Building Wealth

YFP 398: Is Your Income Your Rate Limiting Step?

Posted on by YFP Media

In this episode, Tim Ulbrich, YFP CEO looks at three powerful areas for growing your income: maximizing your compensation, real estate investing, and building side hustles or businesses.

Episode Summary

While cutting expenses is a key part of managing your finances, there’s a limit to how much you can cut. The good news? Your income has no ceiling.

In this episode, Tim Ulbrich, YFP CEO looks at three powerful areas for growing your income: maximizing your compensation, real estate investing, and building side hustles or businesses. Tim shares some personal experiences and examples from other pharmacists who have successfully diversified their income streams and created financial opportunities that go beyond the traditional 9-to-5 grind.

Key Points from the Episode

[00:00] Introduction to Financial Freedom
[00:50] The Importance of Growing Your Income
[05:01] Maximizing Your Compensation
[09:12] Real Estate Investing
[13:50] Side Hustles and Business Income
[26:06] Leveraging Extra Income for Wealth Building
[28:20] Reflection and Conclusion

Episode Highlights

“ Opportunities exist all around us to grow our income. I didn’t say that it was easy and I didn’t say it wouldn’t come without failures along the way. I said that there were opportunities all around us. And that it has no limits.” – Tim Ulbrich [1:43]

“ Is my value being compensated appropriately? If so, great. If not, are you advocating for yourself? And if you’re not advocating for yourself, why not?” – Tim Ulbrich [5:25]

“ Not all side hustles and not all businesses are a good return on time investment, and especially in the case of a business, yes, there is more upside than a traditional W 2. But there’s also risk and we have to assess what that risk is.” – Tim Ulbrich [14:46]

“ Real wealth building potential happens when you take income from these streams and have that money growing and working for you.” – Tim Ulbrich [27:12]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich: [00:00:00] Hey, everybody, Tim Ulbrich here. And welcome to this week’s episode of the YFP podcast, where we strive to inspire and encourage you on your path towards achieving financial freedom. Today, I’m diving deep into a fun topic for anyone looking to build wealth. And that is the role of growing your income.

While cutting expenses is a key part of managing your finances. There’s a limit to how much you can cut the good news. Income has no ceiling. In this episode, we’re going to look at three powerful areas for growing your income, maximizing your compensation, real estate, investing, and building a side hustle or business.

I’ll share some personal experiences and examples from other pharmacists who have successfully diversified their income streams and created financial opportunities that go beyond the traditional nine to five. So let’s dive in to this week’s episode.

Hey guys, welcome to this week’s episode. I’m excited to jump in. As we talk about how your income just might be [00:01:00] the rate limiting step of your financial plan. When we talk about achieving our longterm financial goals, whether that’s building wealth, having more funds to invest in experiences. Whether that’s giving all of the above, it comes down to having cashflow to achieve those goals and cutting expenses.

We’ve talked about that many times on this show before it plays an important role, make no mistake, but at some point in time. You can only cut so much. And so we want to spend some time looking at the other side of the coin, which is growing your income and what potential that might provide when it comes to the financial plan.

So what if we shifted our focus more to the income side of the equation? Because opportunities exist all around us to grow our income. I didn’t say that it was easy and I didn’t say it wouldn’t come without failures along the way. I said that there were opportunities all around us. And that it has no limits.

And this is a big mindset shift [00:02:00] for many of us. That grew up in a profession where there was a ceiling, at least one that we put in our own minds on how much we would earn with the degree that we had. Many of us went through school and we came out with this story. I’m set or unsaid that, Hey, when you graduate, you’re going to make a good six figure income.

And objectively speaking, pharmacists do make a good six figure income. But because of that mindset, we often get uncomfortable. If we think about income growing beyond that number. The idea that it could be more, maybe double or triple that. It’s scary because it butts up against what we have known and what we have believed, right?

It butts up against our experiences. Now, my experience tells me. In my own situation and working with many other pharmacists that if we have a solid financial base and foundation to work from, the more opportunities that we actually start to see, [00:03:00] perhaps they’ve been there all along, but the more aware we are, because we’re now in a position and a mindset that we can entertain the idea of taking calculated risks.

Because when we have that strong foundation, we shift our mindset from a scarcity mindset to an abundance mindset. And we begin to see the opportunities for how we can not only grow our income, but how we can leverage that income growth to other parts of the financial plan. So the question is what opportunities exist?

To earn more income. Tell me more, Tim, what opportunities exist to earn more income. And I’ll speak from experience of those that I have, uh, have run across my own financial plan and those that I’ve come across in interviewing other pharmacists on this show, certainly it’s not meant to be an all inclusive list.

And if you have other ideas, whether you’re employing them in your own financial plan, or, you know, of others. That are leveraging strategies to grow their income and expand their income to accelerate their financial plan. [00:04:00] Send us an email at info at your financial pharmacist. com. We’d love to hear about it and be able to address those on an upcoming episode.

Now, before we jump in, I am not going to spend time on the one income growing idea that perhaps is the most obvious, right? Which is picking up. One of the blessings that we have in our profession is that we can, in many cases, pick up extra shifts, either at our employer or at another employer, at a really good hourly wage, that those additional dollars could be put to work in the financial plan.

