Budgeting / Saving Podcast

YFP 133: Your Financial Toolkit for a Successful 2020

Posted on January 2, 2020November 2, 2022 by yfpadmin

Your Financial Toolkit for a Successful 2020

On the first episode of the New Year, Tim Ulbrich talks about 5 ways you can accelerate your financial plan in 2020. This episode is full of resources you can use to put these ideas into action.

Summary

Tim Ulbrich shares five tangible ways you can crush 2020 in this week’s episode.

1. Get Clearer on the So What

Getting clearer on the “so what” pushes you to dig deeper into finding your why. Why are you focusing on your financial plan or financial goals for 2020? Is it because you are wanting to create flexibility in your job or time? Are you wanting to radically give? Are you hoping to have more control or choice in your life?

2. Build or Modify the Road Map to Achieve Your Goals

When you are clear on your purpose, it’s time to put your plan in place. Without a monthly plan, it’s easy to find yourself in a position where your financial plan is happening to you rather than the other way around. Creating a plan and executing your budget are key.

3. Get a Side Hustle off the Ground

Having a side hustle isn’t only a way to bring in additional income to accelerate your financial goals, but it also allows you to fill the creative expression you might be craving. Plus, it can also satisfy that entrepreneurial itch you may have! If you have an idea in place, what barriers are you facing on taking it to the next level? If you don’t have any ideas on what your side hustle could be, what’s one next step you can take to figure it out?

4. Set One Stretch Goal for 2020

A stretch goal is one that seems out of reach, but you’d absolutely love it if you could achieve it. These types of goals allow you to think beyond what’s possible. Set one big, audacious stretch goal for 2020 and focus on visualizing it into action.

5. Get a Coach

The value of a financial planner isn’t in choosing the right investments or allowing you to have the best return as you can ultimately learn anything online now. Instead, a financial planner carries the most value as being your accountability partner and coach. They help to see the bigger picture of what you’re wanting to achieve and help get you there.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Tim Ulbrich here, and excited to turn the page on the new year and a new decade. Wow, hard to believe here we are at the start of 2020. Now, I don’t know about you, but I’m over the whole 20/20 vision thing. That seems to be trending over the past several years leading up to this year. So I’m going to spare you any of the cheesy references to having 20/20 vision or having a clear vision for the future. But we are going to talk about five tangible ways that you can crush 2020 and accelerate your financial plan. Now, many of these things we have talked about before on the show. However, I don’t know about you, but I know for me, sometimes it’s helpful to hear things more than once or presented in a different way. As I mentioned in the introduction, we have an awesome giveaway to go along with this episode to kick off the new year the right way. And for me and my financial plan, finding great resources and tools has been a big part of the success and of the learning along the way. So again, this giveaway includes five winners. We’re giving away for each of those winners a one-year YNAB subscription, a copy of “Your Best Year Ever” by Michael Hyatt, and a copy of “100 Side Hustles” by Chris Guillebeau. So if you’re interested in that awesome giveaway, head on over to YourFinancialPharmacist.com/giveaway, and you can enter to have a chance to win.

OK, in somewhat of a rapid-fire format, I’m going to walk through these five things, five steps that I think you can take sooner rather than later to make 2020 an awesome year and accelerate your financial plan. So let’s jump right in.

No. 1, get clear on the so what. No. 1 here, get clear on the so what. So you’ve likely heard us talk about before several times on the show about finding your financial why. And that is exactly what we are talking about here in point No. 1. Why does this topic of money even matter to you? It sounds like such a simple question. But if you have thought about this in depth before, you know it is not that simple. This is really the “So what?” question. So before we get too deep into the x’s and o’s of whether it’s budgeting or paying off debt, loan repayment strategies, how to save for the future and think about asset allocation, nerding out about compound growth and real estate investing, all of these different things, this question is “So what?” Why does this even matter? When we talk about financial freedom, why does financial freedom matter? What does this mean to you? What is the ultimate goal of achieving this path?

So to give you an idea of a few things that you may have heard myself, Tim Baker, Tim Church or other guests on the show talk about when it comes to finding your financial why or really answering this question of “So what?,” it’s things that we have heard before like to have flexibility over how you’re spending time or even how you’re spending your money, to be in a position of control, to be in a position of choice, to be able to achieve goals around giving, or to be able to radically give, to put yourself in a position to leave a legacy, to travel and see the world without worry or stress or regret. Maybe it’s to start a business or a movement or a foundation or a charity. So these are some ideas of the bigger the vision in terms of the “So what?” question that we talk so often about on the show. So yeah, we can do a nest egg calculation and figure out how much you need to get to the point of retirement or we can talk about how to aggressively pay off $150,000 or $200,000 of student loan debt. We can talk about how to set up a budget and exactly what a zero-based budget looks like. But what is the ultimate goal of doing this? And that is exactly what we’re talking about here in point No. 1 of getting clear on the “So what?”

So my question here for you today as we roll the calendar into 2020 is what is your financial why? What is your “So what?” And how do you get to the point of defining this if you haven’t yet done this? And so to help you get to that point, I’d recommend if you haven’t already listened to episodes 032 and 033, Tim Baker talks with Jess and I about this concept of finding your financial why. So again, that’s episodes 032 and 033 of which we’ll link to in the show notes. I would also recommend — again, we’ll link in the show notes — there are three life planning questions that we’ve referenced before on this show. These are really big questions, big philosophical questions that are designed to help you answer this question of this “So what?,” finding your financial why. So we’ll link to those questions, the article about those questions, that you can spend some time answering those.

And so my request for you here today, as we enter this new year, which is an opportunity to really set a new path forward, is to put your “So what?” or put your why on paper, say it out loud, and share it with those closest to you. And then revisit this often. So again, I know it’s so easy to want to jump into the specifics of what’s in front of you right now, whether that’s the budget, whether that’s making that next payment, whatever it would be. But really taking a few moments to take a step back if you have not done this before, and to put down on paper your “So what?,” your why, say it out loud, share it with those closest to you, and revisit that often. So that’s No. 1 here, getting clear on the “So what?”

No. 2, build or modify the road map to achieve your goals. Build or modify the road map to achieve your goals. So once you get clear on the purpose, the “So what?” or the why, it’s time to put a monthly plan in place that will simply be the execution plan to see that your goals and vision become a reality. And that’s essentially the budget, the spending plan, and that’s how I like to think of the budget. It’s not necessarily overly complicated, overwhelming, restrictive, do I have to? type of activity, but rather it’s the execution plan of your goals. And we all know how months and at times, years, can fly by. I’m certainly feeling that lately with four young children. And without a monthly road map, without a monthly plan, without a monthly budget, it’s easy to find yourself in a position where your financial plan is happening to you rather than you dictating and directing what your plan is. You know, and credit here to Tim Baker. He does such a great job of this when he’s doing financial planning with clients — and I know I can speak to this firsthand with the planning he has done with Jess and I — one of the very first activities we did is that “So what?,” that why activity and really identifying what’s most important to us. And if we fast forward five or 10 years, you know, what should be happening that we would say, “You know what, things are going well, things are a success when it comes to making sure that we’re spending our money in the places that matter the most to us.” And then we really get into the spending plan and the budget. But he often then comes back to say, “OK, here’s where you’re spending the money. Here’s the budget. But here was the ‘So what?,’ the why we talked about. And does this picture, does this vision, align?” And often what we see is that again, it’s easy that time goes by quickly, it’s easy to get caught up in the month-to-month and sure enough, soon we find ourself in a different direction where the spending plan isn’t necessarily aligned with the vision and the goals. And I think that’s really one of the many values of having a coach in your corner to keep you on track.

So for those of you looking to either start, restart, reinvigorate, refresh your budget, I would encourage you to check out a few different resources: Episode 028 of this podcast, we talked about a budget, just actually I think two years ago. It was called “New Year, New Budget.” We also have a great article that walks you step-by-step, including a budget template that you can download. And that article is “Five Steps to Creating Your Best Budget.” We’ll link to that in the show notes. And then as a next step, as a follow-up once you get that budget template in place, in Episode 057, we talked extensively about how you automate your financial plan. So once you have that plan set, then how do you make sure that is happening each and every month and ultimately getting your own self out of the way so you can ensure success with that plan you set.

So you know, some resources here, obviously we’re highlighting one in our giveaway, and that’s the You Need a Budget software, relatively inexpensive. So whether it’s You Need a Budget, whether it’s another paid budgeting service like Envelopes, there’s certainly several others that are out there or maybe it’s a free tool like Mint.com, maybe it’s an old school spreadsheet that you do this manually, whatever the resource would be, it’s about finding a system that works for you. And so I would encourage you to check out our budget template, YourFinancialPharmacist.com/budget, you can download for free a zero-based budgeting template. And then that will help you get started. And then you can automate that into whatever tool works best for you. I would also point out — and credit here goes to Tim Church — we recently released a great tool that is essentially a financial checkup, financial assessment to see how you’re doing overall with your personal financial plan. So if you go to YourFinancialPharmacist.com, you’ll see that there on the main page. You can go through a series of some quick questions. Tim Church has done a great job of making that easy, quick, he’s put some humor in there. And then essentially, that will help you identify what are the areas that need the most attention when it comes to your financial plan. So if you’re trying to think about does my budget really reflect the areas that I need to be thinking about that may need the most attention, that tool will really help get you there. So again, if you go to YourFinancialPharmacist.com, you’ll see there that we have a tool — and we’ll link to it in the show notes as well — that will help you essentially do your financial fitness test is what we’re referring to.

OK, so that’s No. 2. And that is No. 2, build or modify the road map to achieve your goals.

No. 3 is get a side hustle off the ground. And again, that’s a book here that we’re highlighting as a resource and a giveaway. So yes, yes, the side hustle is by far one of the trendiest movements of the last decade or so and certainly something that we’ve been talking about extensively over the past couple years. So if you’ve been a part of our community for awhile, whether it’s on the podcast, in the blogs, in the Facebook group, you’ve probably heard us talk about side hustles and you know that we have a love for side hustles. And we think that for many, side hustles are a way to not only bring in additional income so that you can accelerate your financial goals and achieving those goals but also allows you to have a creative expression and allows you to work on something that is a passion of yours beyond the traditional 9-5 type of work. And so I think for many, I know this is true for myself, this can really satisfy the entrepreneurial itch that you might have but also can help you achieve your financial goals even faster. And we’ve got some great stories, people in this community that we’ve featured on the podcast, that people have started part-time side hustles and ultimately have turned those into full-time gigs, people that are continuing to do part-time gigs while they’re working full-time and is just something that they really love, but they’ve used it as a way to generate additional income. So I’d love to see when pharmacists are able to leverage the expertise and passion they have in their field and fill the needs that they’re seeing and their patience with the creation of a side hustle as well.

So a couple resources I would mention here. Episode 063 of the podcast — again, we’ll link to these in the show notes — we did an introduction to the side hustle series. Again, Tim Church did this, has done a great job with this. Episode 126, recently published, Brittany Hoffman-Eubanks is a great example. That episode is called “Going Beyond Six Figures Through Medical Writing,” has done a great job of really starting and scaling a side hustle business. And then recently, Eric Christianson came on the show, creator of Med Ed 101, in Episode 131 to talk about the secrets to building a successful side hustle. I would also obviously point you to the resource we have highlighted in our giveaway, “100 Side Hustles: Unexpected Ideas for Making Extra Money Without Quitting Your Day Job,” and that’s by Chris Guillebeau.

So my call to action here for you, my hopefully motivation to get you going in this area if this is something that you’ve thought about. For those that have already have a side hustle in place, you know, have you validated the idea and the business need? And if so, what’s the game plan to grow it? So maybe some of you have started something and for whatever reason, it stayed status quo and you feel like it’s been a good idea but you’re in somewhat of an autopilot mode. Have you validated the idea and the need for that business or that side hustle? If not, what’s the game plan to validate that? How could you do that? And if you have done that, what’s keeping you back from growing that? And what’s the game plan to really grow and scale that? Now, for those that have an idea but have not started the side hustle, what is holding you back? That’s really the question I want you to reflect upon. Have you identified whatever that barrier may be? And what will it take to knock down that barrier? Maybe it’s even multiple barriers that are in place. And who is going to keep you accountable to moving forward? So I think I felt this when I started Your Financial Pharmacist back in 2015. I know at first when you have an idea, you tend to want to keep it quiet and you’re not sure if it’s going to work and you’re not sure what other people will think. But I think there’s real value in talking it out loud with people that you trust and respect their perspective that not only can help you think through the idea but also can help you keep you accountable moving forward to get that off the ground, encourage you, and even to challenge you in a positive way. And I think that ultimately will make your idea and your side hustle or business even better.

Now, for those that maybe don’t even have an idea or maybe are thinking through this at a very early state, you know, my challenge to you would be is what’s the game plan to learn more? What’s the next step you can take to be able to be one step closer in this first part of 2020 to getting something off the ground. So you know, what are you listening to and reading to that can help stimulate more ideas? Who will you reach out to this year that has done this well to pick their brain and learn more? And so I think with side hustles, again, we featured several stories already on the show and we have more planned for 2020. I think it’s helpful to hear others’ stories, even it’s not directly related to whatever idea or interest you may have yourself. So if you’re just in the early stages of this, the challenge really is what are you listening to, what are you reading, what can you be reading or listening to? And who will you reach out to that you can pick their brain and get some additional insights and information? So that’s No. 3, hopefully get a side hustle off the ground or take some steps to be in that direction.

No. 4 is set one stretch goal for 2020. Now, you’ve likely heard of this concept of a stretch goal before. But if not, the idea is setting a goal that seems perhaps out of reach, maybe too audacious, too unrealistic, despite it being something that if you were to achieve, you would say, “Heck yes, that was awesome.” So the idea is that setting a stretch goal allows you to begin to think beyond what you believe is possible and really starts to help you visualize what it would take to knock down those self-limiting beliefs that often hold us back from our true potential. And of course, the power of setting a goal and visualizing a goal then becomes the increased likelihood of achieving that goal. And for those of you that have set goals and visualized goals, you know exactly what I’m talking about. You might them on paper, and you look at them at first, and you say, “That’s bold. I’m not sure how I’m going to get there. And then you start thinking about them, more and more you visualize them, you relook at them, maybe it’s daily or weekly. And all of a sudden, you’re beginning to just train your mind to say, this went from a “I hope” to “How will I get this goal achieved?”

So now, we obviously know that there’s a time and place for setting realistic goals. After all, if we set a bunch of goals that we didn’t achieve, we would likely get pretty frustrated pretty fast. We’d get defeated, and we might move on from this whole goal-setting thing. So here we are talking about one additional bold, audacious goal in addition to the other goals that you have planned for 2020. So of course we want those realistic goals, you know, those goals that we look at our budget, we look at our numbers, we look at our direction of our net worth and our plan and say, “OK. We think we’re going to be able to achieve those.” But here, we’re talking about one additional bold, audacious goal. So maybe it’s something like paying off an extra $10,000 on your debt this year beyond what you think is possible when you look at the numbers. Maybe it’s buying your first real estate investment property, despite not knowing a whole lot about what’s involved and where the cash will come from. Perhaps it’s maxing out your 401k or 403b contributions in 2020, $19,500, although you thought you’d be only able to contribute up to whatever your employer match provides. Maybe it’s giving 10% or 20% or 30% of your income to something that you care about, despite looking at the current numbers and saying, “How am I going to do that?” Or perhaps it’s taking a bold step to start your own business, despite your fears of, you know, what if this fails? Or what will others think? Or I don’t consider myself to be a business-savvy person, so why even bother?

So again, I think there’s lots of resources out there that can help in this direction. And one that I would point to that really has had a profound impact in my life is the book “Miracle Morning” by Hal Alrod. And whether you’re a morning person or not, this idea of establishing a daily routine that includes things like setting goals and visualizing those goals, that includes things like reflecting on your day and gratitude and having a place for silence or meditation or prayer, having a routine and a plan in place, especially at a time when you have potentially a busy professional and personal life is incredibly important when it comes to this topic of setting big goals and achieving those goals. And I would recommend that resource, it’s a quick read, it’s a great system you can implement, “Miracle Morning” by Hal Alrod.

So my challenge to you here is to set one big, audacious goal for 2020. So for Jess and I, our big goal for 2020 is to buy four more rental properties this year. Now, I don’t know exactly how we’re going to get there. We were able to achieve our initial goal in 2019 of getting one property, thanks to the help of many others that were able to wrap around their expertise and really provide us with their time and their wisdom and help us get there. We wouldn’t have gotten there alone. So four is a big stretch goal. I really don’t know exactly how we’re going to get there, but we need to be thinking about it. We know this is a goal for our family for a variety of reasons. And so we initially talked about two, and we decided the stretch goal for 2020 is going to be four. So we’ll see where it goes, and that’s the big goal that we have for 2020. So No. 4 again here, we’re talking about setting one big stretch goal for 2020.

Now No. 5 is get a coach. And I think it’s fitting here that we have this as No. 5 because in order to do all the things that we’ve talked about, these are big things we’re talking about for 2020 when we talk about Nos. 1-5, getting clear on your “So what?” or your why; building or modifying your monthly plan to get there, obviously that’s the budget piece we talked about; getting a side hustle off the ground; and setting a big, audacious goal for 2020. We can see here in No. 5 why a coach could be so valuable. And what we really see when it comes to coaching as it relates to personal finance is that the evidence is getting more and more clear that a financial planner, a financial advisor, a financial coach, their value really is not to help you choose the right investments or to get the best returns because ultimately, we live in a world here in 2020 where you can pretty much learn anything that you want. And what the evidence is really showing, specific even to investing, is that the more passive you are in that process, typically the better the returns that you will have. So a financial planner, in my opinion — and we offer financial planning, so this obviously is front and center for us — it’s not about hiring a financial planner like us to be able to say, “OK, we’re going to outperform the market,” or “We’re going to help you choose the best investments that are going to beat another financial planner.” Now, we obviously want to have success in that area, and we’re going to help you fine-tune your investments, but that’s just one part of the financial plan. And when you think about this bigger picture, the why, the “So what?,” the budget, all the goals that are swirling around, a financial planner and the value of a financial planner is really having an accountability partner and a coach in the process that can help you prioritize and achieve all of these different goals that are out there.

And I can speak firsthand that the power of this and working with Tim, as Jess and I have worked with him over the past couple years. Now, this also reminds me of Episode 124, where we talked with Dr. Daniel Crosby, the author of “The Behavioral Investor,” somebody who studies behavioral psychology for a living. And really what I took away from his book and his interview is that at the end of the day, the two most important things that you can do when it comes to your financial plan is to automate your financial plan, which we talk about extensively on Episode 057, and to hire a coach to help ensure that No. 1 barrier, which is often yourself, isn’t getting in the way of having success with your financial plan. Automation and a coach. And that has exactly been my experience as I reflect back on the past several years. Automating our financial plan and having a coach has helped us to achieve our financial goals.

Other episodes that I would highlight here that you could get additional information, episodes 015, 016, and 017, Tim Baker and I did an entire series on financial planning and the different types of planners that are out there, questions to ask financial planners, how they get paid. In Episode 054, we talked about the importance of fee-only and fiduciary and why that matters. And in Episode 055, we talked about why you should care how a financial plan charges. We also have a great resource if this is something you’ve been thinking about, here we are at the turn of the new year, not a better time to make this decision, to make this a priority in 2020. We have a guide we have created, which is nuts and bolts to hiring a financial planner. And you can get more information and download that guide for free at YourFinancialPharmacist.com/nutsandbolts. And if you are somebody listening today that is ready to take this step or ready to learn more to say, is this the right fit for me? Please head on over to YFPPlanning.com, again, that’s YFPPlanning.com, and you can schedule a free discovery call with Tim Baker where you can talk out loud what our services look like, talk more about your specific financial plan, and determine whether or not it’s a good fit for you going forward. And again, that’s a free discovery call. And you can get that going at YFPPlanning.com.

So before we wrap up today’s episode, I want to remind you again about the giveaway that we’re doing for this month. We’re giving away five winners each a one-year YNAB subscription, a copy of “Your Best Year Ever” by Michael Hyatt, and a copy of “100 Side Hustles” by Chris Guillebeau. You can go to YourFinancialPharmacist.com/giveaway to enter that today.

So here we are in 2020. We’ve got a fresh start ahead for this new year. And I hope you will consider these five things that we talked about as a way to have a successful 2020. And of course here, with these five or others that you think about, it’s all about being intentional with your financial plan, all about dictating your financial plan rather than letting that financial situation happen to you. And so I think it’s important to look back on 2019, to look at the trends, to look at the successes, maybe look at the challenges or failures as well. But looking back, while that is important, I don’t think we want to dwell too much on 2019. We need to look ahead to 2020 and say, “What did we learn? What went well? What can we replicate? What can we do a little bit differently? And what’s the game plan going forward for this year so that at the end of 2020, we will look back and be able to say, ‘Job well done?’”

So I hope you have a great rest of your week. Thank you so much for joining me on this week’s episode of the Your Financial Pharmacist podcast. And as always, if you like what you heard on this week’s episode and you have not done so already, please take some time to leave us a rating and review in iTunes. We’d greatly appreciate that as that will help others find our show. Have a great rest of your week.

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YFP 132: 2019 Financial Wins from the YFP Community

Posted on December 26, 2019November 2, 2022 by yfpadmin

2019 Financial Wins from the YFP Community

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

Summary

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

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

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

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

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

Mentioned on the Show

Episode Transcript

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

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

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

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

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

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

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

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

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

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

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

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

“Paid my last ever student loan payment.”

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

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

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

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

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

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YFP 079: Is It Time to Redefine Retirement?

Posted on December 20, 2018 by yfpadmin

Is It Time to Redefine Retirement?

On episode 079, Tim Ulbrich, co-founder of Your Financial Pharmacist, interviews Dr. Nick Ornella, a 2009 graduate of Ohio Northern University, about his journey paying off his student loans in 10 months and shortly after taking one year off to travel the world. Tim and Nick share thoughts of what it means to redefine retirement and why the concept of mini-retirements are gaining traction. They finish the show up by getting practical with 7 steps you can take to plan for a year off.

