other types of savings. That’s what it is. I mean, that’s a perfect example of getting out of your own way. You know, it’s so true with a lot of parts of the financial plan, sometimes, the more you tinker, the more that you screw it up.

Tim Ulbrich: Yeah, and I think this is — we talked about this in Episode 057, so for those that want to go back and listen.

Tim Church: How do you remember these episodes?

Tim Ulbrich: I don’t know, I spent a little bit of time memorizing them.

Tim Baker: I don’t.

Tim Ulbrich: Yeah, episode 057 on automation and we have a blog post on it as well. But for those of you that want to think about how to automate the plan and what that could look like, and we talk about sinking funds and buckets, but I think the essence of it is get out of your way. Set the plan, be intentional, and get out of the way.

Tim Church: Yeah, you have to protect yourself from yourself.

Tim Ulbrich: Absolutely. Absolutely.

Tim Baker: Yep.

Tim Ulbrich: So present bias, No. 1. The second thing is this concept of comparing to others. So not a new concept, comparing yourself with neighbors, keeping up with the Joneses, you name it. Obviously, I think for pharmacists, that’s a very real thing. So Tim Baker, talk to me about that. Is that something you see with clients? This comparison to other pharmacists or peers and this need to keep up financially in whatever way?

Tim Baker: Yeah, I think so. You know, it might not be as overt of like, hey, my buddy just got this car. I want one too. But I think it’s always there. I mean, comparison is the enemy of content. So I think any time that you’re not doing you, and you’re worried about what everyone else is doing — I sound like my dad — you’re going to run into some problems. Because there’s always going to be someone out there that’s more athletic than you, taller than you, smarter than you. And I think if you get caught up in that, you know, you’re never going to be satisfied. And it’s so true with money as well. And the problem is in a world where we’re so connected with social media and we’re running our highlights on Twitter and Facebook and Instagram, it’s a problem because we want to — there’s the Fear of Missing Out and You Only Live Once and all those concepts which you want to make sure that you’re living an enriched life, but you want to make sure you’re living your wealthy life, which sounds cliche, but maybe for some people, traveling the world is not a thing that they really aspire to. Or maybe someone doesn’t want to retire at age 50 or whatever it is or buy a luxury car. But sometimes, we get caught up in what everyone’s doing, and our own values, our own beliefs depend on — what is the saying? Like you’re the average of the five people that are closest to you. And you know, they obviously are going to affect your exercise habits, your eating habits, your spending habits. And I think those are just things to be hyper-aware of because the reality is, again, to go back to it, the people that from a financial perspective, that are typically the wealthiest and most content are socially indifferent to those things. And it’s one of the things that, you know, as a wealth-building factor for “Millionaire Next Door” is they can — I’m going to say it again — they could give a (bleep) what you’re driving, where you’re going, that type of thing. And they’re focused on their own financial plan and their own vision of what a wealthy life is, and that’s it.

Tim Church: And I think one of the biggest misconceptions is that sometimes when we play that out and we have that comparison to others and what they’re doing, is that we think to ourselves that if we are able to do some of these things that other people are doing, to buy these purchases, to go on these vacations, that that’s automatically going to increase happiness level. And I think that’s the biggest misnomer that comes along with it. Now, of course, some of those things will, and it may be a temporary boost in happiness, but it may not be exactly what you were looking for.

Tim Baker: Yeah, and I think the other thing to is I see is pharmacists or young couples will come to me, and I’ll say, oftentimes when the pharmacist speaks with me, they share that they’re overwhelmed with student debt or some other type of debt. And they’re like, yeah, that’s me. And they start to like tiptoe into how much they actually owe. And I’m like, “Hit me with it. I’ve seen it all. So just tell me.” And you know, it might be like between the two of them, they might have $400,000 in debt. And when I — so I’m taking notes, and I write it down, and I think they’re waiting for a reaction. And I’m not going to give it to them. But what I say to them after we kind of go through the conversation about the debt and how they feel about it is, I say, “In a way, it’s all relative.” Because I have some clients that come on, and they have $800,000 in debt. I have some that come on that have $0, and they actually have a positive net worth. And I think that goes into this is like, if you’re comparing yourself to others — and you know, not everyone is in the same place financially. But we want to put ourselves there, and I think it’s just really, in my opinion, it’s really sitting down and asking yourself, what truly is a wealthy life? Not what your parents think, not what your neighbor thinks. Like what do you think is a wealthy life? And work towards that. Be intentional about that. And you know, it’s something that we tell Olivia, like why did you do this at school? And she’s like, “Well, it’s because everyone else was doing it.” And I’m like, “No, bro. Like come on.”

Tim Ulbrich: That’s not a good reason.

Tim Baker: Yeah. That’s not a thing. So she’s 4, we’re working on it. But it’s a lifelong struggle. Like I do the same thing.

Tim Ulbrich: Yeah. Absolutely.

Tim Baker: Small business owner, like I want to make sure the business is growing and have the things that owning your business affords, but it’s also like when you go down that path, you’re like, I’ve got to stop. Because it’s not productive.

Tim Ulbrich: Well, and I think it can be so subtle, and I think the impact of it happening can be subconscious. And you know, like what you said, just a reminder of we tend to follow the behaviors and patterns of those that we’re closest with, you know, your inner circle. And really taking a step back to say, is that true for you? And are you aware of that and what’s happening? So really evaluating the impact of your neighborhood and evaluating the impact of your coworkers and your friends. And changing the point of comparison. I was talking with the students last week at Ohio State, and I think often in the pharmacy profession, it’s very easy to play the pharmacist-to-pharmacist peer comparison game. And you see this so much with residency. You know, “Hey, I’m making $45,000 in residency. And my friend I sat next to for three years in therapeutics is making $120,000. Life sucks, so I’m just going to keep riding my loans out, and I’ll work on it in five years and kind of woe is me.” But I think if you take a step back, you know, the median household income in the United States for a family of four is about $55,000 a year. So if you’re a resident, single, making $45,000, and you change that point of perspective, how does that alter how you begin to think about your financial plan each and every week? So finding people that can come around you to encourage you with that, that will be on that journey with you to hold you accountable to live the wealthy life, plan for the future but also have fun today, and maybe that means a financial coach and a planner that can help you along in that journey as well. But I think the point is certainly real.

Tim Baker: And I think that’s where we hopefully think that YFP fits. You know, we talk about empowering a community, surrounding yourself with like-minded people. That’s what we want this community to be is that, you know, kind of example of like, hey, there’s other people like me that are struggling with a question about their finances or just the direction in general. And I think that’s healthy conversation, that’s productive conversation, and I think being open — and really, I think one of the things you said is how do you combat it? It’s almost like challenge everything. When we talk with clients that have more or less a spending problem and their credit card, challenge every assumption. We live in a society that’s like, well, I need this. I need that. And like do you? Do you really need it? So challenge it from the bottom up. Obviously, we need clothing and housing and food and all that kind of stuff, but I think approaching it from a very basic level and then working from there is a good way to approach it.

Tim Ulbrich: And I think hearing you talk about community is a great reminder of just what we’re trying to do is empower and build a community that is helping one another. And to be honest, without getting too sentimental, we’re going to talk about this in Episode 100, but that is what is most rewarding for us is seeing that community thrive and help one another. So if you’re not yet a part of the Your Financial Pharmacist Facebook group, please join us. We’d love to have you in the community. And we certainly think you have something to offer to our community. But we hope that that group is there for you as well. Before we wrap up, just a reminder, if you like what you heard on this week’s episode or you’ve been following the podcast for some time, please head on over to iTunes or wherever you listen to your podcasts each and every week and leave us a review. We’d love to get your feedback and a comment as well. And again, next week, we’re going to come back and talk about financial moves that we think the pharmacy graduate should be making and things to be looking out for, and then we’ll be following that up with episode 100. Have a great rest of your week.

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The 6 Biggest Factors Affecting Credit Score Right Now

Posted on April 29, 2019 by yfpadmin

The 6 Biggest Factors Affecting Credit Score Right Now

You often hear how important your credit score is especially leading up to a large purchase. Mom taught me it is important to pay my credit card balance each month, but I never really understood why except for the fact that I didn’t want to pay interest on an outstanding balance.

Yet this little number can have far reaching effects, such as the ability to even get credit or how much you’ll have to pay back based on the interest rate you’re afforded. The latter can move the needle tens of thousands of dollars, if not more. If I asked you what the biggest factors affecting credit score are, you might look at me like this:

It’s important to understand what goes into this score, so you can improve it if need be. Before we get into the six different factors, let me drop a little background knowledge on the subject. In 2003, Congress passed legislation called the Fair and Accurate Credit Transaction (FACT) Act that affords U.S. residents to receive one free credit report every 12 months for each of the three major credit reporting companies, which include Equifax, Experian and TransUnion.

These credit reports, populated by all those lenders/creditors out there, determine your credit score. One misnomer is that the law does NOT require these companies to give you your credit score for free (just the credit report).

Let’s first breakdown what your credit score is and why it matters. Your credit score is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time. So, for those of you that have a less than perfect score, fret not! There are things you can do immediately that can have a positive impact on your score.

Your credit score tells creditors how able you are to pay back your debt over the next 2-3 years. Credit scores are like batting averages, not golf scores, so the higher the better. Higher credit scores equate to the best credit approval rates (so you don’t get denied to finance that new whip), the best interest rates and the possibility of being extending unsecured credit (meaning there’s no collateral like the aforementioned whip that the lender can take back).

It is worth noting that there are different types of credit scores out there with FICO® being the most common. Others include the VantageScore or PLUS Score®. Typical credit scores range from 300 to 850 with 850 being the best. Okay, now that we have a little background information, let’s dive in to see what factors determine your credit score.

1. Credit Card Utilization (High Impact)

This is a high impact factor, which means it’s very important to your credit score! The lower the utilization, the better. Lenders like to see that you’re not using too much of the credit available to you. The tip here is to keep your balances low. Another trick is to ask for a credit limit increase, which will help keep your utilization low.

Use caution though! Don’t think that an increase to your credit limit is an invitation to spend more. A general rule of thumb is to keep your utilization under 30% for good credit and under 10% for excellent credit. This means that if you have a total $10,000 credit card limit, you should carry no more than a $1,000 balance to have excellent credit card utilization. See below for the utilization percentages.

2. Payment History (High Impact)

This is also a high impact factor. Lenders look at this factor to determine how likely you will make future payments on time. A payment that is more than thirty days late constitutes a late payment and, believe it or not, one late payment could hurt your credit score. Also, the credit report keeps track of payments that are 30, 60, 90 and 120 days late, so if you go beyond thirty days, go ahead and get a payment in so you don’t get hit for a sixty-day lateness. A tip here is to set up automatic bill pay so you’re never late.

3. Derogatory Marks (High Impact)

This is the last high impact factor with less derogatory marks being better. A derogatory mark on your credit report could include something like the aforementioned late payment, repossession, a debt going into collections or even bankruptcy. The general rule of thumb is that these derogatory marks can camp out on your report for up to seven years, so do what you can to avoid them. Again, establishing automatic bill pay or setting reminders in your calendar to make a payment are crucial to avoid these on your credit report.

4. Age of Credit History

The higher (or longer) credit history, the better. Lenders like to see that you have experience using credit. This isn’t always fair to the young consumer out there but look at it from the lender perspective. Would you be more comfortable lending to someone approaching retirement that has an expansive credit history or someone who just graduated high school?

It’s a no brainer. One thing consumers often do is close paid off cards or zero balance lines of credit. This isn’t always the best method with regard to your credit score. You can actually improve your age of credit history over time by keeping your accounts open and in good standing. After all, it takes nearly a decade of history to be considered excellent in this regard!

5. Total Accounts

The total accounts are also important to lenders. This factor suggests that other lenders have trusted you before. When I first learned about this, my thinking was backward. I thought lenders would like to see fewer accounts, not more. However, lenders like to see several varying accounts, such as revolving, installment and open accounts because of the behaviors that are associated with them.

Revolving credit accounts (like a credit card) have varying payments and anything you don’t pay is carried over to the following month with an agreed-upon interest charge. Installment credit accounts (like an auto loan or home mortgage) are accounts that typically have fixed payments with balances that amortize on a fixed schedule over time. Open credit accounts (like utility payments or cell phone bills) are paid in full each month and don’t carry over.

These particular types of accounts rarely show up on a credit report unless you decide against paying the water bill or Verizon for all that data you mistakenly used last month. You can improve your credit score by adding another type of account, however, use caution. Think twice before adding an account just to improve your overall number of accounts. Sometimes it isn’t worth the additional risk of taking on more debt.

6. Hard Inquiries

The last factor is hard inquiries with less inquiries being better for your overall credit score. Hard inquiries hit your credit report when you apply for credit. Although they are unavoidable, try to avoid unnecessary hard inquiries because they stay on your credit report for 2 years.

One trick to practice is to take advantage of pre-approved credit card offers instead of applying for them. Pre-approval means the credit company doesn’t need to check your credit so you can avoid the hit. Buying a car or some household furniture and need financing? It’s still okay to shop around for the best deal because multiple inquiries in a short period of time are grouped together and viewed on the credit report as one incident.

A few more things to note about the credit score. Often times you will see that there are differences in your credit score among the credit reporting companies. It is worth noting that each of the reporting companies uses its own proprietary formula for calculating credit scores that are not available for public view (or scrutiny).

This means that the way Equifax calculates your credit score will be different than how TransUnion does it. Another variable to consider is that creditors do not always report to every credit reporting company, which could alter a score for a particular reporting company. Oftentimes, scores are fairly close, but if your scores have a wide range, you may want to research why (that means digging into your credit report for some answers!).

Now if you’re a big Dave Ramsey fan, you know that he advocates striving for a zero or indeterminable credit score. This is because he strongly recommends paying off all of your debt and never using a credit card, ultimately leading to that situation.

While the intention is good in that it promotes reduced reliance on debt utilization, the reality today is that many organizations and financial institutions strongly consider credit score, regardless of your net worth and the rest of your financial picture. Therefore, it can be more difficult to get approved for a mortgage, investment properties, a lower rate for refinancing student loans, and sometimes even rent if you have a low or no credit score.