So, if that’s available to you, and you’re interested in doing that work, that just might be the path of lease resistance. So I’m not going to focus on that, but I am going to focus on three other buckets of which I can, I think you can grow your income, maximizing your compensation, real estate, investing, and generating income through a side hustle or a business.

And again, I’ll feature several examples of [00:05:00] pharmacists all along the way. So let’s start with number one, which is your compensation. Right. Let’s address what you already have available to you to see if we can maximize that further. See if we can squeeze out more from our compensation while we also explore other strategies.

So if you are working a W 2 job, I want you to ask yourself this question. Is my value being compensated appropriately? Is my value being compensated appropriately? If so, great. If not Are you advocating for yourself? And if you’re not advocating for yourself, why not? Is there a potential for a raise within your organization and negotiating that raise or perhaps a, a new position externally that could give a boost to your income?

And now we all know from experience that when it comes to satisfaction in the workplace, it’s not just about the income. So I don’t want you to lose sight of those other factors, but if your value is not compensated appropriately, is there an [00:06:00] opportunity internally or externally? That we could pursue to grow that top number.

Now, my experience tells me that making a transition from one employer to another is a good opportunity. It’s a good time to right size compensation and negotiate. If you have the leverage to do so now, of course, if there’s an opportunity within an organization, and that is one that you already like working for that organization, we want to pursue that first, but if not, perhaps a transition.

Can afford us an opportunity to grow our income. Let me give you an example. In 2018, I made the transition from an academic role at Northeast Ohio medical university to one at Ohio state. In addition to having my partner, Tim Baker, certified financial planner in my corner, who’s an expert in negotiation, and he was able to coach me through that process.

In addition to that resource, there was one thing in particular. That allowed me to jump [00:07:00] my compensation by more than 30, 000 per year during the transition. And that one key ingredient that I believe is a really important ingredient when it comes to negotiation is that I had leverage. Now that’s not a bad word.

That’s not a greedy word. It’s a fact when you look at the negotiation process, do you have leverage or do you not have leverage? It’s an important self assessment. And the reason I had leverage is that I didn’t have an urgency. To make that move. And I applied for the position with a mindset that, Hey, if it works out great, if it doesn’t, that’s okay too.

And that really led me to approach the interview with an abundance mindset. I was able to cast a bold vision for the position that I was interviewing for. And I was able to do that, knowing that that vision was either going to be a home run, or it was going to be a strikeout. And because I love the work that I was doing at Northeast Ohio Medical University.

I like my colleagues. I was [00:08:00] afforded great opportunities there. I was curious about this new position, but it wasn’t a must have. And that leverage really helped me throughout the negotiation process. So back to the question, whether it’s an internal negotiation or an external negotiation, is your value being compensated appropriately?

Yes. Ideally your income is outpatient inflation, but asking for a raise for inflation sake, isn’t going to get you very far in the longterm. Rather, we need to focus on value, value that you bring to the employer and ensuring that that value is fairly compensated. And the key word here in the negotiation is fair.

If we’re talking about value and fair compensation, we’re now in an environment that allow us for hopefully a successful. Negotiation. If you’re curious to learn more about negotiation strategies, Tim Baker, and I talked about this several times in the podcast, but most recently on episode three 84, where we talked about beyond [00:09:00] salary negotiation, looking at your value in the workplace, so make sure to check out.

That episode that’s area number one, as we look at how we can potentially grow our income. And there we’re talking about compensation. Area number two is real estate investing, real estate investing. Now, outside of investing in the purchase of our office building for your financial pharmacist and doing some more passive hard money lending.

I’ll talk about that more here in a moment. I don’t necessarily consider myself to be a big real estate investor. It’s an area that I value as a diversified part of the financial plan. It’s one that I want to continue to grow as a part of our own financial plan, but I don’t consider myself a big real estate investor or pro in this area, but we have some great resources available through our community.

And those have been led by David Bright and Nate Hedrick, who are the co hosts of the YFP Real Estate Investing Podcast. They put out some great content sharing, not only their own investing journeys, but also [00:10:00] featuring other pharmacists that are doing real estate investing in all different types of way across the country.

So make sure to check out that resource. That said. While I don’t consider myself to be a big real estate investor, I do personally know many pharmacists in our community that have been successful in this space and they’ve done it in a lot of different ways. And one of the cool things about real estate is that it comes in many different forms and flavors that depending on your risk tolerance, depending, uh, depending on what level of involvement, how hands on you do or don’t want to be, some opportunities may be more interesting than others.

And many of you are likely already real estate investors and perhaps aren’t even aware of it. I’m talking about investing in REITs, what are known as real estate investment trust, which just might already be in your asset allocation inside of your 401k or inside of your 403b as one example. And what is a REIT?

Well, instead of owning and holding a property, a REIT or a real estate investment trust [00:11:00] is an investment in a company that pools money together to own or finance a real estate portfolio. So it’s one way that you can diversify your portfolio and get invested in real estate without owning the physical property and managing that yourself.

So what are the different types of real estate investing that are out there? Probably what comes to mind for many people, what I consider kind of the traditional real estate investing approach is what I call a buy and hold. So you buy a property, perhaps it’s, it’s undervalued. Maybe you do a little bit of fix up for the property.