About Today’s Guest

Nick Ornella is a 2009 graduate of Ohio Northern University’s College of Pharmacy. He began working for Walgreens when he graduated. Nick was able to pay off his student loans within 10 months. In 2016, he decided to take a year long leave of absence from work to travel. Nick spent an entire year traveling around the western United States, Europe, and east Africa. In 2018, he married his wife, Alanna, and they currently live in Cincinnati. Nick is now back to working for Walgreens as a pharmacy manager. Nick also created a blog called the Young Professional’s Guide to a Year Off to tell the story of his year off and to show other young professionals how to take extended time off work to travel.

Summary

On this episode, Tim Ulbrich interviews Dr. Nick Ornella, a 2009 Ohio Northern University graduate. Nick knew in high school that he wanted to become a pharmacist and began taking the necessary steps to do so. His parents helped to financially support his college career. Nick worked hard in school to earn scholarships from Ohio Northern University that helped to offset his indebtedness. He worked as an intern at Walgreens during school and took advantage of their tuition reimbursement program. At graduation, he had accrued $35,000 in debt.

Nick went to work the day he became a licensed pharmacist. He wanted to build a strong financial foundation and decided to live with his parents so that he could pay off his student loans as quickly as possible. After paying off his loans, he started 401(k) contributions and maxed them out. He avoided big purchases, aside from a 2011 Audi A5, lived humbly in a small apartment, didn’t use a credit card or rack up any credit card debt and minimized costs any way he could.

Nick was fed up with his job and decided, after a lot of contemplation a research, that he wanted to take a year off of work to travel. He had a nice nest egg in his 401(k) and $40,000 in his savings account with no other debt. He purchased several books on how he could travel frugally and for additional inspirational stories and information to help make this long-time dream a reality. He decided he was all in and would have no regrets. He was able to receive a leave of absence from work giving him the ability to take a year off to travel several places in the U.S., Europe and Africa. During his travels, he found himself often living in the present moment and truly finding contentment in his life, a feeling he had never experienced before.

Nick has come to realize that the concept of retirement needs to be rethought and that it’s important to step out of the rat race of work to create pockets of time that you can truly enjoy. Since his return, he created a blog and also lays out 7 financial steps to take a year off.

Mentioned on the Show

Script Financial
Young Professional’s Guide to a Year Off
The 4-Hour Work Week: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss
Vagabonding: An Uncommon Guide to the Art of Long-Term Travel by Rolf Potts
How to Travel the World: Travel Cheaper, Longer, Smarter by Matt Kepnes
Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money – That The Poor and the Middle Class Do Not by Robert T. Kiyosaki
YFP 032: Find Your Why (Part 1) – 3 Life Planning Questions w/ Tim & Jess Ulbrich
YFP 033: Find Your Why (Part 2) – The Path to Success w/ Tim & Jess Ulbrich
Year Off Blog: The 7 Financial Steps to a Year Off
Year Off Blog: Calculate Your Year Off Age

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 079 of the Your Financial Pharmacist podcast. We have a special treat for you on today’s show, Dr. Nick Ornelia, Walgreens pharmacist, fellow Ohio Northern University alum — go Polar Bears — and blogger at Young Professionals Guide to a Year Off. He’s going to share his journey of crushing it to pay off his student loans and shortly after, taking one year off to travel the world. Nick, welcome to the Your Financial Pharmacist podcast.

Nick Ornelia: Hi, Tim. Thanks for having me. Really honored to be here on the podcast.

Tim Ulbrich: Super excited to have you. And I’m fired up about talking about this topic. We’ve actually had lots of interest. People write in about this concept of retirement, should we be thinking about retirement in a different way? Many people know of Tim Ferriss’ work in the 4-hour work week, where he talks about this concept of mini-retirements. We’ll get there, but first, I want to take our listeners — and I don’t know if you’ll remember this, Nick, all the way back to January 4th, 2016, I actually pulled up my email before we were recording — brand new, the Your Financial Pharmacist blog had just started, and you wrote me an email. And the subject line was, “Taking a year off of work.” And I’m going to read this email quick because I think it’s going to set the stage for our conversation today and obviously, show our listeners of what you executed on in taking this year off. So you said, “Hello. Just wanted to know if you’ve ever heard of a pharmacist taking a year off work to travel and/or spend more time with family. If so, what kind of financial impact did that have on them? And what kind of difficulty did they have rejoining the workforce as a pharmacist? Thanks, Nick.” So Nick, with that in mind, give us the back story at this point in time, almost three years ago, when you were thinking about this idea of taking a year off. What was stimulating this interest for you? And maybe what fears were going on in your mind at that time?

Nick Ornelia: That’s incredible that you still have that email because I was scouring the internet at that time, trying to find any kind of example of any pharmacist or similar healthcare professional who had done something similar, just to see kind of like what their experience was and to get some information. And your blog popped up, and actually, I recognized your name. I knew you had gone to Ohio Northern. So I shot you that email, and you know, your response and your quick reply was actually a big kind of help for me, kind of a push out the door. So I will forever be grateful to the Financial Pharmacist for that. But the idea had been kind of brewing in my mind for probably at least a year before then, probably even longer. I had heard about people taking gap years, taking extended time off, maybe like after college or a sabbatical at some point in their career. So the idea was always in the back of my mind as a possibility that sounded pretty awesome and pretty cool, and maybe someday, I can do that. But I’d never really given it too much though until probably about April of 2015, so this was about a year before I started my year off. I was in a long-term relationship at the time. And it wasn’t going as I had hoped it to go. We ended up being two completely different people, and that day I remember in April, I remember we got in a big argument, and it just wasn’t my day. I was having a bad day. A bad day at work, I was kind of fed up with everything. And I went down into the basement, and I ordered three different books off of Amazon. And one of them was the book that you just mentioned, “The 4-Hour Workweek” by Timothy Ferriss. Another one was called, “Vagabonding” by Rolf Potts. And then the third one was, “How to Travel the World on $50 a day.” And that right there was like the first tangible step that I took that kind of set me on that path. And I read those books in a matter of days, and from that point on, it was a daily thing where I thought about it, I dreamed about it. And I really at that point, wanted to make it happen. So as I said, I was in that relationship and later that October, I believe it was, October 2015, about six months before I started the whole year of travel, that relationship ended amicably. We just realized we weren’t right for each other. And the day that that relationship ended, which was probably the hardest day of my life up to this point, very difficult, but that was the day that I decided to go through with it, to take the year off and to jump into it and have no regrets about it.

Tim Ulbrich: So Nick, when you emailed me, you didn’t talk about financial fears, per say, but I’m guessing there were things at the time you were thinking about as a young practitioner, 2009 graduate, maybe fears around whether it’s job security or am I going to be delaying retirement? All these things. I mean, what was going through your mind at that point of potential financial barriers that you saw or — whether they were real or not or maybe perceived to be greater than they were — but financial barriers that you saw that may have prevented you from taking that year off?

Nick Ornelia: There weren’t too many, honestly. I had done a really good job — I’m sure we’ll get into this, but I paid off my loans super quick. I had a nice nest egg in my 401k. I had about $50,000 saved up in my savings account. And after reading that book, “How to Travel the World on $50 a day,” you know, if you calculate that out, 365 days, that’s about $19,000 I think is about what that works out to. That’s traveling relatively cheaply. I knew I didn’t want to travel that cheaply. So that’s where that extra money came in. So I knew, even if I traveled as cheaply as I could, I knew that I would have enough money to last the year. So I was not concerned about running out of money there. I did think quite a bit about the opportunity costs, so you know, you’re going a whole year without earning any money. You’re going a whole year without contributing anything to your 401k. And if you’re looking 30-40 years down the road, that money, if you max it out at $18,500, that’s going to be a considerable amount of money that you’re potentially missing out on. So I thought of those opportunity costs, but then I thought of myself sitting there at the age of 65, you know, with all this extra money but then the thought of never having gone through with this dream of mine to take a year off work. And that was kind of ultimately one of the main reasons why I decided to do it. I was afraid of that regret. Yeah, the money would be great to have at that age, but what are you going to spend it on then? I’m young now, I have the opportunity to do this right now, to live in this moment for an entire year. And so that’s one of the main reasons why I did it. But the financial risks, I mean, probably the biggest risk I was worried about then was my ability to make money. Our biggest asset is our ability to make money. And you know, just being concerned about coming back to a job, to full-time work. But I was prepared for anything. I was prepared to find a different job just to make ends meet for the time being until I was back to full-time pharmacist work. So the financial risks, you know, I looked at them, but I tried not to worry too much about them because if you worry about every single little thing like that, you’re never going to take a leap, you’re never going to take a risk. And you’re going to kind of be stuck sitting on your hands. So eventually, I just was like, whatever. Let’s just jump in and do it. And if I’ll end up on my last dime, I’ll kind of worry about that then. But in the meantime, let’s just do this.

Tim Ulbrich: I really hope, Nick, our listeners will go back and rewind and replay the last few minutes of what you said. I think there’s so much wisdom there. And you know, we talk about the x’s and o’s of personal finance, all of which are important. But at the end of the day, this reminds me back to the conversation Tim Baker and I had with Jess, my wife, and I about really finding your why and not losing sight of your passion, your interests, your purpose, in addition to the x’s and o’s. And I think it’s easy to get hung up in making sure you have your t’s crossed, your i’s dotted with your personal finances. But one of my greatest fears that I share with what I think I heard you say was looking back 30 or 40 or 50 years from now and saying, I saved up all of that for what? What was the purpose? And I think the enjoyment of life experiences is huge. And I’m so glad you took that leap of faith, and I think your story is going to encourage so many others that are maybe feeling in a rut or they’re stuck, they’re stressed and really wanting to pursue a similar path. And we’re going to get tangible here in a little bit about how they can think about doing that. But what I also want to say is I don’t want to brush over what I know you did, which is huge, is you had a solid financial foundation, which allowed this to become a reality. And so many people that are listening are thinking, wow, I’ve got $200,000 student loan debt, I’ve got credit card debt, I’ve got this going on. I’ve got young kids and expenses and I don’t have margin to do something like this. And I think what your story resonated to me, as I’m reading right now through “Rich Dad, Poor Dad,” for a second time, is he talks about the importance of having a strong financial foundation so you can take risk. Now, in his book, he’s really talking about risk from real estate, the business aspect, doing some things that are entrepreneurial, but I think taking risk of taking time off and developing yourself is another aspect of risk. So share with our listeners for a moment, how did you build that strong foundation? You paid off student loan debt in 10 months, you built up some savings, you began retirement, how is that possible? And what was the strategy of doing that in such a short period of time, which takes many other people maybe five or 10 years to get to that point?

Nick Ornelia: Yeah, sure. First of all, you just mentioned the episode about the interview of you and Jess with Tim Baker.

Tim Ulbrich: Yeah.

Nick Ornelia: THat was my favorite episode by far so far, just hearing you guys talk about your whys and the questions that he was asking you just really got me thinking, and I literally, I was at the gym when I listened to that episode. And right when the episode was over, I just got out my phone and I texted my wife and I told her, “I love you.”

Tim Ulbrich: Awesome.

Nick Ornelia: So that, the stuff that you guys are doing is just fantastic in that regard. So I wanted to get that in there. But yeah, going back, my kind of financial story. I mean, really it started in high school, and I just decided to go to pharmacy school. I knew I was good at math and science, and I knew that pharmacists made a good salary, and that honestly kind of why I chose it. And so I went in knowing that I was doing pharmacy and knowing that I would have the degree after six years. And I went with the best financial package, which happened to be Ohio Northern. And so really did a good job of minimizing my debt. My parents were paramount in that. I know they helped me out quite a bit throughout my college years, and it’s something that I’ll never forget, it’s something that I plan on paying forward with my children. But I also, you know, at Ohio Northern, it’s a bit different for all the student listeners out there. Our last two years, our scholarship was based completely on our GPA from our first four years. And there were days that I buckled down, and I went and I studied and I got good grades and got a pretty good financial package for the last two years of pharmacy school. So I was able to come out of ONU with only about $35,000 in debt. I had also taken some money from Walgreens, I started as an intern there and took every single dollar that they offered as far as tuition reimbursement, which really helped minimize my debt as well. So upon graduation, I went right into work. I didn’t mess around. The day I got licensed, I went into work later that day. So I jumped right into it. I was living with my parents at the time and just continued to live with them and my sole purpose in life was to make that $35,000 in debt disappear. And I did owe my dad a little bit of money for a car so I had to pay that off as well. So I just lived at home with my parents, didn’t do much but work, picked up extra shifts and by I think it was January — I got licensed in I think June or July and then by that following January-February, I hit that final payment button. And that was the end of the student loans for me. I know it’s not as easy for a lot of listeners. And I’m forever grateful for that. That’s something that I’ll forever be grateful for. But at the same time, you know, once I paid off my loans, I still kind of kept in that saving money mindset, so as soon as I paid those off, I started my 401k contributions. And from the get-go, I maxed them out. I was throwing 15% of my salary. I started it that January right after I paid off my loans. So I had been maxing that out ever since then, ever since January of 2010. And then also, I really avoided the big purchases. I was young and dumb a little bit. I bought a 2011 Audi A5. You know, you guys call it the million-dollar car and essentially, it is a million-dollar car.

Tim Ulbrich: It might have been 2, right?

Nick Ornelia: But you know, I did that. And that was probably my biggest financial mistake leading up to my year off. I didn’t buy a house, I rented a small apartment that was easy to furnish, cheap, and all my other spending was kept in check. I wasn’t buying new gadgets, I never had credit card debt, never a penny of credit card debt. So I just saved as much money as I could and minimized my costs as much as I could. And that really helped build that financial base that you were talking about, really building the net worth. I know you guys are big net worth guys, and I was really able to do a good job of that over those four or five years leading up to when I actually decided to take a year off.

Tim Ulbrich: Yeah, and Nick, what I appreciate about your journey there — and I hope the students listening heard that your financial foundation post-graduation starts when you’re in school. It’s the decisions you’re making. Yes, you had parental support, which is awesome, but also in there was scholarships and pursuing those types of things, being intentional about putting yourself in a position to get those scholarships. It’s about doing everything you can post-graduation to minimize accumulation of interest and keeping costs down and not buying big homes and other things. So yes, you had help. But there’s intentionality in that and all the way back to your P1 year at Ohio Northern, building that foundation and your parents helping you do that, obviously was a big factor in allowing you to do the things that you’re doing today. So let’s get to the point of, you make this decision, say, “You know what? I’m doing this. I’m taking a year off.” Walk us through that conversation with your employer. What was their receptiveness to it? What security, if any, did you have about if I take this year off, will my job be here? Take us through that conversation with your employer and what was going through your mind at that time.

Nick Ornelia: Yeah, sure. So when I decided to do it, that day that I decided in October of 2015 that I’m going through with this, no matter what, I knew I had two options. I knew I had the option of trying to figure out a leave of absence. And then the alternative option was to quit, to just walk away. And I had it in the back of my mind that even if I can’t work out this leave of absence, I’m going to do it. I’m going to quit. It’s what’s going to be required for me to do this. But I’m going to do it if that’s what it comes down to. So I had that idea in the back of my mind, that kind of promise to myself to do that. But you know, obviously, I wanted to work out a leave of absence. It’s a lot more preferable to quitting, obviously, to have at least some sort of guarantee of work to come back to in a year. It takes a big worry off your mind so you’re able to enjoy the year a little bit more. And to be able to walk back and make any kind of money to begin supporting yourself again is really important, if you can make it happen. So I started looking on the Walgreens website, on our internal website, and found the leave of absence form. And it was the same form that you use for — I think you used it for family medical leave, for personal medical leave, I think even for maternity leave. But the very last option, leave option, was just a personal unpaid leave of absence. And it was left completely blank, no discretion, no direction as what to use it for. So that was my route, so I printed that form out and I needed three different signatures on it. I needed a signature from somebody in my store, which I had my pharmacy manager Jason who happens to be one of my best friends. He was super excited for me when I told him about it, and he signed the form no problem. He was one of my biggest supporters, just an incredible guy.

Tim Ulbrich: That’s awesome.

Nick Ornelia: Forever thankful for him. So I got his signature, and then I needed my district supervisor’s signature, which she had the same thing. She was super pumped for me and excited. And then I needed a signature from somebody in the leaves department, and I got all three of them and got approved for the leave of absence starting April 1, 2016. And then I had to be back to work by March 31 of 2017. Otherwise, I would be terminated. So I basically had this entire year to do whatever I pleased. And I was completely up front with what I wanted to do. I told them, I said, “Hey, I want to travel for a year. This is where I’m going to go, this is what I want to do. I will be back in a year. I want to work for Walgreens, I don’t want to work for anybody else. I love this company, I like my job. But this is what I want to do right now.” And so I got the necessary signatures, and I’ll never forget the day that I got the letter saying my leave of absence was approved. It was a pretty exhilarating day to know that I had this great big adventure planned ahead of me. So it was pretty awesome.

Tim Ulbrich: Yeah. What I like about that part of your story, Nick, is that to me, when I hear about the reaction from your pharmacy manager and your district manager and how excited they were for you, that tells me the level of value that you had brought to the organization. You know, because if you’re somebody who’s a mediocre employee or a disgruntled employee or an OK, average employee, you’re probably not getting that reaction. So I think it just speaks more to what we’ve talked about before on this podcast about as we encourage and coach people through career aspects is focus on the value that you’re providing to the organization. What value do you bring each and every day? And the rest of it will take care of itself, whether it’s opportunities, whether it’s salary increases, whether it’s things like this where you’re granted a year off and ultimately, have excitement around it as well. Now, I know you and I talked a little bit before the show and before we hit record that technically, there was no guarantee of employment upon your return. But you know, you had some indications that there was support for you in that journey. So you had some peace of mind in that aspect. Is that correct? Is that fair?

Nick Ornelia: Yes. So going back to what you said about being a good employee. That’s paramount to getting a leave of absence like this approved. Just thinking from a manager’s standpoint, I’m a pharmacy manager now. Just thinking from that standpoint of, if I had an employee, one of my best employees, come to me and say, “Hey, I want to do this for a whole year. I’m going to leave, but I will be back in a year.” I kind of know that they’re probably going to quit if I don’t approve the leave of absence. But then I think about, you know, in a year, OK, I’ll be able to have a very good, fully trained, highly competent employee back working for me and no problems. So really, it’s almost — if you’re that good of an employee, if you work your butt off and you do everything that’s asked of you, then it’s to the benefit of the company and to your boss for them to approve that leave of absence and, you know, at least get some sort of a guarantee of you coming back to work for you. Now, on the flip side, if from their perspective it was we’re approving this leave of absence, but at the same time, we don’t know where we’re going to be a year from now. So we can’t completely, fully guarantee you any kind of promises as far as number of hours per week or where you’re going to be, where you’re going to be working. But I was prepared to hit the ground running from the bottom like I did when I was a new grad. I figured I would have had to go right back in the floating and it might have just been part-time work, but anything, even just a couple days of work a week would have been enough to kind of get me back on my feet and get me going again until I eventually work my way back into a store in a full-time position. So yeah, you’re right. There was no guarantee of anything coming back. All that leave of absence did was preserve my company start date. And it preserved — or it suspended my benefits. So that way, when I came back, my benefits would resume how they were before my leave of absence. So yeah, that was kind of one of the risks that I took, but it was worth it to me. It was worth it to me to have a year to pursue my dreams and passions and have to kind of start over with my pharmacy job and pharmacy career. But that was a risk I was willing to take. It’s funny how it all worked out, though. I ended up not having to start from the bottom. So the guy who replaced me in my store, I was a staff pharmacist at the time. I’d been at the store with Jason for I think five years at that point, four or five years. And so the guy that replaced me took a manager’s position at a different store about two or three months before I was due to come back to work. And Jason convinced the district supervisors to hold my position for me at my old store until I got back in like two or three months. So I was able to go right back into the exact same store, the exact same position, full-time work. I think my first day back was March 27, 2017. It was a Monday. And I was right back standing where I was a year ago at that time. So it was quite incredible how it all worked out.

Tim Ulbrich: So let’s talk about your trip. Let’s talk about what you saw, where you went, how much money it had cost you throughout the year. And for me, maybe more importantly, what you learned about yourself during that year.

Nick Ornelia: Sure. So the money aspect, I mentioned I had about $50k saved up in a savings account. $10k of that to me was pretty untouchable. It was my emergency fund and my fund in case I needed money when I came back to keep me going and get me going again. So I had about $40k to spend for the whole year. I had mentioned that book, “Travel the World on $50 a Day,” so I knew if I traveled cheap enough, then I could keep my costs around — my living costs, my living costs, my food, my shelter, my travel, plane tickets, that kind of stuff. I knew if I kept that around that cost, that would leave me about $20,000 extra dollars to basically spend on whatever I wanted to do. So that was kind of my budgeting plan. It wasn’t much of a plan, but at least it was something. But I had limits in mind. I knew I wasn’t going to go over a certain amount. So yeah, so my first six months, I am an absolute huge fan of America’s national parks. I am just in love with them, so I had been to quite a few before then, but I wanted to try to hit as many national parks as I could and as many of these just incredible places out west. So the first six months, I spent out west. I drove all the way to California, spent a couple weeks in the Sierra Nevada mountains, which I know you and Jess are big fans of that. I climbed Mount Whitney, which is the highest mountain in the Lower 48 states. I did that as part of a charity fundraiser thing.

Tim Ulbrich: Yeah, I remember that.