Conclusion

I’ve outlined the six factors that determine your credit score, coupled with a few nuggets that are hopefully useful to your own situation. Your credit score is a glimpse into your financial life and your ability to make good on your debts. Know your credit score, know your shortcomings with regard to your credit score and take the necessary steps to fix them to get that score as high as possible!

Need help navigating your credit or finances?

Figuring out how to navigate your finances and improve your credit can be tough if you have student loans and a lot of other competing financial priorities. If you need help improving your financial health, you can book a free call with one of our CERTIFIED FINANCIAL PLANNERS^TM.

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YFP 097: Growing a Brand Through Memes, Products, and a Podcast

Posted on April 25, 2019November 2, 2022 by yfpadmin

Growing a Brand Through Memes, Products, and a Podcast

Richard Waithe, PharmD, joins Tim Church on this episode to take a deep dive into discussing his unique career path, his non-traditional pharmacist role and how he’s helping improve patient adherence and health literacy, and some of his side hustles to create multiple streams of income.

About Today’s Guest

Richard Waithe, PharmD, is passionate about patient engagement and advancements in technology that improve adherence and health literacy to ultimately improve outcomes. With years of experience on the front lines in community Pharmacy, Richard is committed to helping individuals better manage their health and medications.

He is currently the President of VUCA Health, a company that has the largest library of medication education videos that serves to enhance patient engagement and provide an on-demand extension of pharmacists and other healthcare providers. He is also the host of the Rx Radio podcast where he interviews Pharmacists practicing in a vast variety of fields and discusses the future of our profession. Richard is the author of the book First Time Pharmacist: Everything you didn’t learn in school or on-the-job training.

Summary

Richard Waithe, PharmD, joins Tim Church in Miami to discuss how to grow your brand with memes, products and a podcast.

Richard graduated from the University of Florida with his PharmD in 2014. He worked at Target pharmacy first as an intern and then a pharmacist. When Target was bought out by CVS, Richard learned the importance of branding and saw first-hand how branding changed behavior through patients reactions to the buy out.

During his P4 year, Richard felt the desire to become an entrepreneur. While on rotations, Richard saw that it was a mess and needed to be better, and knew that he could do more beyond his current role. He began a MTM practice, MedVise. His journey starting and running MedVise taught him a lot as he had to learn about website building, marketing, and branding.

He also created the RxRadio podcast which targets all pharmacists. The podcast discusses themes of exploring different ways pharmacists can have an impact through various careers and paths. His biggest challenge in getting the podcast running was the editing, recording, and building a listenership.

Richard has been able to monetize the podcast through merchandise like mugs, t-shirts and onesies and the book he wrote, First Time Pharmacist: Everything you didn’t learn in school or on-the-job training. Richard built his a social media following around memes that were created out of his experiences in community pharmacy.

Richard took on the position of President at VUCA Health in 2018 which focuses on medication education and providing content to healthcare providers and health plans. When Richard was a P3 student, he volunteered for VUCA Health when the company was a start-up.

Getting to this point with his brand was not easy. For two years, Richard dedicated time everyday from 10 pm to 2 am, while working as a community pharmacist full-time, to work on what he was passionate about.

Mentioned on the Show

Refinance Student Loans
RxRadio Instagram
VUCA Health
RxRadio Podcast
First Time Pharmacist: Everything you didn’t learn in school or on-the-job training. By Richard Waithe
Richard Waithe on Instagram
Richard Waithe on LinkedIn
Richard Waithe on Facebook
Richard Waithe on Twitter
Richard Waithe on Reddit
Email Richard: [email protected]

Episode Transcript

Tim Church: Richard, thank you so much for taking the time to come on the show and for being part of this side hustle edition.

Richard Waithe: Thanks for having me, I’m excited to be here.

Tim Church: Well, I’m excited to be here because I’m hanging out with you in Miami in your house, where we’re recording this episode, which is pretty cool.

Richard Waithe: Yeah, yeah. The weather, luckily, played out to be a really nice day.

Tim Church: Yeah. I didn’t know for the longest time that we were actually neighbors, you know, which I call us south Florida neighbors because it’s really not that far down the road, which is cool.

Richard Waithe: Yeah, there’s not a lot of pharmacists kind of building a lot of brand down here and kind of vocally. Most of the time, I’m connecting with people that are doing similar things to us, they’re like living out in Pittsburgh, California, and all these different states.

Tim Church: Shout out to your friend Adam Martin.

Richard Waithe: Yeah, Adam Martin, there you go. And it’s cool to know that someone’s kind of in the backyard that we can kind of chop it up with.

Tim Church: Yeah, it’s great. Well, I want to jump in and kind of learn, have our audience learn more about you and your career path. But one of the things that has been, keeps popping on my social media is all these amazing memes that you create. So talk a little bit about what you’re doing with those and how — what I want to know is how do you have so much time to get these going?

Richard Waithe: Yeah. So it’s funny about memes, and you’re actually the first person to kind of bring this up I guess really vocally, which I’m really excited about. And the reason is because I’ve been able to build a pretty solid community on social media purely off the back of those memes. And the inspiration from them, I think they’re — I mean, not to boast, but the memes are hilarious.

Tim Church: They are.

Richard Waithe: And I’m cracking up. And I make a lot of them. Like, if it says RxRadio on the meme, I made it. But it’s from pure pain. Like it’s from pure struggle of being in the community pharmacy and that like even to this day, I still kind of remember back about like the different interactions. But the great thing about it, though, beyond the fact that it was great I was able to build kind of a community around it, is that it lets us connect a lot. And it lets, like when people are seeing it, they’re seeing that other people across the country are kind of going through the same thing that they are. And then it also allows, it also drives team morale within the pharmacy. Like I have people that are tagging their team members in the pharmacy in these memes. And it’s great to know that they’re able to help get them through their day. People are messaging me saying, “Hey, this is just happened to us in the pharmacy. It would be a really funny meme.” It’s just great to kind of build that sort — I don’t want to say if it’s a coping mechanism but just build that community to help everyone get through their days usually.

Tim Church: So one of the characters that commonly comes up in these memes is Samuel L. Jackson.

Richard Waithe: Yeah.

Tim Church: So my question for you is is that somebody you just like? Or you just feel like he’s pretty easy to put in many different memes?

Richard Waithe: He’s like meme gold, so I just kind of use him for that. I don’t have any particular reason other than that.

Tim Church: Oh, OK. Other than that. I noticed that that was a pretty popular one, along with Bird Box.

Richard Waithe: Yeah, the Bird Box meme killed it. Which, you know, it’s funny because luckily, everything that pops up that’s a meme could be applied to pharmacy, which is great. And so it’s great to kind of keep up with culture that way. But Sandra’s another one that like — I feel bad. So I always reference like Sandra picturing being like a customer that’s just kind of always annoying at the pharmacy, and I feel bad because I have people that are following that their names are Sandra. And they’re like, “Hey, my name’s Sandra. You’re always mad at me,” and stuff. It’s just super funny. But yeah.

Tim Church: So talk a little bit about your career path as a pharmacist.

Richard Waithe: Sure. So I went to University of Florida. I was at the Orlando campus for pharmacy school. And I was pretty involved there on campus. I was in a lot of leadership roles and got my career started actually with Target Pharmacy. I started as an intern in school, and I did that for a couple years when I graduated, went right into a pharmacy position. Did that for a couple years, and we ended up actually getting bought out by CVS. I was there during the time of that transition, which was super interesting. One of the biggest lessons I really learned in that transition, not only just from an operations standpoint and transitioning kind of cultures, but I learned the importance of brand from there because I literally had patients tell me that they’re super sorry, but they’re actually not going to be able to come back to the pharmacy anymore because of that brand that was changing over.

Tim Church: Wow.

Richard Waithe: And I thought that was really powerful because it had nothing to do with the product, which the product essentially was the medications and the service that my team provided to the patients, which was great at the time. It was the branding that really triggered something in their mind for them to change their behavior, and that was such a huge lesson to me in realizing that brand is everything, no matter how good your product is or not — I mean, don’t get me wrong. If you have excellent branding and marketing, but your product is terrible, like obviously, that might show at some point. But just the fact that the importance of branding was a huge lesson there. So after I did that transition for awhile, I went over to Publix Pharmacy, which I was there for a couple years. Also made it to a manager position there as well. And recently, last summer, actually, I fell into a role where I’m now the president of VUCA Health, and we provide medication education content to healthcare providers, health systems, health plans and things like that. Along the way, I’ve picked up a couple side hustles that we might dive into.

Tim Church: Yeah, before you jump into those, can you talk a little bit more about VUCA Health? Because I think this role that you have as a pharmacist is really unique and a really cool and exciting role.

Richard Waithe: Yeah, so we — so the funny thing is a lot of people ask me, how did you get this role? Did you apply? I get all these questions. But the interesting thing is that I actually — the role that I’m in now, while it being six years later almost, was the flower that grew from a seed I had planted when I was a P3, where I had met the founders of the company while they were just a startup, and they just needed students to help them build out some content, like to at least start it. And I was one of those people that volunteered for that. So it was a seed that I had no idea what that was going to potentially turn into, but the fact that I always just liked to take up new opportunities, and I took that, and it led to this, is pretty amazing. But in terms of the role itself, I did step away kind of from patient care, which was definitely a huge change and a huge transition. And I stepped more into kind of the business and business operations sides of things. I was able to also do a lot of the marketing for the company and lead a lot of those fronts. But it’s — the interesting thing is — and we’ve actually kind of talked offline about this — is that technically, a pharmacist doesn’t have to be in the role that I’m in, like anyone could kind of — I don’t want to say anyone could lead a company, but anyone with any sort of degree can essentially lead a particular company. But I think it’s extremely helpful to be having a pharmacist training to be in this particular type of role. One, we’re providing education content to patients, so it’s good to know that my absolute goal being that I was a pharmacist is to make sure that we’re delivering messages in a way that people can understand and actually help them improve outcomes and change their behavior. But it also helps in terms of being able to serve my potential business partners in the sense of being a pharmacist, our whole thing is about empathy. We do a lot of training in empathy. We’re trying to make sure that we’re caring as much for that patient and meeting their needs to help them with their outcomes. And applying that in the business world is actually, I think, imperative to success. And realizing that whether it’s your customer or business partner that you’re potentially working with is being as empathetic as possible to their situation, finding out how you can help them in whatever it is that they’re trying to do with the sets of tools that you have as a business.

Tim Church: And so the main thing that you guys are doing as a business is you’re really looking at pharmacies, organizations, and figuring out how to bring interactive media, video content to them and almost either supplement or replace the traditional monographs for drug information. Is that right?

Richard Waithe: Yes. So we have a couple different deliverables. But from an overarching standpoint, our goal is to help improve health literacy. So you look at the wave of digital media and the way people are consuming media with YouTube and Facebook and videos, Instagram, all this stuff. For the last 30 years, since OBRA ‘90 was enacted, it’s only been required that when a patient goes to the pharmacy, that you have to get counseling from a pharmacist and you had to give them materials about their medication. And those materials usually came in the form of paper. And it usually came in very small print, eight pages potentially, right? And not a lot has changed since that. And our company has been able to augment that in a sense where our videos are usually short, they’re usually two minutes in length. It can’t really essentially replace the monograph, but it can essentially help drive deeper conversations with providers. With our deliverables specifically for independent and community pharmacies is that we are not replacing the monograph but moreso, we’re providing the monograph in a digital way so they can actually get access to that same monograph that they get on paper. They can get it digitally through our platform. That’s platform’s called Meds on Queue, it’s one of our deliverables. But essentially, we also sell to health plans, we sell to health systems, independent providers in terms of like whether you’re at a clinic, we provide also just the medication education videos. Being a pharmacist, I’m not trying to replace provider interaction but moreso to allow providers to become confident after a particular interaction happens or even before the interaction happens that that conversation is going to be valuable, and the patient’s going to go home with the confidence that they can potentially watch a trusted video about their health or medication.

Tim Church: I think that’s so cool. And I just think about my own practice with patients in primary care setting that even though I discuss the information, medication changes, different things like that, I provide written instructions for them, a lot of times, it’s still not getting through. They’re still not understanding as deeply as they should be. So I think what you guys are doing is so cool because it really provides an enhancement for that health literacy and really to help patients use their medications better and understand them more because there’s a lot of statistics out there that, you know, so many patients, they either don’t take their medications because they don’t have all the education or they just have no idea basically what they’re doing or don’t want to take the medications because nobody ever took the time and provided that education. So I think it’s really cool. So you’re doing awesome stuff with VUCA Health, so at one point did you say, I have this entrepreneurial itch or I want to do something in addition to what I’m doing as a pharmacist?

Richard Waithe: Yeah, so that for me, that actually started when I was a P4, that itch, I would say. And it was because when I first went out on rotations, before that, all I knew was theory. All I knew was like, OK, this is how healthcare works, you’re going to be a pharmacist, you’re learning all this stuff. When I got out into rotations, I saw that, like, it was a mess. And I was just like, we need to be better at this. Like we need to do more. And I don’t think I’m going to be able to — while I’m going to have a great impact, I know that I can do more beyond than what I’m probably going to be my real, actual real is going to be where I’m going to make my money to pay my bills. And I actually started, at that time, I actually started kind of like a private MTM practice where I was going to do essentially MTM, but I was calling it “Personal Medication Management.” And it was through that I started realizing that this is how I’m really going to have an impact and do more. And I learned a lot, I got into website building, I got into the basics of what marketing was and marketing services. I learned about, again, kind of driving how to build brand, build a brand as a personal brand and also for the company. But that was where I really got my itch was just like, I know I need to do more and really turn — and I know that that was going to take some time to do that. Like I wasn’t going to be able to do it in my current role as just being a community pharmacist.

Tim Church: So what is the status with that company that you started there? What was the result of that?