Hopefully you have a long term tenant. If not, you’re dealing with vacancy and turnover and you’re, you’re charging a monthly rent that that’s. Ideally, positive cash flow and you have that for a long period of time and you can replicate that process potentially over and over again. So that, that’s a more traditional, a more active approach, depending on if you have a property manager, if you’re doing it yourself, that would be a buy and hold.

But there’s lots of other ways. There’s short and midterm rental. So think Airbnb. Right. There’s fix [00:12:00] and flips think, uh, HGTV fixer upper. So these are properties where again, uh, a property that often might be undervalued need significant repair work. You buy it at that lower rate, you fix it up. And ideally you set, you sell it for a profit.

There’s many other considerations to be thinking about there, but that that’s essentially the idea. There’s things that are more passive, like syndications and hard money lending, where you’re serving essentially as being the bank for other people that are doing. Real estate investing. There’s commercial real estate investing.

There’s house hacking where you’re living in a property while renting out a portion of the property to one or more individuals. Heck you can even buy a motel Schitt’s Creek style and turn that into an investment property, similar to what Stewart and Elizabeth only did as they shared on episode. 46 of the YFP real estate investing podcast.

We’ll link to that episode in the show notes. So there’s lots of different flavors of real estate investing, and it’s certainly not for everyone, but it can [00:13:00] provide some very tangible benefits. Including rental income or cashflow appreciation of that property over time where that equity could be leveraged There’s tax benefits and certainly for those that are thinking potentially something like an early retirement We can liquidate some of these properties as one avenue of creating some of that cash flow before we pull on other Investment accounts that might be tied up to that 59 and a half age that we think about with things like a 401k or an IRA.

Lots to think about there. Make sure you check out a real estate investment investment podcast shows. If you’re not already familiar with those, and I think you’ll find those inspiring, informational, and just give you ideas of how real estate investing may or may not fit in with your financial plan. So that’s number two, is we look at three different categories of how you can potentially grow your income.

The third one that I want to talk about. Is side hustle or business income. Now, these are very different, right? If someone owns a business and they operate a [00:14:00] business and that’s, that’s their full time thing versus side hustle. When we think about traditionally, you’re working a full time or part time job in addition to doing the side hustle.

But because many side hustles can become a business, I’m going to group these two things. Uh, together now, I think it’s important to know, right? There’s, there’s risk in lots of the different things that we’re talking about more so with the business and the side hustle, but because side hustles and entrepreneurship have become all the rage over the last decade or so, and, and I’m, I’m all in for a good side hustle or a business, but not all side hustles and not all businesses are a good return on time investment, and especially in the case of a business, yes, there is more upside than a traditional W 2.

But there’s also risk and we have to assess what that risk is. And when it comes to growing your income through a side hustle or business, this could be pharmacy related, or as you’ll see with a couple of examples, as I get towards the end, it might be not pharmacy related, especially if you have a creative outlet or hobby or [00:15:00] skill that is independent of your role or skills as a pharmacist.

So let’s look at a few examples of pharmacists. That have experience building a side hustle or a business. And I’m going to group these into different categories just to get the ideas flowing as you think about your own financial plan, the number one category and no particular order is medical writing.

I see a lot of pharmacists that are interested in doing medical writing. Yes. You can be a contractor. To do medical writing so this could be a side hustle or you could build and own your own medical writing business So I think about individuals like britney hoffman eubanks who we had on episode 126 that has her own medical writing business banner medical I think about megan freeland who was on episode 259 where we talked about building her medical writing business while she was also working Full time job.

I think about Austin Ulrich who was on the podcast who talked about Going on his own as an as an entrepreneur to build a a medical writing business and how he’s able to do that

I think [00:16:00] about Warda Nawaz who talked about in episode 280, how she was able to pivot to a writing career. Lots of cool examples of pharmacists that are dabbling in this from a side hustle as a contractor to building their own medical writing business. Another bucket I would consider here is clinical consulting, right?

In days gone by, this would be performing things like medication therapy management services for a local pharmacy or independent pharmacy in modern day. This would be doing things like virtual medication therapy management or comprehensive medication reviews through companies like Aspen RX Health. So there are opportunities to pick up extra hours, earn some additional income, applying skills that maybe you’re using in your everyday job, or perhaps is tapping into a different part that you’re not using.

Every day in your work, there’s opportunities in speaking lots of pharmacists. I know that are getting paid for speaking Now this can be a grind when you think about the travel if it’s in person speaking Um, sometimes the the money may not be as [00:17:00] as good as it you want Depending on what type of speaking you’re doing, what your audience is.

I know several pharmacists that have made additional income predominantly as a side hustle, this certainly could build into a career. One I think about in particular would be Corey Jenks. We’ve had on the podcast most recently on episode three 62, uh, talking about fatherhood, family, and fire. If you’re not familiar with Corey, he’s written a couple of books and.

On that episode, we got to talk about his book on fatherhood. He’s a comedian and he just has a great speaking package and keynote that brings his healthcare experience, formerly working with the VA now working for a different employer, but. Pairing that health care experience with his passion and love for comedy and bringing that in a way that helps Clinicians pharmacists and other health care professionals be more compassionate And light hearted and how they approach those interactions with patients and he gets paid For the speaking that he does and his book led to his speaking his speaking helped further his book sales So [00:18:00] that’s one example that I would throw out there The next bucket that I would bring forward is what I’m calling content creation or online courses or communities where people are monetizing their clinical expertise.