Nick Ornelia: Which was really cool to be able to raise some money for a pretty cool charity that I support. So yes, I did that and then headed over to Utah and spent like three weeks in Utah, just hiking around all the national parks there and exploring just an absolutely incredible state. And I met my buddy Tony in Colorado, spent a week in Colorado white water rafting, and then we drove home together, went to a couple Major League Baseball stadiums along the way. I went home — so I got home early June, spent a few weeks at home in June, and then at the end of June, I headed back out west. My buddy Sam accompanied me this time. We spent another week in Colorado, just hiking around the mountains, backpacking, camping. And then from there, I drove back out to California. I hiked the John Muir Trail, which is about a 220-mile trail through the Sierra Nevadas, which was two of the best weeks of my life, just the beauty of the places that I saw. Just stunning. And then from there, I headed north up into Washington and from there, I spent about three weeks in Washington. I climbed Mount Rainier, which is just one of the most beautiful mountains in the world, in my opinion. And from there, I headed east towards Wyoming. And we haven’t talked about this much, but I was dating somebody at the time. So I mentioned my relationship ended, and a couple weeks after that, I met Alanna, who is now my wife. So I met her — so we were dating at the time, and so she’d decided to fly out. She met me in Wyoming, and we spent two weeks together in Wyoming. And that was really when I knew I really liked her at the time, she was super supportive of my trip. And when she flew out to meet me and we spent those two weeks together, that was pretty much when I realized I wanted to marry her. So that was just an incredible back story of my whole year off, which we don’t need to get too much into, but from there, we drove home. After that, I flew to Europe in September. I spent two and half months in Europe, just backpacking around. My sister accompanied me for a week in Paris and London. And then I came back to Cincinnati for the holidays. And then right after Christmas, I flew to Africa. And I had signed up to do six weeks of volunteer week in Uganda. And then I went to Tanzania for three weeks, I climbed Kilimanjaro, went on safari there. Also in Uganda, I went on a safari, I went and saw the mountain gorillas, did all the fun stuff there. And then Alanna met me again in Kenya for my last two weeks of my year off. And we volunteered together, went on safari and just had an absolute blast.

Tim Ulbrich: And Nick, I’m getting chills just hearing the experiences you’ve had and thinking about obviously what relationally it did for even just building a good foundation for you and your wife now and that experience and some of the mission and service work that you did. And so I think you’ve partly answered that, but let me wrap that around about as you look back on that year, what are some of the things that you learned about yourself during that year? Because I have to imagine when you’re doing that kind of travel, you’ve got work set aside, there’s probably lots of time for reflection and growth. So what were some of your takeaways from that year?

Nick Ornelia: Sure. One of my goals was to learn as much as I could. So I read constantly. I think I read probably around 40 books throughout the course of the whole year. So you know, just learning practical day-to-day and just reading some great literature and great books. I think I learned, I learned quite a bit. A lot of it, in regards to my career, I learned quite a bit. So when I was volunteering in Uganda, I actually volunteered at a pharmacy there. It was a government-run healthcare facility. And they actually had a small pharmacy. It was a closet. It was like 6-foot by 8-foot. And they only had about 25-30 medications that they dispensed. And I was basically given the keys to the place after my second day of work. So I learned quite a bit about the differences in healthcare between a third-world country and our country. And I learned how it is so easy for us here in America to take everything for granted and the opportunities that we have and the long lives, the long, healthy lives that we live here, it’s just overwhelming to look at the differences between those two. So I learned to really appreciate my health, appreciate everything I have here at home, everything that we have here in America, the healthcare system that we have and the opportunity that we have career-wise as well as pharmacists. But there was a lot of personal things that I kind of learned and I think I improved on as well. I think I was always, you know, prior to my year off, I was always thinking ahead or I was always reliving past moments. I was never able to fully live in the moment and fully appreciate a relationship or appreciate my life the way it is. I don’t think I was ever able to just sit down and say, man, I feel like totally, completely content right now. Everything is just perfect right now. I was always thinking ahead or thinking back and worrying about this or worrying about that, and that year just kind of caused a lot of that to just evaporate. And it’s continued on now. I just notice things, just sitting down and just enjoying myself and just not needing any stimulation and not needing to have the TV on or anything like that. This might sound kind of creepy, but one of my favorite things to do is to just observe my wife. I just love just seeing her facial expressions and the way she laughs and the way she does different things. And it’s just really cool to kind of have that perspective and to be able to just slow down now and just take a deep breath and just say, man, this is exactly where I want to be in life. I don’t want to be anywhere else.

Tim Ulbrich: And to be present, I think just what you said there, again, to me, highlights how many things we miss each and every day of not being present, you know, that are right in front of us. So Nick, as I hear you talk about all of the things you did during this year, the things that you learned about yourself, the opportunities to serve, what you were able to obviously gain relationally — to me, it begs the question of do we need to rethink the concept of retirement? So I think kind of the concept that we all know, we’ve been raised in is you grind it out for 40 or 50 years, you save up a nest egg, and you hope you’re healthy enough to use it and enjoy it. And we know many stories of people that aren’t able to do that or things change or they never save it up, they keep working. Does your experience beg the question of whether or not we should rethink this concept of how we do retirement?

Nick Ornelia: I think it absolutely, most certainly does. You know, this idea of just working and working and working in hopes of this great and happy retirement, you know, I think it’s a lot more possible nowadays. We live long lives. The life expectancy is increasing, and you are able to live a good life. And there’s nothing wrong with that way of thinking. Millions, billions of people have gone about it that way and have lived very happy, fulfilling lives. So there’s absolutely nothing wrong with that. But if you’re given the opportunity to pursue something different, to maybe live life a little bit differently, I think you — when you’re able to step out of that rat race for awhile, of the busyness of everyday life and just step back and be able to think and reflect — it help you grow a greater appreciation for everything that you have. And it creates these pockets of time throughout your entire working life where you’re able to just be fully happy and just enjoy yourself and not be caught up in the rat race of life. It’s not an easy thing to do, you know. It takes pretty good financials and a bit of risk, but I think that’s kind of the wave of the future. There’s becoming more and more literature out there about that. There are countries, European countries, Australia, New Zealand, that sort of thing is actually encouraged — taking extended time off. Some countries actually even have walls that protect a worker if they do decide to leave work for a year that allows them to go right back into their same position. And I think you’re seeing more of that today now with — I know Walgreens and I know CVS just recently announced a new paternity maternity leave. We get eight weeks of paid leave whenever we have children. So I think there is a trend kind of in that direction. But yeah, if you’re able to pull it off, it’s a life-changing experience, and it’s incredible. I can’t speak more about it.

Tim Ulbrich: And that’s why I appreciate you sharing your story. I think as I’ve talked about this concept with many pharmacists, I would say most, if not all, say, “Yes. I get it. I agree,” but struggle with the tangible aspect of show me somebody who’s done it and how do I do it? So let’s there in this show as we talk about seven financial steps to take a year off. We’ll link to your blog post about this topic because I think it’s spot on. So we’ll do it in an abbreviated kind of a rapid-fire format. I’m going to pitch each of these out here so our listeners can hear all of them, and then we’ll go back through them one-by-one and hit the main highlights. So in your blog post — and we’ll link in the show notes over at your blog, which is at YPYearOff.com, you talk about seven financial steps to take a year off. Those seven are No. 1, create an emergency fund. No. 2, pay off credit card debt. No. 3, pay off student loans. No. 4, start 401k/IRA contributions. No. 5, start saving for your year off. No. 6, increase 401k/IRA contributions. And No. 7, add more money to your emergency fund, finish retirement savings and finish your year off savings. So first off, No. 1, create an emergency fund. What’s your recommendation for people here when it comes to an emergency fund?

Nick Ornelia: $10k. Quick and easy, $10k. I mean, that’s going to cover everything you need beforehand and then coming home, $10k is more than enough to last you until you get back to full-time work. So $10k is what I had.

Tim Ulbrich: No. 2, pay off your credit card debt. You know, I think probably the most common question some people may have here is how do you balance that with the student loans, which is No. 3. So what advice do you give people there?

Nick Ornelia: So the high interest stuff, get rid of the high interest stuff first. Credit card debt is going to be your highest interest stuff. So if you have any of that stuff, just get rid of it. It’s terrible. Credit cards are fine. You can earn some really nice rewards points and get some nice round-trip flights for your year off by using a credit card, but pay it off in full every month.

Tim Ulbrich: And then third, you have pay off student loans, which we’ve talked extensively about on this podcast. So let’s jump to No. 4, which is start 401k/IRA contributions, which I’m guessing many listening may struggle with this concept of I want to take a year off, I need to save some money. But I also want to be balancing and thinking about the future. So what advice do you have here in terms of people initiating retirement contributions?

Nick Ornelia: Yeah, before a year off, I think it is important to kind of get some money, a good chunk of money into a 401k or an IRA. You know, when you get it into there at a young age, you’re able to take advantage of compounding interest for a longer period of time. And it’s a nice financial cushion to have. Even though it’s pretty much untouchable, you know, it is money that’s yours. And if in the absolute worst case scenario, that you get into trouble during your year off, you have a serious injury or something and you absolutely need the money, you have that money there. Now, it should be completely untouchable in your mind. But it’s that extra financial cushion and that there’s extra years of compounding interest to keep your future financials in order as well.

Tim Ulbrich: Awesome. No. 5, you have start saving for your year off. What is typically — obviously dependent on where people want to go, what they want to do — but what’s a rough number that you give people in terms of how much they should be saving for a year off?

Nick Ornelia: I think $40,000 is — I mean, that’s how much I had. And I lived cheaply. I camped a lot, I stayed in hostels, I stayed in volunteer houses. But I never had to say no to anything that I wanted to do. So if I wanted to spend $1,500 on a safari in Tanzania, which I did, I had no qualms about that. I had the money to do it. Now, obviously if you can’t reach $40k, it is possible to do an entire year for less than that. You can do stuff a lot cheaper than $40,000. And the other thing is, you don’t have to be gone for a full year. You can cut it back to six months, $20,000 for six months. That would make it easier to get a leave of absence possibly. Or even cut it back even further to three months if three months is all you can get. Then maybe you only need about $10,000 or $15,000 for that three months. But $40,000 for a year will give you one heck of a year.

Tim Ulbrich: Absolutely.

Nick Ornelia: You will have a great time.

Tim Ulbrich: And we’ll link in the show notes to the book you referenced earlier that talked about $50 a day. I think getting examples and things people can read will help with that. And obviously reaching out to you as well and hearing your story. No. 6 is increasing 401k/IRA contributions. We talked about that. And No. 7 is adding more money to emergency fund, finish retirement savings and finish your year off savings. What I love about your seven steps here, Nick, is 1, they’re tangible. But 2, what it does is it allows you to go off and to enjoy this year. And I think to reap all the benefits that you did with having a peace of mind that you’ve got a solid financial foundation in place. You’ve got an emergency fund, you’ve got no credit card debt, student loans hopefully are gone or minimized, you’ve begun retirement savings. You’ve got cash for this year off, so it’s really allowing somebody to enjoy that time, which goes to my last question here. And we’ll link to this in your blog as well. But you talk about the concept of calculating your year-off age, which I love because I think it takes this concept, which can maybe seem somewhat nebulous and start to become very tangible and start so that a lot of people can put a goal to say, “OK, at the age of x, I’m going to actually do this. I’m going to make this happen.” So briefly talk us through how to simply get to that calculation of what their year-off age is.

Nick Ornelia: Yeah, sure. I mean, really, all it is is kind of a net worth calculation. You’re trying to reach a goal net worth and based on how much money you make every year, you subtract out your expenses per year so you’re able to figure out, you know, an exact dollar amount of how much you’re able to save to put toward your net worth to pay off debt, to start your 401k contributions and to save for the year off. So based on what your difference, what the gap is between how much money you bring in per year and how much money is going out towards expenses, you can figure an exact age as to when you would have $40,000 for the year, when you would have a good start on retirement savings and when you would have your student loans paid off. So you can, based on that, figure out the exact age that you will be able to do it. So like you said, it does make things tangible to have an idea of what age it’s possible. And then it also opens up the avenue of figuring out ways to cut back on your expenses. And then you recalculate your year-off age, and you’re like, “Wow. If I cut out this expense, I’d be able to — my year-off age would be a year earlier than that.” So you know, it creates that timeline in your head and kind of makes it easier to adhere to your budget.

Tim Ulbrich: So make sure to our listeners, head on over to the Young Professional’s Guide to a Year Off, YPYearOff.com. Again, that’s YPYearOff.com, where you can get more information about the seven financial steps to take a year off. You can calculate your year-off age. You can follow Nick’s journey. And Nick, thank you so much for taking time to come on. You’ve inspired me. I’m confident you’re going to do that same thing for our listeners. So really appreciate you taking this step out, taking this risk, and then being willing to share your story with other pharmacists that are part of our community. Thank you so much.

Nick Ornelia: It’s been a blast, Tim. Thank you so much.

Tim Ulbrich: As we wrap up another episode of the Your Financial Pharmacist Podcast, I want to thank today’s sponsor, Script Financial.

Sponsor: You’ve heard us talk before on this show about Script Financial. YFP team member, Tim Baker, who is also a fee-only Certified Financial Planner, is owner of Script Financial. Now, Script Financial comes with my highest recommendation. Jess and I use Tim Baker and his services through Script Financial and I can advocate for the planning services that he provides and value of fee-only financial planning advice. Meaning that when I pay Tim for his services, I’m paying directly for his advice, not for products or commissions that may cloud or bias the advice he is giving me. So Script Financial specifically works with pharmacy clients. So, if you are overwhelmed with student loans or maybe confused about how to invest and save for retirement, or just frustrated with the overall progress you are making on your financial plan, I would highly recommend checking out Tim and Script Financial to see whether or not his services are a good fit for you. You can get started by scheduling a free call with Tim Baker by going to scriptfinancial.com, and clicking on ‘Schedule a Free Call.’ Again, that’s scriptfinancial.com.

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YFP 077: Making the Financial Transition from PharmD to Residency

Posted on December 6, 2018November 2, 2022 by yfpadmin

Making the Financial Transition from PharmD to Resident

On episode 77 of the Your Financial Pharmacist podcast, Tim Ulbrich, founder of Your Financial Pharmacist, interviews Dr. Michael Murphy, a 2018 PharmD graduate of THE Ohio State University College of Pharmacy and current PGY1 pharmacy practice resident in ambulatory care at Ohio State. Dr. Murphy served as the APhA-ASP National President from 2017-2018. In this episode, Dr. Murphy and Tim talk about his financial transition from student to resident, what he wishes he would have known financially during pharmacy school and how being involved in professional organizations has put him on the fast track to a successful career.

About Today’s Guest

Michael Murphy, PharmD is a PGY1 Pharmacy Resident in an Ambulatory Care Setting at The Ohio State University College of Pharmacy. Born in Columbus, Ohio, Michael attended Hilliard Davidson High School and then headed down the street to complete his undergraduate degree and attend pharmacy school at Ohio State. During his time at the College of Pharmacy, he found his passion in advocating for an enhanced educational experience for today’s student pharmacists and for the future of the profession. Michael focused on these passions through involvement in student organizations and has held several volunteer leadership positions where he served his peers and profession, including his term as the 2017-2018 American Pharmacists Association Academy of Student Pharmacists (APhA-ASP) National President. Michael is interested in pursuing a career in academia where he looks forward to training the next generation of pharmacists and advocating for the advancement of the profession.

Join APhA

Join APhA now to gain premier access to YFP facilitated webinars, financial articles, live events, resources, and consultations. Your membership will also allow you to receive exclusive discounts on YFP products and services. You can join APhA at a 20% discount by visiting www.pharmacist.com/join-now and using coupon code ‘AYFP18’. For more information about our financial resources, visit www.pharmacist.com/financial-education.

Summary

On this episode, Tim Ulbrich interviews Dr. Michael Murphy. Dr. Murphy went to Ohio State University and graduated from his undergraduate degree with no loans. He began taking loans out for his first year of pharmacy school and took out the maximum amount for four years.

Q: What would you have done differently then now that you know that borrowing the maximum amount isn’t the best option?

A: Dr. Murphy explains that he would have learned about budgeting, monitor your day-to-day spending and also shares the importance of not taking extra student loans out for vacations. After your first semester, you can figure out how much money you actually need instead of just continuing to borrow the maximum amount.

Q: What’s your strategy to make finances work well in marriage?

A: Dr. Murphy shares that communication, cutting costs where you need to, and working together to set fun goals helps are ways to help make your finances work well in a relationship.

Q: Did the indebtedness ever play a factor in deciding to continue your education/residency instead of getting a job right away?

A: Dr. Murphy said this definitely played a factor, but he has seen his mentors go through residency and be able to pay back their loans. He said that he looks at residency as an investment to move his career forward and knew that was the best choice for him.

Q: How are you deciding which repayment plan to choose?

A: Dr. Murphy says that originally he was very ambitious and chose the standard repayment plan for his loans. Now, he and his wife are working with a financial advisor to see what will make the most sense. They are going to switch to an income-based repayment plan and work on paying off other loans first. He has a goal of paying off his loans in 10 years.

Q: How did you make the decision to work with a financial planner?

A: Dr. Murphy said that he wasn’t familiar with student loan options, retirement or investments and thought that going to an expert was the best decision. They chose someone that other family members have used and they feel comfortable working with him.

Q: What tangible benefit do you feel like professional organizational involvement has played for you as a student but also in transitioning to residency?

A: Dr. Murphy said that it’s important to think about what brings value to the money that is being spent. APhA is always fighting for the future of the profession so pharmacy remains relevant and a successful provider. APhA provides resources to help you prepare and practice at the highest level. The relationships that have been formed, although intangible, provide so much value.

Q: After joining a professional organization, what advice do you have for students and new practitioners to further their involvement?

A: Dr. Murphy suggests to take a small positive risk like applying for a leadership position or starting a new project that you are interested in. If you are unsure of how to get more involvement, ask.

Mentioned on the Show

APhA
YFP Episode 072: Investing Mind Tricks: How Behavioral Bias Affects Our Decisions
YFP Financial Planner
Start: Punch Fear in the Face, Escape Average and Do Work That Matters by John Acuff
The Mayor of Castor Street: The Life and Times of Harvey Milk by Randy Shilts
YFP and APhA Partnership
Your Financial Pharmacist

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 077 of the Your Financial Pharmacist podcast. Excited to have a special guest on today’s show, Dr. Michael Murphy, past president of APhASP, current pharmacy resident at the Ohio State University, excited to talk with him about his transition from student to resident. And obviously, now I just officially began my new job at Ohio State. So excited to be here alongside another Buckeye who’s been a Buckeye for a long time. So Dr. Murphy, welcome to the show.

Michael Murphy: Hey, Tim. Super excited to be here. Thanks for having me on the show.

Tim Ulbrich: So I’ve only been at Ohio State, Michael, for a week. And man, the Ohio State culture and energy and that traditions and the legacy, it’s no joke. It’s a lot of fun. And you’ve been there awhile. What — nine years now?

Michael Murphy: Yeah, I’ve been there for nine years. And you know, I don’t think they can get rid of me. I love being a Buckeye, all of the opportunities that it provides to me, my career, and of course, getting to go to those football games, that’s fun too.

Tim Ulbrich: Absolutely. I have to up my game when it comes to Buckeye gear. I’m lacking the Buckeye gear. So as I’ve gone into work over the past week and been in other people’s offices and been there for a Buckeye Friday, I’ve realized that I’ve really got to up my game in that area. So why don’t we start by just tell us a little bit about yourself, including your decision to enter pharmacy school. Why did you want to be a pharmacist in the first place? A little bit about your journey through the PharmD and then ultimately, what led you to choose and pursue the residency training and the path that you’re doing right now?

Michael Murphy: Sure. I’d be happy to. So I am Columbus, Ohio born and raised. I grew up in Hilliard, which is a suburb of Columbus. And while in high school, I started taking some science classes. I took chemistry. And I knew immediately that I loved science. Actually, this is kind of funny. I was the proud only member of the high school chemistry club.

Tim Ulbrich: Only member.

Michael Murphy: Yes. I was real popular in high school. Around the same time, I started volunteering at the Ohio State Wexner Medical Center. I had volunteered, I would take patients from their rooms to their cars when it was time for them to go home. And I just loved seeing these patients on their best day because they were finally getting to go home. So I knew in high school that I loved science, I loved health care, and I was trying to find this way that I could tie those two ideas together. And around the end of high school, my grandfather ended up passing away. And he had been a pharmacist in the Cleveland, Ohio area for about 50 years. And it’s kind of funny how I just learned more about him throughout the process of, you know, him passing away and learned more about the impact that he had made on his community and his profession. And I’ll never forget going to his funeral and seeing all these community members come out that I had never really heard about before, but he’d made a huge impact in their life as this local community pharmacist. And I knew right there that that was the profession for me. I wanted to be a pharmacist so I could make as big of a difference in my community as my grandfather had. So I knew from 16 that I was going to be this pharmacist. And I went to Ohio State with that in mind and stuck around for eight years, and here I am.

Tim Ulbrich: Yeah, and I love that story, Michael. I remember when you were in your national presidency of APhASP, talking a lot about finding your legacy and finding that place that you have in the profession. And hearing you link that back to the inspiration from your grandfather is such a cool story. And so you go into Ohio State — and for those that don’t know and while it’s changing right now, Ohio State is a 4+4 program, so you do four years of undergrad and you do four years of pharmacy school. Obviously, you mentioned that you’re in year nine with your residency. So when I hear eight years, I think, holy cow, we’re starting to think about student loans. This is obviously a financial podcast. So talk me through the financial journey. Did you have loans coming out of undergrad in a pharmacy school? And how did that transition work?

Michael Murphy: So I was really lucky in undergrad. My parents were able to help me significantly with my undergraduate tuition, so I did not have loans coming out of undergrad. But going into pharmacy school, I went through the first year of applying for the FAFSA and seeing that transition. It was pretty significant. And I immediately started to feel that burden, just knowing that this money was not mine. But I should be spending it. It was a weird transition. But now, going through pharmacy school, I took out the max that I could for those four years. And I definitely — there are some things that I wish I had done differently, now looking back. I’m glad for my experience, it was a very positive experience during the pharmacy school. But there was definitely things I could have done differently to help myself now that I’m in this financial situation that I am today.