Richard Waithe: So I learned a ton in that, obviously, in terms of what it was to get a company going, I had to get like a CLIA waiver and do all these things because I wanted to, you know, provide point-of-care testing and do all kinds of things in there. But that was moving along extremely well, and then the reason I actually stopped that was because of the role with VUCA Health came to be. And I felt that I was going to be able to have a very similar impact just on a bigger scale. And I thought there was more opportunity to grow, and so I ended up taking that role. But within that, during the time that I was doing — it was called Medvise at the time — during the time that I was doing Medvise, I also realized that not only do I need to do more, I need to help also inspire the rest of the industry to do more. And that’s when I kind of started the RxRadio podcast and RxRadio branding. So I started doing that kind of in tandem with being a community pharmacist and trying to build that brand to personal medication management.

Tim Church: So talk a little bit about the podcast, who you’re targeting, what is it all about?

Richard Waithe: So the podcast is essentially targeting anyone in pharmacy, but in reality, the general theme around it is exploring the different ways that pharmacists can have an impact. So it’s looking at, you know, pharmacists that are working in different avenues in the hospital setting, it’s pharmacists that are going into informatics and working with mobile apps, pharmacists that are at high level leadership positions in community pharmacies and health plans and things like that. So I wanted to really expose all the different ways that pharmacists can practice with their degrees. But in terms of like what the target is, a lot of them, a large part of the audience is community pharmacists. I mean, you just look at the numbers. It’s just kind of what the numbers of pharmacy are, but a lot of students are tuning in. But it really is for that curious pharmacist that’s wondering what else is out there, what are other people doing, what could I potentially find as my own niche, is kind of who the target is for the podcast.

Tim Church: So what challenges did you face with getting it up and running and then just the maintenance of the podcast?

Richard Waithe: So I had zero experience in terms of media before the podcast, and I think the biggest challenge was — so right now, we’re recording on a couple pieces of different technologies, and it was not easy to learn that. And I had to do a lot of YouTube watching, there was a large learning curve in figuring out how to do all these things, how to edit. I think just the details was the biggest challenges of like figuring out how to get things to places. Then it was, OK, how do I get people to listen? That was another thing. Like how do I build a community of people that are wanting to tune into this content and how to market that, and that’s kind of where the memes started coming along, you know, just building the community that way. But learning how to market and distribute media was a fairly, you know, steep learning curve, I would say.

Tim Church: Now, I know you’ve had a ton of episodes actually air over the past couple of years. Has that resulted in any monetization?

Richard Waithe: Yes. So in a couple ways, the podcast has done well in terms of monetization. So I have merchandise that’s on a the website, it’s RxRadio.fm. There’s merchandise there. And then I also have a book that I wrote that I wrote right before I actually transitioned out of pharmacy. The reason I wrote that book was because I knew, I actually at the time of writing it, I knew things were changing. And I had some time before that change was going to happen, and I wanted to get as much experience that I had just learned that were fresh that I was using in my day-to-day, I wanted to get that out there. So I did have that book in play. And the podcast was definitely a driver of the success of the book and drove to sales of the book. But I think the biggest thing that has so far come along with the podcast has been the ores — the ores — the doors that have opened up in business and in networking. I’ve found value that no shop merchandise sales or book sales are ever going to bring by having the value of building my own brand and content. That has been — it wasn’t a direct monetization, but that by far has been the biggest benefit of that. But don’t get me wrong, the side hustle of kind of having some extra income from the book has been helpful. You know, it’s helped offset a lot of different costs, especially whether it be student loans, insurance payments, like all these kinds of things.

Tim Church: Is that where most of the book revenue, where is that going? Is it mostly going to debt payments and savings?

Richard Waithe: It’s mostly going — so the funny thing about running this podcast is that the money that comes from that book is not paying for all the stuff that I’m doing.
Tim Church: OK.

Richard Waithe: So for the most part, like if you looked at where the direct money is going to, I travel to schools, and I go talk to things, I do a lot of different things for free that a lot of it at some point costs money. And I essentially, those funds that I’m using from the book would go toward some of those things, so whether it’s a flight cost or time I’m taking away from not making money somewhere else, I’d be using that as kind of the income there. But yeah, I mean, it could easily pay for my student loans on the month by itself. Like it could easily do that.

Tim Church: Right. That’s cool. So talk a little bit about this book, “First Time Pharmacist.” What’s the big overview and kind of what’s in it?

Richard Waithe: So there’s a lot of different things in it, and it’s funny that we’re on a podcast that’s kind of surrounding around financials. So we do have a very small part in there kind of about, that I didn’t do — I actually got a friend that was a financial planner to kind of come in and talk a little bit about that — but there’s a lot of different parts in there about fitness, diet, because a lot of times, those things kind of get put aside as you graduate. But the bulk of the book is really about things that you don’t learn in pharmacy school. And it’s ways to interact with patients that can really make a difference in your day day-to-day in terms of your quality of life. There’s a lot of little nuggets in there where it’s not filled with fluff. It’s not filled with like, “Just be nice.” It’s filled with tactical ways to build relationships with your patients to be able to make sure that you’re having a great day. For example, one of the nuggets I’ll give to you is the fact that when you’re dealing with customer service, a lot of times, people see you as part of the machine. So let’s say you’re working for like a community pharmacy, let’s say. If a problem happens, they’re going to think it was you that made that problem, right? But a way to combat that is to actually remove yourself from that machine physically. And what I mean by that is going outside of the counter and being on the other side of the register with that patient. That allows you to explain the, hey look, I’m here with you. But that machine really did us a disservice. Like I didn’t do anything to that, but the computer XYZ, whatever the problem was, or the doctor XYZ, whatever the problem was. It’s just a tactic that allows you to be on the — show your patient that you’re on the same side as them, both physically and kind of mentally, emotionally, all that stuff. And by doing that one time for that one patient, you might not ever have to do it again with them, but they’ll always know that you’re not a part of that machine. You’re their healthcare provider, hoping to take care of them as best as you can. And it really allows your day-to-day to go so much better.

Tim Church: I think that’s a great point and a great tip for pharmacists out there. But I agree. It’s filled with a lot of different kinds of nuggets that you’re not necessarily going to get through school or through on your rotations. And you know, you and I have been talking off air that there’s just so many things that experience really brings into play because you can’t teach all of these things until you actually deal with it or have to deal with it.

Richard Waithe: Yeah, exactly.

Tim Church: So you talked about merchandise as a result of the podcast. What are some of the things that you’re selling?

Richard Waithe: So it’s real T-shirts, mugs. A lot of it is not geared towards specifically branding like our logos and stuff like that in terms of RxRadio, but I think the most successful merchandise on there we have is like onesies, like the kids onesies.

Tim Church: I do like the onesies. They say like “I love my pharmacist.” And then it says, “Because she’s my mom,” right?

Richard Waithe: Yeah, exactly. Yeah, yeah. They’re really cute. Obviously, these onesies are for the little kids and toddlers. But we’re getting to a point now where either you’re having a kid potentially or you’re an aunt to someone else. And they’re just really nice gifts. But those have been really, really successful.

Tim Church: How did you — I mean, when I looked at that, I mean, at first, I thought it was kind of an odd mix in terms of things that you had. But in the back of my mind, I’m thinking like, what was the driving force to put that kind of stuff? Not that — I think it’s great. But how did you even come up with that or decide that you wanted to do that?

Richard Waithe: I mean, I just remember being that — the funny thing about RxRadio and like the whole thing, it’s all tests that I’m doing. And I’m all like kind of testing things and seeing what works. Like for example, the book. The book was self-published. I published it. I wanted to test how to publish a book. Like it was basically an experiment, essentially. And the same thing started happening with the merchandise. I wanted to see what works, like what do people like? Like what is something that would be also valuable to them? So now, I’m also thinking about value is like my whole thing and everything I do on the podcast is about how to bring more value. And I just started thinking about the fact that we’re at a point now, if you graduated pharmacy school or you’re about to graduate pharmacy school, there’s likely going to be a lot of children in your life at some point. And I feel like what better way to drive one, a fun interaction that you’re going to have with some family members or yourself and your kids that are involved in pharmacy? Like the fact that you’re wanting to promote your profession, and that just came to me. It was like, how awesome would it be if you can give your little niece a shirt that says, “I love my pharmacist because she’s my aunt.”

Tim Church: No, it’s cool. I like what you’ve done there because I think people are interested in those kind of things to really highlight that they’re in the profession or to share that with their family. So how many hours are you spending on, you know, creating Samuel L. Jackson memes, doing the RxRadio and everything else that you’ve got going on?

Richard Waithe: So when I was — my life now is a little different because of my current role. So I don’t want to give you that example. But I’m going to tell you about how I was doing the exact same thing while I was a community pharmacist because I had like essentially a “normal job” at that time. I had this thing called #10to2, right? And it was essentially to say, OK, I’m currently working at a job that’s taking 40 hours a week of my time. But there’s a lot of other things that I want to do. So I needed to find the time to do that because they were ambitious things I wanted to do. I wanted to run a podcast, write articles, and do all these types of things. So I essentially dedicated every single day, whether I was working that day at the pharmacy from 9-9 or I had a day off, every single day, I made sure that I was working between the hours of 10 p.m. and 2 in the morning. And it was on things that I was passionate about. It was on my brand, whether it be personal brand or whether it be for RxRadio, whether it be memes, so multiply that out, that was the minimum that I was doing, working towards just my personal brand. I don’t do math well. What is that? Is that 4 hours times 7?

Tim Church: Yeah.

Richard Waithe: That’s 28. So I was doing —

Tim Church: That’s a lot.

Richard Waithe: At least 28 hours. At a minimum.

Tim Church: Wow.

Richard Waithe: And this was not on — and proven in the way — go to Twitter right now, whether you have an account or not. Go look at the #10to2. If you look at the last two years — maybe with the exception of the last six months, only because like I’ve been working but just not on my personal brand, essentially — but the last two years, if you look at the hashtag on Twitter, I’m the only one that was hashtagging that. You can literally look back every single day. And this was like sometime between the hours of 10 and 2, I was talking about it, and I was doing that work and putting it in. So at a minimum, that’s what I was doing to get to that point where I was being, when I was able to run all that same stuff and still work at a regular job.

Tim Church: Wow. Was that hard to do?

Richard Waithe: It was hard, but the crazy thing is is that I would work from 9 — let’s say a Monday that I was working at the pharmacy — I worked from 9 to 9 p.m., right? The normal 12-hour shift at a pharmacy. It would suck to go home and work at 10, right? I would make it home, luckily, my commute wasn’t that bad and I would be able to spend time with my fiance at the time. But the 10-2, it was stuff that I was passionate about. So like that was actually not that hard. That was almost easy because I was excited about it, I really wanted to do things. That wasn’t hard, but it was hard to wake up the next morning and then go to work and do things like that. But that four hours, I loved it. And I’m still doing that today where I’m working like that and working as much as that, it’s just great because now it’s things that I’m all passionate about. If you’re doing something that you don’t like, you’ll easily get burnt out doing that amount of work. But it wasn’t that hard for me, only because I found something that I was really passionate about doing. So it really didn’t feel like work.

Tim Church: Is it hard to manage your personal life on top of everything that you’ve got going on?

Richard Waithe: It depends on how you mean “manage your personal life.” So I think that — and I’m sure that you, being that you’re in finances, when you’re talking to people and giving advice, it’s not a blanket type of advice that you can give. It’s so different between people because they have so much other factors that can play into how they can best manage their finances. And I treat my “personal life” a similar way in terms of my personal life is the happiness — because to me, work-life balance and personal life is like being happy, right? That’s like the ultimate goal of it all. It’s a completely different definition to what someone else’s is. So for my own personal life, it’s actually not that hard. But I feel like if I was someone else that had other types of goals and personal life meant a lot of different things to them, this would be impossible, really, to do.

Tim Church: Right.

Richard Waithe: But for me, I definitely had to make sure that I was really over-communicating with the people that meant a lot to me in terms of spending time with them to let them know kind of this is what’s going on and making sure I still put in the time to spend with them, but I also realized that I had specific ambitions that required work. And I love football. Football is my favorite sport. I know it’s dangerous, and there’s all kinds of things that are problems with it. But I love the sport. I grew up playing it, and I love to watch it. Basketball, same thing. I love basketball. I had to cut a lot of that out to make the time to follow my ambitions. But to me, my ambitions and my goals and my career were just more important than sitting and watching games. So that was hard to do, but it was an easy decision because I realized that I need to put my actions where my mouth and my mind was to be able to say like, you have these ambitions and these goals, you have to put in the work to do it. I think — but there was sacrifice involved.

Tim Church: Yeah. Definitely. It sounds like it. I’m just like, I’m sitting here thinking like, OK, well, when did you eat? When did you sleep? But I think it’s what you said is, you know, how passionate are you about what you’re trying to accomplish? And sometimes, in order to get to that next level, you’re going to have to make a ton of tradeoffs and sacrifices to get there. Otherwise, you may just be mediocre in what you’re trying to do.

Richard Waithe: Yeah. And mind you, I think within — I feel like it was an extreme. I’m not going to sit here and say, “Oh, it wasn’t that bad.” I know it was an extreme. But I think that not everyone has the ambitions to need that sort of extreme, right?

Tim Church: Right.

Richard Waithe: So there are some people that can say, call it #10to11. And they just do one hour a day towards something and see some significant results from that. But I think it’s just being able to dedicate a specific time block and a frame that works in your lifestyle to dedicate towards a side hustle, you’ll really see some results.

Tim Church: Definitely. I agree. I think that’s the key is however much time that is, is that consistency in making that happen all the time. And for me, personally, that’s what seemed to work. We’re going to go through different times when you have to shift your focus on your personal life or different things, but showing up and being consistent, even if it’s 30 minutes, I think can go a long way.

Richard Waithe: Yeah.

Tim Church: So Richard, what advice would you give to other pharmacists or students out there who have an interest in becoming an entrepreneur or starting a business? What would you tell them?