So they built a brand, they have an area of clinical specialty and expertise, and they’ve been able to monetize that in different ways. Several individuals here. That are worth highlighting one, Jamie Wilkie. We had her on, on a couple episodes of the podcast, most recently on three 59. Again, we’ll link to all these in the show notes.

She first built a pharmacogenetics, uh, course in community. She worked for a while in retail pharmacy, left that work, built her own, uh, course and community has now built a brand under the misfit farm D where she’s helping to. coach pharmacists that are looking at career transitions and how they can take the skills that they have and be able to apply those skills to perhaps a different work scenario and employment setting than the one that they’re in now.

So if you’re not already following her on LinkedIn, I would, I would encourage you to [00:19:00] check her out. She’s got great content. I think about individuals like Blair Teelmeyer. Who built the pharmapreneur Academy. And she took a difficult situation of finding herself unemployed to starting her own business and became really a thought leader in our profession, not only through that Academy, but through her personal brand, that is a lead to additional consulting opportunities for her as well.

She wrote a book as well, early in her journey. Uh, so, so lots of pieces to consider here. I think about Tim Gauthier, who’s an ID clinical specialist that we had on the podcast a couple of years ago, who has built. His has taken his clinical expertise to build and monetize, uh, an online community and paid courses.

He has a social following that he built early on in Twitter and now X all focused around ID stewardship. So it’s a work that he’s doing day in and day out, and he’s able to then package that and build a brand around being the leading expert in ID stewardship for pharmacists. I think about individuals like Jimmy Pruitt, [00:20:00] who’s worked full time in an ED pharmacy and has built, started with a podcast.

He’s got an online community and resource. He’s got now an in person, uh, live event for emergency pharmacists and other healthcare professionals. Uh, built that while working full time as an emergency clinical specialist. Again, taking the work that’s being done every day and using it to monetize that clinical expertise and be able to reach a broader group.

I also think about individuals like Kelly Carlstrom, the founder of Kelly C Farm D, who’s a PGY 2 trained oncology he monk specialist that said, Hey, why isn’t this information more readily available outside of large academic medical centers and PGY 2 trained programs? And clinical specialists. And so she built an online community and resources where pharmacists all over the country could have access to that type of information to grow their clinical skills so they could better serve their practice sites and their patients.

Lots of cool examples of pharmacists that are creating courses, communities, [00:21:00] content, finding monetize their clinical expertise. Another bucket would be being an adjunct professor or teacher. I know several pharmacists that work full time but then they adjunct teach at a, could be a college of pharmacy, could be a college of medicine, uh, could be with a nursing program, could be with another healthcare profession that has a pharmacology course, could be in person, could be virtual, online courses, lots of different ways to get involved and to be able to again tap into a different area of your skills.

And earn some additional income. Another area would be an expert witness in episode 112 of the podcast A phd trained pharmacist brent roland shared his story about becoming a pharmacy expert witness for law firms Primarily focusing on marketing cases in addition to standard of care cases And he was able to get this experience while he was in school with his professor Asking for help on a big case.

That’s where he got started and then he continued to receive Casework from there. Many criminal [00:22:00] and civil cases involve medications, involve toxicology, involve quality of care and negligence. All areas where pharmacists are positioned well to provide their expert, uh, opinion and, uh, potentially some expert witness and testimony.

Another area would be consulting. Lots of pharmacists that are doing consulting. I think about individuals like Jill Pallier, who has a background in patient safety, uh, who’s built a specialty practice and has really paired those skills to be able to build a consulting business. I think about individuals like Brooke Griffin, who we had on episode 379 of the podcast, where she talked about her journey, building the business, the bold idea group.

Where she’s a full time academician at Midwestern and was able to build this coaching business while she was and continues to work full time in academia. I think of another category, which would be software or app based businesses. So Derek Borkowski who built pearls, if you’re not already familiar with pearls, I hope you’ll check it out.

[00:23:00] Great drug information resource. When I was in pharmacy school, we had a very antiquated version of micrometics and Lexicom. This is a much more user friendly modern version of those tools. I often joke with Derek, I wish I had this tool and resource available to me when I was in pharmacy school and residency.

And we had Derek on episode 243 where he talked about his non traditional career path, going from a community pharmacy to becoming a software engineer, and then ultimately building his business at Pearls. Other software app based business, I think about PharmaSol and Natalie Parker, graduate of Ohio State, who built PharmaSol with her co founder from MIT.

And PharmaSol is a company that streamlines pharmacy communications with advanced AI. And helps to automate calls and messages with patients, providers, and payers. Really cool example of someone that took their interest with AI and technology and paired it with their background in pharmacy. Another category I think about would be developing a physical product based business.

Now this can come with high risk and [00:24:00] high reward, right? There often is some, some higher, uh, equipment and costs to get started when you talk about a product based business, but two in particular stand out for me, one that’s pharmacy related, one non pharmacy related. One would be Alison Brennan, who we had on episode 180 of the podcast, where we talked about her journey, where she used her pharmacy skills to start her skincare company called Emma Gene Co.