Tim Ulbrich: So let’s talk about that for a minute because I think you brought up an important point that is very, very common that obviously the trend I think is typically to take out the maximum amount of student loans. I did, and I didn’t really think about it in the way I now reflect back on it, right? Which is just part of lessons learned. So obviously, that being one thing you might do. What advice would you have back for your P1 self, looking and saying, OK, I came out of undergrad, I’ve got no student loans thanks to the help of my parents. Now I’m entering into pharmacy school and kind of starting to escalate that indebtedness because of the borrowing the full amount. What would you have done differently in terms of borrowing that money or budgeting through that phase? And what are some things you wish that you would have known during that time?

Michael Murphy: Well, one, I would have introduced P1 Michael to the word “budget.” I think that would be one thing. I watched my money somewhat. But I wasn’t too concerned when it came to little things like going out for dinner or getting lunch, cups of coffee, the normal things that every student needs to do. And when I was thinking about some advice that I could give to a first-year student pharmacist, I would say definitely don’t do what some of my friends did, which they took their extra student loans and they went on these extravagant vacations. Never do that. But also watch your day-to-day because looking back now, that is some of the times that I spent the most money because I would say, “Oh, I’m too busy to go to the grocery store on the weekend. I have to study.” So I would end up having to go out for dinner multiple times a week and go out for lunch. And that stuff adds up quick. So watching the day-to-day can be a significant change in what you can do to help with some of this financial burden. And then after that first semester, you can figure out how much money do you really need? You probably don’t need that full amount. You can budget for yourself to make financial smart decisions now so you’re not regretting them in four years.

Tim Ulbrich: Yeah, absolutely. And I think a couple things there that really stand out to me, Michael. Obviously, the concept of the budgeting piece, of course. But also just the reality of the nickel-and-diming of those expenses, right? And I think we all feel this now. I mean, I’m thinking of the last time I just logged onto my Huntington checking account, and none of those charges look extravagant, but something here, something there, something there, and obviously, those add up over time. And then I hope for the students that are listening to the podcast, you know, they heard that message of reevaluating how much you really need because we’ve been preaching before on this show at anybody who will listen that when you’re borrowing money in school, obviously that is accruing interest. And then that’s going to capitalize when you graduate and you get to the point of active repayment, which you’re just coming up on now and we’ll talk about here in a minute. And so I think it’s for those that have gone through this situation, and you’re looking at yourself in a situation like Michael and somebody who has around the average indebtedness or myself, somebody who had a little bit more, that certainly you want to learn from the lessons and the actions that you took. But obviously, there’s only so much value in beating yourself up. But for those students who are listening, try to figure out what could I do differently right now? And how could I pivot to be able to make some different decisions? So let me transition this a little bit — my understanding, you got married during pharmacy school to your wife, Robin. Is that correct?

Michael Murphy: Yeah, we got married right after my P1 year. So we actually got married about four days after my first year of pharmacy school. And that was a rough transition in itself because the idea is you’re planning about a year to a year and a half before the wedding. And starting pharmacy school and that transition, things just got put off initially to winter break. And then winter break, we were like busy with holidays and seeing family, and things got put off again. And then all of a sudden, we were scrambling. But everything turned out perfectly, as it always does.

Tim Ulbrich: And one of the questions that I always like to ask any couple or anybody on the show that’s working together with somebody else — and obviously, your situation being unique that you got married during school and you’re adding somebody else’s financial picture into the mix. But for you and Robin, what works well for the two of you? I mean, when you’re hitting all cylinders with your finances and you’re doing this well — we all know that that’s not all the time or we’d be lying, right? — but when it’s working well for the two of you, what is the strategy to make that happen?

Michael Murphy: So I think the most important thing is communication. Working with your significant other to set goals that work for both of you so that you can help cut costs where you really don’t need to be spending money. So I’ll use the example of eating out. That’s an easy way to make a pretty quick transition to you just going to the grocery store, preparing ahead of time, setting yourself up for success so you’re not going out to lunch multiple times a week. But also working together on setting fun goals. So part of financial planning, at least for me, is not just about cutting back but using your extra funds in a responsible and valuable way for your own experiences. And I think that’s pretty important. So you’re not just cutting back, but you’re really using those extra funds for something that means a lot to you. So if that’s for me and Robin, that’s going out and exploring a local craft brewery or going to a local restaurant and doing the things that we love to do or taking a quick day trip or for Robin, who is a dairy farmer, going out and seeing some of her favorite cows and maybe putting in a bid at an auction for a cow.

Tim Ulbrich: That’s awesome. I remember — correct me if I’m wrong — but when you were explaining to me before you recorded of what Robin’s doing, you mentioned something like the dairy farm equivalent of like APhA from an association standpoint. Is that right?

Michael Murphy: Yeah. So she works on her parents’ dairy farm a couple days a week. But she also works for the American Guernsey Association, which is what I liken to the APhA for dairy farmers.

Tim Ulbrich: That’s awesome. I love that. So let’s talk about this transition. So you go through eight years of school, undergrad, PharmD, you come out with roughly the average indebtedness, a little bit less than that. And one of the questions I often get — and my previous job was working with students, thinking about how this financial piece plays into the career decisions that they make. And I can comfortably say I felt like it was rare five, six, seven years ago that many people were thinking about this financial piece in a significant way of impacting the decision they made on residency or no residency. But that seems to be changing a little bit as the indebtedness continues to grow. And so my question for you is did the indebtedness — obviously you decided to pursue residency — but did the indebtedness ever play a factor that you thought, eh, maybe I will or maybe I won’t do this because of that dollar amount and the debt you had, versus just going out and getting a job and starting earning an income?

Michael Murphy: Hmm. That’s a good question. I mean, it was definitely a factor. I didn’t put too much weight into it because I’ve seen so many of my mentors go through residency and take that year of investment in their future and into their careers. And they’re able to still pay off their student loans, and it’s not significantly contributing to any problems that they see in the future. But it was definitely a factor. And I guess it depends on the way that I think about residency. Some people think that, oh, you’re taking a pay cut for that year. I think of it as me paying for this experience. And for me, I want to make sure that if I’m paying the difference between what I’m making as a resident and what I would be making as a starting salaried pharmacist, that that experience is worth it for me for my growth and for a springboard for my future career. So I felt like that investment made sense for me. It doesn’t make sense for everyone, but it made sense for me and for my career goals. Now, the idea of not being able to start paying off my student loans as quickly and as hard as I would like to, that’s definitely been something that I’ve been thinking about a lot lately, especially as now I received my first notice from Nelnet, the company that is managing my student loans, saying that my first paycheck is due to them.

Tim Ulbrich: On your birthday, right? Happy birthday.

Michael Murphy: Yeah, it’s due on my birthday, which is just —

Tim Ulbrich: That’s cruel. That’s just cruel.

Michael Murphy: But I’ve seen some of my friends now that started just right off in the community, and they’re able to put more of their monthly salary to their student loans. And you know, it’s just a difference in what we’re able to contribute at this time.

Tim Ulbrich: Michael, one thing I love that you said that just hit me — and I’m going to use this as I talk to student pharmacists, and I wish I would have this mindset — is looking at the residency training year as something you’re paying for — and I love how you said basically, the difference. So if you take a pharmacist is making $100,000, just for an even number, and you’re being paid as a resident whatever, $40,000 is an even number, that you’re making that investment of essentially — one way of looking at it is saying, “I’m taking a pay cut.” The other way of looking at it is say, “I’m investing $60,000 toward this component that’s going to advance my career and the skills and the development of myself.” And I think that’s huge as a mindset shift, right? I mean, if you think of it that way, all of a sudden, it changes probably how you’re getting the most value out of that experience and from your preceptors and the mentorship and all of that. So I love that. And I hope that you’ll continue to shop that message to anybody that will listen because I think that can be such a game-changer for people to make sure they’re getting the most of that year, to look at that year as an investment. So you make this transition into residency and now, as you mentioned, here you are. Here you are in essentially November at the time of recording this, and you get that happy message that hey, grace period is up. And I always joke on the show, I feel like the grace period is anything but gracious because the interest is still accruing, but you don’t have to make payments. All of a sudden you have to make a payment, nonetheless on your birthday. How are you going about making the decision of which repayment option you’re going to choose? Because so many people get hung up, as we’ve talked about before on this podcast, making that decision. So how did you and Robin work through as you’ve had this time in the grace period to say, OK, once I go into active repayment, this is the best game plan for us?

Michael Murphy: So for me, when I initially went through exit cousneling, I was a little bit too ambitious and thought that, oh, I’m going to be making x amount of dollars per month, I will definitely be able to contribute much more than I actually can. So I picked, initially, one of the standard repayment models, which with my student loans is over $1,000 per month, which is just too significant for what I can currently pay on a resident salary. So I’m now going through the process of working with Robin and working with our financial advisor, which is one of the first things that I did once graduating. I can’t advocate that enough to students is to find a financial advisor, start getting advice early on. But working with our financial advisor to find out which repayment plan would make the most sense for me, especially this first year in residency. And we decided an income-based repayment model would be the one that makes the most sense for us because right now, we can spend some time focusing on some of our other debt, like Robin’s car loan, like Robin’s student loans that are a little bit smaller. And then we can be paying off some amount to my student loans as well. And then eventually, we will be able to bring all of these payments together and be putting our full force towards my student loans. The idea that was shared with me is this idea of a snowball that you’re slowly building up steam over time and as the snowball rolls down the hill, it builds and builds and builds, and eventually, you’re putting your full force towards this one student loan.

Tim Ulbrich: I like that. And so what I heard there is essentially, you had jumped out of the gates and said, “OK. I want to do the standard repayment, the 10-year repayment.” The reality of that, of course, is a big payment if we’re looking at let’s say $150,000-160,000 of student loans, resident salary. So then you took a step back and said, OK. For you and Robin, what are the other financial goals you’re trying to achieve, what other debts are you trying to pay off? How much income do we have in our monthly budget that we’re working with? And then obviously, that led you down the path of one of the income-driven plans. And it sounds like you’re still kind of working through which one of those. Is it PAYE? REPAYE? Is it one of the IBR plans? The old IBR? The new IBR? But I know for many — and I’m guessing this is the thought for you as well — that that is a floor, but then obviously, as time goes on, you can of course make extra payments if you decide to in the income-driven plans. Is that the thought you have?
Michael Murphy: Yeah. Unfortunately, I am still very ambitious. And I think that my biggest goal would be to have these paid off in 10 years. And I know that’s probably unrealistic, but I believe in stretch goals.

Tim Ulbrich: Yes.
Michael Murphy: If you shoot for the stars, you may not get to the stars, but you’ll probably get a lot farther than you would have if you’d aimed low. So I figure I’m going to aim for 10 years, get everything paid off, and if it ends up being 12, hey, at least it’s better than 20.

Tim Ulbrich: So Michael, my prediction — just knowing you and working with other people — my prediction is it’s going to be 5 or less for you. And I think that’s why I think that’s going to happen is as I’m sure you’ve talked with other people, I know I experienced this myself, once you start catching the fire of actually seeing that snowball rolling down the hill and getting some momentum, you just get fired up about making it happen quicker, and it impacts how you make other decisions. So certainly no guarantees, but we’ll touch base and kind of follow the journey. But that’s my prediction here is 5 years or less. But I like what you said there about the timeline. So you did mention, which is interesting because not many new graduates choose to work with a financial planner or financial advisor. And I know many new grads, myself included when I graduated, struggle with evaluating the benefits of what that planner can provide versus obviously the investment in doing that and engaging that relationship. So how did you and Robin make the decision that for you, it was best to pull the trigger to invest in and purchase in terms of the value of working with a financial planner?

Michael Murphy: So for me, I mean, this is going to be showing a little bit about myself, I guess it came down to my naivete. I wasn’t too familiar with some of these different student loan options that I could choose between and also just this idea of investing in my future and in a retirement plan and trying to set up some of our investments. I’d always heard this idea that you need to start early, but that’s kind of where the advice ended. I didn’t really know where to go from there to start early. So I figured that I should probably reach out to someone that has more experience than me, just like how our patients come to us for advice on their medications, I figured I should probably go to the expert for advice on what to do to set myself up for success. So that’s the reason that Robin and I reached out to someone that had worked with members of our family before to help them plan for their finances. It was someone that we knew and trusted and we knew that we would feel comfortable with. And we reached out to them, and our first visit was very positive. They talked us through what the next six months are going to look like and what we can do to help start paying off our student loans and at the same time, start investing in our retirement and 40 years down the line and what we want our future to be. And I thought that was interesting because initially, I was just going to think about my student loans. But if we start investing now, we’re going to see significantly more benefits later on than if we waited. So I thought all of that advice was really impressive. And it gave me a lot of confidence that I made the right choice to reach out to someone for help.

Tim Ulbrich: I really appreciate your maturity for you and Robin. I feel like — as probably other new grads can relate — I felt like coming out of school at 24, and even though I had $200,000+ of debt, I felt like I liked the topic enough and want to learn about it that I’ve got this myself. And the piece I forgot and it took me awhile to realize is that so much of this, especially for new practitioners, is so complicated with all these moving pieces and parts. But also, so much of this is so behavioral that even if you have the knowledge and especially I think in a situation with a spouse to have a third party help work through a financial plan can be incredibly powerful and keep you accountable in that plan, even if you have the right knowledge. Ultimately, so much of this topic can be behavioral. And Tim Baker and Tim Church just talked about recently about the behavioral biases that come with investing. And so we have been advocating over and over again on this show about the benefits — and while it may not be for everyone — what you should look for, questions you should ask to make sure you’re working with somebody that has your best interests in mind. YourFinancialPharmacist.com/financial-planner, we’ve got lots of information that will help you hopefully find and ask the right questions to be working with somebody that we think will help you holistically and comprehensively work on your financial plan and not just focus in on one piece. And I like what you said there, Michael about obviously, it’s just much bigger than just one part, whether that be student loans, investing or any part of the plan. So finally, I want to shift gears and talk about your involvement in professional organizations because obviously, you had a very notable role as the national president of APhASP and for those that don’t know, again, correct me if I’m wrong, Michael, APhASP I believe is 22,000+ members strong. Does that sound about right?

Michael Murphy: So depending on the year, we usually hang out around 30,000 members.

Tim Ulbrich: OK. I’m underestimating. So incredible number of student members, all colleges across the country. Obviously, a very highly sought-after position. And in my opinion, the office of the president of APhASP is a reflection of really the cream of the crop of students across the country that are seeking this position. So first of all, congratulations and kudos on getting selected for that position. I know I got to see you kind of work throughout that year and had a chance to have you on campus at NeoMed and visit with our students, which I know you provided them a lot of inspiration. And so one of the first questions I want to ask you is, what tangible benefit — and I’m sure there’s more than one here — but what tangible benefits do you feel like professional organization involvement has played for you, both as a student, but also in this transition because I know I hear from many new practitioners, they struggle with the tangible benefit of the membership. And they’re purely looking at maybe the cost of joining and can’t necessarily see how that’s going to play a role in their professional development or other areas. So what did that mean for you as a student and mean for you as you’ve made this transition into residency?

Michael Murphy: So for me, now I think that is a very important question because we need to think about what brings value to the money that we’re spending. I think that’s what is so important about this podcast is thinking about what we are spending our money on and making sure that it is all of value. And one of those valuable experiences that I always know that I will spend money is my membership to APhA. And that’s because it brings value to me when I was a student, it brings value to me as a new practitioner, and it’s going to bring value to me throughout my time as a pharmacist. And that’s because APhA is constantly fighting for the future of the profession to make sure that the pharmacist will always be a relevant and accessible healthcare provider. So for me as a new practitioner, some of the tangible benefits that I have been able to get are resources. So it can be overwhelming all of a sudden going from this shift, from student where you have this safety net to the pharmacist. And it can be scary of all of a sudden thinking that, whoa, I am the last line of defense. I need to make sure that I am as skilled, confident, as possible so that I can take the best care for my patients. And I think that APhA, through their practice division, provides a great level of resources so that you can practice at the highest level of your potential. Additionally, I know that some of the resources that you can gain through attending their conferences are out of this world. I just went to the MP Day of Life for the first time in July in Washington, D.C., and I learned about this woman’s health initiative out of Indiana, and we listened to a woman’s health pharmacist and learned about some of the different resources that they use in their practice to ensure that they’re using the best oral contraceptives for their patients. And I took that resource and I use it just about every day in clinic, where I’m getting questions from different physicians, asking which oral contraceptive do I pick? There’s so many different ones with different ideas. Which one should I use? And it’s nice having this resource that I was able to get because I attended an APhA conference. And then I mean, the tangible benefits, I can go on and on. But for me, some of the greatest value is in the intangible — the relationships that I’ve been able to form with my friends going back from 5-6 years ago when I first started getting involved in APhA to the relationships that I’m forming every day with different APhA members. And one of the things that is nice about APhA is not just health systems pharmacists or community pharmacists or managed care pharmacists. It’s everyone. And you can really find different ways that you can get to know pharmacists from across the spectrum so that you can find out ways that you can help them, and they can find ways to give back and help you in your career.

Tim Ulbrich: Yeah, that’s great stuff. I couldn’t agree more. And I had the opportunity to serve as our chapter advisor of APhASP at Neomed and, you know, what I always heard over and over again is there’s a hesitancy from some students to jump in. But once they jumped in, they got involved in the meetings, they attended a national meeting, maybe a mid-year meeting, they got involved in advocacy — once they saw it, you know, and it became real to them, obviously they caught fire. And that was so much fun to watch. And the follow-up question I have for you is I think we have many students and practitioners that are listening that are thinking, OK, maybe I’ve joined an organization before, but I didn’t go anywhere beyond that. And so they didn’t necessarily see the value in continuing that membership. So outside of, of course, making that initial decision to join, what advice would you have for students or new practitioners to then further get involved so they can really experience the value of their involvement?

Michael Murphy: So I think one of the best things that you can do is to take a small positive risk. And if that risk is you saying that you’re interested in running for a leadership position, let’s say one of the new practitioner network standing committee applications that are going to be due on Dec. 1. Take that small positive risk. If you want to get more involved, you can do it. Take that risk. If you’re a student pharmacist, and you’re saying that “I want to make a difference in my community,” start a new patient care project that follows your passion in your community and reach out to your chapter executive committee to find ways that you can get involved and make a difference out in the community. There are so many ways that you can get involved, but what you need to do is ask. Reach out to your local leaders or to your leaders within the new practitioner network, and find out ways that you personally can get involved. I just heard a interesting quote from one of my preceptors the other day. And I think it’s just perfect. And the quote was, “A hungry person with a closed mouth never gets fed.” So the idea is if you don’t ask for food, you’re not going to get fed. You’re not going to get fed with what you need. But if you reach out, you ask for what you need, then you will see results immediately. So reach out to your local leaders, reach out to the new practitioner network, the new practitioner advisory committee, and they can give you the resources that you need to get involved more, get that full value from your membership.

Tim Ulbrich: I love that. It reminds me of one of my favorite books I read a couple years ago called “Start” by Jon Acuff, and it’s that idea of taking that idea, taking that risk and that next step and inevitably, any time you do that, the next door opens and it keeps going from there. And I think it’s just part of that mindset that you spoke of earlier. OK, we’re going to finish up the show and have some fun. We’re going to put Dr. Murphy on the hot seat. I’m going to give four questions in a rapid-fire format. Quick question, quick answer. So first question I have for you, Dr. Murphy, the greatest opportunity you feel like we have as a profession right now here in 2018?

Michael Murphy: I think our greatest opportunity as a profession is to realize the impact that we can have out in our community. I believe that the future of pharmacy is in the community and is a mixture between the community pharmacist and an ambulatory care pharmacist, working almost as a primary care pharmacist. But we need to advocate for ourselves to our patients and our legislators so that we can make a difference in providing preventative care for our pharmacists.

Tim Ulbrich: What do you think is the greatest threat that is facing our profession right now?

Michael Murphy: The greatest threat, that is a good question. For me, I think the greatest threat is feeling content, feeling like this is as great as it can be. I always know that any situation can be better if we have an innovative stage of mind and we realize that through hard work today, we can see positive results in the future. We just need to get to work today. So I think our biggest threat is just feeling content. But I know that we can overcome that if we get to work today, and we will see results tomorrow.

Tim Ulbrich: What’s one step that those are listening can take to help advance the profession of pharmacy?

Michael Murphy: Reach out to another healthcare professional or to your patient and ask them to write a letter to their local legislator about the impact that pharmacists can make in their lives. And this will show that pharmacists don’t just make an impact, and pharmacists aren’t just fighting for themselves, but other members of the healthcare team and their patients can see the impact of pharmacist-provided care. And that will help advance pharmacy on a state level and the national level.

Tim Ulbrich: Awesome. My last question is I know you’re a learner. So what are you reading these days, either for fun or even to help develop yourself further?

Michael Murphy: Sure. So one of the books that I’m reading right now, and I feel like I’ve been reading this for awhile because residency sure is busy is the biography of Harvey Milk. And he was the first openly gay city legislator of a major city in San Francisco back in the ‘70s. And it’s really interesting reading about how this person fought against all the odds. He fought against all these people that were saying that he didn’t deserve to be a leader, but he knew in himself that he was a leader. And he didn’t listen to those people that were trying to tell him the type of person that he needed to be. He listened to himself. He listened to that voice inside that was saying that he should go out and make a difference in his community. So I love reading biographies because I love reading about how great people became great. And it reminds me of this idea that I once heard from one of my favorite professors — that if I read about how great people become great, maybe someday I can be great. And that’s what I strive for every day.

Tim Ulbrich: I love that, Dr. Murphy, and thank you so much for coming on the show today and for being an inspiration for me and many others as well and, of course, for your commitment to the profession of pharmacy. I really do appreciate it and think many listeners are going to get great value from today’s episode.

Michael Murphy: Thanks for having me, Tim. It was a ton of fun.

Tim Ulbrich: So before we wrap up today’s episode of the podcast, I want to again thank our sponsor, American Pharmacists Association.