Richard Waithe: The first thing I would tell them to do is that like, first of all, it’s hard as crap to start anything on your own. And let alone start it and actually get it going, but to be successful, it is super hard. And because of that, the best advice I would give is to make sure that anything that you want to do as a side hustle or whether it be a side hustle or you’re actually trying to change your whole career, it needs to be rooted in whatever it is that you’re passionate about and not about what’s going to make you money. Because anyone tomorrow can go and study to take — especially if you’re a pharmacist, that means you’re extremely smart. You can study tomorrow and take a real estate exam and become a real estate agent and start selling homes and make a decent amount of money, but you hate it or you’re not passionate about it. And while you can make extra revenue in there, it’s going to be much harder to do if you’re not passionate about it. Now, if you love homes and interior design and all this stuff, you will be an extremely successful real estate agent, you know? Because of the fact that you love it. So I really think that people need to kind of take a step back and realize, do I love baking? Like do I love making cookies? Because there’s people making millions of dollars selling cookies.

Tim Church: There’s a need.

Richard Waithe: Yeah. And I think that you need to just find what it is that you’re passionate about doing. Because of the way that the Internet works now and social media, you can literally build a brand. You can make a cookie business, at some point, make a brand, write a book about it. Like there’s all these — there’s a model that you can follow, and you can apply it to anything. But it really does start with finding out what it is that you’re actually passionate about doing that you can do forever and not get burned out at because you love it, that’s what you should start with and then go from there.

Tim Church: Solid advice. I really appreciate that. And I think you’re right on there. So Richard Waite, master meme creator and entrepreneur, what is the best way for someone to reach out if they want to learn more about what you do but also see this amazing memes?

Richard Waithe: Yeah, so I’m on every single social media platform out there except for tiktok, I’m not on that thing. You might not have even heard of it, but a lot of teenagers love tiktok. But I am on Instagram, LinkedIn, Facebook, Twitter, now on Reddit as well. Any way, however you prefer to consume media, you can DM me on there, and I’ll respond and help in any way that I can. And then I obviously have an email, [email protected], which I’m sure they can probably put in the show notes because it’s hard to spell, but [email protected].

Tim Church: Great, thank you so much for coming on, Richard.

Richard Waithe: It was a pleasure.

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YFP 096: How to Do a Backdoor Roth IRA

Posted on April 18, 2019November 2, 2022 by yfpadmin

How to Do a Backdoor Roth IRA

On this episode, Tim Baker welcomes Christina Slavonik, CERTIFIED FINANCIAL PLANNER™ and the newest member of the YFP family, to the show. Tim and Christina break down how to do a backdoor Roth IRA conversion, a move that most pharmacists should consider making.

About Today’s Guest

Christina joins us with approximately 15 years of experience in the financial services industry. After serving in various capacities, she attained her Registered Paraplanner℠ designation in 2013 and then her CERTIFIED FINANCIAL PLANNER™ designation in 2017. She currently resides in Ft. Worth, Texas with her husband, Paul, and their two cats.

Summary

Christina Slavonik has been working for YFP for a couple of months as a CERTIFIED FINANCIAL PLANNER™. On this episode, Christina and Tim discuss how to do a backdoor Roth IRA, also known as a Roth IRA conversion.

First, Tim Baker reminds listeners to follow “Baker’s Buckets”, meaning that you should always start saving for retirement with an employer match when available as this is free money. From there, it might make sense to max out an IRA or HSA. After you’ve maxed out your IRA and HSA, go back to your employer 401(k) or 403(b) plan to add in the $19,000 you can put in every year.

Most pharmacists bring in around $125,000 a year, meaning they cannot deduct their traditional IRA contribution as they are above the income limits. In 2019, single taxpayers with a MAGI of $122,000 and married filing jointly taxpayers with a combined income of $193,000 can’t contribute directly to a Roth IRA.

Christina explains that you can instead do a backdoor Roth IRA. First, open up a traditional IRA if one is not already opened and contribute the first $6,000. Then, you can make the conversion by filling out and submitting the appropriate forms. You are then able to convert the nontraditional money to a Roth IRA.

Christina and Tim discuss how to contribute to these accounts, best practices for waiting periods, steps for filing taxes if you contributed an excess amount to an IRA, and a recap of the Roth IRA conversion process.

Check out this blog post for more information on backdoor Roth IRAs.

Mentioned on the Show

Episode Transcript

Tim Baker: What’s up, everybody? Welcome to Episode 096 of the Your Financial Pharmacist podcast. I am so excited to welcome back Christina Slavonik, our newest member to the YFP family. I know, Christina, we heard a little bit from you at APhA Seattle, so welcome back to the podcast.

Christina Slavonik: Yes, thanks so much, Tim. I’m glad to be back.

Tim Baker: So I guess, you know, Christina, just to put you on the spot here, you know, you’ve been working with us for the last couple of months.

Christina Slavonik: Yes.

Tim Baker: How has it been at YFP? And what’s different about us?

Christina Slavonik: Sure. Yeah, it’s been so refreshing. Just really a breath of fresh air just working with —

Tim Baker: Awh, shucks.

Christina Slavonik: Younger people, you know? And we all have, you know, the same kind of not really have the same backgrounds, but at least we have the same things that we’re all working through and especially when you’re able to narrow down your clientele to one niche, it really helps you focus on what they’re really needing, what they’re really wanting, and then being able to share your own life stories as you go through that path together.

Tim Baker: Yeah, I think it’s one of those things where, you know, in my past life, I would work for firms that was kind of a jack-of-all-trades, kind of master-of-none type of thing. That’s not really our game. You know, we really want to focus in on the big issues that are facing pharmacists out there and really provide good service and solutions to really tackle those issues. So today, we’re going to talk about Roth conversions. Like I mentioned, it can be a little bit of a technical subject, but one of the things that we probably should mention first as we kind of get into our list of steps here is way back when in Episode 073, How to Determine Priority Investing, we kind of talk about what Tim Church has deemed “Baker’s Buckets.” So typically when I sit down with clients, you know, I say, “Hey, client, typically how we like clients, pharmacists to really fill their retirement buckets, you know, you should always start with your employer match. So if your employer match is 3%, 5%, 7%, that’s free money.” And nine times out of 10, that should be what we are trying to get, get at least to the match. But from there, depending on the 401k or the 403b, what that plan looks like, not everyone’s 401k, not everyone’s 403b, is going to be equal. So there are some really great 401k’s and 403b’s out there. There are some that are kind of not so great. So it might make sense to kind of go into the IRA world or the HSA world and really max out that bucket next. So typically, for the IRAs for 2019, you can put in aggregate between the Roth IRA and the traditional IRA, $6,000 per year. So that’s roughly $500 per month. In the HSA world, the Health Savings Account, which we’ve talked about time and time again, it’s the only account out there that has a triple tax benefit. So basically it goes in pre-tax, it grows tax-free, and then it comes out tax-free if it’s used for qualified medical expenses. You typically, for a single individual, it’s $3,500 per year that you can do. Or if you’re a family, $7,000 per year. So once we max those out, then it might make sense to go back into the employer plan, the 401k, the 403b, and get to that $19,000 that you can put in — this is not counting your employer contribution — that you can put in every year into that 401k. So Christina, now that we kind of have “Baker’s Buckets” aside and we’re diligently putting in a contribution into the IRA, what happens next with regard to this whole conversion? And why would I convert I guess to begin with?

Christina Slavonik: Sure. Well, in looking at the typical pharmacist’s salary, which I believe is around — latest stats is around $124,000-125,000. You already know that you cannot contribute directly to a traditional IRA. Well, you can, but you can’t deduct it. So that’s the caveat with that. So where the Roth IRA comes into play is most of the times, you won’t be able to contribute directly to the Roth because of your income limits. So I know for 2019, if you’re single and you make an income, a modified adjusted gross income, of $122,000 or if you’re married filing jointly and you’re making an income of $193,000, then you can’t contribute directly to a Roth. So how you can do that is by doing a backdoor Roth IRA or it’s also known as a Roth conversion. And what you will need to do is open up a traditional IRA, and this is assuming you don’t already have a traditional IRA open. We’ll get into the reason why — what will happen if you do currently have a traditional IRA. But first things first, you open the traditional IRA, you put your — say you’re going to max out your contribution for the year — you’d put your contribution in there first of $6,000. And then you can make what’s called a Roth conversion, and normally your firm, your wealth provider, whoever you have your investments with, they should be able to walk you through what forms are needed. You fill out the form, submit it, you have a Roth IRA opened. And then you’re able to convert those traditional dollars, non-deductible traditional dollars, into your Roth IRA. And the beauty of that is not only is your money going to be in the Roth, but it’s going to be after-tax, you’re not going to have to pay any taxes for it going in because you just made the non-deductible contribution. You will have the earnings grow tax-free. And then if you’re — there’s certain stipulations about once you hit retirement or you’ve had the account open for five years, you can start to withdraw those contributions and earnings tax-free. So there are many, many other benefits to having the Roth IRA. One, you do not have to make what’s called a required minimum distribution. And with a traditional IRA, you have to start pulling out money at the age 70.5. You have no choice.

Tim Baker: Right.

Christina Slavonik: But with the Roth IRA, you avoid that altogether as well.

Tim Baker: So just to recap on that, you know, and to back up, anytime that you see “Roth,” you automatically should think after-tax. So whether that’s a Roth IRA, a Roth 401k, a Roth 403b, the money that goes into that bucket is going to be after-tax. The flip side of that is the traditional IRA, the traditional 401k, the traditional 403b, those are all funded with pre-tax dollars. So in simple terms, you know, if I have a traditional 401k and I’m putting in 10% and I make $100,000, then basically I’m putting $10,000 into that account, and the government sees as if I’m being taxed on $90,000. So it lowers my income for which I am taxed on. In that same breath, you know, if I’m putting into a Roth, once I’m putting in with after-tax, so I don’t go from $100,000 to $90,000. I stay at $100,000. But when the money comes out in retirement, I’ve already been taxed on it, so I’m not going to be taxed twice. Whereas traditional, when it comes out, it will be taxed. So it’s important to understand that dynamic. So everyone can contribute to a traditional IRA as long as you have earned income. But not everyone can contribute to a Roth IRA. So if you make a certain amount of money — so it’s if you’re single, if you make more than $137,000, married filing jointly, if you make more than $203,000, then the door slams shut for the Roth IRA for you. So what the Roth conversion does it takes those non-deductible IRA contributions — so everyone can contribute to a traditional IRA, not everyone will get a deduction. So because we don’t get a deduction, we want to move essentially those moneys from the traditional IRA to the Roth IRA and, you know, for a variety of reasons, Christina, that you mentioned, that’s the thing to do. So Christina, if I am a Do-It-Yourself investor out there and I’m looking at kind of my investment game, I don’t have anything open outside of the 401k that I have through my employer, basically you’re saying first step is to open up the traditional IRA and the Roth IRA concurrently? Is that right?

Christina Slavonik: That is correct. If you can, yes.

Tim Baker: OK. And then if I know that I’m not going to be getting — I’m not going to get that deductible IRA contribution so I’m single, I make more than $122,000, how should I actually go about contributing. Should I wait ‘til the end of the year or the tax year to contribute? Should I be contributing per month? Like what’s your thoughts on that?

Christina Slavonik: Sure. Well, it really just depends on personal preference. I’ve seen both sides of the spectrum where a person will save money, like just put it aside in a regular bank savings account, set that aside for their IRA contribution at the end of the year, and right before the tax deadline, they will put it in and do the conversion right away. You know? Others will contribute monthly to that traditional IRA and over time, once they get the contribution to where they can max it out for the year at $6,000 for 2019, then they would make the conversion. And so yeah, the only caveat with contributing directly to the traditional on a monthly basis is if you do have it in any kind of interest-bearing account or if you do decide to put it in a short-term investment, when you do convert, you are going to be converting those earnings as well, which may have a little bit of a gain or may have a little bit of a loss.

Tim Baker: Right.

Christina Slavonik: So it’s just something to consider when you’re going about that process.

Tim Baker: And I think that’s kind of the nuance is it can be a fairly complicated situation, so that’s kind of some of the nuance that a lot of people may not think about is that, you know, if you contribute $6,000 over the course of the year but the account has grown $100-150 in appreciation, that’s something to consider when you’re doing your conversion. And most likely, you’ll have to pay the tax on that, on the difference. So Christina, when you go to make a non-deductible contribution to your IRA, there’s some say that you should have, there should be a small waiting period to let the funds settle. Can I actually go and convert that right away? What does that look like? What’s best practice with regard to making a conversion?

Christina Slavonik: Sure. The common consensus is just to wait a few months, you know, just to let that contribution settle. There are some people that will do the conversion right away, but just because you just want to look like you are making a non-deductible contribution and not immediately converting, it just kind of puts some space between that. It’s just kind of a best practice.

Tim Baker: Sure. Well, and I think there’s some think that the Roth conversion is something that’s illegal or that we shouldn’t be doing. That’s not the case. This is a perfectly legal kind of technique to move the non-deductible traditional IRA contributions into the Roth that is part of the how the tax code is written. So let’s fast forward to it’s April 2020, we’re hopefully in the process of filing our taxes, which we just recently got through, what are some of the steps that we should do in terms of any forms that we need to file or anything that we need to worry about with regard to filing the taxes? And then secondarily, if we see that maybe we’ve contributed in excess to the IRA, how do we fix that issue?

Christina Slavonik: Sure. Well, make sure your CPA or whoever is doing your tax return, that they know that the contribution you had originally made into the traditional was a non-deductible contribution. And most likely, they will have a form 8606, which they will need to fill out. And yeah, just make sure they’re aware of what you were doing. And as a best practice, we try to say if you can do your contributions and your conversions in the same tax year, that helps your CPA or tax preparer out a lot so he doesn’t have to be tracking what happened in 2018 versus what happened in 2019, so to speak. So there’s for that one. And if you for any reason get a massive pay raise and you had been contributing directly to a Roth and then you go back and you look and you see, oh my goodness, I’m making — my income is being phased out, I shouldn’t be able to contribute directly to a Roth, well, you’re going to have to figure out — there’s a calculation or you can have your tax preparer help you — that you’re going to have to remove whatever excess contribution you had put into the Roth IRA.

Tim Baker: Right.