And she started the skincare company out of her house while she was working full time and then eventually part time as a hospital administrator. Eventually she left that work to work full time on the skincare business. Now has her own team, has a warehouse, business is doing really well. Really cool example of a product based business.

The other one I think about here would be Prickly. Prickly is a cactus, uh, base, uh, beverage company. And a shout out to Quan Yang and his team and his co founder Mo who have built Prickly. We had Quan on episode 289, talking about how they built that. What was the vision behind it? Why did they do it? Uh, [00:25:00] really cool example of a pharmacist that appeared on Shark Tank and was able to leverage their entrepreneurial interest to build a product, uh, in what is a very competitive market, right?

The beverage industry. And last, but certainly not least, I think about some of the non pharmacy Uh entrepreneurs that are out there or the side hustlers that are out there as well Individuals like landon connor who’s a pharmacist who has a passion for photography and has built a successful photography business I think about pharmacist stephanie roberts who built an apothecary art business.

I think about pharmacist rosie chun who built a calligraphy Artist business successful business out in California that does a lot of events and high end calligraphy work for celebrities and Corporations again several different ways. There is no one right way, right? The purpose of me sharing these was to give you some examples and hopefully spark some creativity ideas of pharmacists That yes many of who have stayed in their pharmacy careers But are also building some really [00:26:00] cool things on the side or eventually some of those Were were evolved into a business

now here’s the kicker when it comes to earning additional income, whatever avenue that might be, whether it’s growing our compensation, perhaps generating income through real estate investing, whether passive or active or generating income through a side hustle or business that extra income while it’s nice, and we can apply it towards certain goal, that extra income itself.

Is not where the real wealth building potential happens, right? Let me give you an example. If, if you were to take an extra 10, 000 that you earn and you apply it towards a, let’s just say a student loan debt payment, that’s at 6%, and there’s certainly a time and place for that. So don’t, don’t mishear me on this, but in that instance.

The value of that extra 10, 000 is limited, although valuable, limited to paying down that debt by 10, 000 and any of the interest that we would save that would have otherwise accumulated, but over time is we’re able to build a [00:27:00] strong financial foundation. If we can turn that extra income into assets that will produce further income and hopefully do so at a rate that compounds over time, that’s where we really start to see the money.

Working for us. Real wealth building potential happens when you take income from these streams and have that money growing and working for you. So what does that look like? Again, lots of ways that you can do this, but for me, it has included turning extra income from different sources into more traditional compounding assets, right?

Like equities inside of a 401k or four or three B IRA, HRA, HSA, taking that income and investing it as a hard money lender for others that are doing real estate investing, taking that extra income and purchasing a cash flowing. Appreciating property, taking that income and building equity and another business.

taking that income and investing in other businesses and taking [00:28:00] that income and growing an existing business, therefore increasing the value or the equity of that business over time. Those examples I think are really where you start to see the flywheel of how that income and taking off the ceiling of your income, how that income can be leveraged.

Towards that longer term plan to building wealth. So as we wrap up, let me leave you with a few questions of reflection. As you think about how to apply this in your own financial plan. Number one, do you believe that the income that you have and your potential of income for the most part is fixed? If so, why is that the case?

Where does that mindset come from? I think it’s really important to explore that. Second question. If you work for a traditional W 2 job, are you being compensated fairly for the value that you’re bringing? If not, what has been holding you back from asking and negotiating additional compensation? And number three, what opportunities [00:29:00] are there for building wealth?

Investing in experiences and giving beyond those that I mentioned throughout this episode. And if you have an idea, as I mentioned at the beginning of something you’re doing or something, you know, someone else is doing, send us an email at info. At your financial pharmacist. com. Thank you so much for listening to this week’s episode of the podcast.

If you like what you heard, do us a favor, leave us a rating and review on Apple podcasts, which will help other pharmacists find the show. And finally, an important reminder that the content in the podcast is provided for informational purposes only, and is not intended to provide and should not be relying on for investment or any other advice for more information on this.

You can visit your financial pharmacist. com forward slash disclaimer. Thanks so much for listening. Have a great rest of your week.

[END]

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YFP 391: 7 Books That Shaped My Money Mindset

Posted on by YFP Media

Tim Ulbrich shares insights from seven financial books that shaped his journey, offering key lessons on saving, spending, mindset, and building wealth.

Episode Summary

In this episode, Tim Ulbrich highlights seven impactful financial books that shaped his journey, including I Will Teach You to Be Rich by Ramit Sethi, Die with Zero by Bill Perkins, and Rich Dad, Poor Dad by Robert Kiyosaki. He shares key takeaways on topics like balancing saving and spending, adopting a wealth-building mindset, and spending for happiness.