Sponsor: Founded in 1852, APhA is the largest association of pharmacists in the US with more than 62,000 practicing pharmacists, pharmaceutical scientists, student pharmacists, and pharmacy technicians as member. Join APhA now to gain premier access to YFP facilitated webinars, financial articles, live events, resources, and consultations. Your membership will also allow you to receive exclusive discounts on YFP products and services. You can join APhA at a 20% discount by visiting pharmacist.com/join-now and using coupon code ‘AYFP18’. For more information about the financial resources we offer in partnership with APhA, visit www.pharmacist.com/yfp

Tim Ulbrich: And one last thing if you could do us a favor, if you like what you heard on this week’s episode, please make sure to subscribe to in iTunes or wherever you listen to your podcasts. Also, make sure to head on over to yourfinancialpharmacist.com/ where you will find a wide array of resources designed specifically for you, the pharmacy professional, to help you on the path towards achieving financial freedom. Have a great rest of your week!

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YFP Bonus Episode: How A Couple Left Their Careers to Travel the World

Posted on September 3, 2018 by yfpadmin

YFP Bonus Episode: How A Couple Left Their Careers to Travel the World

On this Bonus Episode of the Your Financial Pharmacist Podcast, Tim Ulbrich, founder of Your Financial Pharmacist, interviews Matt and Nikki Javit from Passport Joy about their journey of walking away from their successful careers to travel the world full-time. Matt and Nikki talk about what inspired their journey, how they are managing to do this financially and travel tips and hacks they have learned along the way.

Summary of Episode

Matt and Nikki knew that they wanted to travel full-time before retirement and had been dreaming about the day they could do so. They took several exotic international trips together through Matt’s career as a technology services sales professional and met so many others traveling the world. This inspiration eventually sparked Matt to purchase a one-way ticket to Santiago, Chile turning their dreams into a reality.

Prior to their departure 18 months ago, Nikki worked as a clinical pharmacist for a number of years. She realized that she was solely identifying herself by her pharmacy career and came to the understanding that there was more to life than her job. Although she invested hundreds of thousands of dollars into her pharmacy career, she knows she will be able to step back into it if and when she feels ready. She hasn’t stopped reading and learning even though she isn’t practicing. Matt also left behind a successful sales career and is confident of an easy transition when he’s ready to return to the workforce.

Matt and Nikki worked diligently to pay off their student loan debt, as well as other debt they had accumulated, and saved so they could travel without thinking about any financial burdens. They travel with a set budget which allows them to explore places all around the world while connecting with different cultures, volunteering their time and, of course, making forever memories.

About Today’s Guests

Matt and Nikki Javit are currently traveling the world full-time with just a single backpack each after leaving the US in February 2017. They have been to places like Machu Picchu, the Galapagos Islands, and The Taj Mahal and amazing cities like Hong Kong, Venice, and Cape Town. During their travels, they find creative ways to keep down their costs, get involved in the communities, and network with locals while having a great time.

Before they left to travel full-time, they loved their careers in Indianapolis Indiana where Nikki was a clinical pharmacist and Matt was a Technology Services Sales Professional. They enjoyed hanging out with friends, spending quality time with family, and volunteering in the community but they loved to travel. So after dreaming about it for a while, they decided to take the leap of faith. They document all of their adventures and share travel tips to save time & money on their podcast and blog at PassportJoy.com.

Mentioned on the Show

Real Estate RPH
Passport Joy
Passport Joy Podcast
Pharmacy Leaders Podcast with Tony Guerra, PharmD
The Compound Effect by Darren Hardy
Workaway
Trusted Housesitters
Airbnb

Episode Transcript

Tim Ulbrich: Matt and Nikki, welcome to the Your Financial Pharmacist podcast, excited to have you and thank you for joining me while you’re in and traveling in Osaka, Japan. So thanks for coming on.

Nikki Javit: Thanks for having us.

Matt Javit: Thanks so much.

Tim Ulbrich: Well, I am so excited. And as I shared with you all before we jumped on the call today, I am inspired by your journey, following your podcast and your blog. And when I heard a little about your journey, what you’re doing, and I found out Nikki is a pharmacist, I said, ‘We have got to have them on the show to learn a little bit more about their journey.’ And also, shoutout to Tony Guerra who interviewed you recently who brought your journey to my attention. So as we get started here, I’m going to read a brief bio of who you are, your journey and what you’ve been doing. And then I’m going to have you introduce yourselves, and we’ll kick off the conversation from there. So Matt and Nikki Javit had stress-free lives in Indianapolis. They love hanging out with their friends, spending quality time with their family and making new connections in their vast network. They were both considered very successful in their careers, and they loved their bosses and coworkers. But the desire to travel full-time was already on their mind, and they knew the window would be soon closing to turn a dream into reality. So on February 21, 2017, with a single backpack each, they flew to Santiago, Chile with a one-way ticket that would start their journey around the world, checking off the bucket list locations like Machu Picchu and the Galapagos Islands, the Sistine Chapel and the Taj Majal, creating new and exciting lists every week on where they want to explore next. So again, thanks for joining. And Nikki, I just have to know — as I listened to your first episode and I heard you launch that background to tell the story, coming downstairs and you found out Matt had booked that one-way ticket, which became the fulfillment of a dream you had been talking about for a long period of time. What were your thoughts and your emotions when that day happened?

Nikki Javit: Well, the first time he came down, I thought to myself, we can reverse this situation. We had talked about this, and it was — I mean, it’s always been a dream of ours. We probably, prior to him purchasing that one-way ticket, had talked about it for at least 3-5 years. But it was always just a dream. It was something that was like, we would meet someone on vacation or meet someone well younger than us, and they were doing something like that, traveling the world, they’d left everything behind. And you know, for me, it was, wow, that would be so fun and amazing to be able to do something like that. And so Matt and I, while we were out amongst each other over dinner or at home in the privacy of our home, we had these conversations and say, ‘Oh my gosh, how cool would that be to travel around the world?’ Like get our affairs in order, figure out what we need to figure out at home, and then go travel for an extended period of time. And then when he told me that he purchased that one-way ticket, I kind of — it all just became like a reality for me, but I still in the back of my mind was like, holy crap. I’m working, we haven’t really laid out any solid plans for this. We’ve just been talking about it for so long. And not that I didn’t think he was serious, but I was just like, wow, now is the time. So yeah, it was kind of scary.

Tim Ulbrich: So Matt, I have to give you credit. That’s a bold husband move. I mean, I feel like in my household, I probably would get kicked out the door if I did that. So props to you. Obviously, you guys had been talking about, and we’ll get to that a little later. What I want to start with is for the audience and our community here, a little bit more about your background. Because I think for both of you, your background is very interesting in terms of your careers and the success that you had and obviously leaning to the decision to pick up and travel for several years. So Matt, share a little bit about your background, you know, I heard on the podcast, growing up in a military family and then some of the positions you’ve had since then. Share with our audience a little bit more about you.

Matt Javit: Yeah, thank you. So at a high level, moved around a bunch as a kid, went to three high schools. But I played basketball throughout that, so it was great and easy to get friends and meet new people. And it was a lot of fun. Played Division I basketball, so I had a Division I basketball scholarship out of high school but then ended up bouncing around, just because of playing time and situational stuff. Ended up going to four different undergrad colleges and finished at University of North Carolina Greensboro where I’m proud to say that I did graduate on time, though, and went to a fifth university to get my MBA and coached junior college basketball for two years. And then from there, started a clothing line, moved from Texas back to Indianapolis to do that with my brother. And at that time, I bartended at night and hustled during the day. And towards the end of that bartending, kind of running that bar for three years, met Nikki, and that changed the course of my life, obviously. Decided to get what was deemed a ‘real job’ in the mortgage industry and then did that for three years when I got a promotion to go out to Las Vegas to run an office for about a year of that while Nikki was finishing up her doctorate degree at Butler. And then I ended up coming back home because that’s when the recession hit. Came back home to Las Vegas after we’d lived apart for about a year. And was very fortunate and blessed to get hired by a technology company, a technology services, international technology services company, to do sales in that field, which was all brand new for me. I didn’t know anything about technology, but I did know how to sell at some level and then just cut my teeth, grinded really hard for two years, put in a ton of time and effort, and then finally hit my stride probably two and a half years in, and turned that into a wonderful run of nine years at that company, ending in five straight international sales achievement awards, which also fueled our love for travel because at the time, that took us to different parts of the world because those incentive trips were in exotic places like Chiang Mai, Thailand; Goa, India; Cape Town, South Africa; and Istanbul, Turkey.

Tim Ulbrich: Yeah, I love that part of your story and the success you had at work and incentive trips that helped fuel your passion for travel. These weren’t Disney World trips, right? These were obviously seeing different parts of the world, which helped fuel that passion, which is cool. And Nikki, your background as a pharmacist and, you know, doing undergrad and then making that decision to go into pharmacy school — lay that background for us because I think that’s going to be important for our listeners to hear as we talk a little bit more about your decision to pick up and leave the profession of pharmacy. So how did you get into pharmacy? And then tell us a little bit about the work you did after graduating from Butler.

Nikki Javit: Yeah, so I grew up in Chicago. And then I went to undergraduate school at Indiana University Bloomington. And I studied biology. And I wasn’t sure if I was going to go to medical school or not, so I kind of just took a limbo year, so to speak, off. And in that limbo year, after I had graduated from undergrad, I moved from Bloomington to Indianapolis with a girlfriend I had lived with in school. And she was going to nursing school at IPUI, and I had to get a job to pay the bills. So I applied at a pharmacy, and I started working at a long-term care pharmacy with my biology degree, and I helped manage a long-term care pharmacy. And I knew at the time that I wasn’t done with school, and I had met a really wonderful mentor who I still talk to to this day, who was the pharmacist in charge of that long-term care pharmacy. And he really had great conversations with my about just my career path and what I wanted to do. He noticed that I really took an interest in my current situation, and he was the one that suggested to me that I apply to pharmacy school. I honestly had never even thought about it before. And my biggest concern was is that I had moved from Chicago to Bloomington then to Indianapolis, and I was like, I really don’t want to move to Lafayette and not know anyone. And he was like, why don’t you just apply to Butler? So I didn’t know that Butler had a pharmacy school, so I applied to Butler Pharmacy School, and I was accepted in as a transfer student. So that’s where, essentially, my journey began as a pharmacy student. During school, I worked, I got a job. I switched from the long-term care pharmacy and a lot of my friends that I met at Butler were working in retail pharmacy settings, and I just felt like I could learn a lot more that way. And so I got an intern job at CVS. So I interned throughout pharmacy school at CVS and then upon graduating Butler, I was a staff pharmacist for about a year and then transitioned into a pharmacy manager role for about two years before moving onto a hospital pharmacy position. I was just a little burnt out, I had a couple things happen to me during my time at my retail pharmacy, and I just felt that it was time for me to move on. So I started working at Indiana University, and I started at just basically a staff pharmacist, verifying orders, etc. And their program there is awesome and unique in the fact that it’s a teaching university. And they pair you up with clinical pharmacists and you can specialize in basically a patient population that you like. So they have ICU, they have organ transplant and then they’re associated with the Simon Cancer Center. And I really liked working with oncology patients, so I worked with oncology patients for two years solely. And then I was presented with an opportunity where IU Health was opening up a startup company. And they were having a brand-new specialty pharmacy. And I was asked if I would want to try to apply for the position because there was several other people that were interested in it. And so I interviewed for that, and I got that role. And I helped manage these specialty pharmacy and oncology patients, MS patients, and CF patients and a couple other subsets of patients, but essentially, prior to me living on this journey, my last role as a pharmacist was in an outpatient setting as a specialty pharmacist.

Tim Ulbrich: Got it. So you’ve got a successful career, you’ve got your doctorate degree, you’ve worked in community practice, you’ve worked in obviously you mentioned the long-term care connection initially, you end up in the specialty world. So I think the one thing our listeners are going to want to know that I want to know was you spend all this time, money, invest in the doctorate degree — and we’ll obviously talk a little bit more about your journey of traveling and what you’re doing now — but tell us about that decision, when you made that decision that I’m willing to pick up and leave this career, how hard was that decision? And what fears were you facing, if any, when you made that decision?

Nikki Javit: The decision, for me, was actually a very difficult one. I think it was more difficult for me than it was for Matt. I think I defined myself by my profession, and you know, for awhile, I think that I let that get the best of me. I remember having conversations with Matt and saying, you know, ‘I really do want to travel. I want to go around the world, and I know that now is the time. But I just fear if I walk away from my profession right now after everything that I’ve worked so hard, this is the ideal position that I want to be in, you know, that it’s just not a good thing.’ And you know, the conversations between Matt and I were, well, what makes you happy? It’s just like, does your job make you happy? Well yeah, it makes me happy. But what would make me happier would be is to travel the world with someone who also wants to travel the world with me. And the more I thought about it was is that no matter how long I step away from my profession, I’m always going to have my degree. Like no one can take that away from me. No one can take away from me that I went to school, that I have my doctorate in pharmacy. And yeah, there’s going to be people that are going to say, ‘You haven’t practiced pharmacy for x amount of years.’ But I still think that they can’t take away the fact that I’ve had, you know, 10 years of experience prior to that or I still do continuing education. And it’s not like I’m done reading. It’s not that the knowledge just goes away. And of course when I go back, I’ll be rusty if I choose to go back to that profession, but I think what happened was that I just let my career solely define who I was as a person when I don’t think that’s necessarily a healthy thing to do. There’s so much more to life than just what you do for a job. And once I got to that point and I was OK with that and letting go of that and realizing I can always come back, and I can always be a pharmacist or do something in healthcare, then I was OK with leaving.

Tim Ulbrich: That’s great, and that was part of what inspired me as I was listening and following your journey is seeing you be able to make that decision and obviously not that you don’t value what you’ve done education-wise because obviously, you do, but what I heard through the podcast is that your desire to enter pharmacy was a passion out of helping people. And as I was listening to the journey and what you’ve done, you’re finding a way to fill that bucket of helping people as you’re on this journey of traveling the world, right?

Nikki Javit: Exactly.

Tim Ulbrich: So Matt, talk me through — one thing that stuck out to me on the first episode of the Passport Joy podcast, which I’d highly recommend our audience and listeners check out, you talked about a trip to Cape Town where you met a couple from the Netherlands that were engaged in some long-term travel and that that interaction and that conversation had a profound impact on both of you in terms of the impact that it had on the journey that you’re taking today. So tell us a little bit more about that story and impact that it had for you and Nikki in deciding to take this journey of traveling the world for several years.

Matt Javit: Yeah, so we were in Cape Town, South Africa for one of the incentive trips, my final incentive trip. This would have been March of 2016. And there was a couple there — so essentially, there’s about 15 different executives, about 30 different sales professionals from around the world go to these incentive trips with our spouses. And part of that time is you get a great chance to interact with the people. And one of the couples there were from the Netherlands, and he was actually 30-31 years old. And we ended up hooking up one night and just having conversations over drinks, and they were telling us an amazing story of how they had traveled from — they actually did it a different way. They got a Land Cruiser, put a bed in the back, and drove from the Netherlands to I believe it was South Korea and then shipped the truck from South Korea to Vancouver, Canada and drove down to Patagonia, Chile. And over three or four hours listening to this guy tell the story and all the amazing tales along the way of these two years of traveling, it was just, it was so inspiring and it just moved me in a certain way. And prior to this, Nikki and I, we actually had written down goals of traveling the world. I’m a big goal-setter, I believe if you write things down, they become real and they can become achievable. So we had actually written down the goal of traveling the world probably for the last, I don’t know, 3.5-4 years as a far-reaching, in-the-future goal. But we were — at that point, we were getting closer and closer of financially being able to achieve it. So we come back from just having those drinks that night with that couple, and we got back to that room, and it was just one of those situations where we just looked at each other like, what else, what other signs do we need that this is possible and this is something that we should do? And then I took that and on the flight home, we probably had another week in Cape Town, and we enjoyed our time. And the flights home were always the hardest for me. Every time that we’d fly home from a week or two-week vacation that we were taking, or during these incentive trips from exotic places where the flights are anywhere from 8-12 hours long, that’s when I’m always grabbing the back of the seat where they have the map of all the locations around the world, and I’m just looking at that thing, thinking, OK, where are we going next? And this trip was just different. I just, I was just so moved by what I had heard, and I’m looking at that map, and I’m just saying like, let’s do this. Let’s see if we can pull this thing off. And like Nikki said, within six or eight weeks, that’s when I came down and told her I had booked that first trip because in my mind and looking at all our financial stuff, that we could do it. If we had a lot of things line up over the next 10 months, we could pull it off and feel confident when we left that we could do the journey right. So it was amazing, it felt really good that we could pull it off. And that was — I have since had a chance to circle back with him and tell him that he was the motivation of it. And it’s really cool to know that it was that one deciding thing that put us over the edge.

Tim Ulbrich: That’s awesome. And let’s go there and talk about your financial house and how getting that in order prior to your departure — you mentioned having a runway of time when you were making that decision before you actually left, and I think it’s important because I know as I was listening to your journey, in my mind, questions were swirling about student loans and just practically saving up for the move and how you’re making it work month-to-month and what about retirement and all the questions that I think sometimes are the barriers that can get in the way to us taking bold moves. So let’s talk through some of those, and let’s first talk about student loans. So Nikki, I heard you got through undergrad debt-free, but obviously I’m assuming a PharmD brought some student loans into the equation, so talk us through for both of you where student loans played a role and how you were able to manage those and get those to a point where you felt comfortable that they weren’t going to impede your ability to take this journey that you wanted to take.

Matt Javit: Yeah, so — I’m sorry, Tim, I’ll jump in on this — but it was a situation where it was an early — so where we got engaged, Nikki started school, and within our first year, she was in school, of marriage. And she had done four years in front of that.

Nikki Javit: Five.

Matt Javit: Five years in front of that. And I tell you what, man. It was one of those things where the financial loan system in America is just flawed. It’s so flawed.

Tim Ulbrich: Yes.

Matt Javit: We would just look at these bills coming in, and this was a time where I had gone from making money and then the recession hit, housing crisis is what it is, so I wasn’t making any money. Then I started a new field where I was making severely underpaid. And Nikki was doing her part-time gig, she was amazing in that where she was going to school full-time and working 30 hours a week, which was unbelievable. So we really struggled for probably 2.5 years. We really haven’t talked about that at all to anybody. But it was a very difficult time for us. We stayed extremely minimal, we had a condo that we continue to live in for 15 years now. And at the time, we were paying her father rent on the condo. And we lived extremely, an extremely minimal lifestyle. So much that Nikki drove the same Toyota Corolla for 10 years. I drove a Ford Escape for at least 9 or 10 years.

Nikki Javit: At least 9, yeah.

Matt Javit: And I was in this new profession, and the student loans kept growing and growing and growing. And those things are unbelievable because the interest is what kills you.

Tim Ulbrich: Yes.

Matt Javit: And what was (inaudible) was because I come from a financial background, I understand all this stuff, and I could break it all down, so I would work with Sallie Mae, and I would say, split all these loans up. I want them itemized, I want them split up, and I want to know where I should attack. And when you do that and you see that some of the loans are like 14% and 12%, it’s just unbelievable. So for any of your listeners, when it comes to financial freedom, that is — and I know you guys have spoken about this on your podcast — that’s the main thing is you’ve got to itemize those things. I’m not sure if they do it that way today, but you’ve got to understand where your biggest pains are coming from. And so that’s what we did. So we itemized those things. And I’m talking to an audience that understands all this. We walked out of that with I think it was $289,000.

Nikki Javit: Yeah, so I think it was $287,000 was the total. But we started paying back on my loans about two years into —

Matt Javit: We were doing the bare minimum.

Nikki Javit: The minimum, the bare minimum, just to make a dent.

Matt Javit: Yeah, because we got all of our other stuff out of the way as far as — like I said, the car payments were gone, we were living minimal. Like I said, we did travel much early in that phase. We were doing mostly like U.S.-based vacation trips until I hit my stride in my job. And then —

Nikki Javit: But we don’t, we never lived on credit cards. And I think that’s really important. Like if we went on a vacation, we had that money, and we paid that vacation off then, at the time that we did it. So if we were going to go to let’s say — I’m just going to pick a random place — San Diego, California, for a week, we would go to San Diego, and if it cost us $5,000 to take that, that $5,000 was already saved up. So we never, we never purchased things on credit cards ever. And if we did, we paid that off at the end of the month. And it was just to get travel points, it wasn’t because we needed to use credit cards, it was strictly just to get travel points. So when he says we lived minimal, it was really, we were only paying our bills. I was working to pay bills, and him the same way.

Matt Javit: Yeah, so we went through this cycle where, like I said, I was with that job for nine years. The first two years was extremely difficult, but everything began to line up for us because I hit my stride so I started making money. And my job, in full transparency, was a base commission and bonus. So I’m very much in the sales world where there’s not a ceiling when you’re doing technology service sales, so I could make nice pay. And then Nikki got a chance, she hit the workforce full-time, so then she was making great money at CVS. And then we just went about it, and we attacked it. And like I said, the breaking down, the itemizing of the loans, I think that because we did that the way we did, we could get rid of those the fastest way we could because if we kept them clumped up, those things are going to stick around forever. So we would just break these all down, and we would just attack them. When we paid off a loan, we would celebrate together. And it would be a big thing because I think at one point, there was maybe 14 different —

Nikki Javit: I had 14 different loans.

Matt Javit: 14 loans, so we would pay off the high one, and then we would celebrate, and we would just zone in on that next loan and we’d just keep going, keep going, keep going. And finally, we got them paid off, and then we could start working on our other things to help us get financially free. And then at that point obviously, Nikki was deeper in her career, I was in a situation where I was deep with my clients and making great money doing what I was doing. And it continued to just, we continued to accelerate and set bigger goals and work on skills. I’m real big on you build skills for yourself and not for your job. Just continue to get better as a human, whether it’s personally, spiritually or for whatever profession you’re focused on. So that’s how we spent a lot of time doing that stuff. And we just continued to grow and get better, and the compensation followed.