Christina Slavonik: And so again, there’s a calculation to go about figuring that out, but just know that there are three ways that you can remove it. If you happen to catch it before the tax filing deadline, by all means, withdraw it. Journal it back over. You could talk to your firm and see how they go about doing that. Some will just, you know, say to recharacterize, which normally doesn’t happen until after the tax filing deadline, or you can apply the contribution to the next year. Just don’t make a Roth IRA contribution directly. But just know that if you do decide to leave that excess contribution in the Roth IRA, there is a 6% excise penalty that you will have to pay every year that excess remains in there. And so generally as a best practice, if it’s not a whole lot, I would just say carry it forward to the next year. You may have to pay a small 6% on whatever that excess was, but at least you’ll be covered for the coming year, if that makes any sense.

Tim Baker: Yeah, so just to kind of recap, from basically January to April of say 2020, you can still contribute towards your 2019 bucket for the IRA. So if we were to kind of determine that we’re at our limit already, you could essentially contact your custodian, whether that’s Vanguard or Fidelity or whoever, and say, “I’d like to apply that excess contribution forward to the 2020 bucket.” So Christina, you know, in terms of the process, we have determine what your adjusted gross income, which again, that’s going to be the number that really drives the train on a lot of this tax stuff that goes on. And typically, you take the gross income and you subtract out any contributions you make to the retirement plans. And if you have HSA contributions, student loan interest deduction, if you’re a resident out there, you can probably still get those. That gets to that number, and that’s going to be the driving force of what you can do from a traditional IRA, a Roth IRA, if it determines that you can only make non-deductible traditional IRA contributions, make those contributions, typically, you want them to season a little bit. So wait 30-60 days to get those into the account, and then go ahead and basically fill out the necessary to make the Roth conversion. So we’re essentially, we’re moving those non-deductible IRA contributions from the traditional bucket into the Roth bucket, which is the after-tax bucket because we’re going to pay the tax on it anyway, and there’s lots of benefits to do that. And come tax season, working with your CPA, your advisor, to fill out Form 8606 just to track all of that. It’s best to do that kind of in the same year, so contributions basically marries up with the tax season that you’re filing. And if there is excess contributions to the Roth, we can fix it before the tax filing deadline or recategorize after the fact. You could also contribute to the, move it forward to the next year just so we kind of stay within compliance. So Christina, any other thoughts on the Roth conversion? Anything that we missed that probably listeners should know about when they’re trying to tackle what sounds at first glance kind of can be a very simple procedure but when we peel back the onion a bit, it can be a little bit complex. Any other thoughts?

Christina Slavonik: Yes, just one final thought. When it comes to look at your traditional IRAs — and this is just assuming you have other traditional IRAs when you are considering doing a Roth conversion — that amount that you convert, you can’t just pick that ‘Oh, I want to do this sum of money in this IRA.’ It takes into account your entire balance, not just the $6,000 contribution for the year. So say you were to have your traditional IRA, you have $20,000 in there. Well, for that initial tax year, you may have to move over the full $20,000 because it’s going to take into account — the conversion piece will take into account all the money you have in that one traditional IRA. It’s blind. It can’t really see that you only want to do $6,000. So that’s just one other piece of advice to keep in mind. Most people that do this kind of transaction, they do not have traditional IRAs. If they do, it’s only for this purpose. So that is just one thing that I’d like to point out there, Tim.

Tim Baker: Yeah. Another thing to also point out is I think this particular technique is going to become more and more valuable. With the new tax code, for a lot of people out there, taxes are going to be lower in the near future. So to kind of do this conversion and get these moneys in the right bucket, I think is very valuable. But also remember when you make the contributions into the IRA, whether it’s the traditional or the Roth, that’s just half the battle. The next part of it is really selecting the investments that are inside of that. So we come across pharmacists that are putting money into an IRA, but they’re not actually investing that, whether it’s in a mutual fund or an ETF or a stock or a bond, that type of thing. So understanding that when the money goes in there, we still have to take the necessary steps to get that invested and get that money working because at the end of the day, intelligent investing where you’re taking risk in the market and know that the market is going to go up and down is necessary really to become that “Seven Figure Pharmacist” and really get ahead of things like tax and inflation. And these are some of the things that we work with when we go through the investment module with our clients is making contributions is only half of it. And we have to make sure that we’re building out a proper low-cost asset allocation that has exposure across a variety of sectors in the market, whether it’s large-cap or small-cap or international, bond, that type of thing. So Christina, great job today kind of going through this kind of somewhat complex topic. Like I said, Christina recently helped Tim Church on this blog post that we put out. So if you go to the Your Financial Pharmacist web page, YourFinancialPharmacist.com and check out our blog, you’ll be able to see a lot of this information, also, five steps that we talk through. If you go to YourFinancialPharmacist.com/096, YourFinancialPharmacist.com/096, you can get the basic steps for the backdoor Roth conversion, the checklist to kind of work your way through this process. And like I said, if you’re working with another custodian, a Vanguard, a Fidelity, they’ll be able to walk you through this hopefully to provide the necessary forms and guidance — maybe not guidance but at least point you in the right direction to go through the logistics of converting that. At YFP Planning, we kind of do this on behalf of clients as part of the investment management that we do. So Christina, thank you so much for coming back on the podcast, really enjoyed kind of having your voice on here. We’re going to have to do it again soon. Yeah, thanks again for coming on.

Christina Slavonik: Thank you so much, Tim. I look forward to doing it again.

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YFP 095: Level Up Your Career: An Interview with RxAshlee

Posted on April 11, 2019November 2, 2022 by yfpadmin

Level Up Your Career

Dr. Ashlee Klevens Hayes, founder of RxAshlee and creator of the Rx Buzz Podcast, joins Tim Ulbrich to talk about her career journey and passion for supporting high-level professionals to in creating, launching and landing their dream jobs.

About Today’s Guest

Ashlee Klevens Hayes is a third generation pharmacist who set out on a traditional pharmacy path that turned into so much more. She’s an initiator, an entrepreneur and career strategist. After graduating from The University of Southern California School of Pharmacy she completed a 2-year health system pharmacy administration residency at the University of Kentucky and then took on the position of Associate Director of Central Pharmacy Operations at UK. In 2017, she founded Rx Ashlee, a career development company that focuses on business development, branding, marketing, career pivots and interview preparation for highly skilled professionals. Shortly after, she launched the Rx Buzz Podcast on the Pharmacy Podcast Network and started with the University of Southern California School of Pharmacy as a career strategist.

Summary

Dr. Ashlee Klevens Hayes is a third generation pharmacist. She is a career strategist at the University of Southern California School of Pharmacy and launched RxAshlee in 2017. Ashlee completed a 2 year health system pharmacy administration residency at the University of Kentucky and loved it. She enjoyed seeing how quickly outcomes and results could happen. Ashlee and her husband had to move 7 times in 5 years for his job making it difficult to stay in one position for a while. Ashlee transitioned to be a consultant at a startup company and was exposed to a different side of entrepreneurs.

RxAshlee began in 2017. Friends were turning to Ashlee for advice on how to get non-traditional pharmacy jobs and she realized she was able to support people in this capacity. The main trend Ashlee saw was that people were underselling themselves and that they don’t spend enough time or energy on branding so they can stand out on paper and in interviews. RxAshlee aims to help you level up your career and get your dream job.

Ashlee currently works with high-level professionals in creating, launching, and landing their dream jobs. Ashlee offers a variety of packages and services, but is incredibly passionate about interview preparation. In 1-3 hours with a client, Ashlee watches a person transform in their interviewing skills and loves hearing when clients land their dream jobs.

Ashlee reminds you that your education is a starting place and your career isn’t necessarily a direct path. Blending your education with you passions, strengths and what you want to do and then branding yourself as that person will allow you to step into fulfilling work that you want to be doing.

Ashlee reminds people that if you want to make a change in your life, you have to get comfortable with being uncomfortable. Ashlee has a lot on the horizon with her business. She has several keynote presentations in 2019 and is writing a book, among leading a women’s group and working on more courses to launch.

Mentioned on the Show

Pharmacy Graduate Survival Kit
tl;dr
Indispensable: The Prescription for a Fulfilling Pharmacy Career by Alex Barker
First Time Pharmacist: Everything You Didn’t Learn in School or On The Job Training by Richard Waithe
7 Figure Pharmacist
RxAshlee
RxAshlee – Instagram
YFP – Instagram
RxAshlee – LinkedIn
Start: Punch Fear in the Face, Escape Average and Do Work That Matters by Jon Acuff
Be Fearless: 5 Principles for a Life of Breakthroughs and Purpose by Jean Case

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. I’m excited to have on here – it’s been a long time in the making – Dr. Ashlee Klevens Hayes. We’ve got an exciting conversation to talk about career development, interview preparation, business development, lots of exciting things, to share her journey on this path to the work she’s doing today. So quick introduction to Ashlee: She’s a third-generation pharmacist who set out on a traditional pharmacy path that turned into so much more. She’s an initiator, an entrepreneur, and a career strategist. After graduating from the University of Southern California School of Pharmacy, she completed a two-year health system pharmacy administration residency at the University of Kentucky, and then took on the position of Associate Director of Central Pharmacy Operations at UK. In 2017, she founded RxAshlee, a career development company that focuses on business development, branding, marketing, career pivots and interview preparation for highly skilled professionals. Shortly after, she launched the RxBuzz podcast on the Pharmacy Podcast Network and started with the University of Southern California School of Pharmacy as a career strategist. Ashlee, welcome to the show, excited to have you.

Ashlee Klevens Hayes: Tim, this has been long overdue. Thanks for having me. This is super exciting.

Tim Ulbrich: Long overdue.

Ashlee Klevens Hayes: I love talking to you.

Tim Ulbrich: So fun. Hey, I thought I knew you pretty well until I started doing my homework for this show and totally forgot about the two-year admin residency. We’re going to talk about that, your inpatient experience, I forgot about that, and – have we made the Buffalo connection before? I didn’t realize you did undergrad at the University of Buffalo.

Ashlee Klevens Hayes: I did. I moved from Orange County out to crazy Buffalo.

Tim Ulbrich: What were you thinking? I grew up in Buffalo, and I was like, why would she move from southern California to Buffalo?

Ashlee Klevens Hayes: I’ll be honest with you. My dad was faculty at the University there.

Tim Ulbrich: OK.

Ashlee Klevens Hayes: And we had some connections, and it just – long story short, it just made sense for me to go out there financially and just in terms of seeing my parents. They were traveling out there a ton, and so I made the commitment. And honestly, the first year was really hard because it was snowing, and I had never been around snow before. But then ultimately, I ended up finding my husband out there. So it was a good move.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: And I suckered him into coming back to California too.

Tim Ulbrich: I don’t blame you. I mean, it is night and day, right? Buffalo and southern California?

Ashlee Klevens Hayes: Totally.

Tim Ulbrich: I grew up in Buffalo. It’s a great city, but I mean, when you’re used to the sunshine…

Ashlee Klevens Hayes: I loved it there. No, I really did. It was a great just start to my nontraditional path.

Tim Ulbrich: Yes, yes. And we’re going to talk about that. We’re going to talk today about how to invest in yourself; we’re going to talk about, you know, how to set yourself apart. And you’re doing some awesome work in this area. And I really enjoy following your journey and have a lot of respect for your energy and your passion and your commitment in this area. So before we talk about what you’re doing today with RxAshlee and with USC School of Pharmacy – which by the way, is getting around – I had people here from Ohio State ask me about this work that you’re doing at USC, so it’s exciting to see that work.

Ashlee Klevens Hayes: Oh yeah? OK, let’s do it. Let’s talk – I would love to talk to them.

Tim Ulbrich: But I want to start back at the point of graduating with your PharmD from USC. And you make this decision to go into a two-year admin residency. So PGY1, PGY2, Master’s degree, very specific for many that go through this route in pharmacy.

Ashlee Klevens Hayes: Kind of, yeah.

Tim Ulbrich: What was the goal here? And why did you make the decision at this point in time?

Ashlee Klevens Hayes: Well, to be totally transparent, like you mentioned in the beginning, my dad was a Chief Pharmacy Officer, and so I kind of had a front-row seat my entire life to all the unique, different opportunities and journeys that pharmacists could take, but my dad was a huge, pivotal point, a mentor to me forever. And he loved his job. He loved it. He loved the autonomy, he loved the business side, and he also could have some indirect patient experiences too. So I decided to join that bandwagon, and I followed his footsteps. And I ended up at UK. I was the first PGY1, PGY2 health system administration resident under the new leadership at the time. So gosh, now it’s been about 5-6 years. I don’t even remember. And so they’ve had a few others behind me, which has been really fun for me to be a mentor to them and witness them grow their muscle in that field. So you take a traditional clinical residency program and throw in a nontraditional clinical program, and you know, you have growing pains. But ultimately, the goal was for me to come out and to be a manager or assistant director or a, you know, eventually a Chief Pharmacy Officer, which I was totally down that path. I was heading down that path. I was like, this is what I want to do. I want to be a CEO, I want to be a Chief Pharmacy Officer at a healthy system, and things kind of took a change, as you might notice.

Tim Ulbrich: So what I find interesting, Ashlee – I was glad to look that up before we had talked. And we had discussed that before, but when I think of pharmacy operations and I think of you and your strengths and your talent and what you bring to the table, not that you couldn’t do operations really well, but I think you’re a big vision person, you’re a strategist.

Ashlee Klevens Hayes: I am.

Tim Ulbrich: You’re an entrepreneur. So when did that click for you? Because I’m guessing, you know, you went into the operations role post-residency.

Ashlee Klevens Hayes: Oh, I loved it. It was great.

Tim Ulbrich: Yeah, talk us through that transition.