Key Points from the Episode

[00:00] Introduction and Financial Moves Recap
[00:41] Book 1: I Will Teach You to Be Rich by Ramit Sethi
[03:25] Book 2: Die With Zero by Bill Perkins
[06:14] Book 3: Rich Dad Poor Dad by Robert Kiyosaki
[08:12] Book 4: The Millionaire Next Door by Dr. Tom Stanley
[10:12] Book 5: The Compound Effect by Darren Hardy
[14:09] Book 6: Total Money Makeover by Dave Ramsey
[15:33] Book 7: Happy Money by Elizabeth Dunn and Michael Norton
[17:47] Conclusion and Call to Action

Episode Highlights

“ It’s about intentional allocation of the dollars that we have and spending them in areas that we drive the most significance.” -Tim Ulbrich [1:35]

“The plan that got them there to work hard and to save, save, save…that mindset was going to require a shift in order to live a rich life. New behaviors need to be learned. And ideally we can build these spending muscles throughout our careers and not just wait until some day off in the future.” – Tim Ulbrich [5:54]

“I can’t think of anyone. I know. Who got rich off of buying whole life insurance policies, buying random alt coins or buying NFTs.”- Tim Ulbrich [10:59]

“Learning is one thing, but learning and taking action with accountability is really where we start to see things happen.” -Tim Ulbrich [18:21]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich: Welcome to this week’s episode, Tim Ulbrich here we kicked off the new year where I covered five financial moves to make, and we’ll link to that episode in the show notes.

One of those moves was to set your learning plan. So here are seven financial books that have had a profound impact on my journey, such that I often recommend these books to others, gift them, and I’ve implemented at least one, often more than one of the teachings in my own financial plan. All right. In no particular order, let’s jump in with book number one.

[00:02:00] Which is, I will teach you to be rich by Ramit Sethi.

Now I had the chance to hear Ramit speak in 2019 at the FinCon event, the FinCon conference in Washington, DC, and it was fire. He’s a fantastic speaker, a fantastic teacher. And at the time, the theme of his talk, which he talks about in the book, I will teach you to be rich is money dials, money dials, a key concept in that book.

And. Really, the concept of money dials is identifying what areas of spending have the most significance, meaning or impact for you and dialing those up and on the flip side, finding those areas of spending that perhaps are somewhat automatic and we may not even be thinking a whole lot about it. And they have the least significance or meaning or impact and dialing those down, right?

It’s about intentional allocation of the dollars that we have and spending them in areas that we drive the most significance. Now it sounds obvious, but it’s easy to fall into the [00:03:00] trap of spending money on things that you don’t really care that much about at the expense of not having money. To spend on things that mean the most to you.

And I love that he starts off the book with this, right? Because before we implement the X’s and O’s of the financial plan, as you’ve heard me say on this podcast, many times, we have to be clear on what does it mean to live a rich life? Now he’s, he uses the terminology money dials. We talk about living a rich life.

We’re talking about the same. thing, right? Now, this is not about me saying what should or shouldn’t be meaningful, right?

Everyone has different significance and meaning. It’s about getting clear. What are those things that you derive the greatest significance and meaning from? And is your financial plan, is your spending in alignment with those areas? Now, in addition to the concept of money, Dows in this book, his teachings on automation have stayed with me and are ones I’ve applied to my own plan and teach often to other pharmacists.

Now, he says in the book that automating your money will be the single most profitable system that [00:04:00] you’ll ever build. And I would whole heartedly agree with that. It takes time, a little bit of time to set up, maybe perhaps not as much as you think, but once you have a system in place where you’ve thought about and identified your goals.

We’ve accounted for them inside of the monthly spending plan. And then we are automatically funding those goals. And we see that process happening. Boom, right? That’s when we’re really humming with the financial plan in general. This book is a great personal finance one on one read. It’s an easy read.

Again, he’s a fantastic teacher. And I love the principles in this book and our principles that I often apply in my own financial plan. The second book on my list is die with zero by Bill Perkins, die with zero.

By bill Perkins. This book is going to challenge you to think differently about the value of spending and finding that balance with saving or, as we say at Y. F. P. Finding the balance between living a rich life [00:05:00] today and planning and taking care of our future selves.

Now, if you’re an aggressive saver, Guilty as charged. And you find yourself challenged to enjoy spending money today, right? To let go of the reins a little bit. This is a must read for you. Bill Perkins in the book challenges traditionally held beliefs about retirement planning and passing down generational wealth.

One of my favorite quotes from the book is when he says, quote, people who save tend to save too much for too late in their lives. They’re depriving themselves now, just to care for a much, much older future self, a future self that may never live long enough to enjoy the money.

I’ve come to appreciate and still need a lot of help guidance and reminders from my financial planner, from Jess and our own plan that spending just like saving. Is a learned habit. I was recently reminded of this after listening to an interview on Ramit Sethi’s podcast, where he was talking with a couple [00:06:00] nearing retirement age that had over 6 million in net worth.

It was quite sad to hear the husband rationalized with Ramit for almost two hours, all the reasons why he couldn’t spend and enjoy because he had to quote first, save it up. Or quote work harder to make up for what he was going to spend again, net worth of 6 million. So for all intents and purposes, they achieved their savings goals.

Plus some, right? The plan had worked. They had gotten to that point that they were planning for all along, but despite what the numbers showed, he couldn’t shift his mindset. He was stuck in the grind and the hustle of working and saving. Working and saving. And this is something we don’t talk about often enough with the financial plan that when we work hard for 30 or 40 years to save, that is a big transition.

When we get to the withdrawal phase, right? We need to be planning for that. We need to be preparing for that. And we need training wheels along the way to help us with this learned behavior of spending. And the point that was remit was trying to make and trying to get this husband to see is that in order to live a rich life, the plan that got them there can’t be the same.