Tim Ulbrich: I don’t know if either of you have read “The Compound Effect” by Darren Hardy, but what you were just saying, Matt and Nikki there, you know, your discipline but your cumulative hard effort and work and goal-setting and, you know, even the steps of itemizing loans. You know, I hate to throw Sallie Mae under the bus, but I’m going to since they inflicted a lot of pain on my life is that they, you know — I think that business, obviously there’s that effect where when everything is in one lump thing, and you can’t necessarily see all the details, it’s hard to get the motivation behind having a plan to take care of them. When you itemize them and you see how that interest is accruing, you see the different interest rates, like you all did, you then start to say, ‘OK, let’s put a plan together to pay off this $287,000 of debt. Let’s pay off one of these, let’s celebrate. Let’s pay off another, let’s celebrate it. And let’s keep moving on.’ And I think that, to me, is the essence of “The Compound Effect,” that it’s easy to look at a number like $287,000 and say, forget about it. It’s so big, I can’t even do anything about it. Whereas what I heard you did and your journey is say, let’s break this down. Let’s work together, let’s celebrate. And let’s get after this. And obviously, be appreciative of the income that you have and the ability to do that along the way. And so the question I have to ask here is that if you would have had that debt hanging around, if you would have not been able to live a minimalist lifestyle, if you would have chosen to buy a half a million dollar home, if you would have taken a different route, how would that have impacted your decision in terms of making this bold move to go on this journey to travel the world?

Matt Javit: It would have delayed it. We would have never left if we wouldn’t have gotten in a situation. Because the reality is is I was probably ready almost a year before.

Nikki Javit: Yeah.

Matt Javit: But Nikki wanted a number. She wanted a certain number that we had to have in our assets and our savings in order for us to go. Nikki’s a lot more conservative than I am. Because I’m in a mindset where I worked for — when I did the mortgages, I had zero-based payment. I was 100% commission. I’ve lived in a world where there’s nothing guaranteed. And so I’m comfortable with that. I’m comfortable with that mindset of, hey, if we don’t have any money in the bank, I’m alright with that. We can figure this thing out. Where she’s a lot more conservative and she gets really nervous about money and things like that. So we have a lot of these conversations, and we just got to a point where I got her to commit to a number, and I showed her how we could get to that number and put it all on paper so she could understand it, so she could be comfortable with us leaving. And then that’s when we made the decision. Without that, there was no way. We would have never left with loans and debt hanging over our head because it wouldn’t have been enjoyable. It would just be a different situation. So for me, I’m 42 now. And for us, I felt like it was my window was closing on the opportunity, but I still think we had room. If it would have took two or three more years to make it happen, we still would have been OK because this is definitely a dream and a goal of ours. We would have made it happen, but luckily we made it happen at the time where we’re enjoying it now, and I can get back into the workforce when I’m 44, 45. And I think that I’ll still have that value when I reenter out of the market for three years or so.

Tim Ulbrich: So month-to-month for you guys — I think you’re 18 months into this journey, correct?

Matt Javit: Yes.

Tim Ulbrich: OK. So month-to-month, what is your strategy for month-to-month, just making it, covering your expenses? Obviously, you’re living a minimalist lifestyle. I’m sure it sounds like you’ve got some good budgeting behaviors and practices, but are you finding, you know, work? I heard you reference workaways on the podcast. Are you purely living off savings? Are you getting creative with how you’re funding things? What does that look like month-to-month in terms of paying the expenses as you’re on the road?

Matt Javit: So yeah, we’re absolutely budgeting month-to-month. We’ve done a lot of creative things from Workaway that you described — that’s essentially volunteering our services to places — Workaway’s a website that has hosted certain places that you can stay at by volunteering your services, and they’ll give you a free place to stay and sometimes food as well. We’ve done house-sits with a website called Trusted Housesitters where we watched two cats in Zurich, Switzerland. They gave us, the owners of the home gave us a free place to stay. It ended up being a gorgeous house for three weeks while we just watched their cats.

Tim Ulbrich: That’s awesome.

Matt Javit: We’ve done extremely cheap Airbnb’s, hostels.

Nikki Javit: We have a budget when it comes to the places that we stay. And we know what we should be spending per month. And then when we search for Airbnb, we typically only stay in an Airbnb. In Asia, you can find budget hotels and not have to stay in a hostel. But we know what our budget is for an Airbnb, so we don’t really want to spend more than $50 a night. So when we scroll on the Airbnb website, we just look for places like that. And it’s funny because you can actually, when you’re in Asia, like if you go to Vietnam or Indonesia or, you know, other places in southeast Asia, there’s places that are $10 a night, and they’re absolutely amazing, like gorgeous, places that you wouldn’t even think would be that nice. But they are that price point, so we’ve saved by going to even just different areas of the world, by traveling —

Matt Javit: I mean, we were Paracas, Peru. We stayed there near the coastal place. But we stayed in a campsite. It was like a little cabin for like $12 a night. And we did that consciously, knowing that we’ve got to save money, we’ve got to — there’s going to be peaks and valleys. We knew Europe would be really expensive. So that was the whole mindset is, OK, some months we’re going to spend more, other months we’re not. And then be as smart as we can with the flights because those can really hit into the budget. And then dips and valleys when we’re thinking about going out certain nights. Like we’re in Japan, we’ve been eating at 7-11. You’d be surprised how amazing 7-11 is in Japan. It’s so good.

Nikki Javit: Yeah, that sounds absolutely disgusting.

Matt Javit: LIke nobody would think 7-11, but the good thing is I’ve watched enough foodie shows that they talk about the 7-11 all the time in Japan, that coming here, we were very open-minded. And now that we’re here, we’re like, OK, I get it now. It’s the whole culture, it’s amazing.

Nikki Javit: They make fresh sushi and fresh fruit salads and stuff. They have edamame in 7-11’s. It’s not like a 7-11.

Tim Ulbrich: Is it the same brand we know, 7-11? Or is it a different company?

Matt Javit: It’s the same brand, but I think it’s treated a little bit differently here. It is amazing. So doing things like that when we know that Japan is really expensive. But there’s things you have to cut back on in order for us not to crush our budget. But at the same time, getting a chance to get involved with the culture and see things, experience it, experience the realness of it and have a great time. And that’s the thing is when you do some of these alternative housing situations like a shared space on Airbnb, like where the host is there, and you’re just basically living in one of their rooms, but that also gives you the chance to talk to somebody, understand their culture a little bit better, see how they’re going about their day. And you come away with a different experience than staying in a hotel. And that’s what we set out to do. We didn’t want to travel for two years and just say, yeah, we went to hotels around the world, and it was great, we saw these sights and we saw the Taj Mahal. We wanted to come back changed, in a way. Like we loved who we were in our life in America, but it’s like, it’s an opportunity to put a chapter in our life that maybe changes the next chapter. And that’s what we were hoping to get out of it by all these different experiences and different cultures and get to know people and how they interact on the subway and just all the different things. I mean, I went to a baseball game this weekend in Osaka, and my mind was blown. I mean, I grew up an athlete, and just being around those people at a baseball game is — it just changed how I looked at their culture. So yeah, that’s our hope and that’s when it comes to budget, all of that plays together because it’s hard to month-by-month because now we just set out our plans for the next three months. So we had to book stuff in advance, we had to book a ton of little flights. And so it’s going to hit our budget in September, but then hopefully October and November are easier on the budget if that makes sense.

Tim Ulbrich: Right. Absolutely. So you’re 18 months into this journey, and as I was following along on the podcast, it seems like you’ve seen some of the most beautiful and incredible places in the world. So I want to know from both of you, what’s been your favorite stop so far, I guess if you had to choose one?

Nikki Javit: It’s so hard. So many people ask me this question, and I hate like just saying one. But my go-to is San Pedro de Atacama in Chile. So it’s in the middle of the dryest desert of the world, the Atacama Desert. And it’s like no other place I’ve ever been. The landscape changes just from a couple miles away. You can see geysers that are shooting out steam from the earth, you can see mountains and snow-capped volcanoes, there’s hot springs that you can swim in. I mean, it’s just neverending. There’s red rocks and lagoons and all types of things. It’s like an outdoor — like if you’re an outdoor person, and you just love nature in general, it is paradise. There’s salt flats that you can walk on that look like you’re walking on clear glass. It’s just, it’s phenomenal. They have some of the best stargazing — it’s actually the best stargazing in the entire world. And we were just able to do so many different things in four days. Like we were hiking, we were swimming in hot springs, we were climbing up mountains, we were spelunking in caves. I guess it was the first time I’d ever been to a place like that. I’ve been to California before and Colorado where you see the mountains, and you’re like, OK, I can go on a hike. But you can’t go on a hike and then take a half an hour car ride away and go swim in a hot spring and then drive an hour away from that and then go climb in some caves and walk on salt flats. So for me, it was just like mind-blowing. I just had never seen anything like it before.

Tim Ulbrich: What about for you, Matt?

Matt Javit: For me, it’s tough. So man, I loved Lisbon, Portugal. It might just be because of the people there and the time — we’ve gone now twice in the middle of June, and I just loved Lisbon. But India is just — India is just a different place on this planet. And it’s just, it’s so raw. And 1.3, 1.4 billion, it’s crazy, it’s chaotic, it’s definitely third-world in parts. But the love and just the kindness of the people and how amazing they are. It’s just like nothing else on the planet. And I’m just so intrigued by how people act and how they interact and how they view us and their thoughts and just the chances you get to really look at a part of the world that is so different. So that probably stands out the most to me is when it comes to travel and getting into a different culture, India really, it hits me because I had a lot of fun there. Vietnam is also one of those things that we talk about all the time that we just love. And we’re excited to get a chance to go back there. We’ve got some friends that are going to visit us there. So that’s, Vietnam is an absolute highlight. But it’s hard. Tim, it’s such a hard question because everything is just, has its own uniqueness. Now we’re in Japan. And oh my God, this is amazing. It is just so amazing. And we’ve got four more weeks here, and I could just see it turning into a place that we love. The language barrier is massive, but I think that with some studying or whatnot, you could figure out the phrases to get through the daily life. But yeah, it’s a hard question. But those are probably my highlights.

Tim Ulbrich: So I just have to know, you know, how is being together, traveling the world, sharing this journey — No. 1, do you guys ever get sick of each other and No. 2, how has this strengthened your marriage? Because obviously, I’m assuming it has, being on this journey together.

Nikki Javit: Yeah, so in the beginning, I think it was difficult for us just to figure out like a flow to our day because, you know, prior to us leaving, I had worked my job, I was gone during the day. And Matt was similar, I mean, he had a different schedule. He’d work during the day, and at night, sometimes he’d have to take out clients or he had conference calls. And we pretty much lived separate lives during the week. And on the weekends was our together time, time that we would spend to hang out and do whatever. And you know, I guess our extracurricular time was spent with me, if I wasn’t doing something with Matt, you know, hanging out doing girl stuff with my girlfriends or, you know, working out at my gym that we had at our home or just doing things that I guess kept me busy. And then now, all of a sudden you are with this person 24/7 365, and you’re in tight quarters in an unfamiliar space. And you heavily rely on each other because, you know, it’s like, I don’t know anyone here. So it’s not like I could call up a friend and be like, OK, I’m going to go hang out with this person tonight and go to dinner. But at the same time, you don’t always want to make your significant other think that, well, I need to hang out with you 24/7. So I don’t know. At first, it was hard. And we did, we fought — I mean, full disclosure, we would get in just like tiffs over dumb things. But I think it really stemmed from being frustrated I think from having to be in a tiny, tiny space. And by no means do we live in some huge mansion back at home, but at least we had separate quarters that we could go to. Like I could retreat to the living room and go watch Netflix. And Matt could go to his office and do his own thing. But now, it’s like sometimes, we are legit in something that just one room, and then there’s the bathroom. And so where do you go? So we found ways to, you know, kind of zen out, even if we have to be in the same room. So I’ll throw some headphones in, and I’ll listen to music or I’ll read a book. And even if I’m sitting in a different corner of a room and he’s still there, I’ll try just to get in my own little world. And sometimes I’ll go out and walk around and go for a walk or just go to the grocery store or just have that be my alone time. And then other times, you know, Matt, he’s real big on going on hikes by himself. And he likes to find a gym membership wherever we go or some sort of park where he can work out and do — he does this thing called Foundation training for his back, and so he’ll go and do that just to have some sort of alone time because I don’t really think that it’s healthy to be with someone 24/7, so that has definitely helped us. And I think it’s gotten a lot, it’s just gotten a lot better.

Matt Javit: Yeah, no, it is. It’s a long time, and most people don’t, most married couples — so we’re 13 years married now — don’t get to do what we’re doing until a later stage in life.

Tim Ulbrich: Right.

Matt Javit: And so then they don’t spend that much time together until they’re in their 60s or 70s. But so we’re definitely doing something that’s not, it’s pretty unique in the fact that we’re around each other 24/7. And I would be, Tim, back in my former life in Indianapolis, I would probably be considered a guy’s guy. So I had a lot of my buddies that I would hang around with, I’m a big sports nut, I like drinking bourbons with my buddies and just talking about stuff. But I definitely miss that. But I still text my buddies, call them, and I get a chance to interact with them. It’s not always easy, but it’s been amazing. To be able to see the world with somebody that I love and to be able to share those moments together and knowing that we’re going to be able to reflect on this at some point and understand how lucky and fortunate we are to be able to live this life, that all the positives outweigh any negatives. Yeah, it’s been a blast.

Tim Ulbrich: So what does the future hold? I mean, what’s the plan? You probably hate this question, maybe, but what’s the plan for, you know, I heard kind of a multi-year travel plan, you’re 18 months in, so I interpreted that to mean there’s a desired end date where you may come back stateside, reenter the workforce, you both alluded to that. But is there a chance that may not happen? Or have you kind of set a definitive end date? What’s the game plan going forward?

Matt Javit: As of now, May 2020 is the end date on paper as far as budget goes. What that means is we’re still working through some things. We both have some creative things we’re working on. We’re doing the podcast, we’re doing the blog site. If any of those outlets can turn into revenue streams, could that make the journey longer? Not sure. Are there things that could take us off the road personally? Probably, but we don’t like to think about those things.

Nikki Javit: Yeah.

Matt Javit: Because they’d be extremely negative. But so as of now, yeah, we’re 18 months in, we’re going to come back to the United States in May of 2019 and spend the summer visiting with friends and family and get a chance to explore the U.S. a little bit like we’ve been doing on the road and get a chance to hang out with different people in the States and accelerate some important milestones in some of our family’s lives and stuff like that. And then the hope is to go back out in September of 2019, see more of the world, explore some places that we thought we’d get a chance to see on our first trip out, but we didn’t. And then come back in May of 2020. And at that point, obviously we’re not going to get back to the States and decide what we’re going to do. We’ll understand. A lot of this will happen organically over the next 12 months or so that we’ll know that, OK, we’re going to reenter the workforce. And then we’ll start to line things up the four, five, six months prior to because that’s who we are. I mean, we’re both very career-focused, we love — and I’ll tell you something, that’s why we’re doing the podcast. That’s why we’re doing the blog. There’s something that’s built into humans that makes us want to give back. Either give back in a positive way either to inspire people or just the knowledge and hopefully to help people in some capacity or just give back to other humankind, you know what I mean? We’re just built that way. You can’t just cruise around the world and sit on beaches in Bali and hang out and drink cocktails all day and think that you’re going to improve as a human. It’s just not who we are. And I think Nikki and I are even at a — we didn’t grow up that way to do that. So even when we’re trying to relax, we always have massive “To Do” lists.

Nikki Javit: Yeah.

Matt Javit: The “To Do” lists are growing and growing. But the coolest part about it is is these creative projects we’re working on, we’re excited about them. It’s one of those things where we wake up every day, and we’re like, hey we’re going to do this and hey, let’s make sure we document that. Let’s go walk through the market and check out all these things. So it’s an amazing journey, and it’s a fun phase or a fun chapter. And we’re not really sure what that next chapter is yet. But no matter what, I think we’re going to really prepared for it, mentally, spiritually, physically. I think we’re going to be ready for that next chapter.

Tim Ulbrich: Well, you guys have done an awesome job with the podcast. So first of all, congratulations. I think the content that you’re bringing is awesome. I’ve enjoyed it. And I would just urge our community, check out PassportJoy.com to follow their journey on the blog, listen to the podcasts on whatever podcast subscription service that you use. And I think one of the things, Matt and Nikki, that I really enjoyed about the podcast is obviously, I’m not somebody who’s going to necessarily pick up for a year or two or three and travel, but what you’re talking about is applicable for long weekend getaways, a week vacation, you have an episode around financial security when you’re traveling that I really found interesting. And so I think for all of our audience, make sure you check out PassportJoy.com, listen to the podcast, check out the blog. You’ll hear their latest travel stories, tips to have amazing trips on a budget, hot locations you may not have heard of and how you can get involved and volunteer on the road. And I really appreciate, I would love to meet both of you when you get back stateside in Indianapolis, I’ll be in Columbus. So we’re not that far away. And you’ve inspire me personally and my wife to be thinking about, you know, traveling and how that can impact us as individuals and our family. So thank you for taking time to come on the show and to share your journey with the YFP community. We really appreciate it.

Nikki Javit: Thanks for having us so much.

Matt Javit: Thank you so much.

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YFP 059: Life After Debt Free…Now What?

Posted on August 2, 2018November 2, 2022 by yfpadmin

On Episode 59 of Your Financial Pharmacist Podcast, Tim Baker, founder of Script Financial and YFP Team Member, interviews Adam and Brittany Patterson. On Episode 31, Adam detailed how they paid off $211,000 of student loan debt in 26 months. Adam and Brittany are 2015 graduates from Auburn University Harrison School of Pharmacy. Brittany is a pharmacist at Children’s Healthcare of Atlanta. Adam is a pharmacist at Northeast Georgia Medical Center and Assistant Pharmacy Manager at Publix Pharmacy.

Mentioned on the Show

YFP Student Loan Refinancing Resources
YFP Episode 031: One Pharmacist’s Journey to Paying Off $211,000 in 26 Months
Mint.com
Script Financial
Dave Ramsey
Alabama Pharmacy Association (APA)
National Community Pharmacists Association (NCPA)
YFP Facebook Group

Episode Transcript

Tim Baker: Adam and Brittany, welcome to the Your Financial Pharmacist podcast. How are you guys doing today?

Brittany Patterson: Good.

Adam Patterson: Great, thanks for having us.

Brittany Patterson: Yeah, thanks for having us.

Tim Baker: So I would say, Adam, and you did a good job on Episode 031 when you were last on detailing your amazing debt-free that you did and excellent job of calling out Brittany and giving her credit to this journey of paying back debt, but I’m so happy, Brittany, to bring you on and kind of hear your side of the story. That episode, in particular, has been a huge success. It’s actually our third most downloaded episode with almost 1,600 downloads. And I think it just resonates with a lot of pharmacists out there. So kind of if you would, tell us a little bit about yourself and walk us through kind of — Brittany, I guess I’m talking to you of this debt-free story and kind of recap, you know, how it came to be, how you got through it. And let’s go from there.

Brittany Patterson: Yeah, so it’s great to be here. I know Adam talked a lot about our story. I guess he made it sound it like it was all nice and easy, but we really did have a big struggle, you know, those 2.4 years that we went through this. You know, we got that first letter, I guess six months when we got out, and it said, ‘Hey, great job finishing school, but you know, we need our money back.’ And that’s just something that we didn’t really talk about in school. And so we were texting all of our classmates, trying to figure out what they were going to do, and they didn’t know. And so we kind of bit the bullet and that’s why we just decided to refinance. Both of us came out working retail jobs, and so we refinanced, about a year into your retail, you got your job at the hospital. And that was hard because Adam was working night shift, and I was working day shift, so you know, he would be driving out of the neighborhood when I would be driving in the neighborhood. I think we would go three full days of not seeing each other. So it may sound real great, oh, only 2.4 years, but that was really — I mean, it felt very long when we were in the middle of it. It’s not as easy as it sounds. It was very hard work. But it was definitely hard work that paid off in the end. And we had that support of each other, we were on the same page with money. You know, that’s what we — when we just spoke recently to students, we told them that money is one of the biggest issues that couple fight about. And I feel like for us, that’s something that we never really have arguments about. We’re on the same page with money, and we’ve been kind of there since Day 1, knowing how we were going to refinance and everything. And so even though it’s been hard work, we’ve always been on the same page, and it’s definitely helped our marriage too throughout all of it.

Tim Baker: Yeah, it’s funny, when I was preparing for this episode, I went back and it’s one of the few times, actually, to go back as a listener. And I listened to Episode 031 again, and one of the things that Adam said was, smart decisions, hard work and sacrifices, those are really the three things that allowed us to propel you guys forward to pay off the debt. And another thing that Brittany, you mentioned was the refinance. I think you guys refinanced your rate of 6-7% over 10 years down to I think it was 4.25% over five years, kind of locking you into more of an aggressive payment process but also saving you about $65,000 in interest over the course of paying that off. So I guess for you guys, what has been since you paid off the loans, what’s been going on? Like what’s been the big driver of like where do you go from there? Like what’s been the big difference in life since the loans have been paid off?

Brittany Patterson: You know what’s funny is we were just talking about that this morning. I think we work more now than we did when we paying off loans.

Tim Baker: Really?

Adam Patterson: I can agree 100% with that.

Brittany Patterson: Yes. People are like, oh, your loans are paid off, you’re going to enjoy it so much. And I’m thinking, I think we work more now than we did then, but we’re so accustomed to it that it doesn’t seem like a big difference to us.

Adam Patterson: I think it’s about goal-driven too is setting your sights on what’s into the future and just trying to get there. But also, you have to enjoy every bit of it and take some time and have free time for yourself. But yeah, hustle’s been real. We’ve been hustling since we finished paying off loans, still keeping both jobs, Brittany’s been working a little bit extra too, and I work my full 70 and then turn around and pick up a whole other 44, 45 hours in my off week and then back around again, 70 hours again the next week. So it’s been nonstop.