Ashlee Klevens Hayes: It was awesome. And I was exposed to so much at such an early phase of my career that I realized I really like seeing outcomes and results happen pretty quickly. And I just felt like project management and multitasking and working with whole different interdisciplinary groups: physicians, prescribers, nurses, I loved that part of the work. What was hard for me – and Tim, I’ll be totally honest with you because that’s what I do – it was hard for me because my husband had a big job, and we were constantly having to relocate. It happened probably seven times, literally seven times, over the past five years.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: And in order for me to have that trajectory of getting to CPO, to Chief Pharmacy Officer, it really just wasn’t ideal. And it wasn’t working. So that’s — at some point, I was like, how am I going to do this whole entire love of operations, project management, strategy, planning, vision, just overseeing so many different projects while still balancing my relocation, which is honestly — I knew going into our marriage that I was going to have to do this eventually, so then you get creative. You get thrusted into this. How do you make all of this work? And at that point, I was the assistant director, and I had an opportunity to transition into be a consultant for a startup company — a consultant in operations, and I did that. And it was so fun. And I was exposed to a whole different side of non-pharmacy work, but it was pharmacy work. It was non-pharmacy because I didn’t talk to patients at all or prescribers. It was just different because I was working with software implementation. So then I was exposed to this entrepreneur side, and I was talking — and the people I was working with had no pharmacy background. They had no pharmacy education, but yet, they were talking the language of pharmacists, and I was like, what is going on here? And it was eye-opening. I was traveling the world, literally traveling the world, traveling across the country talking to different people about our products, and I realized what do I want to do next? You know? What am I good at? What are my skills? And that was really teaching people how to do what I was doing, start a consulting company, go do nontraditional things. And that’s kind of when the fruition of RxAshlee started.

Tim Ulbrich: That’s so awesome. I mean, there’s such a need for nontraditional, you know, career paths, mentorship.

Ashlee Klevens Hayes: Totally.

Tim Ulbrich: And I was looking at your website and stuff before, and just to be able to see that merging of hearing from others that recognize that talent within you and that passion to help others and for me and what I’ve known you for the last 1-2 years, like it makes so much sense. But to hear your journey and where it’s come along was a lot of fun.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: So we’re in 2017, and entrepreneurship, the bug sets in. And as you know, once you have the entrepreneurial bug, it isn’t going away, right?

Ashlee Klevens Hayes: No, never. Well, you can try for it to go away. And then it just never goes away.

Tim Ulbrich: Yes, yes. So true. So you start RxAshlee, which for our listeners, we’ll link this in the show notes. It’s RxAshlee.com, RxAshlee.com. So where did this idea come from to get started? Because in reality, any business starts with a problem that needs a solution.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: So what was the problem? And what was the solution? And what did you bring to the table with this?

Ashlee Klevens Hayes: The problem was that a lot of my friends were turning to me for advice about how to get nontraditional pharmacy jobs. So problem for them, but a solution for me because I felt like innately, I kind of just knew. And I was unclear at the time why am I the one answering these questions? I’m not sure. Like why aren’t these people just going out and doing what I did? Isn’t that easy? Like just go out and do it. And I recognized there was an opportunity for me to actually, I don’t know, just support them in this capacity as actually, this could be my job. And I started doing this just for free, to be honest. I started reviewing thousands of resumes. Thousands of CVs. And I started realizing how much people undersell themselves. It’s sad, you know? I talk to these highly qualified people, very competent, very educated. It’s not like the people I’m talking to are Joe Schmoes. They’re like really legit, really, really smart people. But how we distribute ourselves and how we talk about our story and how we articulate, you know, our goals, that’s a disconnect.

Tim Ulbrich: Yes. Absolutely.

Ashlee Klevens Hayes: And especially, you know, CVs and cover letters and all that stuff, I don’t think we as clinicians spend as much time and energy and focus on how do we look on paper and our image, our brand? And so I realized that’s when kind of the fruition and the whole start of RxAshlee actually came was when I saw that I was talking to people all over the world just because I wanted to do it, like for free, for fun. And then I was like, wait a minute, I’m spending all my time and my energy and my resources. Why don’t I kind of see where this goes? And that was two years ago, so.

Tim Ulbrich: So much good stuff there, and I think back to my previous role. I reviewed thousands and thousands of residency letters of intent, CVs, and at the end of the day — and I think it must be either from, you know, just form examples or things that are out there, like unless I had met them and they had been intentional about how they branded and marketed themselves and made relationships, they all looked the same at the end of the day. They were all successful, they were all doing lots of great things, but it came down to that relationship, that networking building, and those that really could, to your point, sell themselves.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: And so I hope the P4s and 3’s and 2’s and 1’s, anybody, really, hears that and I think the intentionality of that is so, so important.

Ashlee Klevens Hayes: Yeah, and sometimes, there’s a negative stigma around the whole phrase “selling themselves.” But we’re not built to be sales people, but at the same time, I just want to affirm to you that it’s not you selling yourself, it’s just about you talking. Being able to confidently walk up to someone, whoever it may be, especially an employer or someone who could lead you to employment, just being able to talk about yourself. And I think a lot of people are very uncomfortable with that. And for whatever reason, that’s not my problem. I have a lot of problems, Tim, let’s just be real. But that is not one of them. As a pharmacist, as a clinician, I’ve always been able to kind of keep up with prescribers, pick up on the key words, pick up on what they want to hear and how they want to hear it. And same with job employers, people who are hiring. You have to be able to articulate and just really be able to talk the talk, and that’s what it’s about.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: It’s not about qualifications once you get to a certain point. It’s not really about your qualifications or about, you know, what skills and certifications you have. It really is about just being able to confidently walk into a discussion if it’s a networking event or if it’s a job interview. Just be able to talk about yourself and why you want to do the things that you want to do.

Tim Ulbrich: So I’m curious, you’re in this moment of saying, OK, I’m doing this for fun, I’m reviewing all these CVs, and you probably have this “Aha!” moment of like, oh my gosh, if I see another Microsoft Word tracked changes document, you know, I need to eventually turn this into some type of a business, and there’s an opportunity to do so. But I’m guessing at the same time, you probably had some self-limiting beliefs, fears about is this an actual business? Will people pay for this? Is there a need? Is it validated? So talk me through that. Were there fears that were holding you back in doing that?

Ashlee Klevens Hayes: Let’s talk about — yeah, we could talk about a whole podcast episode on that. You know my story through that.

Tim Ulbrich: That was a stupid question, yes.

Ashlee Klevens Hayes: I talked to you about that a variety of times. But of course. 100%. I am no different than any of the other listeners in my fears and, you know, what people thought about me at that time. Now my life looks a little bit differently because I have results, right? I see positive results. When you see results, confidence tends to follow. At first, it just takes a little bit of courage and a little bit of humility. And then here I am a little bit of I see the results that my clients get, so now I’m like, OK, this stuff works. It’s validated. But in the beginning, let’s go back a couple years. I remember having conversations with my husband, like how am I going to do this? What are the logistics? And he looked at me, he said, “Ashlee, I don’t really care what you do. Like you do you. You just need to pay for your student loans, and you need to pay for child care, and you need to be able to like keep up with rent and keep up with our bills.” And I was like OK. So we shook on it, and I was like, “Watch me.”

Tim Ulbrich: Yeah, yeah.

Ashlee Klevens Hayes: And from there, I knew exactly how much money I needed to make in order to survive, right? Like bare minimum. I wasn’t talking about like going to Target and spending $100 there. No. I was very intentional with every penny spent. So you’ll appreciate this, Tim. I was very intentional with all of the money at first.

Tim Ulbrich: I like that, I like that.

Ashlee Klevens Hayes: You know, like I was just head down, focused on how am I going to pay my bills? Like that’s at the end of the day. And I did that for a year and then I started seeing, again, I started seeing results, and I was like, OK, so it’s time to reevaluate. I’m going to look at some services, I’m going to put together different packages. Who do I want to work with? Instead of I’ll just work with anyone. And it just really has evolved over the past couple of years. And one thing led to the next, for example, like I had a career coaching client that came to me, and we were working together for a couple months. He landed a job interview, and he called me up. He’s like, “Ashlee, can you prep me for my interview?” And I was like, “Sure.” I whipped something up, and the next morning, I prepared him. A week later, he was flown out to the job interview, he nailed the interview, like the interview of his dream job. And he called me, he was like, “You should have charged me five times that price because I got the job.” And I was like, here we go. Here comes the results. And so from there, not that — a few more too. I started creating packages for people and how I could really, really support them land their dreams jobs.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: And it wasn’t — again, I just want to reiterate, it’s not a matter of qualifications. It’s not a matter of, you know — once you get the interview, it’s not really a matter of what’s on your resume or what’s on your CV or what jobs you’ve had in the past. It’s about how you craft your own story. And that’s what I help clients with. And that has been so potent and so powerful. And quite frankly, so fun for me because that’s what energizes me.

Tim Ulbrich: Yeah, and what I love about that — and I’m sure you hear this from your clients all the time — is that while they’re engaging with you in that, whether it’s interview prep or you’re working them through that process, that is a lifelong benefit that they’re investing in.

Ashlee Klevens Hayes: Yes! Totally.

Tim Ulbrich: Because to your point, once you knock that out of the park and it leads to a job or whatever, confidence builds. And you know, I can speak from my own personal experience, once you go through that process and you get some wins or you go through a successful negotiation, whatever you’re working through, all of a sudden, you start approaching things with a different mindset.

Ashlee Klevens Hayes: A different lens. Yeah.

Tim Ulbrich: And that mindset — a different lens, exactly. So —

Ashlee Klevens Hayes: And that’s what happens too. So I have career pivot clients that turn into interview prep clients that turn into lifelong clients because they recognize the value of investing in yourself and investing in this process.

Tim Ulbrich: Yes, yes.

Ashlee Klevens Hayes: And it’s always nice to have kind of an outsider looking into your own little bubble and to kind of give you an outside view of what’s going on.

Tim Ulbrich: So speaking on investing in yourself, I shared with you before we jumped on the interview here that for me, 2019, you know, I don’t know if I’m having a third-life crisis, whatever we want to call it, but to me, 2019 is all about game on mindset and investing in the things that I think are most important in my life. So you know, whether that’s my marriage with Jess and I, whether that’s from a career standpoint, finances, health, (inaudible), it really feels like it took me awhile to really see into that positive lens of the ROI of investing in that support.

Ashlee Klevens Hayes: Totally, yes.

Tim Ulbrich: And I think that I tend to be probably be somewhat frugal. You know, I’m the financial guy, after all. But when you begin to see the return on investment, those things that are most important, and you think about, hey, when this is all said and done, I look back and say, ‘These things were the most important,’ I’m never going to regret in making those investments. So talk to me. I’m guessing you have several clients that some get over that hurdle to invest in themselves, some —

Ashlee Klevens Hayes: 100% of clients are like, why should I ever spend money on this? Literally everyone asks.

Tim Ulbrich: What is that? I mean, give us the background on why that is.

Ashlee Klevens Hayes: Right. Well first and foremost, just because you’re the finance guy doesn’t mean you’re frugal. You’re just intentional with your time and resources and money, right? Money’s just a tool. So I love that. I mean, just because you’re an expert in money doesn’t mean you’re frugal. It means you’re smart. And you spend your money intentionally. And that should be for everything. Your life needs to be very holistic approach in the sense of where do I want to spend my energy? Where do I want to spend my money? And what do I want out of all of this? And I’m the same way. I look at everything with intentions. My diet, my lifestyle, who I spend my time with, what I say yes to, what I say no to. And I know for me personally, the more I invest in the process, the more accountable I am to the outcome.

Tim Ulbrich: Amen.

Ashlee Klevens Hayes: So for example, I mean — gosh, I have so many examples — but one of them being I myself invest in a business coach. I myself have a speaking coach because I know that I want to bring my level up, right? I’m always just like how do I perfect some of the things? How do I tweak some things? So what do I do? I invest in experts who are better at these things than me. And quite frankly, one of the things that I guess I could speak for RxAshlee is that I’m really good at interviewing. And so what I’ve turned this into is a service. And how do I teach people? And whether or not they want to invest in it is whether or not they feel like they need it. That’s a whole other conversation of if you need it or not. But I am a big believer of investing in the things that are going to give you the biggest ROI, as with you, Tim. But one of them is my marriage. I’m very committed to whatever it takes, you know, my husband and I go away two weeks every year, just us two just because it’s important for us. We get such little time just between us amongst both of our busy careers, amongst our family, balancing all of the things that we do together. So we invest in our marriage first and foremost. And that is by time away and by all other things too. I mean, marriage counseling or whatever it is you need, you have to take those steps in order to really get the best outcome. And financial advice is no different. If you don’t know how to manage your financial services, what would hold you back from investing a little bit of cash, a little bit of income, to get you the bigger result of, wow, I feel confident in the direction that I’m going now.

Tim Ulbrich: Yeah, and that’s why we share with people, I have a financial planner as well because I know at the end of the day, you know, that for me, knowledge aside, there’s always something more to learn on this. But even with knowledge on the topic, I need accountability, and I need somebody to challenge me and to set goals and to help my wife and I navigate it. So I’m with you. And if you listen and watch most of the successful entrepreneurs that are out there, I can think of probably almost all of them, the stories that I’ve listened to, that all have a coach in different areas of their life, you know? And I think that speaks to it. Let’s talk about interview prep for a minute because I think that is your jam. Right?

Ashlee Klevens Hayes: Totally. I love it. I mean, I love a lot of things, right? I’m a multi-passionate person. I love supporting clients in whole different aspects of their career, anything career-related, I just love it. But the thing is is the interview prep — to be totally transparent to me — it’s a quick win. People like quick wins. I spend a couple of hours, maybe 1-3 hours, with a client. And from time 0 to the end, it is like a totally different person. And it’s so fun for me to watch that process. So that’s why it’s been a big one because it’s very little time that I’m spending to see such an awesome result. And so that’s why it’s been growing, and it’s been huge, and the testimonials and the reviews, it shows itself. But long term-wise, I mean, I love working with clients long-term too.

Tim Ulbrich: Absolutely. Yeah, I think —

Ashlee Klevens Hayes: It’s like a constant pull of, you know, interview prep versus long-term clients.

Tim Ulbrich: I think, though, as we think about some of the things that are going on with the job market and other things, and this is a way that I think people, to your point, a quick win can really, really differentiate themselves and is one thing that has a win that will last much longer than the individual preparation work that they do with you. So for those that are interested in learning more, I know you’ve got some info on your website, RxAshlee.com. You’ve got a section on interview prep, sign up for your email list, make sure that you’re up-to-date, and I think you’ve got some information on there for a call as well for those that may be interested.