As the plan going forward. The plan that got them there to work hard to save, save, save, work hard, save, save, save. That mindset was going to require a shift in order to live a rich life. New behaviors need to be learned. And ideally we can build these spending muscles throughout our careers and not just wait until some day off in the future.

That may or may not come and may or may not be what we have in mind.

Number three on the book is rich dad, poor dad by Robert Kiyosaki, rich dad, poor dad by Robert Kiyosaki. Now, Robert Kiyosaki has recently come into the spotlight and many different controversial ways. So personality aside, his teachings in this book, in my opinion, remain a classic. This book is all about mindset, not X’s and O’s like some of the other books that are on the list today.

And if you think of the financial plan as a series of decisions that need to be made, I think of this book as being [00:08:00] a philosophy that guides those decisions. It’s the thread behind the decisions that we make. And a few of the things that have stayed with me is that, you know, what we might think is an asset versus a liability. I think he challenges that mindset. Why leverage is an important tool to build wealth.

And of course there’s risk with leverage and we have to balance that. Also, what has stayed with me is why traditional W 2 income limits wealth building. And finally, why business ownership and real estate investing are key legs. Of the wealth building school.

Now this book in particular, along with tax free wealth by Tom Wheelwright, and we’ll link to all of these books in the show notes, tax free wealth by Tom Wheelwright really opened my eyes to the importance of tax as a part of the financial plan. One that is kind of always behind the scenes that probably many of us are not thinking about, and more specifically the strategies.

That can be employed to optimize our tax situation, right? We want to pay our [00:09:00] fair share, but we want to pay no more. And I think through these teachings and really digging into the form 10 40 and understanding how the different components of that form work and what are the levers that we can pull to make our, uh, tax rate as efficient as possible.

These two resources, rich dad, poor dad, and tax free wealth have really been instrumental in opening my eyes to the significance and importance of tax as a part of the financial plan. All right. Number four on my list is the millionaire next door. By Dr. Tom Stanley, the millionaire next door by Dr. Tom Stanley and the updated version, the next millionaire next door featuring Tom’s daughter, Dr.

Sarah Stanley flaw, which we had the pleasure of having on the podcast on episode number 200. This book examines the key behavioral traits. Of millionaires. One of my favorite quotes from the book is when he says, quote, one of the reasons that millionaires are economically successful is that they think differently.

They think differently. What he’s talking about is one of [00:10:00] my key takeaways from that book is that net worth, not income net worth, which is your assets, what you own minus your liabilities, that really. Is a true indicator of your overall financial health, right? Net worth, not income as the financial vitals check is really going to help us as we think about this mindset of, is our income being translated into building our assets and paying down our debt, some of my other key takeaways from this book is that, you know, we often wouldn’t know who the people are that are millionaires or multimillionaires.

When you look at the research that’s presented in the millionaire next door, as well as the updated version and the next millionaire next door, the spending behaviors and patterns would say that they probably aren’t the people that we think are millionaires that more or portray. To be millionaires, they often have a frugal mindset.

Doesn’t mean that they’re cheap. Doesn’t mean that they don’t like investing in good experiences. Doesn’t mean that they’re not a philanthropic or givers, but they often have a frugal [00:11:00] mindset. They’re they’re typically not trapped. Millionaires are not trapped by what I think of as the big rocks, right?

They’re not house poor. They’re not car poor. They do take calculated risk often in business or real estate. And most millionaires, as the research suggests in that book are self made. It’s not typically inherited money, fascinating research and concepts. I would highly recommend that the millionaire next door, the updated version.

If you haven’t already read it. Alright, number five on my list is The Compound Effect by Darren Hardy it was one of those books I, I, I remember exactly where I was when I read it, uh, at our old house up in northeast Ohio during the summer.

I read it outside and, and a couple hours I couldn’t put it down. And one of those books, you’re just constantly highlighting, taking notes. You’re like, yes, yes, yes. And this is not exclusively a personal finance book, but I love the applications here. And I was recently reflecting on those in my life that have been financially successful, because I think it’s helpful to learn and grow [00:12:00] from those who have actually done it right.

And as people came to mind that I thought of, okay, who has been a long term financially successful in building wealth, not short term success, long term financially successful. And as I thought more about that, I was like, I can’t think of anyone. I know. Who got rich off of buying whole life insurance policies, buying random alt coins or buying NFTs.

And I’m not saying that people don’t exist that have built wealth in those ways. Rather, what I’m saying is that I don’t know anyone that took this path, and I feel confident in saying the perception is much greater than the reality when it comes to these types of vehicles being a viable path to building wealth, right?

Often these are short term solutions that are band aids when we really need to look at long term consistent behaviors. Rather, when I think of those people that have built long term wealth, it was a long methodical, patient journey. One intentional step after another [00:13:00] where those decisions and good decisions, not to say there weren’t mistakes along the way, but those good decisions compounded over a long period of time.

And I think, unfortunately, we’re hearing less of these journeys, right? Because these aren’t great clickbait. These aren’t great. In terms of social media algorithms are often boring stories in the, in the literature really supports that. And the book, the millionaire next door, which I just mentioned previously, Yeah.

And several, when I thought more about who are these people, several, not all have multiple pathways of building wealth. Typically it’s traditional investments. It might be equity in a business. It might be real estate, and those aren’t always in balance, but I’ve noticed that as a theme and those that have been really long term, uh, Successful in building wealth and often being philanthropic is a part of that wealth building.