Tim Baker: It’s funny though, because like I think what, you know, it’s kind of like the get-rich-quick schemes that are out there, one of the things I often say to clients and even when we’re speaking is, you know, the key here, especially if you want to retire early or if you want to get through the debt is a lot of it is just elbow grease and is just kind of putting your head down and working hard. There’s not a lot of fancy schemes or tricks. It’s about, you know, really maximizing income and being smart with, you know, budget. I know, Adam, you talked about how, you know, Mint.com was a big part of this. And Brittany, I know you are a Mint.com addict, it kind of is safe to say that.

Brittany Patterson: Yes.

Tim Baker: So and then just having that kind of 100% transparency between the two of you and really looking at it as your loans, but you know, so not much has changed. Obviously, I knew that you guys — and to kind of full disclosure here, you know, Adam mentioned he would be reaching out to me and Script Financial about working together. And you guys did in February, you kind of came on and became clients. And that’s why I have a little bit of an inside track to what’s been going on. But I was reviewing your finances, just in the time that you guys have come on, your net worth has grown exponentially. And it’s really just exciting to see because you guys obviously took a negative of the $211,000 and in two years and change, took that off the balance sheet. And now, you’re perpetuating that same type of mentality and really deploying your resources to your goals. So one of the things that you guys talked about when we did kind of the ‘find your way’ was experiences. And you guys took a vacation here recently. Where did you guys go? How was that?

Adam Patterson: We took a trip to Ireland. We went for a little under two weeks. It was breathtaking. It was amazing.

Brittany Patterson: So much fun.

Adam Patterson: Being able to cash flow pretty much everything and knowing you’re not having to worry about spending this, spending that, because you’ve worked hard, we’ve worked hard, we’ve saved for it. It’s a great payoff, treating yourself to something like that after you finish accomplishing one of those goals.

Brittany Patterson: Yeah, we didn’t have to limit ourselves on the trip, which is nice. We weren’t afraid about not being able to afford a dinner or buying a souvenir because we knew that we worked hard before we went on this trip, and we were able to, you know, buy the things that we wanted to buy. We didn’t go overboard on things, but we just knew that we didn’t have to limit ourselves while we were there, which was really nice.

Tim Baker: Well, and I know kind of when we talk about your goals, obviously experiences is a big part of that. And you know, like when I look at some of the things that we’ve done, you know, as kind of just simple, you know, we’ll get to kind of your next big goal here in a bit, but obviously vacations, so having a travel fund, you know, a savings account that you can cash flow, having a, you know, obviously a fully funded emergency fund, having your home purchase fund, which is kind of the next big thing on the horizon, I think those are just naming the accounts the goals that are out there, you know, psychology says that that alone is a big win. And you know, for me as kind of working with you guys, I know that, you know, if the next trip is Australia or New Zealand or Germany or attending a sporting event to the Panthers or Steelers or Cooperstown, whatever those things are that we kind of outline, my job is to kind of help you make sure that this is the next on the docket and we’re cash flowing those appropriately. So walk me through, you know, since the debt was paid, why did you guys — what was the genesis around, hey, we need to work with a financial planner? What was the big driving force to kind of email me and contact me and say, ‘Hey, Tim, we want to see if working together is a good fit.’?

Adam Patterson: I would say the first thing that got us talking about it is — and I tell other people this too — is we went to school to be pharmacists. We understand certain things when it comes to financial stuff, but we’re not a professional in that. So seeking out professional help, it was our No. 1 goal, whether we should have started before we paid off loans or not, that’s up in the air, but we tell people all the time, it’s never too early to find a financial planner or somebody to help you with that because that’s what their profession is. For us, it was being a pharmacist, serving patients and things like that. So seeking out a financial planner, it was our next step, our next goal simply because we wanted somebody to give us more directive, be able to help balance more things in our life.

Brittany Patterson: Yeah, and to hold us accountable. We know we do have a good income that comes in, but making sure we are putting that income towards our goals and making sure our budget is correct. Just we knew that you could help us more financially than we could help ourselves in that area.

Tim Baker: Well, and I think the other thing that I think resonates or resonated with me in the last story — I know, Brittany, like you just said, kind of confirms that is — I think one of the things that a lot of pharmacists do is they kind of drink that six-figure Kool Aid that says, hey, I come out, and I’m making x amount of dollars, I don’t really have to worry about the debt, it’ll take care of itself. And I think for you guys, and I know, you know, kind of the backdrop is Adam, you went through the Dave Ramsey — I’m not sure if both of you guys went through the Dave Ramsey stuff — but it was kind of this no-nonsense approach to paying off the debt. So talk to me, what’s the big thing right now that is kind of top of mind with where you want to take your financial plan and where we’re going? So I know the big one is the home purchase, right? So we’ve talked about this at length and what that looks like. So walk me through kind of where you guys currently are in that part of your financial plan and what you’ve learned thus far.

Adam Patterson: Right now, like you said, our next step is financially purchasing a home, working with you, setting up, figuring out what we can actually afford. I think that’s one of the biggest things and knowing that you’re not spending too much but you’re going to be comfortable. That’s something that we are working with you, getting approved, working with a bank to get approved. We have a real estate agent now, so we’re in the process of shopping for a home, whether it’s one month, two months, six months from now, we just know that we’re ready for it. And that’s what we’re doing right now is we’re continuing to work towards that goal.

Tim Baker: And I think, I think the idea was to be almost singularly focused on that, similar to what you were with the debt until you guys are moved into the house. And I know, Brittany, that’s kind of like, you want that to happen yesterday because you’re ready to make the purchase. But I think being smart about it and surrounding yourself with a team of people that have your best interests in mind. And I think sometimes that is lost in the home purchase process just because most people, most professionals are incentivized about how much you actually purchase in terms of the size of the house, but I think you guys are going about it, and I think when we went through, ‘Hey, what can we actually afford?’ it was with this discount that you guys are not going to be hustling like that for the rest of your life, you can actually afford something probably greater than you probably would be if you were kind of working consistently. But I think it’s been great working with you because I think you are very open to advice and kind of the education that surrounds a lot of these decisions. So from my end, it’s been awesome. And I think, you know, we see it a lot because I think your story resonates. So walk me through kind of what you’ve been doing speaking-wise since, you know, we’ve last had you on the podcast.

Brittany Patterson: I think — was it June, Adam?

Adam Patterson: Yeah, it was around June.

Brittany Patterson: Yeah, in June, we went to the Alabama Pharmacy Association convention, and we were invited to come speak to the students there. So there were Stanford students, and there were also Auburn students. And we went in, and we had a whole PowerPoint presentation, and it was funny because I don’t think we spoke until about 7, 8 o’clock at night.

Adam Patterson: Yeah, it was 7 or 8.

Brittany Patterson: And it was after they’d all been to the pool, they were all outside, all having fun, and I’m thinking, there’s no way they’re going to want to sit in here and listen to us talk about finances at all. And we walked in there, gave our presentation, and they ate it up. I was shocked.

Adam Patterson: It’s just — it’s crazy when we’re presenting and seeing these students’ mouths drop just because we’re providing them with this information that whether they knew about it or not, it’s just resonating with them and telling a story not in trying to convey that they have to pay off this much money in such a short period of time, but the fact that we’re giving them these resources that, you know, they’re just not provided in school. And I think Your Financial Pharmacist, I think we’ve all harped on this, is making the education relevant and putting it out there for everybody. That’s just something, it’s a passion that we’ve kind of taken up on now is wanting to speak at more events and do more things to try and share our story.

Brittany Patterson: Right, because I think it’s something that we wish we would have had too, coming out of school.

Tim Baker: Yeah, I think Adam, I think one of the things that you said was, you know, when you were looking around, kind of looked to your left and looked to your right at hey, what’s the best way to tackle the loans, there wasn’t really anything there outside of maybe like a colleague and a few opinions. So you know, I think shining a light on this and having more people kind of like just openly speak about some of the trepidations with their loans. We hear a lot of people say, ‘Hey, you know, if we would have known now what we know today, we would have made a lot better decisions,’ and I think that’s why, aside from the facts of, you know, the facts and figures around your particular case, you know, there’s no — like I said, there’s really no silver bullet. It’s just like, OK, we worked a lot, we sacrificed, and you wake up, and you’re through the loans. And now, it’s what’s next? So I think your story, you know, is amazing. But then, you know, the fact that you can stand in front of people and say, ‘A few short years ago, I was in a similar spot, this is kind of what we did,’ is really amazing. So do you guys see yourself speaking more? Did you enjoy that part of it?

Brittany Patterson: Yeah. We both really enjoy it. And we actually have another one in November coming up, and we’re speaking at the National Community Pharmacists Association in Auburn. And so we’re going to go back to Auburn and be able to speak to those students. They came up to us after, I think it was the president of NCPA from Auburn, she came up, she’s like, ‘Oh, we loved y’all so much. We really want to have y’all back. I feel like these students could really learn from y’all since this is something that we don’t hear much about in school.’

Tim Baker: Well, and I think, you know, and that’s what I’m kind of hearing more, especially from NCPA, you know, or at least people associated with, pharmacists associated with NCPA is, you know, the decision or start, you know, an independent pharmacy is so huge. You have to have your own financial house in order or at least have a plan to have it in order, so I think there’s a lot of — you know, especially with that group, you know, a lot of relevancy to say, ‘Hey, if this is something that I really want to pursue, you know, I need to make sure that, you know, this big kind of elephant in the room at least is accounted for and there’s a plan in place,’ and I think that’s a great group to be talking to. So I guess for you guys, if I’m a recent pharmacist grad, what are kind of the big takeaways — I’m a new PharmD, I’m out, I’m earning income, I have kind of the average $150,000, $160,000 in debt. What would be the kind of big takeaways for, that you would impart on me in terms of how to tackle it?

Brittany Patterson: I know no one likes to hear this, but the biggest thing that we did was we lived below our means, which I know everybody hates to hear that because you feel like you’re constricted, but we weren’t because we were so used to living like that in school. And I think that’s one of the biggest reasons we were able to pay off our loans. We weren’t buying expensive cars, we weren’t buying expensive boats. Nobody told the students. We had friends who went and bought cars and boats, and there’s nothing wrong with that, but we just didn’t want more debt on top of the debt we already had. So I think that was one of the biggest things was really watching what we were spending and not overspending.

Adam Patterson: Yeah, I would say that would probably be one of my biggest things is living below our means. Something other to add to that is, you know, work hard for what you’re given. I mean, there’s too many people that just expect or receive things, and it’s all about hard work. Like we’ve talked about before, you know, putting in the hours, trying to maximize that income. As a new grad, I mean, what else do you have to do?

Brittany Patterson: Right.

Adam Patterson: I hate to say it, but to go on top of that, while you’re working hard, you have to treat yourself every now and then. I think debt’s something that we all can get caught up, and just working nonstop but not ever reaping some of that benefit, some of that benefit is to take a vacation every once in awhile.

Brittany Patterson: Yeah, and we don’t really eat out much, and that’s something that, you know, we really appreciate when we do get to eat out. We enjoy those moments more because of the fact that we aren’t doing it all the time.

Adam Patterson: Right.
Brittany Patterson: So we don’t take those moments for granted when we are able to enjoy evenings out together, which is nice.
Tim Baker: Yeah, it’s a treat rather than the norm, right?

Brittany Patterson: Right.

Tim Baker: Exactly. Well, and maybe, you know, you grow an affinity for Mint.com and logging in every day, right, Brittany? And making sure that the spending is in line, and you’re good there, that would probably be another piece of that.

Brittany Patterson: Right, that is true.

Adam Patterson: What is it they say? Eat, sleep. And Brittany’s is eat, sleep, mint.

Brittany Patterson: Mint, unfortunately.

Adam Patterson: So I will add, you know, something we got a lot of questions about. As a new grad, don’t be afraid to reach out for help. Using your resources and everything, that’s huge coming out of school is finding the information and going off, adding to that is talking about a financial planner and stuff. You know, that question’s came up to us a lot. Should I invest in a financial planner early on? There’s nothing that hurts from investing in a financial planner early on because they’re going to be able to, you know, guide you to those resources also. So that is a big thing I would harp on coming out of school.

Tim Baker: Yeah, and I think to play on that, you know, in terms of extra resources, obviously, I think what we’re trying to achieve here at Your Financial Pharmacist is just with the Facebook group and the different guides, to have information and kind of a community surrounding the information to put you in a position to tackle the debt or investments or if it’s insurance questions, so you know, I know you guys talked about — to kind of bring it back to the loans is one of the big things you did is refinance. So if you are looking to refinance, you know, YourFinancialPharmacist.com/refinance, we have calculators, we have different refinance companies that will give you bonuses and we have podcast episodes that are about student loans. So there’s a lot of good information there if you’re a YFP listener that you can digest and kind of learn more about the process. And I think it’s key to continuously push the envelope in terms of what you want to do with your financial life. Well, Brittany and Adam, thank you so much for coming back on the Your Financial Pharmacist podcast and sharing your incredible story. It doesn’t sound like you guys have let off the gas at all. I know you took your trip to Ireland and took some of that time to decompress, but it sounds like with the home purchase and some of the other things you’ve got going on that, you know, you’re kind of going back to the hustle and making sure you’re making moves with your financial plan. So it’s been a pleasure working with you guys, and I can say that your story truly resonates with a lot of our listeners and just a lot of pharmacists out there that it’s truly inspiring. So keep up the good work, and we’d love to have you back for the next major milestone. So you’ve done the debt-free theme hour, maybe we’ll have you on for the millionaire theme hour when you hit that millionaire status for net worth. So again, thanks again for coming on.

Adam Patterson: Thank you so much for having us.

Brittany Patterson: Yes, we really appreciate it.

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YFP 047: Best Practices for Car Buying

Posted on May 10, 2018November 2, 2022 by yfpadmin

On Episode 47 of the Your Financial Pharmacist Podcast, YFP Founder Tim Ulbrich, PharmD talks about the best practices for car buying and how to ensure car buying doesn’t get in the way of achieving other financial goals. In addition to Tim sharing his own tips and experiences, car buying recommendations from the YFP community are shared throughout the show.

Mentioned on the Show

Experian State of Automotive Finance Market Q4 2017
Your Financial Pharmacist Facebook Group
Edmunds
Kelley Blue Book
The Millionaire Next Door by Thomas Stanley

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 047 of the Your Financial Pharmacist podcast. Tim Ulbrich here, flying solo and excited to be talking about car buying. And as I alluded to in the introduction, we’ve got some great content for you and specifically, the YFP community has shared lots of their own opinions and experiences on car buying that I’m going to share with you throughout the show. So here’s how we’re going to break down today’s episode. I have three different sections that we’re going to tackle this topic of car buying. First, I’m going to present some data and statistics, just make sure we’re all on the same page of exactly what are we talking about in terms of the costs associated with car buying. Then, I’m going to share the community members from the YFP Facebook group and some of the lessons and advice that they have around car buying. And finally, I’m going to share some of my lessons learned and blunders when I had my most recent car purchase of my 2009 Honda Odyssey, my Swagger Wagon, which I’m extremely proud of. Learned lots through that experience. I’m excited to share that with you as well.

OK, so before we jump in and talk about the numbers and data surrounding car buying, I have to get this out there. And I recognize I’m not going to become the most popular person by talking about this topic. We, myself included, we love our cars, right? That’s just a reality. And I have fallen into the trap before of putting my car buying priorities above other financial priorities that I’m trying to achieve, most notably when I was trying to pay off my student loan debt. And so we obviously have a love for cars, and I think often, it’s easy for us to defend that purchase. And so my goal with this episode is for us to take a step back and say, ‘OK. Maybe you’ve made great car decisions. Maybe you’ve made bad or poor car buying decisions. How can we really look at and evaluate where car buying fits in with the rest of your financial plan? And whether or not that’s being prioritized appropriately.’ So as you think about other goals that you’re trying to achieve and that you’re working on, maybe it’s student loan debt, maybe it’s credit card debt. Maybe some of you are out there, trying to build an emergency fund or save more for retirement, kids’ college, more vacations, whatever that would be, where does car buying fit in? So here’s the one question that I want you to ask yourself after you hear today’s episode: Is my current car situation and car payment getting in the way of me achieving other financial goals? And if so, is it worth it? Let me say that again. Is my current car situation and payment getting in the way of me achieving other financial goals that I’m working on? And if so, is it worth it?

OK, so one more thing I have to get out there before we jump in and talk about the numbers and continue on with today’s episode is that I’m all about safety when it comes to driving vehicles. And let’s work with that assumption as we go throughout the rest of the episode. And I think it’s also safe to assume that all of the cars that we’re driving, with maybe a few exceptions out there, all of the cars that we’re driving are safe vehicles. Now, commercials we watch and other things may make us believe that this car has a better safety rating than another car, but relatively speaking, across the board, I think it’s fair to say that our cars are safe. And therefore, I am not suggesting that you drive an unsafe vehicle just to save a few bucks. And so let’s be clear with that as we talk about some of the considerations around car buying.

So let’s jump in and talk about some of the data and statistics surrounding car buying. And one of the things that you’ve often, I’m sure, heard before is that cars are a depreciating asset. Cars are a depreciating asset, meaning essentially that they are going down in value from the moment that you purchase that vehicle. Now contrast that with other things that are appreciating in value, such as your home — hopefully, depending on the market that you live in — maybe investments that you have. Cars, on the other hand, for the most part — unless you have purchased some type of a rare vehicle or you collect vehicles that have significant value — for most listening to this podcast, your car is a depreciating asset. Now, why is that an important thing? It’s an important thing to consider because when we talk cars, whether it’s a new car, a lease, a used car, whatever be the case, I want you to think about a car in the context of the other goals that you’re achieving and whether or not it’s an opportunity cost.

Now check out this data here from Edmunds.com. If you had a $30,000 new vehicle that you purchased, the second that you drive off that vehicle from the lot, it depreciates by over $3,000. A year later, it’s down about $7,500 later. And then fast forward to five years after purchasing that vehicle, that $30,000 car now has a value of approximately $11,000. So that vehicle, $30,000, five years later on average is worth about $11,000. So you can see that for most new vehicles, there is a significant amount of depreciation that happens within the first five years. Now, hold onto that thought because one of the things we’re going to talk about is if you buy used, when might be the right time to buy? And hopefully that data gets you thinking, is there a period where a car may have a lower number of miles and has still taken a fair amount of the depreciation and the hit on the value of that car? And the answer to that is yes because if you look at a car that’s at the third, fourth or fifth year of its lifespan, it’s probably still relatively low mileage but also has taken a hit of the depreciation, meaning that you have a good value that will be in front of you.

OK, so cars are a depreciating asset. Now, check this out as well. If you look at the data from Experian, who publishes a report, which is really fascinating — I’ll link to it in the show notes — it’s called the Automotive Finance Market Quarter Four Report from 2017. Now, what they found in this Quarter Four report from 2017 is that the new car loan average monthly payment is $515 per month from that 2017 report. Let me say that again. The new car loan average monthly payment is $515 per month. Now, what if you lease a new car? You’re looking at an average payment of $430 per month. What about a used car? The average monthly payment for a used car is about $371. Now, hopefully you’re thinking, holy cow, that’s a lot of money. Especially as we think about other financial goals that you’re trying to achieve. Now, I know some of you are going to be right in line with those averages. Others of you maybe have paid cash for a vehicle. And others of you maybe have a loan, but that amount of the loan is significantly less than those averages. So based on that data, if we look at used car payments ranging from $371 up to a new car payment ranging at the top end of $515, if you are somebody that’s listening to this episode, and you think that you’re struggling with other goals that you’re trying to achieve — debt repayment, getting in control of your monthly expenses — car buying, your car, is an area that I would highly recommend you take a look at to see if cutting back may be worth it. And I think that if you talk with other people that have gotten rid of a car or scaled down their car, I think you’ll find that you probably won’t miss your car maybe as much as you think you will to begin with.

So what is the opportunity cost here of a vehicle, whether we talk about a lease, a new purchase or a used? So the question I want to pose to you is what if you were to take that monthly payment — and where you have that current average there of $515, what if instead you paid cash for a car every six years? And let’s just assume for this situation that that vehicle that you’re paying cash for is going to cost you $10,000 every six years? Now, some of you are thinking, can I really buy a decent car for $10,000 that’s going to last me six years? And I would say yes. If you actually do a quick search on cars.com, depending on what you’re looking for, you can find a lot of decent cars at a relatively low mileage rate, 50, 60, 70, 80,000 that’s going to be somewhere in the $4,000-10,000 range. So remember here, we’re going for safe and functional, right? So we’re not going for top-end features, we’re going for safe and functional. OK, so if we play out this situation, a $10,000 every six years that we pay cash for, if you divide that out, that would cost you on average, $139 per month. Now I got that by taking $10,000, and I divided it by 72 months. So if we were to take the difference, let’s say you’re somebody listening that has that average new car payment of $515 per month, if we would take the difference and you’d say, ‘OK, what if I sold that and instead paid cash for a $10,000 car every six years?’ That was $139, and if we take that difference, that difference is $376 per month. Now, here I’m talking the savings that you could have, which relates to the point that I made about the opportunity cost that come along with buying a car. So if you took this difference, $376 per month, and you instead invested that money in a mutual fund — better yet, let’s say an index fund, maybe within a Roth IRA, and that earned 6% growth per year, check this out. In 10 years, that would be worth approximately $62,000. In 20 years, that would be worth approximately $175,000. In 30 years, you’d have about $378,000. In 40 years, about $750,000. And drumroll — in 50 years, you’d have about $1.4 million. So there it is. The potential to save more than $1 million by strategically buying a car that’s at a lower monthly payment. And for some of you, maybe that’s leasing a car at a lower monthly payment. For many others of you, maybe it’s selling your vehicle and buying a used car like I mentioned in this example, $8,000-10,000 or so that you can have for five, six, seven years, maybe even a little bit longer. Now, some of you are hearing that math and thinking, OK, well obviously the cost of vehicles are going to go up, and you’re going to have to have some maintenance — all great points. So maybe it’s not $1.4 million. Maybe instead, it’s $800,000, $700,000. The figure doesn’t matter. I think what we’re really highlighting here is that there’s an opportunity cost that can come with having too much money tied up in a depreciating asset, which is your vehicle.