Ashlee Klevens Hayes: Yeah, I have a course that I produced. Basically, what I realized was that 99.9% of the clients that come to me have the same questions. They don’t know how to answer a few basic but sometimes tricky questions, and so what I did was in order to lower the cost and to make it just really more potent and quick for the client, I created a course. And it’s been really successful. And then what happens is if the client has more one-on-one questions, then at that time, they can invest in working one-on-one with me. And I have found that extremely beneficial because I gave you like the down-and-dirty, simple tricks on the course. But then if you want just to take it a little bit more to the next level, then I would love, obviously, to support them even more. So that’s been really fun.

Tim Ulbrich: So I want to talk for a minute about some of the work that you’re doing with USC College of Pharmacy and from my experiences in the academic world, you know, I would often do career advising with students. And they would come to me, and we’d have a conversation about their goals and aspirations, and I could tell they were down one of two tracks. They saw, really — many of them saw two paths in their mind: community pharmacy or largely in-patient pharmacy residency. And I think as I see the work that you’re doing on the “nontraditional” setting, that’s a limit we have right now is that there’s not a broad awareness of the opportunities that are out there and really aligning students strengths with the interests that are there. So tell us a little bit about —

Ashlee Klevens Hayes: Oh yeah, I could talk about that forever. Yes.

Tim Ulbrich: Yeah. And some of the work that you’re doing at USC.

Ashlee Klevens Hayes: Let me ask you a question. When students come to you, what do they define as, you know, nontraditional pharmacy? I’m just curious.

Tim Ulbrich: So if I get a response on that, they’re typically then starting, I would say maybe they broaden out to like managed care, PBM world. Sometimes I’ll hear things like nuclear pharmacy or long-term care consulting. But that really is the end of it. And if you look at the trend data at many colleges, if you take the residency pool and you take those that go into community pharmacy, that is usually 90-95%, if not in some cases more, of where the students are going. So how are you getting that message out there?

Ashlee Klevens Hayes: In my opinion, that is traditional pharmacy.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: All of those roles. So what is nontraditional pharmacy? And I think that’s the message I’m trying to spread amongst obviously our students but just really the global pharmacy world at large is nontraditional pharmacy is whatever you want it to be. It doesn’t have to be a pharmacy title. It doesn’t have to be a specific industry. It doesn’t have to be a specific sector. What you need to do as students and as just the larger body of pharmacists is recognize that your education is just laying the groundwork for you. It’s not a direct one-to-one path. It’s not this plus that equals this. Gone are those days. No longer are the days that that’s where it’s at. And if we’re not on the bandwagon, then we need to jump on that bandwagon because we have to teach the students to get really, really creative as to what are their skills? What do they enjoy doing? You know, use your background, use your education to just be like a starter place. And then blend with that with what are you good at, what are your passions, what do you want to do in this whole entire universe. Like the sky is the limit. And then just go out and brand yourself as that person. And go out and do it. What’s holding you back?

Tim Ulbrich: Yes, totally.

Ashlee Klevens Hayes: That’s the question. And I think what a lot of schools are missing is telling the students that, giving them the support, giving them the “I think that’s a great idea, go out and do it. I support you.” I just had a student in my office this morning talking to me about how he wants to get involved in health literacy and like how he wants to do outcomes research in that realm.

Tim Ulbrich: Huge problem, right? Yes.

Ashlee Klevens Hayes: Huge. It’s an amazing topic. I’m like, “OK, well, what can I do to support you? What can we do? What internship can you get? What alumni can I support you with? You know, let’s do it.” So it’s totally changing, and we just need to lay — from day one, from ground zero, from day zero, we’ve got to get them to start thinking like outside of that white coat.

Tim Ulbrich: Oh, yes.

Ashlee Klevens Hayes: Outside of the tradition of traditional pharmacy, this is the only thing, one plus one equals two. I strongly just don’t think that that’s where we’re heading anymore. And we need to support the students in thinking that because they’re very smart. They’re very, very competent, capable human beings. They just need a little bit more nurturing.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: They just need more impetus of, yeah, that’s an opportunity. Go after it.

Tim Ulbrich: And I’ve seen this mindset develop very quickly, you know, in a pharmacy student’s schooling. I mean, their first, second year, they’re obviously watching their peers above them, they may have come in with preconceived notions of what these paths are, so I feel like there’s somewhat of an uphill battle to redefine that, right?

Ashlee Klevens Hayes: Well, of course, because they see the faculty doing the, for the most part, fairly traditional roles.

Tim Ulbrich: Yes, yes.

Ashlee Klevens Hayes: So we have to realize as faculty, as staff, these students are looking at us. We are the embodiment to what they can and can’t do. So I think what we can do as staff and faculty is really just support their dreams, support their ambitions. Don’t tell them what’s right or wrong. We don’t know.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: Who’s to say who’s right or wrong?

Tim Ulbrich: I love that. And I think there’s so much fear there around, you know, obviously student loan debt plays a role in that, the income expectation.

Ashlee Klevens Hayes: Totally, yeah. I’m in that. Tim, that’s my jam. Like I pay my student loans — I am not innocent here. I am not student loan-free.

Tim Ulbrich: Yeah.

Ashlee Klevens Hayes: So I get it. But I’m still doing it. And I still love my job and for some reason, my husband and I are still able to pay our bills.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: So I think it’s just the whole notion of having less fear.

Tim Ulbrich: So a student who’s listening to this podcast and, you know, hopefully they don’t have Ashlee Klevens Hayes as a career strategist at their college of pharmacy, right? So they may not be getting this. But they’re maybe going to begin starting —

Ashlee Klevens Hayes: First I would tell them to follow me on Instagram. I love Instagram.

Tim Ulbrich: There we go.

Ashlee Klevens Hayes: I love Instagram.

Tim Ulbrich: Yes. We are new on the Instagram platform.

Ashlee Klevens Hayes: It’s so fun. OK, first of all, you called it “the Instagram.” No. It’s Instagram.

Tim Ulbrich: Can you tell I’m new on the Instagram platform?

Ashlee Klevens Hayes: It’s fun. It’s a creative outlet. And I think LinkedIn’s a little bit — for me, personally, it’s a little bit more professional where I don’t feel like I can voice what I really want to because I feel like I get a little bit more pushback on LinkedIn, quite frankly. Instagram is creative, there’s so many different people on there, it’s so fun for me. So anyways. We digress.

Tim Ulbrich: We do. So student, let’s say a student at University of Buffalo, here at the Ohio State University, and they’re hearing this and they’re thinking, wow, I’m really passionate about this area. I mean, health literacy is a great example. It could be one of a thousand areas of healthcare, right? There’s infinite opportunities. But they think, I don’t know where to go with this. It’s an idea. I don’t necessarily see or know of a job that’s defined. I can’t find a job posting. Where do they start?

Ashlee Klevens Hayes: Well, it’s a great question. I would say, go read my blogs. There’s like 25 blogs that I have talked about this for a long, long time. You know, where do I start? That’s everyone’s question. How do I get a job? And that’s a mindset thing. And instead of asking, how do I get a job?, ask yourself, what am I good at? What are my strengths? What does success mean to me? You know, what do I want out of my career? That’s the first thing. What are your goals? Like what is it you want to create out of this life of yours? And how do you want to impact people? And how do you want to influence people? That’s No. 1. Step 2, go brand yourself as that person. Once you’ve identified kind of the path you want to take, I didn’t start off this way. I didn’t start off by having all these different services, packages, courses, books, speaking engagements. I just started off like reviewing CVs.

Tim Ulbrich: Yep. One step.

Ashlee Klevens Hayes: Yeah.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: And then I was like, oh gosh, it’s so much more and deeper than just the CV. It’s so much bigger. And the vision is you’ve got to figure out what you want and then OK, let’s make you look like the best freaking candidate out there. And then go for it. And only do the things that are going to get you closer to that bigger vision. And I think a lot of students come to me, and they’re like, I don’t know what a vision is. I’m like, “OK, well, what do you want for your career?”

Tim Ulbrich: Absolutely. What gets you excited, right? What leaves you energized.

Ashlee Klevens Hayes: Right, exactly.

Tim Ulbrich: Yes, yes. It’s that reflection. And I’ve talked before on the podcast about the book for me, one of the books, many that were game-changers, but one that was really pivotal in kind of my path was “Start” by Jon Eckhoff. And just, it talks a lot about this concept of like be aware, reflect on the things that you cannot get off your mind because you’re so passionate about it or that people are telling you, that you’re really good in this area and helping people and doing this or that, and acknowledge that. Reflect on it. And then take one step towards beginning to articulate what that vision is. And then obviously, begin to execute on that. But we talked on your show, if you articulate the 20-year plan, that becomes paralyzing, right? But you take one step. One step.

Ashlee Klevens Hayes: Totally. Oh my gosh, yes. Let me just say, just to be clear, five years ago, if someone would have told me that I was launching this business, I would have been confused. I would have no idea that I would have been in this place. But I had an idea and I knew what I was good at. And I knew how I wanted to help people. And that’s the same definition of a lot of pharmacists out there. They want to help people. The way I help people is much different than the way other pharmacists help people. So I think you just have to have that idea of what does helping people look like to you? And then what capacity do you like talking about that? And then from there, obviously, you just put your head down and work. And you don’t give up. You commit. Commit to this. And I think that’s what’s been the best part about all of this for me is seeing the clients that commit and the outcome is huge.

Tim Ulbrich: Let’s talk about that hard work and commitment for a minute because you and I both know that starting a business is both exhilarating and it can be a grind at the same time. And I think we don’t always talk about, you know, both sides of it. And of course, the passion brings you through those moments of, you know, difficulty. Seth Godin calls them the “dips,” and you’ve kind of got to — very few people get to the other side of the dip. So what keeps you motivated through the hustle, the hard work, balancing family, all these things?

Ashlee Klevens Hayes: Oh man, good question. All of the things?

Tim Ulbrich: Yes, yes.

Ashlee Klevens Hayes: First and foremost, I have a daughter who I want to show her that if she puts her heart and mind to something, that she is capable of doing anything in this whole entire universe. I want her to see that firsthand. Two, I — honestly, I have a support group that I go to. I’m in a big entrepreneurship group that I lean on them hard when I’m feeling like the little bit of imposterish. I don’t think that really goes away. And three, I see the results of my clients, and that drives me. And honestly, at the end of the day, I think that’s what I’m in this for. I want to see people just as happy and thriving just as much as I am. And I think the people that I’m serving, the audience that I’m working with, they’re all so smart. So smart. I have physicians, I mean, I have pharmacists, I have you name it: agriculture, architects, lawyers, that are coming to me, and they are brilliant. So smart. They just need a little bit of tweaking. And that’s — at the end of the day, that’s what I’m good at, and that’s what I support them through. So I think the results have been a big driver for me.

Tim Ulbrich: So you alluded to this a little bit in what you just said, but you know, the reality is — and it’s hard to think about this, but I think it’s so critical for you, and I know you’ve thought about it, but our listeners also be thinking about legacy. And the reality is what you’re working on today is obviously going to be left behind for others to continue to consume, to build upon, and ultimately, you know, I’m thinking of your daughter, to look back and say, yes, that was my mom. You know? So what do you want your legacy to be?

Ashlee Klevens Hayes: Oh gosh, this could get me like choked up, Tim. What the heck? I’ve had such great mentors in my life, one of them being my dad. And I talk about him a lot. He passed away very suddenly in the middle of my second year of pharmacy school. And he was like the legacy that I wanted to live by. And one of the last conversations I had with my dad, the last, which is so powerful, is I was driving to pharmacy school, he was driving to work, and we were talking about pharmacy, all of the stressors that came along with being a Chief Pharmacy Officer. But at the end of the conversation, he goes, “Ashlee, I just want you to know, I’ve kind of like word vomited on you, but I love my job. And at the end of the day, at the end of the day, you have to make a positive impact on this world, on your job, and on the people you’re working with. Or else it’s not worth it.” And that’s stuck — and eight weeks later, my dad passed away. And that’s stuck with me now nine years ago that that’s what’s the impetus behind me launching my own brand and my own business is I love what I’m doing.

Tim Ulbrich: Yes.

Ashlee Klevens Hayes: And it’s not every single day is like skipping and rainbows. No, I get things pop up all the time. But I feel really fulfilled. And I think if I can show that to the people around me and especially like my daughter and my husband and my family, then that inspires them to do that. It’s kind of like a trickle effect, you know?

Tim Ulbrich: I do. And that’s why I love, I love what you’re doing in terms of, you know, helping people whether it’s a quick win in interview prep, whether it’s helping them make a career pivot, whether it’s helping them take their business to the next level and develop it is that has such a profound effect on every other area of our lives. And we cannot disconnect them. And I think some of the negativity that’s out there right now in the job market is a disconnect or trying to disconnect between the work and the life and all the other parts that come. And you cannot. They all influence one another.

Ashlee Klevens Hayes: No. Yeah, no. Yeah. Well, I have to say, if you’re one of those people that is, you know, feeling a little — not just unhappy. It’s more than just unhappiness, right? If it’s unfulfilled or if you feel like you’re not living up to your expectations in your career. You have to understand that if you — and I say it on my business card, it’s on my LinkedIn, it’s everywhere. If you want to make a change in your life, you have to get comfortable being uncomfortable. Because with all this newness comes uncomfortable territory. On the first podcast I launched, I talked about imposter syndrome, and I read off the screen, I was so nervous. I was shaking. And I think I should have had a cocktail before that because I was so nervous to put my heart out there and to put, you know, all these thoughts out into the world for people to look at me. But it’s working, and that’s what kind of drives me too. I’m still uncomfortable, just to be clear.

Tim Ulbrich: Sure. Yes. So give us a book recommendation, a podcast that you’re listening to, something that’s inspiring you that can inspire our audience.