These individuals that come to mind are taking calculated risks on opportunities where they see that the upside dramatically outweighs the downside, and they have a strong financial [00:14:00] foundation in place such that if that calculated risk doesn’t work, They’re not going to be impacted in a significant or catastrophic way, right?

They’re able to take that calculated risk because they have that strong base and foundation in place. As I think of these people that come to mind, I would describe them as overall fairly conservative yet willing again, to take some level of risk if an opportunity presents itself. So they’re not risk averse, but they’re also not flashing.

In fact, they’re quite humble and they’re often very philanthropic. And they really do embody some of the teachings that have stayed with me from this book, the compound effect by Darren Hardy. He has a formula in this book that I often reference back to. And that formula is small, smart choices. Plus consistency, plus time equals radical difference, small, smart choices, plus consistency, plus time equals radical difference, right?

That is the definition of compound interest when we think about saving over a long period of time. So this is the [00:15:00] path I will follow. This is the one that I have seen work a path defined by working hard, taking calculated risk. Investing in tax efficient, appreciating assets, building equity that can be converted to other assets.

Developing a habit and priority for giving and doing this over and over over a long period of time to allow those results to compound. All right. Number six on my list is total money makeover by Dave Ramsey, the total money makeover by Dave Ramsey. Now I’m not an avid follower of Dave Ramsey and his principles and the baby steps, but I have to give credit Where credit is due, reading the total money makeover, going through financial peace university, listening to Dave Ramsey’s podcast was really like a wake up call over a decade ago that inspired the journey that Jess and I took to ultimately pay off our 200, 000 of student loan debt and really led to is the really beginning steps of the place that we are today.

And the journey that we would take to get there, that [00:16:00] book. The total money makeover, listening to the podcast really lit a fire under me to want to learn more, right? As I mentioned, it was kind of a wake up call to create our own path, our own plan. Even if we didn’t follow the path in plan that he prescribes to so many through the baby step formula.

The baby steps I will admit early in our journey, it was a grounding framework, a grounding framework for us that we needed at the time. As we were trying to balance many things, we weren’t doing any of them particularly well, and we didn’t have an intentional plan in place. And that really was the footing that we needed to get started.

That would ultimately allow us to build momentum, to build our emergency savings, to get out of debt, and then to have a prioritized approach. To achieving our goals. So that’s number six, a total money makeover by Dave Ramsey. Number seven last on my list is happy money. The science of happier spending by Elizabeth Dunn and Michael Norton.

Now I would assume many of you have heard of. All [00:17:00] perhaps the first six books that I mentioned, but maybe not the case with this one. I ran across this, uh, several years ago and I intentionally book ended my list of seven here with this one per particular, because I think that it’s an important reminder that money is a tool, right?

I mentioned that when I talked about die was zero by bill Perkins. Money is something that affords us the opportunity to pay for our basic needs. And if we’re able to live our rich life and to give to others. And next time you hold a bill of any value in your hand, remind yourself that it’s a piece of paper.

In fact, it’s a piece of paper that I recently learned is 25 percent Linden, 75 percent cotton, but this is a piece of paper that has value because number one, we all agree that it has value. Number two, it’s backed by the faith and credit. Of the U. S. Government. So what’s my point? My point is that it’s finite, right?

And if we’re not careful, we can miss the boat on a crewing while losing sight of the so what? [00:18:00] And that reminder comes, I think, strongly in the book. Happy money. The science of happier spending. By Elizabeth Dunn and Michael Norton. This book provides what the research has to say on the science of spending and the connection between money and happiness.

Now, happiness, how you define that, right? That’s an important component to consider. But my takeaways from this book were that the literature supports to no surprise, but an important reminder, the link between happiness and Monday. Typically lies in two main areas. Number one, spending money on experiences and memories that will come for those.

And number two on giving, when you look at the connection between happy and moneyness, it strongly points to giving and experiences as an important part of the financial plan. And I think if you talk to anyone who’s been at this for a while, You start to see this come out again, especially as they short up some of the basis of their financial plan.

These are the areas that you typically see people light up when they talk [00:19:00] about their financial plan. All right. So there you have it. Short and sweet. Seven personal finance books. That have had a profound impact on my journey and our books that I would recommend you read or reread . We’ll link to all of these books in the show note.

And if you have a book that you often recommend or that has had a profound impact on your journey, I want to hear about it. Shoot me an email at info at your financial pharmacist. com. Let me know what I left off the list. I’d love to read it and perhaps share it with our community. In the future. Again, you can reach us at info at your financial pharmacist.

com. Now we all know that learning, right? Reading books, listening to podcasts, learning is one thing, but learning and taking action with accountability is really where we start to see things happen. And that’s why we’re so excited about the work that our team at YFP planning is doing through our fee only certified.

Financial planning service. If you want to learn more about what it looks like to work one on one with a fee only certified financial planner from your financial pharmacist, yes, to learn and grow in your financial IQ [00:20:00] and knowledge, but also to take steps and implement those in your financial plan and be held accountable to achieve those results, you can book a free discovery call at YFP planning.com again. That’s YFP planning. com. Thanks so much for joining me on this week’s episode, and we’ll be back next week. Have a great rest of your day.

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