So what does the YFP community have to say about car buying? Now, the other night I wanted to throw out a question to the community because I know that based on the data that I just shared, and knowing that I have a bias toward buying used cars, I really wanted to get some more input from the YFP community. So just a couple nights ago, I posted these two questions inside of our Facebook group. Question No. 1 is: What lessons have you learned through your car buying experiences that you’d be willing to share with others? And No. 2: Do you buy or lease your vehicles? And why? And if you buy, and you buy used, where is the sweet spot in your mind in terms of having the best value? Now, the comments I got from this post were just awesome and further inspired me to do this podcast because I could tell for many, there’s a lot of passion around car buying and a lot of discussion about the different strategies and tricks and tactics to consider when you are car buying? So let me put a plug here. If you’re not already a part of the YFP Facebook group, I would highly encourage you to join us. I’ll link to it in the show notes. You can also just search on Facebook, Your Financial Pharmacist Facebook group. Join the conversation. There’s so much education, motivation and feedback that’s happening amongst this community. And this is really just one example of that happening.

So what I’m going to do, I’m going to read you some of the responses that I got because I think as I was reading these, it really helped for me reinforce a point that I think is great for you all to consider or even brought forward points that I had not even thought about talking about on this show. So Latonia, who’s a very active member of our Facebook group, so shoutout to Latonia, her response to this is that “I learned to not buy new and to buy used because it depreciates once you drive it off the lot,” just like we just talked about. Shop around and continue to bargain as much as you can. So for Latonia, she said, “I buy instead of lease since I don’t feel a desire to drive a new car every 2-3 years. I also want to finish car payments and not to have present in the long term.”

Erin from our Facebook group says, “I’ve purchased new and used, but prefer used. If you feel uncomfortable, walk away. Also, don’t fall victim to them asking what you want to pay each month instead of telling you the whole price of the car. They’ll try to get you in a five-year or longer loan to get you into your monthly budget. Haggle the price down instead. Again, if they can’t get the price to where you want it, walk away. They’ll probably call you the next day, offering what you wanted. It helps to finance your credit union too if you’re a member. Our credit union actually talked the price down for us before.” Well, Erin, great advice you’ve packed in there. You mentioned very briefly preferring used. I think you have great advice there about walking away in the negotiation process, which I’ll talk about here in a little bit. I love your advice about not falling victim to the monthly payment. Instead, looking at the whole picture about what it’s going to cost you over the life of the loan.

Cammy, who actually is not a pharmacist but has joined the conversation, actually works in the auto industry, who messaged me yesterday and has enjoyed being a part of this group, she says that buy used about three years old with preferably about 40,000 or under for mileage. So her advice is three years old, preferably about 40,000 or under for mileage. She says that “I’m struggling now as our van is or has been paid off and is turning 100,000 miles. She just put $1,200 doing the maintenance, still needs to get a few more fluid changes to the tune of $600. This weekend, the air has seemed to gone out in the vehicle. It’s a 2010.” And she goes on to talk about her vehicle being a Honda, and she’s really at that point trying to figure out, you know, when are you going to continue to invest money in a vehicle versus looking at something else. So shoutout to Cammy for joining the conversation. Also love to have fellow Honda Odyssey owners in the group as well.

So Scott says buy the cheapest car that you’re comfortable using. He says, “I refuse to pay sales tax on an expensive car that depreciates so quickly. 3-5 years used with a single owner is the best way to go for most people.” Scott, one of the things I didn’t think about, and I’m glad you brought that up, is the cost of the sales tax. So obviously, the higher the buy, the more the sales tax is going to be on the purchase, so I think that’s great advice and input.

Courtney says that “If you’re buying used from a private party, have your own mechanic look at it. If the selling party isn’t comfortable with that, you should probably find a different car. This allows you to know what you’re getting into.” And as somebody who’s completely incompetent when it comes to vehicles, I can attest to the importance of having somebody else give you a second set of eyes and give you some advice to make sure you’re not overlooking things that maybe you have blind spots when it comes to buying a vehicle.

David says that “We bought a four-door Toyota that was six months old with only 5,000 miles and got it for half the new sticker price. That was several years ago and haven’t come across anything nearly that good, but the dealer said it sat on the lot because that specific vehicle wasn’t real popular at the time, and nobody wanted a stick shift. We learned to look for cars that had been sitting on the lot for a long time in order to get a good deal.” Great advice, David.

Rachel says, “Go to the dealership with a plan.” Amen to that, Rachel. “Do your window shopping online only. My goal was to buy a used, reliable, safe vehicle with under 50,000 miles. I purchased with a low-interest loan, but I could have paid with cash, which made me feel really good. Research the cars you’re interested in before going, and research the cars that the dealers have on their lot. Last time I was car shopping, I knew more about the car than the salesperson, which made me look and feel confident in negotiations. Be patient,” Rachel says. “I didn’t budge on the price I wanted the vehicle for. And in a few months, I ended up getting a better model of the same vehicle for the price that I wanted.”

Brianne says, “I’ll tell you the truth and admit that I’ve leased for the past five years. Previously, I bought a used car, and when it started breaking down on a regular basis while I was on rotations, I needed something reliable quick and didn’t have time to shop around for the best deal. I had a great experience at the dealership and extremely low monthly payments for a brand-new car, and best of all, never had to worry, which was worth its weight in gold to me. When the lease was up, I re-leased because I was about to be fresh out of training with little savings. I feel like it was the right decision for me both times, and now I’m saving for a used car that I’ll have time to research and look for and hope to pay close if not all of it up front.” Brianne, I’m so glad you jumped in the conversation because I think you bring up a great point that this is not a black-and-white decision in my mind of buying a car used is better than lease new versus used and so forth. You know, I think back to a couple years ago when Volkswagen was having some of their specials because of some of the PR troubles that they were having where they were running — I think it was a Jetta, I believe — they were running for $89 or $99 a month with nothing down. It’s hard to beat that when you look at the math on a vehicle. And so I think when you, you bring up some good points about the point you were at in terms of transitioning out from rotations and through residency, in terms of some of the comfort that you were looking for and not wanting to deal with the hassle. And I think that highlights the importance of this really being an individualized situation and to do the math to see what might be best for your personal situation.

Kelly says “I lease and love the idea of renting a car. The important mindset of leasing is to know it’s not your car. I don’t have to do much except take it in for regular maintenance, and I haven’t had hidden costs. I won’t lease forever, but it’s convenient. And since cars are not really investments, it’s a good option for me now.”

And finally, Sandy says, “I’ve had two cars since I graduated in 2001. One I bought new and have driven for 13 years, still going strong and probably turning to 150,000 miles today or tomorrow.” And actually, she confirmed that. She put a screenshot of the odometer onto the Facebook page. So Sandy, thank you for doing that. She says that, “Now that my husband has had a few more vehicles than me, the biggest mistake was getting the extended coverage on one of his vehicles. Won’t do that again if I were to buy new.”

So thank you to those in the YFP community who jumped into the conversation. This was really only about a third of the comments, so for those of you who are thinking about car buying, thinking about is this the best decision for me? What might I be looking for in the process? Or maybe some of you are thinking, I might want to get rid of my car, sell my car, look for something else. I would encourage you to ask those questions inside of the YFP Facebook group and to join the conversation.

I want to take a brief moment before we jump into the second part of the show and to highlight today’s sponsor of the Your Financial Pharmacist podcast, which is Script Financial. Now, you’ve heard us talk about Script Financial before on the show. YFP team member Tim Baker, who’s also a fee-only certified financial planner, is owner of Script Financial. Now, Script Financial comes with my highest recommendation. Jess and I use Tim Baker and his services through Script Financial, and I can advocate for the planning services that he provides and the value of fee-only financial planning advice, meaning that when I’m paying Tim for his services, I’m paying him directly for his advice and to help Jess and I with our financial plan. I am not paying him for commissions, I am not paying him for products or services that may ultimately clout or bias the advice that he’s giving me. So Script Financial specifically works with pharmacy clients. So if you’re somebody who’s overwhelmed with student loans, or maybe you’re confused about how to invest and adequately save for retirement, or maybe you’re frustrated with just the overall progress of your financial plan, I would highly recommend Tim Baker and the services that he’s offering over at Script Financial. You can learn more today by going over to scriptfinancial.com. Again, that’s scriptfinancial.com.

OK, so we’ve talked about some of the data and statistics surrounding car buying, and we’ve gotten some input from the YFP community about what they prefer in the car buying process and what is some of the advice that they have and things to consider. So what I want to do to wrap up this episode is talk about five lessons that I recently learned when I went through the process, Jess and I went through the process, of buying a car a couple years ago. So this is our most recent Swagger Wagon. And I have to be honest, if you had asked me five years ago, would I be excited about getting a good deal on a used minivan, I’m pretty sure I couldn’t have honestly said yes, but that’s the reality of three young kids, and I have a lot of pride in our used minivan in getting a good deal on that buy. So here’s the backstory. In 2014, Jess and I were still trying to get rid of our student loans. And at the time, I had an itch to get a new car. And that itch turned into going to the dealer. Going to the dealer turned into me trading in a paid off Nissan Sentra that had less than 50,000 miles on it and instead buying a used Lincoln MKX that had more miles on it and obviously was a greater expense.

Now, in the moment, the Lincoln MKX looked great. Great leather seating, great — I think it had a Bose sound system, actually, which was incredible — had the moonroof, had the whole nine yards. But here we were, almost about to pay off our student loans, and we took a step backwards financially. Now, six months later, kind of looked back on the situation, said probably shouldn’t have done it, actually turned around and sold that car and ultimately used the difference that we gained in that sell to finish paying off our student loans in October 2015.

So was it a massive mistake? No. But did it cost us some money and some stress along the way? It certainly did. Now, fast forward a little bit further from that. And we went through our second experience of buying a used car and paying cash for that used car. So just about two years ago, we went and we were in the business of needing a new used minivan, a new used, new used minivan. At the time, actually our sliding door had fallen off. Thankfully, one of our friends had helped us put it back on. But nonetheless, it was time for a new used minivan. And so as we went through that process of looking for, talking about, buying that new used minivan, there’s really five lessons that I learned from buying that minivan that built upon the lessons I learned when I went through the process of buying and then selling the Lincoln MKX. So those five lessons, I’m going to walk through briefly.

No. 1 is cash is king. Cash is king. So when you pay for a vehicle with cash, if you can do that, what I have found through doing that twice is that you ultimately get a better overall price. There is real power in the negotiation with cash. The other thing that I really like, which is kind of the silver lining with paying cash, is in my opinion, it forces you to buy down on the car that you’re looking for. What do I mean by that? If I’m going to write a check for a car, I’m probably not going to be willing to write a check for or $20,000 or $30,000 car. And it’s going to force me to look down into something that’s a little bit lower in overall price, maybe $8,000, $10,000, $12,000. And again, back to the earlier point that cars are a depreciating asset. I’m always trying to figure out, what’s the lowest dollar amount that I can spend to get the best value. And I think cash forces you to buy down because you’re writing a check.

So why else is cash king? Ultimately, you own the vehicle. No payments, which means that you’re using those payments elsewhere to achieve your financial goals. Now, the caveat here is if you’re going to pay cash for a car, I would highly advocate that you have a good emergency fund in place before you make that decision because in the event that anything goes wrong, obviously you want to be able to make sure that you can fund it. However, if you have no monthly payments on that car, chances are you’re going to have some margin in your budget to be able to do that. So No. 1, cash is king.

No. 2, patience pays off. So in my opinion, the best time to buy a car is when you don’t actually need a car. When you don’t have that pressing moment of, I need to have a vehicle. So if you can plan a month, three months, six months out, know that it’s coming, but be in the position to make sure you can do your homework and to be patient. It’s going to allow you to find the best deal, and it’s going to make sure that you’re not emotionally reacting to that buy. Because just like I mentioned, when I went and bought that Lincoln MKX, it started one day in a very casual search on cars.com, quickly turned into a feeling of, man I’ve really got to have this, quickly turned into me ending up at the lot and making that decision. So patience pays off in the car buying process.

No. 3, having an educated offer equals savings. Having an educated offer equals savings. And this really builds on No. 2 that if you have time, and if you can be patient, you’re ultimately going to be able to start looking and doing your research and making sure you’re coming with a very detailed, educated offer. And I can remember when I came to buy that Honda Odyssey recently, I could tell you a 2009 Honda Odyssey in the EX model that had this many miles on it, what was the going price for that car. So when you go into the dealer with that type of information, you’re obviously ready to negotiate. So I would recommend that you first start by looking up features and reviews of the car that you’re interested in in a site like Edmunds.com or a similar site, which I’ll link to in our show notes. Then you can start to work through Kelly Blue Book and other sources to really get to the nitty gritty on what is that car worth, what’s the value of that, and what price might you want to go into when you begin the negotiation process?

No. 4, used cars most, not all of the time, buying a used car most, not all the time, is going to be the better move. Now, I cannot emphasize that enough that it’s most, not all the time, as we’ve heard through some of the comments in the YFP Facebook group and in the community. So really this goes back to the point that we talked about, depreciation, right? So that if depreciation has already happened, and you’re buying at the right point of a used car, you’re really going to get that sweet spot where the hit of depreciation has already been taken, and you’re still going to be in a relatively low mileage position that it’s not going to require a ton of maintenance. Again, this is also highlighting the fact that if you can buy at the right price of a used car, it’s going to help free up some cash each and every month that you can use that difference to throw that money towards other financial goals that you have.

Now, things to think about that if you buy used at a dealer versus you buy used, let’s say from a private party. With a dealer, typically — not always, but typically — the car is going to be a little bit more expensive. It’s going to be a little more difficult to negotiate because those people are trained to negotiate. Now, the plus side of a dealer environment is it’s usually a little bit easier, and they’re going to help take care of all of the paperwork. And if you’re going to finance the vehicle, obviously they may have financing options that are available. Also, if you’re somebody that says, ‘I really want to be certified pre-owned,’ working with a dealer is going to give you that option. Now, working with a private party, there’s going to be more work on your end. You’re going to have to handle a lot of the paperwork and the processing, although I can tell you that’s fairly easy, and there’s a lot of great resources out there that can help you. It’s going to probably, not always, probably going to be a little bit easier to negotiate if you’re comfortable with that. Now, the downsides here is that you’re going to really have to do your homework on the inspection, making sure you’re feeling comfortable with the quality of the vehicle. And you’re going to, of course, have to pay cash typically for that vehicle unless you’re going to have some type of private arrangement with that person to finance it. So No. 4 is used cars most, but not all the time, are going to be the better move.

Now, No. 5 is I would highly encourage you, if you’re looking at a lease versus an own is to do the math. Do the math to see is this a better financial move when it comes to a lease or an own? And then on top of the math, make sure you’re factoring in things like your comfort with taking care of the maintenance and your comfort with having a used car that you might have a few things that go wrong here or there. So let me give you an example of what I mean by doing the math. If I were to be shopping today for a Honda Odyssey van, and I was looking at, say, a 2018 lease versus buying a older, used, decent mileage Honda Odyssey. I just pulled up today, actually, if you look at a 2018 Honda Odyssey LX, the current offer that they have with good credit is a 36-month lease that’s $369 a month for $2,500 that’s due at signing. Kind of sounds like a commercial, right? $2,500 due at signing at $369 per month for 36 months. So in this example, the total payout comes to $15,783. And that’s combined with the monthly payments as well as what you’re due at signing. And if you take that dollar amount, and you divide it by 12 for how much that would cost you per month, that’s going to cost you $438 per month, assuming that there’s no damage to the vehicle, there’s no overmileage, etc. when you turn in that car. So a lease option, as I’m looking at the numbers here on a Honda Odyssey LX, is going to cost me about $438 a month. Now, what if instead of leasing, I were to buy a used Honda Odyssey vehicle? What would be the difference there? And what are some of the considerations? So I was looking at today a 2012 Honda Odyssey EX, which is actually a model up from the LX, has about 60,000 miles. That car is selling for approximately $11,500. So if I were to convert that into a monthly payment, if I were to take that to convert it to a monthly payment so I could do an apples-to-apples comparison to the lease, that comes out to $319 per month. So instead of the lease costing me $438 per month, here this buy would cost me approximately $319 per month. So if you just look at that on the surface, that looks like $120 per month of savings. But in reality, at the end of 36 months remember, in this situation you have no more payments. So every month that goes by that you own that vehicle that you’re not reupping a lease, you have to then of course factor that into the savings. But you also, on the flip side, need to factor in that you’re probably going to have some cost around maintenance that maybe you would not have with the lease. So if you look at this example, I think if you’re comfortable driving a car that’s got 60,000 miles on it, the math is pretty clear that that’s a better option when you consider what you could do with that $120 per month plus whatever you save when your payments are done. Now, some of you may be driving vehicles that the lease numbers look much more favorable than that. So what I’m advocating for in point No. 5 here is to do the math and to make sure you really evaluate the difference between leasing and buying used.

So just to recap five lessons there that I learned from buying those two most recent vehicles, the Lincoln MKX and the Honda Odyssey:

No. 1, cash is king.
No. 2, patience pays off.
No. 3, an educated offer equals savings.
No. 4, used cars are superior most, not all of, the time.
And No. 5, do the math on a lease versus an own.

Now, here is my call to action for you is to go back to the question that I asked at the very beginning of this segment. And that question was this: Is my current car situation and payment getting in the way of me achieving my other financial goals? If so, is it worth it? Is my current car situation and payment getting in the way of me achieving my other financial goals? And if so, is it worth it? And some of you might answer that question and say, no, it’s not. And that’s great, continue on with the plan that you have. Others of you may take a step back and say, you know what, I think my car is getting in the way of achieving whatever financial goal you’re working on: student loan, credit card debt, retirement, etc.

And so then the question would be do you have an opportunity to sell your current car? Could you potentially sell your car and buy down on car so that you could free up some money each and every month to help achieve those goals? If you have a question about that, please jump over to the Facebook group and pose that question.

Now, one last thing that I’d like to end on here is if you’ve never read the book, “The Millionaire Next Door,” by Tom Stanley, I would highly encourage you to do it. He does a great job of outlining the financial behaviors and mindset of those that have a net worth of $1 million or more. And one of the things he spends a lot of time on the book is car buying because what he evaluates and recognizes is that those that have a net worth of $1 million or more often look at a car as a depreciating asset and are instead looking at where else could I be putting my money that is appreciating or that is growing in value? And through his research, he concludes that more than 50% of millionaires never spend more than $30,000 on a new car. And only about 23% actually own a new car. So 50% of millionaires never spend more than $30,000 on a new car. And only about 23% own a new car.

So thank you for joining me on this week’s episode of the Your Financial Pharmacist podcast. It’s been a lot of fun to be alongside here to talk about car buying, and I hope you’ll jump over to the conversation in the Your Financial Pharmacist Facebook, and I look forward to next week’s episode and hope you’ll tune in as well.

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YFP 036: A Pharmacist Couple Working to Row Their Financial Boat in the Same Direction

Posted on February 22, 2018November 2, 2022 by yfpadmin

On this episode of the Your Financial Pharmacist podcast, we finish our month long focus on how couples work together on their finances.

In Episode 36, we speak with Andria and Tim Church who share their story about how they first met and how their approach to their finances evolved over the course of their relationship. Andria and Tim share their wins and their struggles and impart valuable advice to other pharmacists and couples that are working together on their finances.

Featured on the Show

How Tim Church used Andria’s interest in primary care to court her
The Church’s struggle with budgeting, combining finances
Their “gazelle intensity” towards their student loans enroute to payoff and acquiring the Church family cat
How being budgeting, being frugal, side jobs and student loan refinance helped along the way
Advice to other couples
- Live like a student for a few more years
- Know what your goals are
- Educate yourself on personal finance
- Don’t take out more loans that you need
- “It’s our money…it’s our debt.”

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YFP 028: New Year, New Budget

Posted on January 4, 2018November 2, 2022 by yfpadmin

On Episode 28 of the Your Financial Pharmacist Podcast, we discuss the dreaded, yet all important, “B word”….budgeting.

With a New Year comes the opportunity to get a fresh start on setting a budget that will help you achieve your financial goals. In this episode, we cover why having a budget is key to your long-term financial success, why so many people fail with keeping a budget, various budgeting strategies, and tools that can help you execute your monthly budget.

Episodes 28 Giveaway

Along with this episode, we are providing a YFP step-by-step spending plan (budget) template that will put you on the path to putting purpose to your spending each month.

This YFP spending plan Excel template is ready to go with formulas that will allow you to easily create a zero-based budget.

Get your FREE spending plan template at www.yourfinancialpharmacist.com/budget

Featured on the Show

YFP Episode 027: Tim, Tim & Tim Recap the Best of 2017 & What’s Ahead for 2018
‘When Budgeting Isn’t Your Thing’ by Jess Ulbrich
Nerdwallet 2017 American Household Credit Card Debt Study
The 4-Hour Workweek by Tim Ferris
YFP Episode 020 & 021: 6 Reasons Pharmacy Graduates Will Struggle to Build Wealth (And What to Do About It)
YFP Episode 005: The Impact of Rising Student Debt on a Pharmacist’s Income
YFP Episode 026: Baby Stepping Your Financial Plan – The 2 Things to Focus on First
YFP Student Loan Quick Start Guide
Financial Peace University by Dave Ramsey
Seven Figure Pharmacist by Tim Church, PharmD, BCACP, CDE and Tim Ulbrich, PharmD
Mint – www.mint.com
Mvelopes – www.mvelopes.com
EveryDollar – www.everydollar.com
You Need a Budget (YNAB) –www.youneedabudget.com/
YFP Pharmacist’s Guide to $1 Million

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