Ashlee Klevens Hayes: Oh, that’s a great question. So I just read the book, “Fearless” by Jean Case over the weekend. She is the national — or I might screw up her title, but she’s like the chairman of the National Geographic. She’s the first woman or second woman to be in that role. And she just talks about all these inspiring people who came from nothing. These people are essentially — not no ones, but they came from nothing, and then they turned their lives into this huge, impactful careers. And that’s really, just hearing those stories and hearing, you know, all of her tips and tricks on how she go to where she is now, and she’s a philanthropist. It’s really inspiring. So that’s the book I read over the weekend.

Tim Ulbrich: Awesome.

Ashlee Klevens Hayes: I read so much too. Just I love reading.

Tim Ulbrich: Me too. Me too. And I’m hoping to inspire that in my boys because I didn’t have that when I was younger, but I can’t get enough of it now.

Ashlee Klevens Hayes: I used to hate reading.

Tim Ulbrich: Me too. I’m ashamed to say that.

Ashlee Klevens Hayes: Oh, I’m not. I hated it. But now, over the last three or four years, I’m in it. I love it.

Tim Ulbrich: We’ll link to that in the show notes. So what’s on the horizon for RxAshlee? What are you working on?

Ashlee Klevens Hayes: Oh, all of the things. You know, it’s always changing. But I have four keynote presentations this year, which I have to say, when you take on a big presentation in front of a big audience, it’s so much work. Holy moly. So much energy. So that’s one thing. Two, I’m leading a women’s group. It’s a branding — it’s not a mastermind, I would say, but it’s just like 10 of us that are just trying to go through career pivots or launching their own brand, and that’s been so much — I love that group. I mean, those are my people. I am writing a book, I’m launching courses. You know? It’s just keeping up the grind, and I love it. It’s so much.

Tim Ulbrich: That’s awesome. So obviously, you mentioned before, you’re on Instagram at @RxAshlee. Again, that’s @RxAshlee. And we referenced the website, RxAshlee.com.

Ashlee Klevens Hayes: Thank you, Tim.

Tim Ulbrich: Absolutely. This has been so much fun. Looking forward to more collaborations. I would highly encourage our listeners to check out the work that you’re doing over at RxAshlee.com, and I’m sure we’ll have you again on the show here in the future. Thank you.

Ashlee Klevens Hayes: Tim, I love what you’re doing. You know, we’ve had this conversation so many times, and I just want to say, thank you for what you’re doing in the profession. I know how much work it takes to put yourself out there and to kind of like just go after it. And you are a strong mentor to so many of us out there. So thanks again for having me on the show.

Tim Ulbrich: Thank you. Have a great rest of your week.

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5 Key Financial Moves To Make With A New Baby

Posted on April 9, 2019June 16, 2023 by yfpadmin

5 Key Financial Moves to Make with a New Baby

The following is a guest post by Karen Berger, PharmD. Karen is a pharmacist and medical writer in Fair Lawn, NJ. Her husband has been trying unsuccessfully to put her on a budget for many years.

This post contains affiliate links through which Your Financial Pharmacist may receive compensation

In an earlier post, we talked about how to prepare financially when expecting. Once your little one makes his or her big appearance, though, the financial planning is not over – it has just begun. Continue to work on those important financial moves we talked about earlier, and start to incorporate these additional tips.

Nothing can prepare you for life with a baby. Whether this is your first or fifth baby, the first few months are exhausting. You walk around on a few hours of sleep every night – getting more than four hours of sleep in a row is cause for celebration. You might not remember the last time you showered or sat down for an uninterrupted meal. Although it is the last thing on your mind, financial planning for new parents is key to ensuring a strong financial position for the upcoming years.

1. Start Saving For College

With the average cost of college for 2017-2018 at $20,770 for in-state public schools and $46,950 for nonprofit private schools (including tuition, fees, and room and board), and prices increasing every year, it is never too early to start saving for college. Don’t forget to multiply these numbers by six (years), the average length of time students take to earn a bachelor’s degree, and also by the number of children you have.

Having a monthly savings goal is a fantastic way to help your children pay for college. NerdWallet estimates that saving $500 a month, per child, earning 5%, should be adequate for you to cover $50,000 of college costs per year for four years once your child turns 18. Obviously if you’re planning to pick up the tab for potential graduate or professional school, you’re going to need to save a lot more. You can find calculator tools online to tweak the numbers to your personal situation. Often, saving for college will involve a combination of several of the strategies below:

529 College savings plan: The 529 is the most popular savings plan geared toward education; there are two types. The first type is the 529 investment savings account. With this plan, you invest with the same risk/return profile of other stock investments. Check your own state for tax breaks or matching funding before looking into 529 plans offered by other states.

The second type is the 529 prepaid tuition plan. This method locks in tuition costs and avoids the yearly increase in tuition. Paying for 6 semesters now, at today’s cost, will pay for 6 semesters in the future, even if the costs are higher at that time. These plans are starting to have more restrictions.

Pros of the 529 include: high contribution rates (plans typically allow up to $300,000 in lifetime total contribution), the ability to change beneficiaries, and the benefit of tax-free growth. Also, if the parent is the account holder, the 529 is considered a parental asset and it will have a minimal impact on financial aid as compared to other education savings options.

On the other hand, there are a few cons of the 529. It is strictly to be used for education, so if your child does not go to college, the money may be unavailable for other purposes. However, depending on the plan, you may be able to change the beneficiary or pay tax and a 10% penalty on the growth of assets. There is also the inherent stock market risk.

Savings Accounts & Other Low-Yield Options: Savings accounts are flexible, but provide little in the way of interest. Using a regular checking/savings account with the intent to save for college may backfire, as money may be tapped into and not replaced. Not only that, but because of inflation which is typically around 2-3% per year, you may actually be losing money keeping it parked here. Certificates of Deposit (CD) and US Savings Bonds are other options, but these are mostly out of favor due to low interest rates. Sometimes, a very conservative contributor may favor this option.

Roth IRA: A Roth IRA can be used as a combination retirement account and educational savings account. It allows you to invest with after-tax dollars while the earnings grow tax-free. Although this is typically used as a retirement account with a penalty for early withdrawals on any growth before 59 ½, if used for higher education, distributions can be taken tax- free and penalty-free. The biggest downside to this is that it could significantly reduce your overall retirement projections. In addition, the distribution must be made in the same year that the qualified expenses are paid. Another item to note is this distribution is considered to be income to the student and could reduce eligibility for need-based financial aid.

Coverdell Education Savings Account (ESA): This is like a smaller version of a 529: it offers tax-free withdrawals, and you can invest in the market. However, one of the biggest advantages is that you will have a lot more investment options to choose from, since you won’t be limited to what’s available to what a specific 529 plan offers. Contributions are limited to $2,000 per year, and until the beneficiary turns 18. ESA’s may offer more flexibility, and qualified expenses may include educational expenses from Kindergarten all the way through graduate school (529 plans also now allow up to $10,000 per year to pay for private elementary and post secondary school tuition).

Important to note with a Education Savings Account is that income limits apply, and depending on your salary/combined salary, you may not be able to participate. Currently, the income limit for a maximum contribution is $190,000 for a married couple filing joint returns, and contributions phase out at $220,000 in 2018/2019. The limit is $110,000 for those not filing a joint return.

If you are indeed eligible to contribute to an ESA, the cool thing is that you don’t have to choose between an ESA and a 529 – you can do both!

Trusts: These are structured as UTMA or UGMA. Assets are transferred to the child’s account and invested on his/her behalf until the child reaches the “age of trust determination,” which is between 18-21, depending on the state. As soon as the beneficiary becomes an adult, he/she can use the money however he/she wishes. As a custodial account, these assets are considered to be assets of the child/student and are included in calculating financial aid. These funds will stay in the custodian’s taxable estate until the child reaches the age of trust determination.

2. Make A Will

This is the happiest time of your life – who wants to think about something depressing like a will? Although it seems sad, a will is a very necessary part of life. Just think about the recent, unexpected passing of 90210 and Riverdale star Luke Perry from a stroke at the young age of 52. That was a major wake-up call for many people to get their affairs in order.

In your will, you will clearly and concisely state your wishes for the distribution of your assets after death, and appoint guardians for your children if both parents pass away. You will designate an executor, who will ensure the provisions of the will are carried out.

You can either hire an attorney to create your will or do it yourself. I would recommend hiring an attorney if you can afford to do so. The attorney handles all of the intricate details, making sure nothing is left out and can keep a copy on file. Attorneys may charge a flat fee or hourly rate, with an average cost of $300-$1000 for an uncomplicated will, or up to $10,000 if you have complex assets and an estate, or the need to establish a trust.

Many companies offer a very affordable legal plan for employees, where you contribute a small amount per paycheck for legal representation by participating attorneys. At the time, my husband and I were able to do both our will and closing on our house, and we did not have to pay anything above the regular paycheck contribution.

If you would rather create a will yourself, you can use an online program or software to make a will for less than $100. Requirements for witnesses or other specifications vary by state.

Another thing you need to do that falls under the “no fun, but necessary” category, that goes along with your will, is to create a living will, or advanced directive. This lets you set the terms for healthcare providers about the kind of health care you want or do not want to receive, in the event that you are unable to speak or make decisions for yourself. The living will sets forth your wishes on resuscitation, quality of life, and end of life treatment. The Durable Power of Attorney for Healthcare is a designated, trusted person who will make medical decisions for you in an emergency situation, in cases where the living will may not provide a clear answer. This person is there to fill in gaps that are not clarified by your living will, and cannot contradict your living will.

3. Obtain or Update Life Insurance

Now is the time to get a life insurance policy, if you do not have one already. Life insurance ensures that your beneficiaries (spouse, children) are financially taken care of if you die.

There are two types of life insurance:

Term Life Insurance: This type of life insurance offers coverage for a specified period of time. It is less expensive than whole life insurance and has a predetermined guaranteed death benefit. Your premiums will increase at preset time intervals, such as every 10 years.
Permanent Life Insurance: A number of policies such as whole life, cash value, and universal life, fall under this umbrella. This type of insurance has a death benefit that never expires as long as you pay your premium. In addition, there is typically a saving/investing plan baked in, which is one of the benefits that agents use frequently as a marketing tactic. The rates of return vary, depending on the policy, and they are generally filled with many different kinds of fees. Plus, these policies are often much more expensive than term policies. Because of these issues, the YFP team recommends that most people should keep their savings and investments separate and go for a term life insurance policy.

Once you determine the term (usually 10-30 years) that works best for you, you need to decide the amount of coverage. Financial experts often recommend that your death benefit be 6 to 12 times your annual salary. However, this may not be enough and a number of factors will come into play, including what you can afford, homeownership, and number of dependents. For a more tactical approach, you can check out this calculator.

4. Obtain or Update Disability Insurance

Would you be able to support yourself and your family, pay bills, and achieve your financial goals if you became disabled and couldn’t work anymore? If your answer is no, then you need disability insurance.

Do you know your most valuable asset? Surprisingly, it is not a material possession such as your house, but it is the ability to earn a living. Disability insurance pays a portion of your regular income if you are unable to work for an extended period of time due to illness or injury.

Although it seems unlikely, more than 1 in 4 20-year olds will have a disability for 90 days or more by age 67. Often, people think of worst-case scenarios and assume that they are immune, but something as “minor” as a back injury can put an otherwise healthy person on disability.

There are two types of disability insurance – short-term and long-term coverage. Both replace part of your monthly salary up to a certain amount, such as $10,000, during a disability. Some long-term policies also may pay for additional services, such as training to return to work.

Short-term disability replaces 60-70% of your salary, and pays out for several months up to one year, depending on the policy. It has a shorter waiting period, about 2 weeks, between the time of disability and the time when payments are made to you.

Long-term disability policies typically can replace up to 40-60% of your salary. With long-term disability insurance, benefits end when the disability ends. If the disability continues, benefits end either after a certain number of years or at age of retirement. There is a longer waiting period, usually 90 days, between the time of disability and the time when payments are made

Disability insurance can get pretty complex as there are a number of riders and definitions that vary between companies. Besides your age, occupation, term, benefit amount, and waiting period, these riders will play a huge part in the cost of your policy. To get a better understanding of these and what to expect, you can check out this free guide.

How do you sign up for disability insurance? First, look at your workplace. Often, employers include coverage and contribute towards the premium. Even if your employer does not pay towards your coverage, you can often buy your own coverage through the employer’s insurance broker at a discounted group rate. You can also check with professional pharmacist associations. Another way is to buy an individual plan through a broker or directly through an insurance company. Your Financial Pharmacist offers a helpful service through Policygenius that shops multiple companies to find you the best disability insurance policy.

5. Start or Continue Contributing Toward Retirement

Although retirement may seem far away, and college savings for your children may be at the front of your mind, it is an inevitable event that requires planning. I always remember Suze Orman telling callers on her radio show, “You can take out loans for college but you can’t take out loans for retirement.” The sooner you start saving, the longer your money has to grow. Be sure to contribute to your company’s 401(k) plan, and if your company has a match, try to at least contribute that much since it’s basically free money. The maximum 401(k) contribution limit for 2019 is $19,000 unless you’re over 50 in which you can add an additional $6,000.

Even If your company does not offer a 401(k), or you are self-employed, you can open up an IRA (individual retirement account). For 2019, your total contributions to all of your IRA’s cannot exceed $6,000 if you are under 50 years old, or $7,000 if you are age 50 or older.

Besides an IRA or 401(k), a Health Savings Account (HSA) is another great way to save for retirement as it has triple tax benefits. It lowers your taxable income, grows tax-free, and can be distributed tax-free if used for qualified medical expenses. Despite its name, your contributions do not have to sit in a simple savings account, but can actually be invested aggressively. In order to get access to an HSA, you have to have a high deductible health plan (HDHP).

These financial moves to make with a new baby may not be the most exciting things to do and they can come with a high cost, but they will help you sleep better at night, knowing that you are taking care of your family. Now, here’s to hoping your new bundle of joy sleeps through the night!

Financial planning for a baby, and in general, life events, can be overwhelming. Often it is best to bring in an experienced financial planner to help you plan and prepare. If you are looking for some extra help, you can click here to book a free call with the YFP Planning financial planning team.

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